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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMR CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 4512 75-1825172
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
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P.O. BOX 619616
DALLAS/FORT WORTH AIRPORT, TEXAS 75261-9616
(817) 963-1234
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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ANNE H. MCNAMARA, ESQ. JOHN B. BRADY, JR., ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL DEBEVOISE & PLIMPTON
AMR CORPORATION 875 THIRD AVENUE
P.O. BOX 619616 NEW YORK, NEW YORK 10022
DALLAS/FORT WORTH AIRPORT, TEXAS 75261-9616 (212) 909-6000
(817) 963-1234
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(Name, address, including ZIP code, and telephone number of agents for service)
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Copy to:
ROHAN S. WEERASINGHE, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 848-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED TO BE REGISTERED PER DEBENTURE(1) PRICE(1) REGISTRATION FEE
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% Convertible Subordinated
Quarterly Income Capital
Securities due August 1,
2024....................... $1,100,000,000 $840 $924,000,000 $318,621
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Common Stock, par value $1.00
per share(2)............... (3) -- -- (4)
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(1) Estimated as of August 18, 1994 solely for the purpose of calculating the
registration fee pursuant to Rule 457(f)(1) promulgated under the Securities
Act of 1933.
(2) Includes Rights to purchase Series A Junior Participating Preferred Stock of
AMR Corporation that are associated with the Common Stock but will not be
exercisable or evidenced separately from the Common Stock prior to the
occurrence of certain events.
(3) There are being registered hereunder such presently indeterminate number of
shares of Common Stock of AMR Corporation into which the Convertible
Subordinated Quarterly Income Capital Securities may be converted and for
which no separate consideration will be received.
(4) Pursuant to Rule 457(i) promulgated under the Securities Act of 1933, no
registration fee is required.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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AMR CORPORATION
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING
LOCATION IN PROSPECTUS OF ITEMS OF FORM S-4
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FORM S-4 ITEM NO. CAPTION IN PROSPECTUS
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1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus................. Facing Page, Outside Front Cover
Page; Cross Reference Sheet; Inside
Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus..................................... Inside Front Cover Page;
Incorporation of Certain Documents by
Reference; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information.......................... Prospectus Summary; The Company;
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends; Selected Consolidated
Financial Data
4. Terms of the Transaction......................... The Exchange Offer; Description of
Debentures; Certain Federal Income
Tax Considerations; Certain Federal
Tax Considerations for Non-United
States Persons
5. Pro Forma Financial Information.................. Not Applicable
6. Material Contacts with the Company Being
Acquired....................................... Not Applicable
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be
Underwriters................................... Not Applicable
8. Interests of Named Experts and Counsel........... Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................... Not Applicable
10. Information with Respect to S-3 Registrants...... Incorporation of Certain Documents by
Reference
11. Incorporation of Certain Information by
Reference...................................... Incorporation of Certain Documents by
Reference
12. Information with Respect to S-2 or S-3
Registrants.................................... Not Applicable
13. Incorporation of Certain Information by
Reference...................................... Not Applicable
14. Information with Respect to Registrants Other
than
S-3 or S-2 Registrants......................... Not Applicable
15. Information With Respect to S-3 Companies........ Not Applicable
16. Information with Respect to S-2 or S-3
Companies...................................... Not Applicable
17. Information with Respect to Companies Other Than
S-3 or S-2 Companies........................... Not Applicable
18. Information if Proxies, Consents or
Authorizations
are to be Solicited............................ Not Applicable
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or in an
Exchange Offer................................. Incorporation of Certain Documents by
Reference
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 23, 1994
PROSPECTUS
AMR CORPORATION
OFFER TO EXCHANGE
% CONVERTIBLE SUBORDINATED QUARTERLY INCOME CAPITAL SECURITIES DUE 2024
("CONVERTIBLE QUICSSM")
FOR SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
---------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1994, UNLESS EXTENDED.
---------------------------
AMR Corporation (the "Company"), a Delaware corporation, hereby offers, upon
the terms and subject to the conditions set forth in this Prospectus (the
"Prospectus") and the accompanying Letter of Transmittal (the "Letter of
Transmittal" which, together with the Prospectus, constitute the "Exchange
Offer"), to exchange up to $1,100,000,000 aggregate principal amount of its
% Convertible Subordinated Quarterly Income Capital Securities due 2024 (the
"Debentures") for Series A Cumulative Convertible Preferred Stock of the Company
(the "Preferred Stock") with a like aggregate liquidation preference. The
Debentures are offered in minimum denominations of $1,000 and integral multiples
thereof, and the Preferred Stock has a liquidation preference of $500 per share.
Consequently, the Exchange Offer will be effected on a basis of $1,000 principal
amount of Debentures for every two (2) shares of Preferred Stock validly
tendered and accepted for exchange. The Company will pay amounts of less than
$1,000 due to exchanging shareholders in cash, in lieu of issuing Debentures
with a principal amount of less than $1,000. Dividends accumulated since August
1, 1994, the last regular Preferred Stock dividend payment date, will not be
paid on Preferred Stock accepted for exchange in the Exchange Offer. In lieu
thereof, holders of Debentures will be entitled to interest from August 1, 1994,
as described below.
Ownership of the Preferred Stock may be evidenced by certain $3.00
Depositary Shares (the "Depositary Shares"). Each Depositary Share represents
1/10 of a share of Preferred Stock, and entitles the owner, proportionately, to
all the rights and preferences of the Preferred Stock represented thereby.
Either Depositary Shares or Preferred Stock may be tendered in the Exchange
Offer. See "The Exchange Offer -- General".
The Company will accept for exchange Preferred Stock, validly tendered and
not withdrawn prior to 5:00 p.m., New York City time, on , 1994, or
if extended by the Company, in its sole discretion, the latest date and time to
which extended (the "Expiration Date"). Tenders of Preferred Stock may be
withdrawn at any time prior to the Expiration Date and, unless accepted for
exchange by the Company, may be withdrawn at any time after forty business days
after the date of this Prospectus. The Exchange Offer also may be withdrawn,
extended, modified or terminated by the Company at any time and for any reason
including (without limitation) if Preferred Stock having an aggregate
liquidation preference of at least $200 million is not tendered. See "The
Exchange Offer -- Expiration Date; Extensions; Amendments; Termination".
The Debentures will mature on August 1, 2024 and will bear interest at an
annual rate of % from the first day following the Expiration Date (the "Issue
Date"). In addition, holders of the Debentures will be entitled to interest at a
rate of 6.0% per annum from August 1, 1994 through the Expiration Date, in lieu
of dividends on their Preferred Stock accepted for exchange, payable at the time
of the first interest payment on the Debentures. Interest will be payable
quarterly in arrears on February 1, May 1, August 1, and November 1 of each
year, commencing November 1, 1994, provided that, so long as the Company shall
not be in default in the payment of interest on the Debentures, the Company
shall have the right, upon prior notice by public announcement given in
accordance with New York Stock Exchange rules at any time during the term of the
Debentures, to extend the interest payment period from time to time for a period
not exceeding 20 consecutive calendar quarters (each, an "Extension Period"). No
interest shall be due and payable during an Extension Period, but at the end of
each Extension Period the Company shall pay all interest then accrued and unpaid
on the Debentures, together with interest thereon, compounded quarterly. Upon
the termination of any Extension Period and the payment of all interest then
due, the Company may commence a new Extension Period. After prior notice by
public announcement given in accordance with New York Stock Exchange rules, the
Company also may prepay at any time all or any portion of the interest accrued
during an Extension Period. See "Description of Debentures -- Interest" and
"-- Option to Extend Interest Payment Period".
Each Debenture is convertible at the option of the holder at any time after
the date of original issuance thereof, unless previously redeemed, into shares
of common stock, par value $1.00 per share, of the Company (the "Common Stock"),
at a conversion price of $79.00 per share of Common Stock (equivalent to 12.658
shares of Common Stock per $1,000 principal amount of Debentures converted).
Such conversion price is subject to adjustment in certain events, including a
Non-Stock Fundamental Change or Common Stock Fundamental Change (each as defined
herein). See "Description of Debentures -- Conversion". On , 1994,
the last reported sale price of the Common Stock on the New York Stock Exchange
was $ per share.
The Debentures are redeemable at any time after February 1, 1996 at the
option of the Company, in whole or in part, initially at a redemption price of
104.2% of the principal amount of the Debentures redeemed, and thereafter at
prices declining ratably to 100% of the principal amount of the Debentures
redeemed from and after February 1, 2003, plus interest accrued and unpaid to
the redemption date. No sinking fund will be established for the payment of the
Debentures. The Debentures will be subordinate to all Senior Indebtedness (as
defined herein) of the Company. See "Description of Debentures -- Redemption"
and "-- Subordination".
For federal income tax purposes, the exchange of Preferred Stock for
Debentures will, depending upon each particular exchanging holder's facts and
circumstances, be treated as either an exchange in which gain or loss is
recognized or as a dividend, and the Debentures will be treated as having been
issued with original issue discount. For a discussion of these and other United
States federal income tax considerations relevant to the Exchange Offer, see
"Certain Federal Income Tax Considerations" and "Certain Federal Tax
Considerations for Non-United States Persons".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Debentures constitute a new issue of securities with no established
trading market. While the Company intends to apply to list the Debentures on the
New York Stock Exchange, there can be no assurance that an active market for the
Debentures will develop. The Depositary Shares, the Preferred Stock represented
thereby and the Common Stock issuable upon conversion of such Preferred Stock
have not been and will not be registered under the Securities Act of 1933 and
are subject to certain restrictions on transfer provided for therein. Such
restrictions will continue to apply to Depositary Shares, the Preferred Stock
represented thereby and the Common Stock issuable upon conversion of such
Preferred Stock that is not exchanged for Debentures. Moreover, to the extent
that Preferred Stock or Depositary Shares are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Preferred Stock or
Depositary Shares could be adversely affected.
Lehman Brothers and Goldman Sachs & Co. have been retained as Dealer
Managers to solicit exchanges of Preferred Stock and Depositary Shares for
Debentures. See "The Exchange Offer -- Dealer Managers". D.F. King & Co., Inc.
has been retained by the Company to act as Information Agent to assist in
connection with the Exchange Offer.
---------------------------
The Dealer Managers for the Exchange Offer are:
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
The date of this Prospectus is , 1994.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS
GIVEN HEREIN. THE EXCHANGE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE
ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF PREFERRED STOCK IN ANY JURISDICTION IN
WHICH THE MAKING OF THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, THE COMPANY MAY, AT ITS
DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO MAKE THE EXCHANGE OFFER
IN ANY SUCH JURISDICTION AND EXTEND THE EXCHANGE OFFER TO HOLDERS OF PREFERRED
STOCK IN SUCH JURISDICTION. IN ANY JURISDICTION THE SECURITIES LAWS OR BLUE SKY
LAWS OF WHICH REQUIRE THE EXCHANGE OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THE EXCHANGE OFFER IS BEING MADE ON BEHALF OF THE COMPANY BY THE DEALER
MANAGERS OR ONE OR MORE REGISTERED BROKERS OR DEALERS WHICH ARE LICENSED UNDER
THE LAWS OF SUCH JURISDICTION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024;
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such material can also be inspected and copied at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, N.Y. 10005.
This Prospectus constitutes a part of a registration statement on Form S-4
(together with all amendments and exhibits, the "Registration Statement") filed
by the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements
contained herein concerning the provisions of any document do not purport to be
complete and, in each instance, are qualified in all respects by reference to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994 and June 30, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified and superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner of the Preferred Stock, to whom this Prospectus is delivered,
upon the written or oral request of such person, a copy of any or all of the
foregoing documents incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests for such documents should be directed to the
Corporate Secretary of the Company at P.O. Box 619616, Mail Drop 5675,
Dallas/Fort Worth Airport, Texas 75261-9616 (Telephone 817-963-1234). In order
to ensure timely delivery of the documents, any request should be made not later
than five business days prior to the Expiration Date.
2
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary.................................................................... 4
The Company........................................................................... 8
Price Range of Common Stock and Dividends............................................. 8
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends............. 9
Capitalization........................................................................ 10
Selected Consolidated Financial Data.................................................. 11
Recent Developments................................................................... 12
The Exchange Offer.................................................................... 12
Description of Debentures............................................................. 19
Description of Common Stock........................................................... 30
Description of Rights And Junior Preferred Stock...................................... 31
Description of Preferred Stock........................................................ 33
Description of Depositary Shares...................................................... 40
Certain Federal Income Tax Considerations............................................. 44
Certain Federal Tax Considerations for Non-United States Persons...................... 47
Legal Opinions........................................................................ 50
Experts............................................................................... 50
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3
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PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the detailed information contained elsewhere in this Prospectus.
Unless the context otherwise requires, references herein to the Company's Series
A Cumulative Convertible Preferred Stock (the "Preferred Stock") shall include
Preferred Stock represented by certain $3.00 Depositary Shares (evidenced by
depositary receipts) (the "Depositary Shares") issued pursuant to the Deposit
Agreement, dated February 4, 1993 (the "Deposit Agreement"), among the Company,
First Chicago Trust Company of New York (in such capacity, the "Depositary") and
holders from time to time of depositary receipts issued thereunder. Each
Depositary Share represents 1/10 of a share of Preferred Stock and entitles the
owner, proportionately, to all the rights and preferences of the Preferred Stock
represented thereby. Either Depositary Shares or Preferred Stock may be tendered
in the Exchange Offer. See "The Exchange Offer -- General".
THE COMPANY
The Company has three business units: the Air Transportation Group; The
SABRE Group; and the AMR Management Services Group. The Air Transportation Group
includes the Passenger and Cargo Divisions of American Airlines, Inc.
("American"), the Company's principal subsidiary, and AMR Eagle, Inc. American's
passenger division is one of the largest scheduled passenger airlines in the
world. The SABRE Group includes the Company's information technology businesses.
The AMR Management Services Group includes the Company's airline management,
aviation services, training, consulting, and investment service activities. See
"The Company" and "Recent Developments".
THE EXCHANGE OFFER
PURPOSE OF EXCHANGE OFFER
The principal purpose of the Exchange Offer is to improve the Company's
after-tax cash flow by replacing the Preferred Stock with the Debentures. The
potential cash flow benefit to the Company arises because interest payable on
the Debentures should be deductible by the Company for federal income tax
purposes, while dividends payable on the Preferred Stock are not deductible. See
"The Exchange Offer -- Purpose of the Exchange Offer."
THE EXCHANGE OFFER; SECURITIES OFFERED
Subject to the terms and conditions set forth herein and in the Letter of
Transmittal, the Company hereby offers to exchange up to $1,100,000,000
aggregate principal amount of its % Convertible Subordinated Quarterly
Income Capital Securities due 2024 (the "Debentures") for shares of Preferred
Stock with a like aggregate liquidation preference. Exchanges will be made on a
basis of $1,000 principal amount of Debentures (the minimum permitted
denomination) for every two (2) shares of Preferred Stock validly tendered and
accepted for exchange in the Exchange Offer. The Company will pay amounts of
less than $1,000 due to any exchanging shareholder in cash, in lieu of issuing
Debentures with a principal amount of less than $1,000. See "The Exchange
Offer -- Terms of the Exchange Offer".
The Debentures will mature on August 1, 2024 and will bear interest at an
annual rate of % from the first day following the Expiration Date (the "Issue
Date") or from the most recent interest payment date to which interest has been
paid or duly provided for. Interest will be payable quarterly in arrears on
February 1, May 1, August 1 and November 1 of each year, commencing November 1,
1994, provided that, so long as the Company shall not be in default in the
payment of interest on the Debentures, the Company shall have the right, upon
prior notice by public announcement given in accordance with New York Stock
Exchange rules at any time during the term of the Debentures, to extend the
interest payment period from time to time for a period not exceeding 20
consecutive calendar quarters. Dividends accumulated since August 1, 1994, the
last regular Preferred Stock dividend payment date, will not be paid on
Preferred Stock accepted for exchange in the Exchange Offer. Instead, holders of
the Debentures will be entitled to interest at a rate of 6.0% per annum
4
<PAGE> 7
from August 1, 1994 through the Expiration Date, in lieu of dividends on their
Preferred Stock accepted for exchange, payable at the time of the first interest
payment on the Debentures. The Debentures will be issued pursuant to an
indenture, dated as of , 1994, between the Company and The First
National Bank of Chicago, as trustee. See "Description of Debentures".
EXPIRATION DATE; WITHDRAWALS
The Exchange Offer will expire on the Expiration Date. The term "Expiration
Date" shall mean 5:00 p.m., New York City time, on , 1994, unless
the Company, in its sole discretion, extends the Exchange Offer, in which case
the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended. Tenders of Preferred Stock pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Date and, unless
accepted for exchange by the Company, may be withdrawn at any time after forty
business days after the date of this Prospectus. See "The Exchange Offer --
Withdrawal of Tenders".
EXTENSIONS, AMENDMENTS AND TERMINATION
The Company expressly reserves the right to (i) extend, amend or modify the
terms of the Exchange Offer in any manner and (ii) withdraw or terminate the
Exchange Offer and not accept for exchange any Preferred Stock, at any time for
any reason, including (without limitation) if Preferred Stock having an
aggregate liquidation preference of at least $200 million is not tendered (which
condition may be waived by the Company). See "The Exchange Offer -- Expiration
Date; Extensions; Amendments; Termination".
PROCEDURES FOR TENDERING
Each Holder of the Preferred Stock wishing to accept the Exchange Offer
must (i) properly complete and sign the Letter of Transmittal or a facsimile
thereof (all references in this Prospectus to the Letter of Transmittal shall be
deemed to include a facsimile thereof) in accordance with the instructions
contained herein and therein, together with any required signature guarantees,
and deliver the same to the First Chicago Trust Company of New York, as Exchange
Agent, at either of its addresses set forth in "The Exchange Offer -- Exchange
Agent and Information Agent" and either (a) certificates for the Preferred Stock
must be received by the Exchange Agent at such address or (b) such Preferred
Stock must be transferred pursuant to the procedures for book-entry transfer
described herein and a confirmation of such book-entry transfer must be received
by the Exchange Agent, in each case prior to the Expiration Date or (ii) comply
with the guaranteed delivery procedures described herein.
Holders of Depositary Shares may effect a tender of the underlying
Preferred Stock by tendering such Depositary Shares to the Exchange Agent who,
as agent for tendering holders, will withdraw such underlying Preferred Stock
and tender it in the Exchange Offer. When tendering Depositary Shares, holders
must comply with all of the documentation and timing requirements applicable to
tenders of Preferred Stock described herein and in the Letter of Transmittal.
See "The Exchange Offer -- General" and "-- Procedures for Tendering".
SPECIAL PROCEDURE FOR BENEFICIAL OWNERS
Any beneficial owner whose Preferred Stock is registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on its own behalf, such owner must, prior to
completing and executing a Letter of Transmittal and delivering its Preferred
Stock, either make appropriate arrangements to register ownership of the
Preferred Stock in such owner's name or obtain a properly completed stock power
from the registered holder. The transfer of registered ownership may take
considerable time and may not be able to be completed prior to the Expiration
Date. See "The Exchange Offer -- Procedures for Tendering -- Signature
Guarantee".
5
<PAGE> 8
GUARANTEED DELIVERY PROCEDURES
If a Holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or Preferred Stock to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected in accordance with the guaranteed
delivery procedures set forth in "The Exchange Offer -- Procedures for
Tendering -- Guaranteed Delivery".
ACCEPTANCE OF SHARES AND DELIVERY OF DEBENTURES
Subject to the terms and conditions of the Exchange Offer, including the
reservation by the Company of the right to withdraw or terminate the Exchange
Offer and certain other rights, the Company will accept for exchange shares of
Preferred Stock that are properly tendered in the Exchange Offer and not
withdrawn prior to the Expiration Date. Subject to such terms and conditions,
the Debentures issued pursuant to the Exchange Offer will be issued as of the
Issue Date and will be delivered as promptly as practicable following the
Expiration Date. See "The Exchange Offer -- Terms of the Exchange Offer" and
"-- Expiration Date; Extensions; Amendments; Termination".
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Preferred Stock for Debentures pursuant to the Exchange
Offer will be a taxable event. Depending on each exchanging shareholder's
particular facts and circumstances, the exchange may be treated as (i) a
distribution taxable as a dividend in an amount equal to the fair market value
of the Debentures received by such exchanging shareholder or (ii) a transaction
in which gain or loss will be recognized in an amount equal to the difference
between the exchanging shareholder's tax basis in the shares of Preferred Stock
surrendered and the fair market value of the Debentures received in the
exchange. In addition, for federal income tax purposes, the Debentures will be
treated as having been issued with original issue discount. See "Certain Federal
Income Considerations" and "Certain Federal Tax Considerations for Non-United
States Persons".
UNTENDERED SHARES
Holders of Preferred Stock who do not tender their Preferred Stock in the
Exchange Offer or whose Preferred Stock is not accepted for exchange will
continue to hold such Preferred Stock and will be entitled to all the rights and
preferences, and will be subject to all of the limitations, applicable thereto,
including without limitation the existing restrictions on transfer under the
Securities Act. See "The Exchange Offer -- Listing and Trading of Debentures and
Preferred Stock; Transfer Restrictions."
EXCHANGE AGENT AND INFORMATION AGENT
First Chicago Trust Company of New York has been appointed as Exchange
Agent in connection with the Exchange Offer. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent at its addresses and telephone number set forth
in "The Exchange Offer -- Exchange Agent and Information Agent". Questions and
requests for assistance, as well as for copies of relevant documentation, may
also be directed to D.F. King & Co., Inc., which has been retained by the
Company to act as Information Agent for the Exchange Offer. The address and
telephone number of the Information Agent are also set forth in "The Exchange
Offer -- Exchange Agent and Information Agent".
DEALER MANAGERS
Lehman Brothers and Goldman, Sachs & Co. have been retained as Dealer
Managers to solicit exchanges of Preferred Stock for Debentures. Questions with
respect to the Exchange Offer may be directed to at (212)
.
6
<PAGE> 9
COMPARISON OF DEBENTURES AND PREFERRED STOCK
The following is a brief summary comparison of certain of the principal
terms of the Debentures and the Preferred Stock.
<TABLE>
<CAPTION>
DEBENTURES PREFERRED STOCK
-------------------------------------- --------------------------------------
<S> <C> <C>
Interest/Dividend Rate % annual interest (6.0% per annum for 6% annual dividend, payable quarterly
the period from and including August out of funds legally available
1, 1994 to but excluding the Issue therefor on February 1, May 1, August
Date) payable quarterly in arrears on 1 and November 1 of each year, when,
February 1, May 1, August 1 and as and if declared by the Company's
November 1 of each year, commencing Board of Directors.
November 1, 1994, subject to the
Company's right to extend the interest
payment period from time to time to a
period of up to 20 consecutive
calendar quarters, as described
herein.
Conversion Convertible into Common Stock at a Convertible into Common Stock at a
conversion price of $79.00 per share conversion price of $78.75 per share
of Common Stock (equivalent to 12.658 of Common Stock (equivalent to 6.349
shares of Common Stock per $1,000 shares of Common Stock per $500
principal amount of Debentures liquidation preference of Preferred
converted), subject to adjustment as Stock converted), subject to
described herein. adjustment as described herein.
Optional Redemption Redeemable at the option of the Redeemable at the option of the
Company at any time on or after Company at any time on or after
February 1, 1996, in whole or in part, February 1, 1996, in whole or in part,
initially at a redemption price of initially at a redemption price of
104.2% of the principal amount of the 104.2% of the liquidation preference
Debentures redeemed, declining ratably of the Preferred Stock redeemed,
to 100% of the principal amount of the declining ratably to 100% of the
Debentures redeemed from and after liquidation preference of the
February 1, 2003, in each case plus Preferred Stock redeemed from and
accrued and unpaid interest to the after February 1, 2003, in each case
date fixed for redemption. plus accumulated and unpaid dividends
to the date fixed for redemption.
Subordination Subordinated to all existing and Subordinate to claims of creditors,
future Senior Indebtedness of the including holders of the Company's
Company, and effectively subordinated outstanding debt securities and the
to all liabilities of the Company's Debentures, and effectively
subsidiaries, but senior to preferred subordinated to all liabilities of the
stock of the Company, including the Company's subsidiaries, but senior to
Preferred Stock, and to the Common the Common Stock.
Stock.
Voting Rights None. None, except in certain circumstances.
Transfer Restrictions; The Debentures and the Common Stock The Depositary Shares, the Preferred
New York Stock Exchange issuable upon conversion thereof will Stock represented thereby and the
Listing be registered under the Securities Act Common Stock issuable upon conversion
and will be transferable to the extent of such Preferred Stock have not been
permitted thereunder. Application will and will not be registered under the
be made to list the Debentures on the Securities Act and have not been and
New York Stock Exchange. will not be listed on the New York
Stock Exchange. The Depositary Shares,
the Preferred Stock represented
thereby and such Common Stock are
subject to certain significant
restrictions on their transfer under
the Securities Act, and unexchanged
Depositary Shares, Preferred Stock and
Common Stock issued upon conversion
thereof will remain subject to such
transfer restrictions.
Dividends Received Interest will not be eligible for the Dividends are eligible for the
Deduction dividends received deduction for dividends received deduction for
corporate shareholders. corporate shareholders.
</TABLE>
7
<PAGE> 10
THE COMPANY
The Company was incorporated in 1982 and its principal subsidiary,
American, was founded in 1934. The Company's three business units are the Air
Transportation Group, The SABRE Group and the AMR Management Services Group.
The Air Transportation Group includes American's Passenger and Cargo
Divisions and AMR Eagle, Inc. American's Passenger Division is one of the
largest scheduled passenger airlines in the world. At the end of 1993, American
provided scheduled jet service to 106 cities in the U.S. mainland and Hawaii, 28
in Latin America, 14 in Europe and 24 other destinations worldwide, including
service to six cities provided through cooperative agreements with other
airlines.
The SABRE Group includes the Company's information technology business. The
AMR Management Services Group includes the Company's airline management,
aviation services, training, consulting, and investment service activities.
More detailed descriptions of the Company's three business units, and their
recent operating results, are included in the Company's Annual Report on Form
10-K for the year ended December 31, 1993 and its Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed on the New York Stock Exchange (the "NYSE") and
traded under the symbol AMR. The following table sets forth, for the calendar
periods indicated, the high and low closing sales prices per share of the Common
Stock as reported on the NYSE Composite Tape. The reported last sale price of
the Common Stock on the NYSE on , 1994 was $ per share.
<TABLE>
<CAPTION>
HIGH LOW
----- -----
<S> <C> <C>
1991
1st Quarter........................................................ $62 1/4 $44 3/8
2nd Quarter........................................................ 67 3/4 57 1/4
3rd Quarter........................................................ 66 1/2 55 7/8
4th Quarter........................................................ 70 1/2 54 3/4
1992
1st Quarter........................................................ $79 1/4 $69 3/8
2nd Quarter........................................................ 73 61 6/8
3rd Quarter........................................................ 66 7/8 55 1/4
4th Quarter........................................................ 67 1/2 55
1993
1st Quarter........................................................ 69 5/8 55 5/8
2nd Quarter........................................................ 72 5/8 60 1/2
3rd Quarter........................................................ 67 5/8 59 5/8
4th Quarter........................................................ 71 3/4 63 7/8
1994
1st Quarter........................................................ 71 3/4 56 1/2
2nd Quarter........................................................ 60 3/4 52 1/4
3rd Quarter (through August 22, 1994).............................. 62 7/8 55 3/4
</TABLE>
On February 13, 1986, the Board of Directors of the Company declared a
dividend of one Right for each outstanding share of the Common Stock to
stockholders of record on February 24, 1986. See "Description of Rights and
Junior Preferred Stock." Except for such dividend, no dividends have been paid
on the Common Stock and, prior to October 1, 1982 (the date as of which the
Company became the parent of American), no dividends had been paid on the common
stock of American after the first quarter of 1980.
8
<PAGE> 11
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividends for the Company for the periods indicated.
Earnings represent consolidated earnings (loss) before income taxes and the
cumulative effect of accounting changes and fixed charges (excluding interest
capitalized). Fixed charges consist of interest and the portion of rental
expense deemed representative of the interest factor. The preferred stock
dividend requirements were assumed to be equal to the pre-tax earnings that
would be required to cover such dividend requirements. The amount of such
pre-tax earnings required to cover preferred stock dividends was computed using
the Company's effective tax rate for the applicable year. During 1989, the
Company redeemed all the outstanding shares of no par preferred auction rate
stock issued in 1987. The Company had no preferred stock outstanding from the
end of 1989 until the issuance of the Preferred Stock in 1993.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------- -------------
1989 1990 1991 1992 1993 1993 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges and
preferred stock dividends.......................... 2.11 (a) (a) (a) (a) (a) 1.26
==== ==== ==== ==== ==== ==== ====
</TABLE>
- ---------------
(a) Earnings were inadequate to cover combined fixed charges and preferred stock
dividends by $150 million for the year ended December 31, 1990; by $499
million for the year ended December 31, 1991; by $798 million for the year
ended December 31, 1992; by $224 million for the year ended December 31,
1993; and by $34 million for the six months ended June 30, 1993.
9
<PAGE> 12
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at June 30, 1994 and as adjusted to give effect to the Exchange Offer
(assuming that 50% and 100% of the outstanding shares of the Preferred Stock are
exchanged). The financial data at June 30, 1994 in the following table are
derived from the Company's unaudited financial statements for the quarter ended
June 30, 1994.
<TABLE>
<CAPTION>
AS ADJUSTED ASSUMING
JUNE 30, ----------------------------
1994 50% EXCHANGE 100% EXCHANGE
-------- ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
INDEBTEDNESS(1)
Current maturities of long-term debt.................... $ 61 $ $
Current obligations under capital leases................ 128
Long-term debt, less current maturities................. 5,441
Obligations under capital leases, less current
obligations.......................................... 2,269
Debentures(2)........................................... --
-------- --------- ----------
Total Indebtedness.............................. 7,899
-------- --------- ----------
STOCKHOLDERS' EQUITY(1)
Series A Cumulative Convertible Preferred Stock......... 1,081
Common stock-76 million shares issued and outstanding... 76
Additional paid-in capital.............................. 2,038
Retained earnings....................................... 1,204
-------- --------- ----------
Total Stockholders' Equity...................... 4,399
-------- --------- ----------
Total Capitalization............................ $ 12,298 $ $
======== ========= ==========
</TABLE>
- ---------------
(1) For additional information regarding obligations under capital leases,
long-term debt (including repayment requirements), Preferred Stock, Common
Stock and retained earnings, see notes 4, 5, 6, 8 and 9 to the audited
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1993. See "Incorporation of
Certain Documents by Reference".
(2) Amounts shown for the Debentures are based upon their estimated fair market
value at the time they are issued.
10
<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data in the table below for each of the
five years in the period ended December 31, 1993 have been derived from audited
consolidated financial statements of the Company previously filed with the
Commission. The selected consolidated financial data in the table below as of
June 30, 1994 and for the six months ended June 30, 1993 and 1994 are unaudited
but in the opinion of management include all adjustments necessary for a fair
presentation. The following information should be read in conjunction with the
consolidated financial statements and related notes of the Company included, or
incorporated by reference, in its reports filed under the Exchange Act that are
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------------- ---------------
1989 1990 1991 1992(1) 1993 1993 1994
------- ------- ------- ------- ------- ------ ------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED OPERATING
DATA(2):
Total operating revenues.......... $10,480 $11,720 $12,887 $14,396 $15,816 $8,026 $7,909
Total operating expenses.......... 9,736 11,596 12,882 14,421 15,126 7,546 7,349
Operating income (loss)........... 744 124 5 (25) 690 480 560
Earnings (loss) before
extraordinary loss and
cumulative effect of accounting
changes......................... 455 (40) (240) (475) (96) 25 146
Earnings (loss) before cumulative
effect of accounting changes.... 455 (40) (240) (475) (110) 25 146
Net earnings (loss)............... 455 (40) (240) (935) (110) 25 146
Earnings (loss) per common share
before extraordinary loss and
cumulative effect of accounting
changes:
Primary......................... 7.16 (0.64) (3.54) (6.35) (2.05) (0.03) 1.48
Fully diluted................... 7.15 (0.64) (3.54) (6.35) (2.05) (0.03) 1.48
Net earnings (loss) per common
share:
Primary......................... 7.16 (0.64) (3.54) (12.49) (2.23) (0.03) 1.48
Fully diluted................... 7.15 (0.64) (3.54) (12.49) (2.23) (0.03) 1.48
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------- JUNE 30,
1989 1990 1991 1992(1) 1993 1994
------- ------- ------- ------------- ------- --------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED BALANCE SHEET
DATA(2):
Total assets.......................... $10,877 $13,354 $16,208 $18,706 $19,326 $ 19,867
Long-term debt, less current
maturities.......................... 809 1,674 3,951 5,643 5,431 5,441
Obligations under capital leases, less
current obligations................. 1,497 1,598 1,928 2,195 2,123 2,269
Obligation for postretirement
benefits............................ -- -- -- 1,006 1,090 1,058
Preferred stock....................... -- -- -- -- 1,081 1,081
Common stock and other stockholders'
equity.............................. 3,766 3,727 3,794 3,349 3,195 3,318
Common shares outstanding at end of
period.............................. 62 62 68 75 76 76
Book value per common share........... 60.50 59.82 55.50 44.41 41.92 43.49
</TABLE>
- ---------------
(1) Effective January 1, 1992, the Company adopted Statements of Financial
Accounting Standards No. 106, "Employer's Accounting for Postretirement
Benefits Other Than Pensions," and No. 109, "Accounting for Income Taxes."
(2) No dividends were declared on common shares during any of the periods above.
11
<PAGE> 14
RECENT DEVELOPMENTS
In November 1993, American endured a five-day strike by its flight
attendants' union; the strike ended when both sides agreed to binding
arbitration. The arbitration process is expected to be complex and will likely
not be decided for several months. While the ultimate outcome is uncertain, the
new contract will likely result in higher unit labor costs.
American's labor contract with its pilots' union becomes amendable on
August 31, 1994. The Company and the union leadership have commenced
negotiations. The ultimate outcome of these negotiations cannot be estimated at
this time.
THE EXCHANGE OFFER
GENERAL
Participation in the Exchange Offer is voluntary and Holders (as defined
below) should carefully consider whether to accept. Neither the Board of
Directors nor the Company makes any recommendation to Holders as to whether to
tender or refrain from tendering in the Exchange Offer. Holders of the Preferred
Stock are urged to consult their financial and tax advisors in making their own
decisions on what action to take in light of their own particular circumstances.
Unless the context otherwise requires, all references in this section, and
throughout this Prospectus, to Preferred Stock shall include Preferred Stock
represented by Depositary Shares. Holders of Depositary Shares may effect
tenders of the underlying Preferred Stock in the Exchange Offer by tendering
such Depositary Shares to the Exchange Agent who, as agent for such tendering
Holders, will withdraw such underlying Preferred Stock and tender it in the
Exchange Offer. When tendering Depositary Shares, Holders must comply with all
of the documentation and timing requirements applicable to tenders of Preferred
Stock described herein and in the Letter of Transmittal. See " -- Procedures for
Tendering". Unless the context requires otherwise, the term "Holder" with
respect to the Exchange Offer means (i) any person in whose name any Preferred
Stock or Depositary Shares are registered on the books of the Company or (ii)
any other person who has obtained a properly completed stock power from the
registered holder, or (iii) any person whose Preferred Stock or Depositary
Shares are held of record by The Depository Trust Company who desires to deliver
such Preferred Stock by book-entry transfer at The Depository Trust Company. All
references herein and in the Letter of Transmittal to registered holders of
Preferred Stock shall, in the case of Preferred Stock represented by Depositary
Shares, be deemed references to the registered holder of such Depositary Shares.
PURPOSE OF THE EXCHANGE OFFER
The principal purpose of the Exchange Offer is to improve the Company's
after-tax cash flow by replacing the Preferred Stock with the Debentures. The
potential cash flow benefit to the Company arises because interest payable on
the Debentures should be deductible by the Company for federal income tax
purposes, while dividends payable on the Preferred Stock are not deductible. The
extent of this cash flow benefit, however, cannot be predicted because it
depends upon the number of shares of Preferred Stock exchanged pursuant to the
Exchange Offer and upon the Company's federal income tax position in any year.
Except as described herein, the Company has no present plans or intention
to make any acquisitions of or offers for the Preferred Stock. However, if any
shares of Preferred Stock remain outstanding after the expiration of the
Exchange Offer, the Company will continue to monitor the market for the
Preferred Stock and reserves the right, in its sole discretion, to acquire and
to make offers for Preferred Stock subsequent to the Expiration Date for cash or
in exchange for other securities, by optional redemption or otherwise. The terms
of any such acquisitions or offers may differ from the terms of the Exchange
Offer. Such acquisitions or offers, if any, would depend upon, among other
things, the price and availability of such shares and the Company's tax
position.
12
<PAGE> 15
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth herein and in the
Letter of Transmittal, the Company will exchange up to $1,100,000,000 aggregate
principal amount of Debentures for Preferred Stock with a like aggregate
liquidation preference. The Debentures are offered in minimum denominations of
$1,000 and integral multiples thereof, and the Preferred Stock has a liquidation
preference of $500 per share. Consequently, the Exchange Offer will be effected
on a basis of $1,000 principal amount of Debentures for every two (2) shares of
Preferred Stock validly tendered and accepted for exchange. The Company will pay
cash to tendering Holders of Preferred Stock in lieu of issuing Debentures with
a principal amount of less than $1,000. Upon the terms and subject to the
conditions set forth herein and in the Letter of Transmittal, the Company will
accept Preferred Stock validly tendered and not withdrawn as promptly as
practicable after the Expiration Date unless the Exchange Offer has been
withdrawn or terminated. The Company will not accept Preferred Stock for
exchange prior to the Expiration Date. The Company expressly reserves the right,
in its sole discretion, to delay acceptance for exchange of Preferred Stock
tendered under the Exchange Offer or the exchange of the Debentures for the
Preferred Stock accepted for exchange (subject to Rules 13e-4 and 14e-1 under
the Exchange Act, which require that the Company consummate the Exchange Offer
or return the Preferred Stock deposited by or on behalf of the Holders thereof
promptly after the termination or withdrawal of the Exchange Offer), or to
withdraw or terminate the Exchange Offer and not accept any Preferred Stock at
any time for any reason. In all cases, except to the extent waived by the
Company, delivery of Debentures in exchange for the Preferred Stock accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of Preferred Stock (or confirmation of book-entry transfer
thereof), a properly completed and duly executed Letter of Transmittal and any
other documents required thereby.
As of August 22, 1994, there were 2,200,000 shares of Preferred Stock
outstanding. This Prospectus, together with the Letter of Transmittal, is being
sent to all registered Holders as of , 1994.
The Company shall be deemed to have accepted validly tendered Preferred
Stock (or defectively tendered Preferred Stock with respect to which the Company
has waived such defect) when, as and if the Company has given oral or written
notice thereof to the Exchange Agent. The Exchange Agent will act as agent for
the tendering Holders for the purpose of receiving the Debentures from the
Company and remitting such Debentures to tendering Holders. Upon the terms and
subject to the conditions of the Exchange Offer, delivery of Debentures in
exchange for Preferred Stock will be made as promptly as practicable after the
Expiration Date.
If any tendered Preferred Stock is not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, unless otherwise requested by the Holder under "Special Delivery
Instructions" in the Letter of Transmittal, such Preferred Stock will be
returned, without expense, to the tendering Holder thereof (or in the case of
Preferred Stock tendered by book-entry transfer into the Exchange Agent's
account at the Depository Trust Company ("DTC"), such Preferred Stock will be
credited to an account maintained at DTC designated by the participant therein
who so delivered such Preferred Stock), as promptly as practicable after the
Expiration Date or the withdrawal or termination of the Exchange Offer.
Holders of Preferred Stock will not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware (the "DGCL")
in connection with the Exchange Offer. The Company intends to conduct the
Exchange Offer in accordance with the applicable requirements of the Exchange
Act and the rules and regulations of the Commission thereunder.
Holders who tender Preferred Stock in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of
Preferred Stock pursuant to the Exchange Offer. See "-- Fees and Expenses".
13
<PAGE> 16
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The Exchange Offer will expire on the Expiration Date. The term "Expiration
Date" shall mean 5:00 p.m., New York City time, on , 1994, unless
the Company, in its sole discretion, extends the Exchange Offer, in which case
the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended.
The Company reserves the right to extend the Exchange Offer in its sole
discretion at any time and from time to time by giving oral or written notice to
the Exchange Agent and by timely public announcement communicated, unless
otherwise required by applicable law or regulation, by making a release to the
Dow Jones News Service. During any extension of the Exchange Offer, all
Preferred Stock previously tendered pursuant to the Exchange Offer and not
withdrawn will remain subject to the Exchange Offer.
The Company expressly reserves the right to (i) amend or modify the terms
of the Exchange Offer in any manner and (ii) withdraw or terminate the Exchange
Offer and not accept for exchange any Preferred Stock, at any time for any
reason, including (without limitation) if Preferred Stock having an aggregate
liquidation preference of at least $200 million is not tendered (which condition
may be waived by the Company). If the Company makes a material change in the
terms of the Exchange Offer or if it waives a material condition of the Exchange
Offer, the Company will extend the Exchange Offer to the extent required by law.
Any withdrawal or termination of the Exchange Offer will be followed as promptly
as practicable by public announcement thereof. In the event the Company
withdraws or terminates the Exchange Offer, it will give immediate notice to the
Exchange Agent, and all Preferred Stock theretofore tendered pursuant to the
Exchange Offer will be returned promptly to the tendering Holders thereof. See
" -- Withdrawal of Tenders".
ACCUMULATED DIVIDENDS AND INTEREST ON DEBENTURES
Dividends accumulated since August 1, 1994 (the last regular Preferred
Stock dividend payment date) will not be paid on Preferred Stock accepted for
exchange in the Exchange Offer. In lieu thereof, regardless of when Preferred
Stock is tendered in exchange therefor, interest on Debentures received by
exchanging Holders will accrue initially at a rate of 6.0% per annum (equal to
the stated dividend rate on the Preferred Stock) from and including August 1,
1994 to but excluding the Issue Date, and thereafter at an annual rate of %,
payable at the time of the first interest payment on the Debentures as described
in "Description of Debentures -- Interest".
PROCEDURES FOR TENDERING
The tender of Preferred Stock by a Holder thereof pursuant to one of the
procedures set forth below will constitute an agreement between such Holder and
the Company in accordance with the terms and subject to the conditions set forth
herein and in the Letter of Transmittal.
Each Holder of the Preferred Stock wishing to accept the Exchange Offer
must (i) properly complete and sign the Letter of Transmittal or a facsimile
thereof (all references in this Prospectus to the Letter of Transmittal shall be
deemed to include a facsimile thereof) in accordance with the instructions
contained herein and therein, together with any required signature guarantees,
and deliver the same to the Exchange Agent, at either of its addresses set forth
in "-- Exchange Agent and Information Agent" and either (a) certificates for the
Preferred Stock must be received by the Exchange Agent at such address or (b)
such Preferred Stock must be transferred pursuant to the procedures for
book-entry transfer described below and a confirmation of such book-entry
transfer must be received by the Exchange Agent, in each case prior to the
Expiration Date or (ii) comply with the guaranteed delivery procedures described
below.
LETTERS OF TRANSMITTAL, PREFERRED STOCK AND ANY OTHER REQUIRED DOCUMENTS
SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE COMPANY, THE DEALER
MANAGERS OR THE INFORMATION AGENT.
Signature Guarantees. If tendered Preferred Stock is registered in the name
of the signer of the Letter of Transmittal and the Debentures to be issued in
exchange therefor are to be issued (and any untendered Preferred Stock is to be
reissued) in the name of the registered Holder (which term, for the purposes
described herein, shall include any participant in DTC whose name appears on a
security listing as the owner
14
<PAGE> 17
of Preferred Stock), the signature of such signer need not be guaranteed. In any
other case, the tendered Preferred Stock must be endorsed or accompanied by
written instruments of transfer in form satisfactory to the Company and duly
executed by the registered Holder and the signature on the endorsement or
instrument of transfer must be guaranteed by a commercial bank or trust company
located or having an office or correspondent in the United States, or by a
member firm of a national securities exchange or of the National Association of
Securities Dealers, Inc. (any of the foregoing hereinafter referred to as an
"Eligible Institution"). If the Debentures and/or Preferred Stock not exchanged
are to be delivered to an address other than that of the registered Holder
appearing on the register for the Preferred Stock, the signature in the Letter
of Transmittal must be guaranteed by an Eligible Institution. Any beneficial
owner whose Preferred Stock is registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and who wishes to tender should
contact such registered holder promptly and instruct such registered holder to
tender on such beneficial owner's behalf. If such beneficial owner wishes to
tender on its own behalf, such owner must, prior to completing and executing a
Letter of Transmittal and delivering its Preferred Stock, either make
appropriate arrangements to register ownership of the Preferred Stock in such
owner's name or obtain a properly completed stock power from the registered
holder. The transfer of registered ownership may take considerable time and may
not be able to be completed prior to the Expiration Date.
THE METHOD OF DELIVERY OF PREFERRED STOCK AND ALL OTHER DOCUMENTS IS AT THE
ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, PRIOR INSURANCE OBTAINED,
AND THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT
DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE.
Book-Entry Transfer. The Company understands that the Exchange Agent will
make a request promptly after the date of this Prospectus to establish accounts
with respect to the Preferred Stock at DTC for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in DTC's system may make book-entry delivery
of Preferred Stock by causing DTC to transfer such Preferred Stock into the
Exchange Agent's account with respect to the Preferred Stock in accordance with
DTC's procedures for such transfer. Although delivery of Preferred Stock may be
effected through book-entry transfer of Preferred Stock into the Exchange
Agent's account at DTC pursuant to DTC's Automated Tender Offer Program ("ATOP")
procedures, the tendering Holder's properly completed and duly executed Letter
of Transmittal, with any required signature guarantees, must, in any case, be
received by the Exchange Agent at its address set forth in the Letter of
Transmittal prior to the Expiration Date or the guaranteed delivery procedures
described below must be complied with.
Guaranteed Delivery. If a Holder desires to accept the Exchange Offer and
time will not permit a Letter of Transmittal or Preferred Stock to reach the
Exchange Agent before the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if the
Exchange Agent has received at its office prior to the Expiration Date, a
letter, telegram or facsimile transmission from an Eligible Institution setting
forth the name and address of the tendering Holder, the name(s) in which the
Preferred Stock is registered and, if the Preferred Stock is held in
certificated form, the certificate number of the Preferred Stock to be tendered,
and stating that the tender is being made thereby and guaranteeing that within
five NYSE trading days after the date of execution of such letter, telegram or
facsimile transmission by the Eligible Institution, the Preferred Stock in
proper form for transfer together with a properly completed and duly executed
Letter of Transmittal (and any other required documents), or a confirmation of
book-entry transfer of such Preferred Stock into the Exchange Agent's account at
DTC, will be delivered by such Eligible Institution. Unless the Preferred Stock
being tendered by the above-described method is deposited with the Exchange
Agent within the time period set forth above (accompanied or preceded by a
properly completed Letter of Transmittal and any other required documents) or a
confirmation of book-entry transfer of such Preferred Stock into the Exchange
Agent's account at DTC in accordance with DTC's ATOP procedures is received, the
Company may, at its option, reject the tender. Copies of a Notice of Guaranteed
Delivery which may be used by Eligible Institutions for the purposes described
in this paragraph are available from the Exchange Agent and the Information
Agent.
Miscellaneous. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for exchange of any tender of
Preferred Stock will be determined by the Company, whose
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<PAGE> 18
determination will be final and binding. The Company reserves the absolute right
to reject any or all tenders not in proper form or the acceptance for exchange
of which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any defect or irregularity in the
tender of any Preferred Stock, and the Company's interpretation of the terms and
conditions of the Exchange Offer (including the Instructions in the Letter of
Transmittal) will be final and binding. None of the Company, the Exchange Agent,
the Dealer Managers, the Information Agent or any other person will be under any
duty to give notification of any defects or irregularities in tenders or incur
any liability for failure to give any such notification.
Tenders of Preferred Stock involving any irregularities will not be deemed
to have been made until such irregularities have been cured or waived. Preferred
Stock received by the Exchange Agent that is not validly tendered and as to
which the irregularities have not been cured or waived will be returned by the
Exchange Agent to the tendering Holder (or in the case of Preferred Stock
tendered by book-entry transfer into the Exchange Agent's account at DTC, such
Preferred Stock will be credited to an account maintained at DTC designated by
the participant therein who so delivered such Preferred Stock), unless otherwise
requested by the Holder in the Letter of Transmittal, as promptly as practicable
after the Expiration Date or the withdrawal or termination of the Exchange
Offer.
LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.
The party tendering Preferred Stock for exchange (the "Transferor")
exchanges, assigns and transfers the Preferred Stock to the Company and
irrevocably constitutes and appoints the Exchange Agent as the Transferor's
agent and attorney-in-fact to cause the Preferred Stock to be assigned,
transferred and exchanged. The Transferor specifically authorizes the Exchange
Agent to withdraw under the Deposit Agreement the Preferred Stock underlying any
tendered Depositary Shares, and to tender such underlying Preferred Stock in the
Exchange Offer. The Transferor represents and warrants that it has full power
and authority to tender, exchange, assign and transfer the Preferred Stock and
to acquire Debentures issuable upon the exchange of such tendered Preferred
Stock, and that, when the same are accepted for exchange, the Company will
acquire good and unencumbered title to the tendered Preferred Stock, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim. The Transferor also warrants that it will, upon request,
execute and deliver any additional documents deemed by the Company to be
necessary or desirable to complete the exchange, assignment and transfer of
tendered Preferred Stock or transfer ownership of such Preferred Stock on the
account books maintained by DTC. All authority conferred by the Transferor will
survive the death, bankruptcy or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
WITHDRAWAL OF TENDERS
Tenders of Preferred Stock pursuant to the Exchange Offer may be withdrawn
at any time prior to the Expiration Date and, unless accepted for exchange by
the Company, may be withdrawn at any time after 40 business days after the date
of this Prospectus.
To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at the address set forth in the Letter of Transmittal. The method of
notification is at the risk and election of the Holder. Any such notice of
withdrawal must specify (i) the Holder named in the Letter of Transmittal as
having tendered Preferred Stock to be withdrawn, (ii) if the Preferred Stock is
held in certificated form, the certificate numbers of the Preferred Stock to be
withdrawn, (iii) a statement that such Holder is withdrawing his election to
have such Preferred Stock exchanged, and the name of the registered Holder of
such Preferred Stock, and must be signed by the Holder in the same manner as the
original signature on the Letter of Transmittal (including any required
signature guarantees) or be accompanied by evidence satisfactory to the Company
that the person withdrawing the
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<PAGE> 19
tender has succeeded to the beneficial ownership of the Preferred Stock being
withdrawn. The Exchange Agent will return the properly withdrawn Preferred Stock
promptly following receipt of notice of withdrawal. If Preferred Stock has been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawn Preferred Stock and otherwise comply with DTC's procedures.
All questions as to the validity of notice of withdrawal, including time of
receipt, will be determined by the Company, and such determination will be final
and binding on all parties. Withdrawals of tenders of Preferred Stock may not be
rescinded and any Preferred Stock withdrawn will thereafter be deemed not
validly tendered for purposes of the Exchange Offer. Properly withdrawn
Preferred Stock, however, may be retendered by following the procedures therefor
described elsewhere herein at any time prior to the Expiration Date. See
"-- Procedures for Tendering."
EXCHANGE AGENT AND INFORMATION AGENT
First Chicago Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance, requests
for additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent at its address and telephone number set forth below:
The Exchange Agent:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:
First Chicago Trust Company of New York (registered or certified mail recommended)
Tenders & Exchanges First Chicago Trust Company of New York
Suite 4680 -- AMR Tenders & Exchanges
14 Wall Street, 8th Floor P.O. Box 2565, Mail Suite 4660
New York, NY 10005 Jersey City, NJ 07303-2565
</TABLE>
By Facsimile:
(For Eligible Institutions Only)
(201) 222-4720 or (201) 222-4721
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(201) 222-4707
D.F. King & Co., Inc. has been retained by the Company as the Information
Agent to assist in connection with the Exchange Offer. Questions and requests
for assistance regarding the Exchange Offer, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery may be directed to the Information Agent at 77 Water Street,
New York, New York 10005, telephone (800) 347-7869.
The Company will pay the Exchange Agent and Information Agent reasonable
and customary fees for their services and will reimburse them for all their
reasonable out-of-pocket expenses in connection therewith.
DEALER MANAGERS
Lehman Brothers and Goldman, Sachs & Co., as Dealer Managers, have agreed
to solicit exchanges of Preferred Stock for Debentures. The Company will pay
each Dealer Manager a fee that is dependent on the number of shares of Preferred
Stock accepted pursuant to the Exchange Offer. The maximum fee payable is
approximately $ . The Company will also reimburse the Dealer Managers
for certain reasonable out-of-pocket expenses in connection with the Exchange
Offer and will indemnify the Dealer Managers against certain liabilities,
including liabilities under the Securities Act. Additional solicitation may be
made by telecopier, telephone or in person by officers and regular employees of
the Company and its affiliates. No additional compensation will be paid to any
such officers and employees who engage in soliciting tenders.
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<PAGE> 20
LISTING AND TRADING OF DEBENTURES AND PREFERRED STOCK; TRANSFER RESTRICTIONS
There has not previously been any public market for the Debentures. While
the Company intends to list the Debentures on the NYSE, there can be no
assurance that an active market for the Debentures will develop or be sustained
in the future on such exchange. Listing will depend upon the satisfaction of the
NYSE's listing requirements with respect to the Debentures, including
requirements as to the principal amount and distribution of the Debentures.
Although the Dealer Managers have indicated to the Company that they intend to
make a market in the Debentures as permitted by applicable laws and regulations,
they are not obligated to do so and may discontinue any such market-making at
any time without notice. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the Debentures.
The Depositary Shares, the Preferred Stock represented thereby and the
Common Stock issuable upon conversion of such Preferred Stock have not been and
will not be registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. The Depositary Shares, such
Preferred Stock and such Common Stock are subject to restrictions on their
transfer designed to ensure compliance with the requirements of the Securities
Act and, upon consummation of the Exchange Offer, will continue to be subject to
such existing restrictions upon transfer. Holders of Preferred Stock who do not
tender their Preferred Stock in the Exchange Offer or whose Preferred Stock is
not accepted for exchange will continue to hold such Preferred Stock and will be
entitled to all the rights and preferences, and will be subject to all of the
limitations applicable thereto. See "Description of Preferred Stock." Moreover,
to the extent that Preferred Stock is tendered and accepted in the Exchange
Offer, a holder's ability to sell untendered Preferred Stock could be adversely
affected.
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE PREFERRED STOCK
Except as described herein, there are no contracts, arrangements,
understandings or relationships in connection with the Exchange Offer between
the Company or any of its directors or executive officers and any person with
respect to any securities of the Company, including the Debentures, the
Depositary Shares, the Preferred Stock and the Common Stock issuable upon
conversion thereof.
FEES AND EXPENSES; TRANSFER TAXES
The expenses of soliciting tenders of the Preferred Stock will be borne by
the Company. For compensation to be paid to the Dealer Managers see "-- Dealer
Managers." The total cash expenditures to be incurred by the Company in
connection with the Exchange Offer, other than fees payable to the Dealer
Managers, but including the expenses of the Dealer Managers, printing,
accounting and legal fees, and the fees and expenses of the Exchange Agent, the
Information Agent and the Trustee under the Indenture, are estimated to be
approximately $ .
The Company will pay all transfer taxes, if any, applicable to the exchange
of Preferred Stock pursuant to the Exchange Offer. If, however, certificates
representing Debentures, or shares of Preferred Stock not tendered or accepted
for exchange, are to be delivered to, or are to be issued in the name of, any
person other than the registered Holder of the Preferred Stock tendered or if a
transfer tax is imposed for any reason other than the exchange of Preferred
Stock pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other persons) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering Holder.
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<PAGE> 21
DESCRIPTION OF DEBENTURES
GENERAL
The Debentures are to be issued under an Indenture (the "Indenture"), dated
as of , 1994, between the Company and The First National Bank of
Chicago, as trustee (the "Trustee"). The following statements with respect to
the Debentures are summaries and are subject to the detailed provisions of the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
Indenture, a copy of the form of which has been filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Debentures and the
Indenture, including the definitions therein of certain terms capitalized and
not otherwise defined in this Prospectus. Wherever references are made to
particular provisions of the Indenture or terms defined therein, such provisions
or definitions are incorporated by reference as part of the statements made and
such statements are qualified in their entirety by such references.
The Debentures will be unsecured, subordinated obligations of the Company,
will be limited in aggregate principal amount to the aggregate principal amount
of Debentures issued in the Exchange Offer and will mature on August 1, 2024.
The Debentures will be issued only in fully registered form, without coupons, in
minimum denominations of $1,000 and any integral multiples of $1,000 in excess
thereof.
Debentures will be transferable or exchangeable at the agency of the
Company maintained for such purpose in The City of New York (which, unless
changed, shall be a corporate trust office or agency of the Trustee). Debentures
may be transferred or exchanged without service charge, other than any tax or
governmental charge imposed in connection therewith. (Section 3.5 of the
Indenture.)
INTEREST
The Debentures will mature on August 1, 2024 and will bear interest at an
annual rate of % from the Issue Date or from the most recent interest
payment date to which interest has been paid or duly provided for. In addition,
holders of the Debentures will be entitled to interest at a rate of 6.0% per
annum from August 1, 1994 through the Expiration Date, in lieu of dividends on
their Preferred Stock accepted for exchange, payable at the time of the first
interest payment on the Debentures. Interest will be payable quarterly in
arrears on February 1, May 1, August 1 and November 1 of each year commencing
November 1, 1994, provided that, so long as the Company shall not be in default
in the payment of interest on the Debentures, the Company shall have the right,
upon prior notice by public announcement given in accordance with NYSE rules at
any time during the term of the Debentures, to extend the interest payment
period from time to time for a period not exceeding 20 consecutive calendar
quarters (each, an "Extension Period"). See "-- Option to Extend Interest
Payment Period." Interest payable on any Debenture that is punctually paid or
duly provided for on any Interest Payment Date shall be paid to the person in
whose name such Debenture is registered at the close of business on the January
15, April 15, July 15 or October 15, respectively, preceding such Interest
Payment Date (each, a "Record Date"). Interest will be computed on the basis of
twelve 30-day months and a 360-day year and, for any period shorter than a full
calendar month, on the basis of the actual number of days elapsed in such
period. If any date on which interest is payable on the Debentures is not a
Business Day, the payment of interest due on such date may be made on the next
succeeding Business Day (and without any interest or other payment in respect of
such delay). A "Business Day" shall mean any day other than a day on which
banking institutions in The City of New York or in Fort Worth, Texas are
authorized or required by law to close. (Section 3.1 of the Indenture.)
Payments in respect of the Debentures will be made at the office or agency
of the Company maintained for that purpose in The City of New York (which,
unless changed, shall be a corporate trust office or agency of the Trustee).
However, at the option of the Company, payments on the Debentures may be made
(i) by checks mailed by the Trustee to the Holders entitled thereto at their
registered addresses or (ii) by wire transfers to accounts maintained by the
Holders entitled thereto as specified in the Register, provided that, in either
case, the payment of principal with respect to any Debenture will be made only
upon surrender of such
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<PAGE> 22
Debenture to the Trustee. Interest payable on any Debenture that is not
punctually paid or duly provided for on any Interest Payment Date will forthwith
cease to be payable to the person in whose name such Debenture is registered on
the relevant Record Date, and such defaulted interest will instead be payable to
the person in whose name such Debenture is registered on the special record date
or other specified date determined in accordance with the Indenture; provided,
however, that interest shall not be considered payable by the Company on any
Interest Payment Date falling within an Extension Period unless the Company has
elected to make a full or partial payment of interest accrued on the Debentures
on such Interest Payment Date. (Section 3.7 of the Indenture.)
In the event the Company fails to make any payment of interest, principal
or premium on the Debentures when due (after giving effect to any grace period
for payment thereof as described in "-- Events of Default, Notice and Certain
Rights on Default"), or the Company exercises its option to extend the interest
payment period as described in "-- Option to Extend Interest Payment Period",
the Company will not, until all defaulted interest on the Debentures and all
principal and premium, if any, then due and payable on the Debentures shall have
been paid in full and any Extension Period has terminated, (i) declare, set
aside or pay any dividend or distribution on any capital stock of the Company,
including the Preferred Stock and the Common Stock, except for dividends or
distributions in shares of its capital stock or in rights to acquire shares of
its capital stock, or (ii) repurchase, redeem or otherwise acquire any shares of
its capital stock (except by conversion into or exchange for shares of its
capital stock and except for a redemption, purchase or other acquisition of
shares of its capital stock made for the purpose of an employee incentive plan
or benefit plan of the Company or any of its subsidiaries).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company shall not be in default in the payment of interest
on the Debentures, the Company shall have the right, upon notice by public
announcement given in accordance with NYSE rules at any time during the term of
the Debentures, prior to an Interest Payment Date as provided below, to extend
the interest payment period from time to time to another Interest Payment Date
by one or more quarterly periods, not to exceed 20 consecutive calendar quarters
from the last Interest Payment Date to which interest was paid in full. No
interest shall be due and payable during an Extension Period, but at the end of
each Extension Period the Company shall pay all interest then accrued and unpaid
on the Debentures, together with interest thereon, compounded quarterly,
commencing on the first Interest Payment Date in such Extension Period, at the
rate specified for the Debentures to the extent permitted by applicable law.
Prior to the termination of any Extension Period, the Company may pay all or any
portion of the interest accrued on the Debentures on any Interest Payment Date
to holders of record on the Record Date for such Interest Payment Date or from
time to time further extend the interest payment period, provided that any such
Extension Period together with all such previous and further extensions thereof
may not exceed 20 calendar quarters. If the Company shall elect to pay all of
the interest accrued on the Debentures on an Interest Payment Date during an
Extension Period, such Extension Period shall automatically terminate on such
Interest Payment Date. Upon the termination of any Extension Period and the
payment of all amounts of interest then due, the Company may select a new
Extension Period, subject to the above requirements. The Company shall cause the
Trustee to give holders of the Debentures prior notice, by public announcement
given in accordance with NYSE rules and by mail to all such holders of (i) the
Company's election to initiate an Extension Period and the duration thereof,
(ii) the Company's election to extend any Extension Period beyond the Interest
Payment Date on which such Extension Period is then scheduled to terminate, and
(iii) the Company's election to make a full or partial payment of interest
accrued on the Debentures on any Interest Payment Date during any Extension
Period and the amount of such payment. Such notice shall be given by public
announcement in accordance with NYSE rules not less than five Business Days
prior to the earlier of (a) the January 15, April 15, July 15 or October 15 next
preceding the applicable Interest Payment Date or (b) the date the Company or
the Trustee is required to give notice to the NYSE or other applicable self
regulatory organization of the record and payment dates for any payment of
interest. (Section 3.1 of the Indenture.)
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<PAGE> 23
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Debentures will be subordinated to the extent set forth in the Indenture to the
prior payment in full of amounts then due on all Senior Indebtedness (as defined
below). No payments or distributions, whether in cash, securities or other
property (other than securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the same extent as the Debentures, to the payment of
all Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment) on
account of principal of, premium, if any, or interest on the Debentures may be
made by the Company unless full payment of all amounts then due on Senior
Indebtedness has been made or provided for in money or money's worth. Upon any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company or
any other corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinated, at least to the same extent as the
Debentures, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under such plan of
reorganization or readjustment) to creditors upon any dissolution or winding up
or total or partial liquidation or reorganization of the Company, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due upon all Senior Indebtedness shall first be paid in
full, or payment thereof provided for in money or money's worth, before the
holders of the Debentures or the Trustee shall be entitled to retain any assets
so paid or distributed (other than the securities described in the first
parenthetical of this sentence) in respect of the Debentures (for principal or
interest) or of the Indenture. (Article XI of the Indenture.)
The term "Senior Indebtedness" of the Company means each of the following,
unless the agreement, instrument or lease evidencing the same expressly provides
that it is not superior in right of payment to the Debentures: (1) any Payment
Obligation (as defined) of the Company in respect of any indebtedness, directly
or indirectly, created, incurred or assumed for borrowed money or in connection
with the acquisition of any business, property or asset (including securities),
other than any account payable or other indebtedness created, incurred or
assumed in the ordinary course of business in connection with the obtaining of
materials or services; (2) any Payment Obligation of the Company in respect of
any lease that would be required to be classified and accounted for as a capital
lease; (3) any Payment Obligation of the Company in respect of any interest rate
exchange agreement, currency exchange agreement or similar agreement that
provides for payment (whether or not contingent) over a period or term
(including any renewals or extensions) longer than one year from the execution
thereof; (4) any Payment Obligation of the Company in respect of any agreement
relating to the lease (including a sale and leaseback) of real or personal
property and that provides for payment (whether or not contingent) over a period
or term (including any renewals or extensions) longer than one year from the
execution thereof; (5) any Payment Obligation of any Subsidiary (as defined in
the Indenture) or of others of the kind described in the preceding clauses (1)
through (4) assumed or guaranteed by the Company or for which the Company is
otherwise responsible or liable; and (6) any amendment, renewal, extension or
refunding of any of the foregoing Payment Obligations. However, Senior
Indebtedness does not include the Company's obligations in respect of the 5 1/4%
Subordinated Debentures due 1998 issued by American and for which the Company
and American are jointly and severally liable. The Company's obligations in
respect of such 5 1/4% Subordinated Debentures are equal in rank to the
Company's obligations to pay principal of, premium, if any, and interest on the
Debentures. (Article II of the Indenture.)
The term "Payment Obligation", when used with respect to Senior
Indebtedness, means an obligation stated in an agreement, instrument or lease to
pay money (whether for principal, premium, interest, sinking fund, periodic
rent, stipulated value, termination value, liquidated damages or otherwise), but
excludes an obligation to pay money in respect of fees of, or as payment or
reimbursement for expenses incurred by or on behalf of, or as indemnity for
losses, damages, taxes or other indemnity claims of any kind owed to, any holder
of Senior Indebtedness or other party to such agreement, instrument or lease.
By reason of the subordination described herein, in the event of the
distribution of assets upon insolvency, creditors of the Company who are not
holders of Senior Indebtedness or of the Debentures may recover less, ratably,
than holders of Senior Indebtedness, and may recover more, ratably, than holders
of the Debentures.
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<PAGE> 24
Moreover, upon any distribution of the assets of the Company, the holders of the
Debentures are required to pay over their share of such distribution to the
holders of Senior Indebtedness to the extent necessary to pay all holders of
Senior Indebtedness in full.
On June 30, 1994 there was approximately $6.3 billion of Senior
Indebtedness outstanding. The calculation of the amount of Senior Indebtedness
assumes that the Company is primarily obligated for the present value of future
minimum lease payments under operating leases guaranteed by the Company but does
not include other contingent obligations such as stipulated values or liquidated
damages. There is no restriction under the Indenture on the creation of
additional indebtedness, including Senior Indebtedness, by the Company,
including indebtedness owed by the Company to American and its other
subsidiaries.
Because the Company is a holding company that conducts business through its
subsidiaries, the Debentures are effectively subordinated to all existing and
future liabilities of the Company's subsidiaries, including American. Any right
of the Company to participate in any distribution of the assets of any of the
Company's subsidiaries, including American, upon the liquidation, reorganization
or insolvency of such subsidiary (and the consequent right of the holders of the
Debentures to participate in those assets) will be subject to the claims of the
creditors (including trade creditors) and preferred stockholders of such
subsidiary, except to the extent that claims of the Company itself as a creditor
of such subsidiary may be recognized, in which case the claims of the Company
would still be subordinate to any security interest in the assets of such
subsidiary and any indebtedness of such subsidiary senior to that held by the
Company. Moreover, because the Company is a holding company, the Company's cash
flow and consequent ability to meet its debt obligations are primarily dependent
upon the earnings of its subsidiaries, particularly American, and on dividends
and other payments therefrom. The Company's subsidiaries are not obligated or
required to pay any amounts due pursuant to the Debentures or to make funds
available therefor in the form of dividends or advances to the Company. In
addition, certain debt and credit facility agreements of American contain
certain restrictive covenants, including a cash flow coverage test, a minimum
net worth requirement and limitations on indebtedness and the declaration of
dividends on shares of its capital stock, that could affect the Company's
ability to pay principal of, premium, if any, and interest on the Debentures. At
June 30, 1994, under the provisions of the most restrictive of those debt and
credit facility agreements, approximately $859 million of the retained earnings
of American were available for payment of cash dividends to the Company.
CONVERSION
Outstanding Debentures will be convertible at the option of the holder
thereof at any time after the date of original issuance thereof, unless
previously redeemed, into whole shares of Common Stock at a conversion price of
$79.00 per share of Common Stock (equivalent to 12.658 shares of Common Stock
per $1,000 principal amount of Debentures converted), subject to adjustment as
described below. (Section 12.4 of the Indenture.) No fractional shares of Common
Stock shall be issued upon conversion of Debentures. Instead of any fractional
share of Common Stock that would otherwise be issuable upon conversion of any
Debenture, the Company shall pay a cash adjustment in respect of such fraction
in an amount equal to the same fraction of the market price per share of Common
Stock (as determined or prescribed by the Board of Directors or a duly
authorized committee thereof, whose determination shall be conclusive, but
which, so long as the Common Stock is listed on the NYSE, shall equal the price
reported on the NYSE) at the close of business on the Trading Day (as defined in
the Indenture) immediately preceding the date of conversion. (Section 12.3 of
the Indenture.) Holders that convert their Debentures will not be entitled to
payment of any accrued interest on such Debentures, including interest that
accrues during an Extension Period. Debentures surrendered for conversion during
the period after any Record Date and prior to the corresponding Interest Payment
Date must be accompanied by payment of an amount equal to the interest payable
on such Debentures on such Interest Payment Date. (Section 12.2 of the
Indenture.) Debentures called for redemption will not be convertible after the
close of business on the Business Day preceding the date fixed for redemption,
unless the Company defaults in payment of the redemption price. (Section 12.1 of
the Indenture.)
The initial conversion price of $79.00 per share of Common Stock is subject
to adjustment (under formulae set forth in the Indenture) in certain events,
including: (i) the issuance of Common Stock as a
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dividend or distribution on Common Stock of the Company; (ii) certain
subdivisions and combinations of the Common Stock; (iii) the issuance to all
holders of Common Stock of certain rights or warrants to purchase Common Stock;
(iv) the distribution to all holders of Common Stock of shares of capital stock
of the Company (other than Common Stock) or evidences of indebtedness of the
Company or assets (including securities, but excluding those rights, warrants,
dividends and distributions referred to above and dividends and distributions in
connection with the liquidation, dissolution or winding up of the Company or
paid in cash); (v) distributions consisting of cash, excluding any quarterly
cash dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (x) the
amount per share of the next preceding quarterly cash dividend of Common Stock
to the extent that such preceding quarterly dividend did not require an
adjustment of the Conversion Price pursuant to this clause (v) (as adjusted to
reflect subdivisions or combinations of the Common Stock), and (y) 3.75 percent
of the average of the daily Closing Prices (as defined in the Indenture) of the
Common Stock for the ten consecutive Trading Days immediately prior to the date
of declaration of such dividend, and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company; and
(vi) payment in respect of a tender or exchange offer by the Company or any
subsidiary of the Company for the Common Stock to the extent that the cash and
value of any other consideration included in such payment per share of Common
Stock exceeds the current market price per share of Common Stock on the last
Trading Day preceding the date on which the Company becomes irrevocably
obligated to make such payment. If any adjustment is required to be made as set
forth in clause (v) above as a result of a distribution which is a quarterly
dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant to such clause (v). If an adjustment is required to be made as
set forth in clause (v) above as a result of a distribution which is not a
quarterly dividend, such adjustment would be based upon the full amount of such
distribution.
In the event that the rights issued pursuant to the Rights Agreement (as
defined below) are separately distributed to holders of Common Stock upon the
occurrence of certain events specified in the Rights Agreement or otherwise,
such that holders of Debentures would thereafter not be entitled to receive any
such rights in respect of the Common Stock issuable upon conversion of such
Debentures, the conversion price of the Debentures will be adjusted in
accordance with the provisions of the Indenture governing clause (iv) of the
preceding paragraph.
The Company from time to time may to the extent permitted by law reduce the
conversion price by any amount for any period of at least 20 days, in which case
the Company shall give at least 15 days' notice of such reduction, if the Board
of Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. The Company
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. (Section 12.5 of the Indenture.) See "Certain
Federal Income Tax Considerations -- Adjustment of Conversion Price."
If any transaction shall occur (including without limitation (i) any
recapitalization or reclassification of shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination of the Common Stock),
(ii) any consolidation or merger of the Company with or into another person or
any merger of another person into the Company (other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of Common
Stock), (iii) any sale or transfer of all or substantially all of the assets of
the Company, or (iv) any compulsory share exchange) pursuant to which either
shares of Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of a sale or transfer of all
or substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
appropriate provision shall be made so that the holder of any Debenture then
outstanding shall have the right thereafter to convert such Debenture only into
(x) in the case of any such transaction that does not constitute a Common Stock
Fundamental Change (as defined below) and subject to funds being legally
available for such purpose under applicable law at the time of such conversion,
the kind
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<PAGE> 26
and amount of the securities, cash or other property that would have been
receivable upon such recapitalization, reclassification, consolidation, merger,
sale, transfer or share exchange by a holder of the number of shares of Common
Stock issuable upon conversion of such Debenture immediately prior to such
recapitalization, reclassification, consolidation, merger, sale, transfer or
share exchange, after giving effect, in the case of any Non-Stock Fundamental
Change (as defined below), to any adjustment in the conversion price in
accordance with clause (1) of the following paragraph, and (y) in the case of
any such transaction that constitutes a Common Stock Fundamental Change, common
stock of the kind received by holders of Common Stock as a result of such Common
Stock Fundamental Change in an amount determined in accordance with clause (2)
of the following paragraph. The company formed by such consolidation or
resulting from such merger or that acquires such assets or that acquires the
Company's shares, as the case may be, shall make provisions in its certificate
or articles of incorporation or other constituent document to establish such
right. Such certificate or articles of incorporation or other constituent
document shall provide for adjustments that, for events subsequent to the
effective date of such certificate or articles of incorporation or other
constituent documents, shall be as nearly equivalent as may be practicable to
the relevant adjustments provided for in the preceding paragraphs and in this
paragraph. (Section 12.6 of the Indenture.)
Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Fundamental Change (as defined below) occurs, then the
conversion price in effect will be adjusted immediately after such Fundamental
Change as follows:
(1) in the case of a Non-Stock Fundamental Change, the conversion
price of the Debentures immediately following such Non-Stock Fundamental
Change shall be the lower of (A) the conversion price in effect immediately
prior to such Non-Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to the preceding paragraphs, and
(B) the product of (1) the greater of the Applicable Price (as defined
below) and the then applicable Reference Market Price (as defined below)
and (2) a fraction, the numerator of which is $1,000 and the denominator of
which is (x) the amount of the redemption price for $1,000 principal amount
of Debentures if the redemption date were the date of such Non-Stock
Fundamental Change (or, for the period commencing on the Issue Date and
ending on January 31, 1995 and the twelve-month period commencing on
February 1, 1995, the product of 105.4% and 104.8%, respectively, times
$1,000) plus (y) any then-accrued and unpaid interest on such Debenture;
and
(2) in the case of a Common Stock Fundamental Change, the conversion
price of the Debentures immediately following such Common Stock Fundamental
Change shall be the conversion price in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price (as defined
below) and the denominator of which is the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in which
(A) 100% of the value of the consideration received by a holder of Common
Stock is common stock of the successor, acquiror, or other third party (and
cash, if any, paid with respect to any fractional interests in such common
stock resulting from such Common Stock Fundamental Change) and (B) all of
the Common Stock of the Company shall have been exchanged for, converted
into, or acquired for, common stock of the successor, acquiror or other
third party (and any cash with respect to fractional interests), the
conversion price of the Debentures immediately following such Common Stock
Fundamental Change shall be the conversion price in effect immediately
prior to such Common Stock Fundamental Change multiplied by a fraction, the
numerator of which is one (1) and the denominator of which is the number of
shares of common stock of the successor, acquiror, or other third party
received by a holder of one share of Common Stock as a result of such
Common Stock Fundamental Change. (Section 12.10 of the Indenture.)
Depending upon whether a Fundamental Change is a Non-Stock Fundamental
Change or a Common Stock Fundamental Change, a Holder may receive significantly
different consideration upon conversion. In the event of a Non-Stock Fundamental
Change, the Holder has the right to convert Debentures into the kind and amount
of the shares of stock and other securities or property or assets (including
cash), except as
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<PAGE> 27
otherwise provided above, as is determined by the number of shares of Common
Stock receivable upon conversion at the conversion price as adjusted in
accordance with clause (1) of the preceding paragraph. However, in the event of
a Common Stock Fundamental Change in which less than 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror or other third party, a holder of Debentures who converts
such Debentures following the Common Stock Fundamental Change will receive
consideration in the form of such common stock only, whereas a holder who
converted such Debentures prior to the Common Stock Fundamental Change would
have received consideration in the form of such common stock as well as any
other securities or assets (which may include cash) issuable upon conversion of
such Debentures immediately prior to such Common Stock Fundamental Change.
The term "Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a holder of one share of Common Stock and (ii) in
the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the reported last sale price for one share of
the Common Stock (determined as provided in the Indenture) during the 10 Trading
Days immediately prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other assets
in connection with such Non-Stock Fundamental Change or Common Stock Fundamental
Change or, if there is no such record date, prior to the date upon which the
holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the National Market System of NASDAQ; provided, however, that a
Fundamental Change shall not be a Common Stock Fundamental Change unless either
(i) the Company continues to exist after the occurrence of such Fundamental
Change and the outstanding Debentures continue to exist as outstanding
Debentures, or (ii) not later than the occurrence of such Fundamental Change, a
corporation succeeding to the business of the Company complies with the
provisions described under the heading "-- Consolidation, Merger or Sale by the
Company".
The term "Fundamental Change" means the occurrence of any transaction or
event or series of transactions or events pursuant to which all or substantially
all of the Common Stock of the Company shall be exchanged for, converted into,
acquired for or shall constitute solely the right to receive cash, securities,
property or other assets (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); provided, however, in the case of any such
series of transactions or events, for purposes of adjustment of the conversion
price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock of the Company shall have been exchanged
for, converted into, or acquired for, or shall constitute solely the right to
receive, such cash, securities, property or other assets, but the adjustment
shall be based upon the consideration that the holders of Common Stock received
in the transaction or event as a result of which more than 50% of the Common
Stock of the Company shall have been exchanged for, converted into, or acquired
for, or shall constitute solely the right to receive, such cash, securities,
property or other assets; and provided, further, that such term does not include
(i) any such transaction or event in which the Company and/or any of its
subsidiaries are the issuers of all the cash, securities, property or other
assets exchanged, acquired or otherwise issued in such transaction or event, or
(ii) any such transaction or event in which the holders of Common Stock receive
securities of an issuer other than the Company or any of its subsidiaries if,
immediately following such transaction or event, such holders hold a majority of
the securities having the power to vote normally in the election of directors of
such other issuer outstanding immediately following such transaction or other
event.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
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<PAGE> 28
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the reported last sale price for one share of
the common stock received by holders of Common Stock (determined as provided in
the Indenture) in such Common Stock Fundamental Change during the 10 Trading
Days immediately prior to the date fixed for the determination of the holders of
Common Stock entitled to receive such common stock or, if there is no such date,
prior to the date upon which the holders of Common Stock shall have the right to
receive such common stock.
The term "Reference Market Price" shall initially mean $42.3333 and, in the
event of any adjustment to the conversion price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the conversion price after giving
effect to any such adjustment shall always be the same as the ratio of the
initial Reference Market Price to the initial conversion price of $79.00 per
share. (Section 12.1 of the Indenture)
No adjustment to the conversion price will be required to be made in any
case until cumulative adjustments amount to 1% or more of the conversion price.
(Section 12.5 of the Indenture.)
REDEMPTION
The Debentures will not be subject to any mandatory redemption, sinking
fund or other obligation of the Company to amortize, redeem or retire the
Debentures, and will not be redeemable prior to February 1, 1996. On and after
such date, the Debentures are redeemable at the option of the Company upon
notice at any time, in whole or in part, at the following percentages of the
principal amount thereof redeemed, plus accrued and unpaid interest, if any, up
to but excluding the redemption date, if redeemed during the twelve-month period
commencing February 1 of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---------------------------- ----------
<S> <C>
1996........................ 104.2%
1997........................ 103.6%
1998........................ 103.0%
1999........................ 102.4%
2000........................ 101.8%
2001........................ 101.2%
2002........................ 100.6%
2003 and thereafter......... 100.0%
</TABLE>
If fewer than all the outstanding Debentures are to be redeemed, the Company
will select those Debentures to be redeemed by lot or pro rata or in such other
manner permitted by the rules of the NYSE as the Board of Directors may
determine.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Debentures to be
redeemed at the address shown on the stock transfer books. After the redemption
date, interest will cease to accrue on the Debentures called for redemption and
all rights of the holders of such Debentures will terminate, except the right to
receive the redemption price without interest. (Section 10.5 of the Indenture.)
VOTING RIGHTS
The holders of the Debentures will have no voting rights.
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
The Indenture provides that the Company may merge or consolidate with or
into any other corporation or sell, convey, transfer or otherwise dispose of all
or substantially all of its assets to any person, firm or corporation, if (i)
(a) in the case of a merger or consolidation, the Company is the surviving
corporation or (b) in the case of a merger or consolidation where the Company is
not the surviving corporation and in the case of a sale, conveyance, transfer or
other disposition, the successor corporation is a corporation organized and
existing under the laws of the United States of America or a State thereof and
such corporation expressly assumes by supplemental indenture all the obligations
of the Company under the Debentures and under the Indenture, (ii) immediately
after giving effect to such merger or consolidation, or such sale, conveyance,
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<PAGE> 29
transfer or other disposition, no Default or Event of Default (as defined below)
shall have occurred and be continuing or (iii) certain other conditions are met.
In the event a successor corporation assumes the obligations of the Company,
such successor corporation shall succeed to and be substituted for the Company
under the Indenture and under the Debentures and all obligations of the Company
thereunder shall terminate. (Section 7.1 of the Indenture.)
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
The Indenture provides that, if an Event of Default specified therein shall
have occurred and be continuing, either the Trustee or the holders of 25% in
aggregate principal amount of the Debentures then outstanding may, by written
notice to the Company (and to the Trustee, if notice is given by such holders of
Debentures), declare the principal of all the Debentures to be due and payable.
However, at any time after a declaration of acceleration with respect to the
Debentures has been made, but before a judgment or decree based on such
acceleration has been obtained, the holders of a majority in aggregate principal
amount of the Debentures then outstanding may, under certain circumstances,
rescind and annul such acceleration. (Section 5.2 of the Indenture.)
Events of Default are defined in the Indenture as being: default for thirty
days in payment of any interest installment when due; default for ten days in
payment of principal or premium, if any, at maturity or on redemption or
otherwise, on the Debentures when due; default for sixty days after notice to
the Company by the Trustee, or to the Company and the Trustee by the holders of
at least 25% in aggregate principal amount of the Debentures then outstanding,
in the performance of any other covenant in the Indenture; default resulting in
acceleration of other indebtedness of the Company for borrowed money where the
aggregate principal amount so accelerated exceeds $150 million and such
acceleration is not rescinded or annulled within ten days after the written
notice thereof to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in aggregate principal amount of the Debentures
then outstanding, provided that such Event of Default will be cured or waived if
the default that resulted in the acceleration of such other indebtedness is
cured or waived; and certain events of bankruptcy, insolvency or reorganization
of the Company. (Section 5.1 of the Indenture.)
The Indenture provides that the Trustee shall, within ninety days after the
occurrence of a Default with respect to the Debentures, give to the holders of
the Debentures notice of all uncured Defaults known to it; provided that, except
in the case of default in payment on the Debentures the Trustee may withhold the
notice if and so long as a Responsible Officer (as defined in the Indenture) in
good faith determines that withholding such notice is in the interests of the
holders. (Section 6.5 of the Indenture.) "Default" means any event which is, or
after notice or passage of time or both, would be, an Event of Default. (Section
1.1 of the Indenture.)
The Indenture provides that the holders of a majority in aggregate
principal amount of the Debentures then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, provided that such
direction shall not be in conflict with any law or the Indenture and subject to
certain other limitations. (Section 5.8 of the Indenture.) The right of any
holder of Debentures to institute action for any remedy under the Indenture
(except the right to enforce payment of the principal of, interest on, and
premium, if any, on its Debentures when due) is subject to certain conditions
precedent, including a request to the Trustee by the holders of not less than
25% in aggregate principal amount of Debentures then outstanding to take action,
and an offer to the Trustee of satisfactory indemnification against liabilities
incurred by it in so doing. (Sections 5.9 of the Indenture.)
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate as to the Company's compliance with all conditions and
covenants of the Indenture. (Section 9.6 of the Indenture.)
The holders of a majority in aggregate principal amount of the Debentures
then outstanding by notice to the Trustee may waive, on behalf of the holders of
all the Debentures, any past Default or Event of Default and its consequences
except, unless theretofore cured, a Default or Event of Default in the payment
of the principal of, premium, if any, or interest on any of the Debentures and
certain other defaults. (Section 5.2 of the Indenture.)
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<PAGE> 30
AGREED TAX TREATMENT
The Indenture provides that the each holder of a Debenture, each person
that acquires a beneficial ownership interest in a Debenture and the Company
agree that for United States federal, state and local tax purposes it is
intended that such Debenture constitute indebtedness. (Section 3.1 of the
Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee to
enter into one or more supplemental indentures without the consent of the
holders of any of the Debentures in order (i) to evidence the succession of
another corporation to the Company and the assumption of the covenants of the
Company by such successor to the Company; (ii) to add to the covenants of the
Company or surrender any right or power of the Company; (iii) to add additional
Events of Default; (iv) to change or eliminate any of the provisions of the
Indenture, provided that any such change or elimination shall become effective
only when there is no Debenture outstanding; (v) to secure the Debentures; (vi)
to evidence and provide for successor Trustees; (vii) to provide for
uncertificated Debentures so long as such uncertificated Debentures are in
registered form for United States federal income tax purposes; (viii) to correct
or supplement any provision of the Indenture which may be inconsistent with any
other provision therein; (ix) to make any other provisions with respect to
matters or questions arising under the Indenture, provided that such action
shall not adversely affect the interests of the holders of the Debentures; (x)
to cure any ambiguity or correct any mistake; or (xi) to comply with any
requirement of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act. (Section 8.1 of the Indenture.)
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Debentures then outstanding, to execute supplemental indentures
adding any provisions to or changing or eliminating any of the provisions of the
Indenture or any supplemental indenture or modifying the rights of the holders,
except that no such supplemental indenture may, without the consent of each
holder, (i) change the time for payment of principal, premium, if any, or
interest on any Debenture; (ii) reduce the principal of, or interest on any
Debenture; (iii) reduce the amount of premium, if any, payable upon the
redemption of any Debenture; (iv) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debenture; (v) reduce the
percentage in principal amount of the outstanding Debentures the consent of
whose holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain default; (vi) adversely affect the right to convert Debentures; (vii)
change the obligation of the Company to maintain an office or agency in the
places and for the purposes specified in the Indenture; or (viii) modify the
provisions relating to waiver of certain defaults or any of the foregoing
provisions. (Section 8.2 of the Indenture.)
THE TRUSTEE
The First National Bank of Chicago is the Trustee under the Indenture.
First Chicago Trust Company of New York, an affiliate of the Trustee, will act
as Exchange Agent for the Exchange Offer, and currently serves as Depositary
under the Deposit Agreement for the Depositary Shares, as Transfer Agent and
Registrar for the Preferred Stock and the Common Stock, and as Rights Agent
under the Rights Agreement (as defined below).
FORM OF DEBENTURES
The Debentures will be issued in fully registered form, without coupons.
Investors may elect to hold their Debentures directly or, subject to the rules
and procedures of DTC described below, hold interests in a global Debenture (the
"Global Debenture") registered in the name of DTC or its nominee.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the Banking Law of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
New York Uniform Commercial Code, and a "clearing agency" registered pursuant to
the provisions of section 17A of the Exchange Act. DTC was created to hold
securities of its participants
28
<PAGE> 31
(the "Participants") and to facilitate the clearance and settlement of
securities transactions among its Participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations, some of whom (and/or
their representatives) own DTC. Access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly.
Upon the issuance of a Global Debenture, DTC will credit on its book-entry
registration and transfer system, the principal amount of the Debentures
represented by such Global Debenture to the accounts of institutions that have
accounts with DTC. The accounts to be credited shall be designated by the
holders that sold such Debentures to such Participants. Ownership of beneficial
interests in a Global Debenture will be limited to Participants or persons that
may hold interests through Participants. Ownership of beneficial interests in a
Global Debenture will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC for such Global Debenture and
on the records of Participants (with respect to the interests of persons holding
through Participants). So long as DTC, or its nominee, is the owner of a Global
Debenture, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Debentures represented by such Global Debenture for all
purposes under the Indenture.
Each person owning a beneficial interest in a Global Debenture must rely on
the procedures of DTC and, if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, if it requests any action of holders or
if an owner of a beneficial interest in a Global Debenture desires to give or
take any action which a holder is entitled to give or take under the Indenture,
DTC would authorize the Participants holding the relevant beneficial interests
to give or take such action, and such Participants would authorize beneficial
owners owning through such Participants to give or take such action or would
otherwise act upon the instructions of beneficial owners holding through them.
The Company expects that DTC, upon receipt of any payment of principal or
interest in respect of a Global Debenture, will credit immediately Participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the Debentures represented by the Global Debenture as shown on the
records of DTC. The Company also expects that payments by Participants to owners
of beneficial interests in such Global Debenture held through such Participants
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
Participants. Accordingly, although owners who hold Debentures through
Participants will not possess Debentures in definitive form, the Participants
will provide a mechanism by which holders of Debentures will receive payments
and will be able to transfer their interests.
Principal and interest payments on Debentures represented by a Global
Debenture registered in the name of DTC or its nominee will be made to DTC or
its nominee, as the case may be, as the registered owner of such Global
Debenture. None of the Company, the Trustee or any other agent of the Company
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interest in such Global
Debenture or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
If DTC or a successor depository is at any time unwilling or unable to
continue as depository of the Global Debentures and a successor depository is
not appointed by the Company within ninety days, the Company will issue
Certificated Debentures in exchange for the Global Debentures. In addition, the
Company may at any time determine not to have Debentures represented by a Global
Debenture and, in such event, will issue Certificated Debentures in exchange for
the Global Debentures. In either case, an owner of a beneficial interest in a
Global Debenture will be entitled to have Certificated Debentures equal in
principal amount to such beneficial interest registered in its name and will be
entitled to physical delivery of such Certificated Debentures.
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<PAGE> 32
SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL DEBENTURES
So long as any Debentures are represented by Global Debentures registered
in the name of DTC or its nominee, such Debentures will trade in DTC's Same-Day
Funds Settlement System, and secondary market trading activity in such
Debentures will therefore be required by DTC to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Debentures.
DESCRIPTION OF COMMON STOCK
The following statements with respect to the capital stock of the Company
are summaries and are subject to the detailed provisions of the Company's
certificate of incorporation, as amended (the "Certificate of Incorporation"),
and by-laws, as amended (the "By-Laws"). These statements do not purport to be
complete, or to give full effect to the provisions of statutory or common law,
and are subject to, and are qualified in their entirety by reference to, the
terms of the Certificate of Incorporation and the By-Laws, copies of which are
filed as exhibits to the Registration Statement and are incorporated by
reference into this Prospectus.
The Certificate of Incorporation authorizes the issuance of 150,000,000
shares of Common Stock. On July 29, 1994, 75,858,777 shares of Common Stock were
outstanding. The Certificate of Incorporation provides that the Company's Board
of Directors (the "Board of Directors") is authorized to provide for the
issuance of shares of preferred stock, from time to time, in one or more series,
and to fix any voting powers, full or limited, and the designations, preferences
and relative, participating, optional or other special rights, applicable to the
shares to be included in any such series and any qualifications, limitations or
restrictions thereon. No shares of preferred stock of the Company (other than
the Preferred Stock) are outstanding as of the date hereof. However, 1,000,000
shares of Series A Junior Participating Preferred Stock of the Company (the
"Junior Preferred Stock") have been authorized and reserved for issuance in
connection with the preferred stock purchase rights (the "Rights") described
below in "Description of Rights and Junior Preferred Stock."
VOTING RIGHTS
Each holder of Common Stock is entitled to one vote for each share
registered in his name on the books of the Company on all matters submitted to a
vote of shareholders. Except as otherwise provided by law, the holders of Common
Stock vote as one class. The shares of Common Stock do not have cumulative
voting rights. As a result, subject to the voting rights, if any, of the holders
of any shares of the Company's preferred stock which may at the time be
outstanding, including the Preferred Stock, the holders of Common Stock entitled
to exercise more than 50% of the voting rights in an election of directors can
elect 100% of the directors to be elected if they choose to do so. In such
event, the holders of the remaining Common Stock voting for the election of
directors will not be able to elect any persons to the Board of Directors.
DIVIDEND RIGHTS
Subject to the rights of the holders of any shares of the Company's
preferred stock which may at the time be outstanding, including the Preferred
Stock, holders of Common Stock are entitled to such dividends as the Board of
Directors may declare out of funds legally available therefor. For a description
of contractual provisions and other factors that limit or affect the ability or
contractual right of the Company to pay dividends, see "Description of Preferred
Stock -- Dividends."
With the exception of the dividend of the Rights, no dividends have been
paid on the Common Stock, and, prior to October 1, 1982 (the date as of which
the Company became the parent of American), no dividends had been paid on the
common stock of American after the first quarter of 1980.
DELAWARE GENERAL CORPORATION LAW SECTION 203
As a corporation organized under the laws of the State of Delaware, the
Company is subject to Section 203 of the DGCL which restricts certain business
combinations between the Company and an
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<PAGE> 33
"interested stockholder" (in general, a stockholder owning 15% or more of the
Company's outstanding voting stock) or its affiliates or associates for a period
of three years following the date on which the stockholder becomes an
"interested stockholder". The restrictions do not apply if (i) prior to an
interested stockholder becoming such, the Board of Directors approves either the
business combination or the transaction in which the stockholder becomes an
interested stockholder, (ii) upon consummation of the transaction in which any
person becomes an interested stockholder, such interested stockholder owns at
least 85% of the voting stock of the Company outstanding at the time the
transaction commences (excluding shares owned by certain employee stock
ownership plans and persons who are both directors and officers of the Company)
or (iii) on or subsequent to the date an interested stockholder becomes such,
the business combination is both approved by the Board of Directors and
authorized at an annual or special meeting of the Company's shareholders, not by
written consent, by the affirmative vote of at least 66 2/3% of the outstanding
voting stock not owned by the interested stockholder.
LIQUIDATION RIGHTS AND OTHER PROVISIONS
Subject to the prior rights of creditors and the holders of any preferred
stock which may be outstanding from time to time, including the Preferred Stock,
the holders of the Common Stock are entitled in the event of liquidation,
dissolution or winding up to share pro rata in the distribution of all remaining
assets.
The Common Stock is not liable to any calls or assessments and is not
convertible into any other securities. The Certificate of Incorporation provides
that the private property of the stockholders shall not be subject to the
payment of corporate debts. There are no redemption or sinking fund provisions
applicable to the Common Stock, and the Certificate of Incorporation provides
that there shall be no preemptive rights.
The Certificate of Incorporation provides that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the directors's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the DGCL or (iv) for any transaction from which the director derived an improper
personal benefit. Section 174 of the DGCL specifies conditions under which
directors of Delaware corporations may be liable for unlawful dividends or
unlawful stock purchases or redemptions.
The Transfer Agent and Registrar for the Common Stock is First Chicago
Trust Company of New York.
DESCRIPTION OF RIGHTS AND JUNIOR PREFERRED STOCK
RIGHTS
On February 13, 1986, the Board of Directors declared a dividend of one
Right for each outstanding share of Common Stock to stockholders of record on
February 24, 1986. Each share of Common Stock issued thereafter and before the
Distribution Date (as defined below) or earlier redemption, exchange or
expiration of the Rights pursuant to the Rights Agreement, dated as of February
13, 1986, as amended (the "Rights Agreement"), between the Company and First
Chicago Trust Company of New York (as successor Rights Agent to J. Henry
Schroder Bank and Trust Company), will also be accompanied by one Right. The
following statements with respect to the Rights are summaries and are subject to
the detailed provisions of the Rights Agreement, which is filed as an exhibit to
the Registration Statement. This summary does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the provisions of
the Rights Agreement, which are incorporated by reference into this Prospectus.
Following the Distribution Date and except as described below, each Right
entitles the registered holder thereof to purchase from the Company one
one-hundredth of a share of Junior Preferred Stock at a price (the "Purchase
Price") of $200 per one one-hundredth of a share of Junior Preferred Stock,
subject to adjustment. See "-- Junior Preferred Stock". The Rights are not
exercisable until the Distribution Date. The Rights will expire on February 29,
1996, unless exercised in connection with a transaction of the type described
below or unless earlier redeemed or exchanged by the Company.
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<PAGE> 34
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Initially, ownership of the Rights will be evidenced by the Common Stock
certificates representing shares then outstanding, and no separate certificates
representing the Rights (the "Rights Certificates") will be distributed. Until
the Distribution Date (or earlier redemption, exchange or expiration of the
Rights), the Rights will be transferable only with the Common Stock, and the
surrender for transfer of any certificate for Common Stock will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earlier of (i) 10 days following a public announcement
that a person or group of affiliates or associated persons (other than the
Company, its subsidiaries or employee benefit plans thereof) (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership of
10% or more of the outstanding Common Stock or (ii) 10 days following the
commencement of or announcement of an intention to make a tender offer or
exchange offer, the consummation of which would result in the Acquiring Person
becoming the beneficial owner of 30% or more of such outstanding Common Stock
(such date being called the Distribution Date). As soon as practicable following
the Distribution Date, Rights Certificates will be mailed to holders of record
of Common Stock as of the close of business on the Distribution Date. After such
time, such separate Rights Certificates alone will evidence the Rights and could
trade independently from the Common Stock.
In the event that any person or group of affiliated or associated persons
becomes the beneficial owner of 10% or more of the outstanding Common Stock,
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price of the
Right and in lieu of Junior Preferred Stock, that number of shares of Common
Stock having a market value at the time of the 10% acquisition of two times the
then current Purchase Price.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power is acquired, proper provision will be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price of the Right and in lieu of Junior Preferred Stock,
that number of shares of common stock of the acquiring company which at the time
of such transaction would have a market value of two times the then current
Purchase Price.
At any time after any person or group has become an Acquiring Person but
before any person or group becomes the beneficial owner of 50% or more of the
outstanding Common Stock, the Board of Directors may exchange each Right (other
than Rights beneficially owned by the Acquiring Person) for one share of Common
Stock (or one one-hundredth of a share of Junior Preferred Stock), subject to
adjustment.
At any time prior to the time that an Acquiring Person acquires beneficial
ownership of 10% or more of the outstanding Common Stock, the Board of Directors
may redeem the Rights in whole, but not in part, at a price of $.05 per Right
(the "Redemption Price"). Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
The Purchase Price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment upon the occurrence of certain events with respect to the
Company, including stock dividends, sub-divisions, combinations,
reclassifications, rights or warrants offerings of Junior Preferred Stock at
less than the then current market price and certain distributions of property or
evidences of indebtedness of the Company to holders of Junior Preferred Stock,
all as set forth in the Rights Agreement.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors since the Rights may be
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<PAGE> 35
redeemed by the Company at $.05 per Right prior to the time that a person or
group has acquired beneficial ownership of 10% or more of the Common Stock.
JUNIOR PREFERRED STOCK
In connection with the Rights Agreement, 1,000,000 shares of Junior
Preferred Stock have been authorized and reserved for issuance by the Board of
Directors. No shares of Junior Preferred Stock are outstanding as of the date
hereof. The following statements with respect to the Junior Preferred Stock are
summaries and are subject to the detailed provisions of the Certificate of
Incorporation and the certificate of designation relating to the Junior
Preferred Stock, which is filed as an exhibit to the Registration Statement (the
"Junior Preferred Stock Certificate of Designation"). These statements do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, the terms of the Certificate of Incorporation and the Junior
Preferred Stock Certificate of Designation, which are incorporated by reference
in this Prospectus.
Subject to the prior payment of cumulative dividends on any class of
preferred stock ranking senior to the Junior Preferred Stock, a holder of Junior
Preferred Stock will be entitled to cumulative dividends out of funds legally
available therefor, when, as and if declared by the Board of Directors, at a
quarterly rate per share of Junior Preferred Stock equal to the greater of (a)
$5.00 or (b) 100 times (subject to adjustment upon certain dilutive events) the
aggregate per share amount of all cash dividends and 100 times (subject to
adjustment upon certain dilutive events) the aggregate per share amount of all
non-cash dividends or other distributions (other than dividends payable in
Common Stock) declared on Common Stock since the last quarterly dividend payment
date for the Junior Preferred Stock (or since the date of issuance of the Junior
Preferred Stock if no such dividend payment date has occurred).
A holder of Junior Preferred Stock will be entitled to 100 votes (subject
to adjustment upon certain dilutive events) per share of Junior Preferred Stock
on all matters submitted to a vote of shareholders of the Company. Such holders
will vote together with the holders of Common Stock as a single class.
In the event of a merger or consolidation of the Company which results in
Common Stock being exchanged or changed for other stock, securities, cash and/or
other property, the shares of Junior Preferred Stock shall similarly be
exchanged or changed in an amount per share equal to 100 times (subject to
adjustment upon certain dilutive events) the aggregate amount of stock,
securities, cash and/or other property, as the case may be, into which each
share of Common Stock has been exchanged or changed.
In the event of liquidation, dissolution or winding up of the Company, a
holder of Junior Preferred Stock will be entitled to receive $100 per share,
plus accrued and unpaid dividends, before any distribution may be made to
holders of shares of stock of the Company ranking junior to the Junior Preferred
Stock, and the holders of Junior Preferred Stock are entitled to receive an
aggregate amount per share equal to 100 times (subject to adjustment upon
certain dilutive events) the aggregate amount to be distributed per share to
holders of Common Stock.
The Junior Preferred Stock is not subject to redemption. The terms of the
Junior Preferred Stock provide that the Company is subject to certain
restrictions with respect to dividends and distributions on and redemptions and
purchases of shares of stock of the Company ranking junior to or on a parity
with the Junior Preferred Stock in the event that payments of dividends or other
distributions payable on the Junior Preferred Stock are in arrears.
DESCRIPTION OF PREFERRED STOCK
The following statements with respect to the Preferred Stock are summaries
and are subject to the detailed provisions of the Certificate of Incorporation
and the By-Laws, as well as the certificate of designations relating to the
Preferred Stock (the "Certificate of Designation"). These statements do not
purport to be complete, or to give full effect to the provisions of statutory or
common law, and are subject to, and are qualified in their entirety by reference
to, the terms of the Certificate of Incorporation, the By-Laws,
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<PAGE> 36
and the Certificate of Designation, copies of which are filed as exhibits to the
Registration Statement and are incorporated by reference into this Prospectus.
GENERAL
The Certificate of Incorporation provides that the Company's Board of
Directors (the "Board of Directors") is authorized, without stockholder
approval, to provide for the issuance of up to 20,000,000 shares of preferred
stock, from time to time, in one or more series, and to fix any voting powers,
full or limited, and the designations, preferences and relative participating,
optional or other special rights, applicable to the shares to be included in any
such series and any qualifications, limitations or restrictions thereon. Thus,
without stockholder approval, the Company could authorize the issuance of
preferred stock with voting, conversion and other rights that could dilute the
voting power and other rights of holders of the Common Stock and other series of
preferred stock, including the Preferred Stock. No shares of preferred stock of
the Company (other than the Preferred Stock) are outstanding as of the date
hereof. However, 1,000,000 shares of Junior Preferred Stock have been authorized
and reserved for issuance in connection with the Rights described above in
"Description of Rights and Junior Preferred Stock."
The Board of Directors has designated 2,200,000 shares of the Company's
preferred stock as the Preferred Stock. When issued, the Preferred Stock was
fully paid and nonassessable. The holders of the Preferred Stock have no
preemptive rights to subscribe for any additional securities which may be issued
by the Company.
RANKING
The Preferred Stock, with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company, ranks prior to the
Common Stock and Junior Preferred Stock. While any shares of Preferred Stock are
outstanding, the Company may not authorize, create or issue any class of stock
that shall, with respect to dividend rights or rights upon liquidation, winding
up and dissolution of the Company, rank prior to the Preferred Stock without the
consent of the holders of two-thirds of the outstanding shares of Preferred
Stock. See "-- Voting Rights" below. The Company may, however, create additional
classes of stock or issue series of preferred stock ranking on a parity with the
Preferred Stock with respect to the payment of dividends or upon liquidation,
dissolution and winding up without the consent of any holder of Preferred Stock.
DIVIDENDS
Holders of shares of Preferred Stock are entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available therefor,
cash dividends at an annual rate of $30.00 per share (equivalent to $3.00 per
Depositary Share), payable quarterly in February 1, May 1, August 1 and November
1 of each year, except that if any such date is a Saturday, Sunday or legal
holiday then such dividend shall be payable on the next day that is not a
Saturday, Sunday or legal holiday. Each such dividend is payable to holders of
record as they appear on the stock transfer books on such record dates, not more
than 60 nor less than 10 days preceding the payment dates thereof, as are fixed
by the Board of Directors. Dividends have accrued from the date of issuance of
the Preferred Stock. Dividends are cumulative from such date, whether or not in
any dividend period or periods there shall be funds of the Company legally
available for the payment of such dividends. Accumulations of dividends on
shares of Preferred Stock do not bear interest. Dividends payable on the
Preferred Stock for any period greater or less than a full dividend period are
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Dividends payable on the Preferred Stock for each full dividend period are
computed by dividing the annual dividend rate by four.
A certain debt agreement of the Company contains covenants restricting the
declaration or payment of any dividend or the making of any distribution in
respect of the Company's capital stock (other than a dividend or distribution
payable in capital stock of the Company), including Preferred Stock and Common
Stock, or the purchase, redemption or other acquisition or retirement of any
capital stock of the Company, including Preferred Stock and Common Stock, by the
Company or any subsidiary of the Company. At June 30, 1994, under the provisions
of this agreement, all of the retained earnings of the Company were
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<PAGE> 37
available for the payment of dividends. In addition, the Indenture relating to
the Debentures will contain a covenant restricting the Company's ability to
declare or pay dividends or distributions on its capital stock or repurchase,
redeem or otherwise acquire shares of its capital stock in certain circumstances
as described in "Description of Debentures -- Interest". There presently are no
other contractual agreements of the Company that limit the payment by the
Company of dividends on shares of Preferred Stock or Common Stock. However,
because the Company is primarily a holding company that conducts its business
through its wholly-owned subsidiaries, the Company's cash flow and consequent
ability to pay dividends on the Preferred Stock and the Common Stock are
primarily dependent upon the earnings of such subsidiaries, particularly
American, and on dividends and other payments therefrom. See "Description of
Debentures -- Subordination."
No full dividends shall be declared or paid or set apart for payment on
stock of the Company of any series ranking, as to dividends, on a parity with
(the "Parity Dividend Stock") or junior to (the "Junior Dividend Stock") the
Preferred Stock unless full dividends for the immediately preceding dividend
period on the Preferred Stock (including any accumulation in respect of unpaid
dividends for prior dividend periods) have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof is
set apart for such payment. When dividends are not so paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Preferred Stock
and any Parity Dividend Stock, dividends upon the Preferred Stock and such
Parity Dividend Stock shall be declared pro rata so that the amount of dividends
declared per share on the Preferred Stock and such Parity Dividend Stock shall
in all cases bear to each other the same ratio that accrued dividends for the
then-current dividend period per share on the shares of Preferred Stock
(including any accumulation in respect of unpaid dividends for prior dividend
periods) and accrued dividends, including required or permitted accumulations,
if any, on shares of such Parity Dividend Stock, bear to each other. Unless full
dividends on the Preferred Stock have been declared and paid or set apart for
payment for the immediately preceding dividend period (including any
accumulation in respect of unpaid dividends for prior dividend periods) (a) no
dividend or distribution (other than in shares of Junior Dividend Stock) may be
declared, set aside or paid on the Junior Dividend Stock, (b) the Company may
not repurchase, redeem or otherwise acquire any shares of its Junior Dividend
Stock (except by conversion into or exchange for Junior Dividend Stock and
except for a redemption, purchase or other acquisition of shares of Junior
Dividend Stock made for the purpose of an employee incentive or benefit plan of
the Company or any of its subsidiaries) and (c) the Company may not, directly or
indirectly, repurchase, redeem or otherwise acquire any shares of Preferred
Stock or Parity Dividend Stock (except by conversion into or exchange for Junior
Dividend Stock) other than pursuant to a concurrent redemption of all of the
outstanding shares of Preferred Stock or except in accordance with a purchase or
exchange offer made by the Company to all holders of Preferred Stock and Parity
Dividend Stock. The Company does not currently have outstanding any Parity
Dividend Stock.
LIQUIDATION RIGHTS
In the case of the voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, holders of shares of Preferred Stock
will be entitled to receive the liquidation preference of $500 per share
(equivalent to $50 per Depositary Share), plus an amount equal to any accrued
and unpaid dividends to the payment date, before any payment or distribution is
made to the holders of Common Stock or any series or class of stock hereafter
issued that ranks junior as to liquidation rights to the Preferred Stock
("Junior Liquidation Stock"), but the holders of the shares of the Preferred
Stock will not be entitled to receive the liquidation preference of such shares
until the liquidation preference of any other series or class of stock hereafter
issued that ranks senior as to liquidation rights to the Preferred Stock
("Senior Liquidation Stock") has been paid in full. If, upon such voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Company, the assets of the Company are insufficient to pay in full the amounts
payable thereon with respect to the Preferred Stock and any series or classes of
stock ranking on a parity with the Preferred Stock as to liquidation,
dissolution or winding up, the holders of the Preferred Stock and of such other
class or series of stock will share ratably in any such distribution of assets
of the Company (after payment of the liquidation preference of the Senior
Liquidation Stock) first in proportion to their respective liquidation
preferences until such preferences are paid in full, and then in proportion to
their respective amounts of accrued but unpaid dividends. After payment in full
of the liquidation preference of the shares of the Preferred Stock and accrued
dividends, the holders of such shares will not be entitled to any further
participation in any distribution of
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<PAGE> 38
assets by the Company. Neither the sale of all or substantially all the assets
of the Company, nor the merger or consolidation of the Company into or with any
other corporation, will be deemed to be a liquidation, dissolution or winding up
of the Company.
REDEMPTION
The Preferred Stock is not subject to any mandatory redemption, sinking
fund or other obligation of the Company to redeem or retire the Preferred Stock,
and will not be redeemable prior to February 1, 1996. On and after such date,
the Preferred Stock is redeemable at the option of the Company upon notice at
any time, in whole or in part, at the following redemption prices per share
(expressed as a percentage of the $500 liquidation preference thereof), plus
accrued and unpaid dividends, if any, up to but excluding the redemption date,
if redeemed during the twelve-month period commencing February 1 of the years
indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---------------------------- ----------
<S> <C>
1996........................ 104.2%
1997........................ 103.6%
1998........................ 103.0%
1999........................ 102.4%
2000........................ 101.8%
2001........................ 101.2%
2002........................ 100.6%
2003 and thereafter......... 100.0%
</TABLE>
If fewer than all the outstanding shares of Preferred Stock are to be redeemed,
the Company will select those shares to be redeemed by lot or pro rata or in
such manner as the Board of Directors may determine.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of shares of Preferred
Stock to be redeemed at the address shown on the stock transfer books. After the
redemption date, dividends will cease to accumulate on the shares of Preferred
Stock called for redemption and all rights of the holders of such shares will
terminate, except the right to receive the redemption price without interest.
VOTING RIGHTS
The holders of the Preferred Stock have no voting rights except as
described below or as required by law.
At any time dividends in an aggregate amount equal to at least six
quarterly dividends on the Preferred Stock (whether or not consecutive) shall
have accrued and be unpaid, the maximum authorized number of directors of the
Company will be increased by two and the holders of the Preferred Stock shall
have the right to a separate class vote (together with the holders of shares of
any Parity Dividend Stock upon which like voting rights have been conferred and
are exercisable ("Voting Parity Stock")) to elect two members of the Board of
Directors at the next annual meeting of stockholders and thereafter until
dividends on the Preferred Stock have been paid or declared and set apart for
payment. Upon payment or declaration and setting apart of funds for payment of
all such dividends in arrears, the term of office of each director elected will
immediately terminate and the number of directors constituting the entire Board
of Directors of the Company will be reduced by the number of directors elected
by the holders of the Preferred Stock and Voting Parity Stock.
Additionally, without the affirmative vote of the holders of two-thirds of
the shares of Preferred Stock then outstanding (voting separately as a class
together with any Voting Parity Stock), the Company may not, either directly or
indirectly or through merger or consolidation with any other corporation, (i)
approve the authorization, creation or issuance of, or an increase in the
authorized or issued amount of, any class or series of stock ranking prior to
the shares of Preferred Stock in rights and preferences or any security
convertible into any such class or series of stock, or (ii) amend, alter or
repeal its Certificate of Incorporation or the Certificate of Designation so as
to materially and adversely affect the preferences, rights, powers, privileges,
qualifications or restrictions of the Preferred Stock. An amendment which
increases the number of authorized shares of or authorizes the creation or
issuance of other classes or series of preferred stock ranking junior to or on a
parity with the Preferred Stock with respect to the payment of dividends or
distribution of assets on liquidation, dissolution or winding up shall not be
considered to be such an adverse change.
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CONVERSION
Shares of the Preferred Stock are convertible at the option of the holder
thereof at any time into such number of whole shares of Common Stock as is equal
to the aggregate liquidation preference of the shares of Preferred Stock
surrendered for conversion divided by the conversion price of $78.75 per share
of Common Stock, subject to adjustment as described below. Shares of Preferred
Stock surrendered for conversion during the period after any dividend payment
record date and prior to the corresponding dividend payment date must be
accompanied by payment of an amount equal to the dividend payable on such shares
on such dividend payment date. Shares of Preferred Stock called for redemption
will not be convertible after the close of business on the business day
preceding the date fixed for redemption, unless the Company defaults in payment
of the redemption price.
The initial conversion price of $78.75 per share of Common Stock is subject
to adjustment (under formulae set forth in the Certificate of Designation) in
certain events, including: (i) the issuance of Common Stock as a dividend or
distribution on Common Stock of the Company; (ii) certain subdivisions and
combinations of the Common Stock; (iii) the issuance to all holders of Common
Stock of certain rights or warrants to purchase Common Stock; (iv) the
distribution to all holders of Common Stock of shares of capital stock of the
Company (other than Common Stock) or evidences of indebtedness of the Company or
assets (including securities, but excluding those rights, warrants, dividends
and distributions referred to above and dividends and distributions in
connection with the liquidation, dissolution or winding up of the Company or
paid in cash); (v) distributions consisting of cash, excluding any quarterly
cash dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (x) the
amount per share of Common Stock of the next preceding quarterly cash dividend
on the Common Stock to the extent that such preceding quarterly dividend did not
require an adjustment of the Conversion Price pursuant to this clause (v) (as
adjusted to reflect subdivisions or combinations of the Common Stock), and (y)
3.75 percent of the average of the daily Closing Prices (as defined in the
Certificate of Designation) of the Common Stock for the ten consecutive Trading
Days (as defined in the Certificate of Designation) immediately prior to the
date of declaration of such dividend, and excluding any dividend or distribution
in connection with the liquidation, dissolution or winding up of the Company;
and (vi) payment in respect of a tender or exchange offer by the Company or any
subsidiary of the Company for the Common Stock to the extent that the cash and
value of any other consideration included in such payment per share of Common
Stock exceeds the current market price per share of Common Stock on the last
Trading Day preceding the date on which the Company becomes irrevocably
obligated to make such payment. If any adjustment is required to be made as set
forth in clause (v) above as a result of a distribution which is a quarterly
dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant to such clause (v). If an adjustment is required to be made as
set forth in (v) above as a result of a distribution which is not a quarterly
dividend, such adjustment would be based upon the full amount of such
distribution.
In the event that the rights issued pursuant to the Rights Agreement (as
defined below) are separately distributed to holders of Common Stock upon the
occurrence of certain events specified in the Rights Agreement or otherwise,
such that holders of Preferred Stock would thereafter not be entitled to receive
any such rights in respect of the Common Stock issuable upon conversion of such
Preferred Stock, the conversion price of the Preferred Stock will be adjusted as
provided in clause (iv) of the preceding paragraph.
The Company from time to time may to the extent permitted by law reduce the
conversion price by any amount for any period of at least 20 days, in which case
the Company shall give at least 15 days' notice of such reduction, if the Board
of Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. The Company
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes.
If any transaction shall occur (including without limitation (i) any
recapitalization or reclassification of shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par
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<PAGE> 40
value to par value, or as a result of a subdivision or combination of the Common
Stock), (ii) any consolidation or merger of the Company with or into another
person or any merger of another person into the Company (other than a merger
that does not result in a reclassification, conversion, exchange or cancellation
of Common Stock), (iii) any sale or transfer of all or substantially all of the
assets of the Company, or (iv) any compulsory share exchange pursuant to which
either shares of Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of a sale or transfer of all
or substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
appropriate provision shall be made so that the holder of each share of
Preferred Stock then outstanding shall have the right thereafter to convert such
share only into (x) in the case of any such transaction that does not constitute
a Common Stock Fundamental Change (as defined below) and subject to funds being
legally available for such purpose under applicable law at the time of such
conversion, the kind and amount of the securities, cash or other property that
would have been receivable upon such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock issuable upon conversion of such share of
Preferred Stock immediately prior to such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange, after giving effect, in
the case of any Non-Stock Fundamental Change (as defined below), to any
adjustment in the conversion price in accordance with clause (i) of the
following paragraph, and (y) in the case of any such transaction that
constitutes a Common Stock Fundamental Change, common stock of the kind received
by holders of Common Stock as a result of such Common Stock Fundamental Change
in an amount determined in accordance with clause (ii) of the following
paragraph. The company formed by such consolidation or resulting from such
merger or that acquires such assets or that acquires the Company's shares, as
the case may be, shall make provisions in its certificate or articles of
incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments that, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent documents,
shall be as nearly equivalent as may be practicable to the relevant adjustments
provided for in the preceding paragraphs and in this paragraph.
Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Fundamental Change (as defined below) occurs, then the
conversion price in effect will be adjusted immediately after such Fundamental
Change as follows:
(1) in the case of a Non-Stock Fundamental Change, the conversion
price of the shares of Preferred Stock immediately following such Non-Stock
Fundamental Change shall be the lower of (A) the conversion price in effect
immediately prior to such Non-Stock Fundamental Change, but after giving
effect to any other prior adjustments effected pursuant to the preceding
paragraphs, and (B) the product of (1) the greater of the Applicable Price
(as defined below) and the then applicable Reference Market Price (as
defined below) and (2) a fraction, the numerator of which is $500 and the
denominator of which is (x) the amount of the redemption price for one
share of Preferred Stock if the redemption date were the date of such
Non-Stock Fundamental Change (or, for the twelve-month periods commencing
February 1, 1994 and 1995, the product of 105.4% and 104.8%, respectively,
times $500) plus (y) any then-accumulated and unpaid dividends on such
Preferred Stock; and
(2) in the case of a Common Stock Fundamental Change, the conversion
price of the shares of Preferred Stock immediately following such Common
Stock Fundamental Change shall be the conversion price in effect
immediately prior to such Common Stock Fundamental Change, but after giving
effect to any other prior adjustments effected pursuant to the preceding
paragraphs, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as defined below) and the denominator of which is
the Applicable Price; provided, however, that in the event of a Common
Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror, or other third party (and cash, if any, paid with
respect to any fractional interests in such common stock resulting from
such Common Stock Fundamental Change) and (B) all of the Common Stock of
the Company shall have been exchanged for, converted into, or acquired for,
common stock of the successor, acquiror or other third party (and any cash
with respect to fractional interests), the conversion price of the shares
of Preferred Stock immediately following such
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Common Stock Fundamental Change shall be the conversion price in effect
immediately prior to such Common Stock Fundamental Change multiplied by a
fraction, the numerator of which is one (1) and the denominator of which is
the number of shares of common stock of the successor, acquiror, or other
third party received by a holder of one share of Common Stock as a result
of such Common Stock Fundamental Change.
Depending upon whether a Fundamental Change is a Non-Stock Fundamental
Change or a Common Stock Fundamental Change, a holder may receive significantly
different consideration upon conversion. In the event of a Non-Stock Fundamental
Change, the holder has the right to convert shares of Preferred Stock into the
kind and amount of the shares of stock and other securities or property or
assets (including cash), except as otherwise provided above, as is determined by
the number of shares of Common Stock receivable upon conversion at the
conversion price as adjusted in accordance with clause (i) of the preceding
paragraph. However, in the event of a Common Stock Fundamental Change in which
less than 100% of the value of the consideration received by a holder of Common
Stock is common stock of the successor, acquiror or other third party, a holder
of a share of Preferred Stock who converts such share following the Common Stock
Fundamental Change will receive consideration in the form of such common stock
only, whereas a holder who converted such share prior to the Common Stock
Fundamental Change would have received consideration in the form of such common
stock as well as any other securities or assets (which may include cash)
issuable upon conversion of such share of Preferred Stock immediately prior to
such Common Stock Fundamental Change.
The term "Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a holder of one share of Common Stock and (ii) in
the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the reported last sale price for one share of
the Common Stock (determined as provided in the Certificate of Designation)
during the 10 Trading Days immediately prior to the record date for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of the Common Stock shall
have the right to receive such cash, securities, property or other assets.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the National Market System of NASDAQ; provided, however, that a
Fundamental Change shall not be a Common Stock Fundamental Change unless either
(i) the Company continues to exist after the occurrence of such Fundamental
Change and the outstanding shares of Preferred Stock continue to exist as
outstanding shares of Preferred Stock, or (ii) not later than the occurrence of
such Fundamental Change, the outstanding shares of Preferred Stock are converted
into or exchanged for shares of convertible preferred stock of a corporation
succeeding to the business of the Company, which convertible preferred stock has
powers, preferences and relative, participating, optional or other rights, and
qualifications, limitations and restrictions substantially similar to those of
the Preferred Stock.
The term "Fundamental Change" means the occurrence of any transaction or
event or series of transactions or events pursuant to which all or substantially
all of the Common Stock of the Company shall be exchanged for, converted into,
acquired for or shall constitute solely the right to receive cash, securities,
property or other assets (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); provided, however, in the case of any such
series of transactions or events, for purposes of adjustment of the conversion
price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock of the Company shall have been exchanged
for, converted into, or acquired for, or shall constitute solely the right to
receive, such cash, securities, property or other assets, but the adjustment
shall be based upon the consideration that the
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<PAGE> 42
holders of Common Stock received in the transaction or event as a result of
which more than 50% of the Common Stock of the Company shall have been exchanged
for, converted into, or acquired for, or shall constitute solely the right to
receive, such cash, securities, property or other assets; and provided, further,
that such term does not include (i) any such transaction or event in which the
Company and/or any of its subsidiaries are the issuers of all the cash,
securities, property or other assets exchanged, acquired or otherwise issued in
such transaction or event, or (ii) any such transaction or event in which the
holders of Common Stock receive securities of an issuer other than the Company
or any of its subsidiaries if, immediately following such transaction or event,
such holders hold a majority of the securities having the power to vote normally
in the election of directors of such other issuer outstanding immediately
following such transaction or other event.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the reported last sale price for one share of
the common stock received by holders of Common Stock (determined as provided in
the Certificate of Designation) in such Common Stock Fundamental Change during
the 10 Trading Days immediately prior to the date fixed for the determination of
the holders of Common Stock entitled to receive such common stock or, if there
is no such date, prior to the date upon which the holders of Common Stock shall
have the right to receive such common stock.
The term "Reference Market Price" shall initially mean $42.3333 and, in the
event of any adjustment to the conversion price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the conversion price after giving
effect to any such adjustment shall always be the same as the ratio of the
initial Reference Market Price to the initial conversion price of $78.75 per
share.
No adjustment to the conversion price will be required to be made in any
case until cumulative adjustments amount to 1% or more of the conversion price.
DESCRIPTION OF DEPOSITARY SHARES
The Depositary Shares were sold by the Company on February 4, 1993 in
reliance on Section 4(2) under the Securities Act to Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co. (the "Initial Purchasers"), who informed
the Company that they resold the Depositary Shares (i) within the United States
to Qualified Institutional Buyers (as defined in Rule 144A under the Securities
Act) in reliance on Rule 144A under the Securities Act, (ii) within the United
States to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that, prior
to their purchase, delivered a letter to the Initial Purchasers and the Company
containing certain representations and agreements and (iii) outside the United
States to certain persons other than U.S. persons in reliance on Regulation S
under the Securities Act.
GENERAL
Each Depositary Share represents 1/10 of a share of Preferred Stock. The
Company has deposited the shares of Preferred Stock underlying the Depositary
Shares pursuant to the Deposit Agreement. Subject to the terms of the Deposit
Agreement, each owner of Depositary Shares is entitled, in proportion to the
applicable fractional interest in a share of Preferred Stock underlying such
Depositary Shares, to all the rights and preferences of the Preferred Stock
underlying such Depositary Shares (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares are evidenced by receipts ("Depositary Receipts")
issued pursuant to the Deposit Agreement. Immediately following the issuance and
delivery of the Preferred Stock by the Company to the Depositary, the Company
caused the Depositary to issue, on behalf of the Company, the Depositary
Receipts evidencing the Depositary Shares to the initial purchasers thereof.
Copies of the Deposit Agreement and Form
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of Depositary Receipt may be obtained from the Company upon request, and the
following summary is qualified in its entirety by reference thereto.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date, subject to certain obligations of holders to file proofs, certificates and
other information and to pay certain charges and expenses to the Depositary.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares in
proportion to the numbers of Depositary Shares owned by such holders on the
relevant record date, subject to certain obligations of holders to file proofs,
certificates and other information and to pay certain charges and expenses to
the Depositary, unless the Depositary determines that it is not feasible to make
such distribution, in which case the Depositary may, with the approval of the
Company, sell such property and distribute the net proceeds from such sale to
such holders.
WITHDRAWAL OF STOCK
Upon surrender of Depositary Receipts at the corporate trust office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption), a holder of Depositary Shares evidenced thereby is entitled to have
the Depositary deliver to such holder at such office to or upon his order, the
number of whole shares of Preferred Stock underlying the Depositary Shares
evidenced by the surrendered Depositary Receipts, and any money or other
property represented by such Depositary Shares. Holders of Depositary Shares
will be entitled to receive whole shares of Preferred Stock on the basis of one
share of Preferred Stock for each ten Depositary Shares, but holders of such
whole shares of Preferred Stock will not thereafter be entitled to receive
Depositary Shares therefor. If the Depositary Receipts delivered by the holder
evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of whole shares of Preferred Stock to be
withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. The
Depositary also acts as Transfer Agent and Registrar for the Preferred Stock.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares of Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares relating to the shares of Preferred Stock so redeemed,
provided the Company shall have paid in full to the Depositary the redemption
price of the Preferred Stock to be redeemed plus an amount equal to any accrued
and unpaid dividends thereon to the date fixed for redemption. The redemption
price per Depositary Share will be equal to 1/10 of the redemption price and any
other amounts per share payable with respect to such shares of Preferred Stock.
If fewer than all of the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot, pro rata or other equitable
method, in each case as may be determined by the Company.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all reasonable action which may be deemed necessary
by the Depositary in order to enable the Depositary to do so. The Depositary
will abstain from voting shares of Preferred Stock to
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the extent it does not receive special instructions from the holders of
Depositary Shares relating to such Preferred Stock.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, are not convertible into Common Stock or
any other securities or property of the Company. Nevertheless, the Depositary
Receipts may be surrendered by holders thereof to the Depositary with written
instructions to the Depositary to instruct the Company to cause conversion of
the Preferred Stock represented by the Depositary Shares evidenced by such
receipts into whole shares of Common Stock, and the Company has agreed that upon
receipt of such instructions and any amounts payable in respect thereof, it will
cause the conversion thereof utilizing the same procedures as those provided for
delivery of Preferred Stock to effect such conversions. If the Depositary Shares
represented by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary Shares not to
be converted. See "Description of Preferred Stock -- Conversion."
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority (or, in the case of amendments relating to or
affecting rights to receive dividends or distributions, or voting, redemption or
conversion rights, two-thirds) of the Depositary Shares then outstanding.
The Deposit Agreement may be terminated by the Company upon not less that
60 days' notice whereupon the Depositary shall deliver or make available to each
holder of Depositary Receipts, upon surrender of the Depositary Receipts held by
such holder, such number of whole or fractional shares of Preferred Stock
represented by such receipts. The Deposit Agreement will terminate automatically
if (i) all outstanding Depositary Shares relating thereto have been redeemed,
(ii) there has been a final distribution in respect of the Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distribution has been distributed to the holders of Depositary Receipts or
(iii) each share of Preferred Stock shall have been converted into or exchanged
for shares of Common Stock.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay the fees and expenses of the Depositary in connection with the
performance of its duties under the Deposit Agreement. Holders of Depositary
Receipts will pay transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary, which successor Depositary must be appointed within 60
days after delivery of the notice of resignation or removal and must be a bank
or trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Depositary will forward to holders of Depositary Shares any reports and
communications from the Company which are received by the Depositary.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of
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the Company and the Depositary under the Deposit Agreement will be limited to
performing their duties thereunder without negligence or willful misconduct, and
the Company and the Depositary will not be obligated to prosecute or defend any
legal proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Depositary will be
entitled to rely on advice of counsel and accountants, on information provided
by persons presenting Preferred Stock for deposit, holders of Depositary Shares
or other persons believed to be authorized or competent and on documents
believed to be genuine.
In the event the Depositary shall receive conflicting claims, requests or
instructions from any holders of Depositary Receipts, on the one hand, and the
Company, on the other hand, the Depositary shall be entitled to act on such
claims, requests or instructions received from the Company.
BOOK-ENTRY, DELIVERY AND FORM
The Depositary Receipts have been issued in fully registered form, without
coupons. Depositary Shares held by "qualified institutional buyers", as defined
in Rule 144A under the Securities Act ("QIBs"), but not by other purchasers, are
evidenced by a global Depositary Receipt (the "Global Certificate") which has
been deposited with DTC and registered in the name of Cede & Co. ("Cede") as
DTC's nominee. Except as set forth below, the Global Certificate may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee.
QIBs may hold their interests in the Global Certificate directly through
DTC, or indirectly through organizations which are participants in DTC (the
"Participants"). Transfers between Participants will be effected in the ordinary
way in accordance with DTC rules and will be settled in New York Clearing House
funds. The laws of some states require that certain persons take physical
delivery in definitive form of securities. Consequently, the ability to transfer
beneficial interests in the Global Certificate to such persons may be limited.
QIBs who are not Participants may beneficially own interests in the Global
Certificate held by DTC only through Participants or certain banks, brokers,
dealers, trust companies and other parties that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants"). So long as Cede, as the nominee of DTC, is the
registered owner of the Global Certificate, Cede for all purposes will be
considered the sole holder of the Global Certificate. Except as provided below,
owners of beneficial interests in the Global Certificate will not be entitled to
have certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be
considered the holders thereof.
Payment of dividends and the redemption price of the Global Certificate
will be made to Cede, the nominee for DTC, as the registered owner of the Global
Certificate by wire transfer of immediately available funds. Neither the
Company, the Depositary nor any Transfer Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Certificate or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
With respect to any payment of dividends on or the redemption price of the
Global Certificate, DTC's practice is to credit Participants' accounts on the
payment date therefor with payments in amounts proportionate to their respective
beneficial interests in the shares represented by the Global Certificate as
shown on the records of DTC, unless DTC has reason to believe that it will not
receive payment on such payment date. Payments by Participants to owners of
beneficial interests in shares represented by the Global Certificate held
through such Participants will be the responsibility of such Participants, as is
now the case with securities held for the accounts of customers registered in
"street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and banks, the ability of a person having a
beneficial interest in shares represented by the Global Certificate to pledge
such interest to persons or entities that do not participate in the DTC system,
or otherwise take actions in respect of such interest, may be affected by the
lack of a physical certificate evidencing such interest.
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Neither the Company nor the Transfer Agent will have any responsibility for
the performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the Company
will cause Depositary Receipts to be issued in definitive form in exchange for
the Global Certificate.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the material United States federal
income tax considerations relevant to an exchange of Preferred Stock for
Debentures and the ownership, disposition and conversion of Debentures by
persons acquiring Debentures pursuant to the Exchange Offer. To the extent it
relates to matters of law or legal conclusion, this summary constitutes the
opinion of Debevoise & Plimpton, special counsel to the Company. This summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations (including Proposed Regulations and Temporary Regulations)
promulgated thereunder, Internal Revenue Service ("IRS") rulings, official
pronouncements and judicial decisions, all as in effect on the date hereof and
all of which are subject to change, possibly with retroactive effect, or
different interpretations. This summary is applicable only to holders who are
United States persons for federal income tax purposes and who hold Preferred
Stock as a capital asset and who will hold Debentures and any Common Stock
received on conversion of Debentures as capital assets. For a discussion of
certain material United States federal income and estate tax considerations that
may be relevant to non-United States persons, see "Certain Federal Tax
Considerations for Non-United States Persons".
This summary does not discuss all the tax consequences that may be relevant
to a particular holder in light of the holder's particular circumstances and it
is not intended to be applicable in all respects to all categories of investors,
some of whom--such as insurance companies, tax-exempt persons, financial
institutions, regulated investment companies, dealers in securities or
currencies, persons that hold Preferred Stock or the Debentures received in the
exchange as a position in a "straddle", as part of a "synthetic security",
"hedge", "conversion transaction" or other integrated investment or persons
whose functional currency is other than United States dollars--may be subject to
different rules not discussed below. In addition, this summary does not address
any state, local or foreign tax considerations that may be relevant to a
holder's decision to exchange Preferred Stock for Debentures pursuant to the
Exchange Offer.
References in this discussion and below under the caption "Certain Federal
Tax Considerations For Non-United States Persons" to a holder of Preferred Stock
includes a holder of Depositary Shares.
ALL PREFERRED STOCK HOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE EXCHANGE
OF PREFERRED STOCK FOR DEBENTURES AND OF THE OWNERSHIP, CONVERSION AND
DISPOSITION OF DEBENTURES RECEIVED IN THE EXCHANGE IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
EXCHANGE OF PREFERRED STOCK FOR DEBENTURES
The exchange of Preferred Stock for Debentures pursuant to the Exchange
Offer will be a taxable event. If, with respect a particular holder, such
exchange satisfies one of the tests of section 302 of the Code described below,
it will be treated as a transaction in which capital gain or loss is recognized,
rather than as a dividend. The tests under Section 302 of the Code are applied
on a shareholder-by-shareholder basis; therefore, whether an exchange will be
treated as a transaction in which capital gain or loss is recognized or as a
dividend with respect to a particular holder will depend on that holder's
particular facts and circumstances. If the exchange of Preferred Stock for
Debentures is treated as a transaction in which capital gain or loss is
recognized with respect to a particular holder, the capital gain or loss will be
based on the difference between the fair market value of the Debentures received
in the exchange and such holder's adjusted tax basis in the Preferred Stock
surrendered therefor. Such capital gain or loss will be long-term capital gain
or loss if the
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Preferred Stock surrendered in the exchange was held by such holder for more
than one year. The exchanging holder's tax basis in the Debentures received in
the exchange will equal the fair market value of such Debentures at the time of
the exchange and the holding period for such Debentures will begin on the day
after the day on which the Debentures are acquired by such holder.
Pursuant to section 302 of the Code, an exchange will be treated as a
transaction in which gain or loss is recognized if, after giving effect to the
constructive ownership rules of section 318 of the Code, the exchange (i)
represents a "complete termination" of the exchanging holder's stock interest in
the Company, (ii) is "substantially disproportionate" with respect to the
exchanging holder or (iii) is "not essentially equivalent to a dividend" with
respect to the exchanging holder, all within the meaning of section 302(b) of
the Code. Under the constructive ownership rules of section 318 of the Code, a
holder of a Debenture will be treated as owning the Common Stock into which such
Debenture is convertible. Accordingly, an exchange pursuant to the Exchange
Offer could not, standing alone, satisfy the "complete termination" or the
"substantially disproportionate" tests. An exchange will be "not essentially
equivalent to a dividend" as to a particular holder if it results in a
"meaningful reduction" in such holder's interest in the Company (after
application of the constructive ownership rules of section 318 of the Code).
Because the conversion price of a Debenture is higher than that of the
equivalent amount of Preferred Stock to be surrendered therefor, an exchange of
Preferred Stock for Debentures would, standing alone, result in some reduction
in an exchanging holder's constructive stock interest in the Company. There is
no authority, however, on whether such reduction would constitute a "meaningful
reduction" in a particular holder's interest in the Company. No assurance can be
given that any of these tests will be satisfied. EACH HOLDER SHOULD CONSULT ITS
OWN TAX ADVISOR AS TO ITS ABILITY TO SATISFY ANY OF THE FOREGOING TESTS,
POSSIBLY BY DISPOSING OF A PORTION OF ITS INTEREST IN THE COMPANY
CONTEMPORANEOUSLY, AND AS PART OF AN INTEGRATED PLAN, WITH THE EXCHANGE OF
PREFERRED STOCK FOR DEBENTURES, IN LIGHT OF ITS OWN PARTICULAR CIRCUMSTANCES.
If an exchange is treated as a dividend with respect to a particular
exchanging holder under section 302 of the Code, such holder (i) will not
recognize any loss on the exchange and (ii) will recognize dividend income
(rather than capital gain) in an amount equal to the fair market value of the
Debentures received (without regard to such holder's basis in the Preferred
Stock surrendered in the exchange), to the extent of its proportionate share of
the Company's current or accumulated earnings and profits. Such holder's tax
basis in the Debentures generally will equal the fair market value of such
Debentures at the time of the exchange (without regard to such holder's basis in
the Preferred Stock surrendered in the exchange). The holder's adjusted tax
basis in its Preferred Stock surrendered in the exchange will be transferred to
any remaining Preferred Stock held by such holder or, if such holder does not
retain any Preferred Stock, to any Common Stock held by such holder. If the
holder does not retain any stock ownership in the Company, it is unclear whether
the holder will be permitted to add such basis to any Debentures received in the
exchange or will lose such basis entirely. The amount treated as a dividend will
qualify for the 70% dividends received deduction for corporate shareholders,
subject to the minimum holding period requirement under section 246(c) of the
Code and other applicable requirements. Section 1059 of the Code, however, would
require a corporate shareholder to reduce its tax basis (and possibly to
recognize gain) in any stock of the Company held by it by the nontaxed portion
of any such dividend. The holding period for the Debentures will begin on the
day after the day on which the Debentures are acquired by the exchanging holder.
INTEREST AND ORIGINAL ISSUE DISCOUNT ON DEBENTURES
In accordance with sections 1271 through 1275 of the Code and the final
Treasury Regulations promulgated thereunder (the "OID Regulations"), a debt
instrument bears original issue discount ("OID") if its "stated redemption price
at maturity" exceeds its "issue price" by more than a de minimis amount. The
issue price of the Debentures will be their fair market value at the time of the
exchange. The stated redemption price at maturity of a debt instrument generally
includes all amounts payable other than "qualified stated interest" (i.e.,
payments that are unconditionally required to be paid at least annually at a
single fixed rate over the term of the instrument). Because the Company has the
right to elect to extend the interest payment period to a period of up to 20
consecutive quarterly periods, none of the payments of stated interest
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on the Debentures will be qualified stated interest. Thus, the Debentures will
have OID in an amount equal to the excess of all payments required to be made
under the Debentures over their issue price. A holder will be required to
include OID in income, based on a constant yield method, before the receipt of
cash attributable to such income, regardless of such holder's regular method of
accounting, including during any period in which the Company has elected to
extend the interest payment period. A holder will not recognize any income upon
the receipt of a payment of stated interest on a Debenture; instead, a holder's
basis in the Debentures will be increased by the amount of OID includible in
income and reduced by all payments made on the Debentures.
The amount of OID includible in income is the sum of the daily portions of
OID with respect to such Debenture for each day during the taxable year on which
such holder held such Debenture. The daily portion of OID on a Debenture is
determined by allocating to each day in any "accrual period" a ratable portion
of the OID allocable to such accrual period. The term "accrual period" means a
period of any length selected by the holder, provided that each accrual period
must be no longer than one year and each scheduled payment date of principal or
interest on a Debenture must occur either on the final day of an accrual period
or the first day of an accrual period. The amount of OID allocable to an accrual
period is the product of the "adjusted issue price" at the beginning of the
accrual period and the "yield to maturity" of the Debenture. For the first
accrual period, the adjusted issue price of the Debentures will be their issue
price. Thereafter, the adjusted issue price of a Debenture generally will be its
issue price increased by any OID previously includible in the gross income of
the holder and decreased by any payment previously made on the Debenture.
Under the OID Regulations, in computing the yield to maturity of an
instrument the issuer is deemed to elect to exercise any option available to it
under the instrument if doing so will minimize the yield on the instrument. If
the issuer does not exercise such option, then, solely for purposes of the
accrual of OID, the yield and maturity of the instrument are redetermined by
treating the instrument as reissued for an amount equal to its adjusted issue
price. Thus, for example, in the case of the first accrual period with respect
to the Debentures, the OID Regulations require that the yield to maturity of the
Debentures be computed assuming that the Company would elect to extend the
interest payment period to the maximum 20 consecutive quarters (because doing so
would minimize the yield on the Debentures). Assuming quarterly accrual periods,
the aggregate amount of OID for the first quarterly accrual period would equal
the product of the issue price and the yield to maturity (as so determined). If,
contrary to this assumption under the OID Regulations, the Company does not
elect to extend the interest payment period and pays the stated interest at the
end of the first quarterly interest payment period, the instrument will be
treated, solely for OID purposes, as having been reissued on such payment date.
The yield to maturity would then be recomputed, again assuming that the Company
would elect to extend the interest payment period to the maximum 20 consecutive
quarters (again, because doing so would minimize the yield on the Debentures).
The amount of OID for this second accrual period would equal the product of such
recomputed yield to maturity and the adjusted issue price on the date of such
deemed reissuance (i.e., the issue price plus the amount of previously accrued
OID minus the interest previously paid on the Debentures). In the case of the
final accrual period, the allocable OID is the difference between the amount
payable at maturity and the adjusted issue price at the beginning of the accrual
period.
If an exchange of Preferred Stock for Debentures is treated as a dividend
to the exchanging holder (see "-- Exchange of Preferred Stock for Debentures",
above), and the exchanging holder's basis in the Preferred Stock surrendered in
the exchange is transferred to the Debentures, such holder may have acquisition
premium with respect to the Debentures, which would reduce the amount includible
in such holder's income as OID in each taxable year.
SALE OR REDEMPTION OF DEBENTURES
Generally, a sale or redemption of Debentures will result in taxable gain
or loss equal to the difference between the amount realized and the holder's tax
basis in the Debentures. Such gain or loss would be long-term capital gain or
loss if the Debentures were held for more than one year.
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CONVERSION OF DEBENTURES
In general, no gain or loss will be recognized on conversion of Debentures
solely into Common Stock. The tax basis for the Common Stock received upon such
conversion will be equal to the tax basis of the Debentures converted (reduced
by the portion of such basis allocable to any fractional Common Stock interest
paid in cash). The holding period for the Common Stock generally will include
the holding period of the Debentures converted. However, the holding period
allocable to original issue discount during the holder's holding period for the
Debentures converted may be treated as commencing on the day after the date of
the conversion. A holder generally will recognize gain or loss upon a conversion
to the extent that such holder is paid cash in lieu of a fractional share of
Common Stock.
Conversion of the Debentures into cash, property or securities other than
stock of the Company (or stock of a successor to the Company) as a result of a
Fundamental Change or other transaction with similar effect will be treated as a
redemption of the Debentures.
SALE OR DISPOSITION OF COMMON STOCK
A holder will recognize gain or loss on the sale or exchange of Common
Stock received upon conversion of a Debenture equal to the difference between
the amount realized on such sale or exchange and the holder's adjusted tax basis
in the Common Stock sold or exchanged. Such gain or loss would be long-term
capital gain or loss if the holder's holding period for the Common Stock were
more than one year. See "-- Conversion of Debentures".
ADJUSTMENT OF CONVERSION PRICE
Pursuant to Treasury Regulations promulgated under section 305 of the Code,
a holder of a Debenture will be treated as having received a constructive
distribution from the Company upon an adjustment in the conversion price of the
Debentures if (i) as a result of such adjustment, the proportionate interest of
such holder in the assets or earnings and profits of the Company were increased
and (ii) the adjustment was not made pursuant to a bona fide, reasonable
anti-dilution formula. An adjustment in the conversion price would not be
considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the stock into
which the Debentures are convertible. Thus, under certain circumstances, an
increase in the conversion price for the Debentures may be taxable to a holder
as a dividend to the extent of the current or accumulated earnings and profits
of the Company. In addition, the failure to adjust fully the conversion price of
the Debentures to reflect distributions of stock dividends with respect to the
Common Stock (or rights to acquire Common Stock) may result in a taxable
dividend to the holders of the Common Stock and holders of rights to acquire
Common Stock.
BACKUP WITHHOLDING
A holder of Preferred Stock, a Debenture or Common Stock issued upon
conversion of a Debenture may be subject to backup withholding at a rate of 31%
with respect to dividends or interest (including OID) on, or the proceeds of a
sale, exchange, or redemption of, such Preferred Stock, Debenture or Common
Stock, as the case may be, unless (i) such holder is a corporation or comes
within certain other exempt categories and, when required, demonstrates this
fact or (ii) provides a taxpayer identification number, certifies as to no loss
of exemption from backup withholding, and otherwise complies with applicable
backup withholding rules.
CERTAIN FEDERAL TAX CONSIDERATIONS
FOR NON-UNITED STATES PERSONS
The following is a general summary of the material United States federal
income and estate tax considerations relevant to the exchange of Preferred Stock
for Debentures by non-United States persons and the ownership, disposition and
conversion of Debentures by non-United States persons acquiring Debentures
pursuant to the Exchange Offer. To the extent it relates to matters of law or
legal conclusion, this summary constitutes the opinion of Debevoise & Plimpton,
special counsel to the Company. This summary is based on
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the Code, Treasury Regulations (including Proposed Regulations and Temporary
Regulations) promulgated thereunder, IRS rulings, official pronouncements and
judicial decisions, all as in effect on the date hereof and all of which are
subject to change, possibly with retroactive effect, or different
interpretations. This summary does not discuss all the tax consequences that may
be relevant to a particular holder that is a non-United States person in light
of the holder's particular circumstances and it is not intended to be applicable
in all respects to all categories of non-United States persons, some of
whom -- such as foreign governments and certain international
organizations -- may be subject to special rules not discussed below. In
addition, this summary does not address any state, local or foreign tax
considerations that may be relevant to a holder's decision to exchange Preferred
Stock for Debentures pursuant to the Exchange Offer. For a discussion of certain
United States federal income tax considerations, some of which may also be
relevant to non-United States persons, see "Certain Federal Income Tax
Considerations".
As used herein, "non-United States person" means any person who, for United
States federal income tax purposes, is neither (i) a citizen or resident of the
United States (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any State or of any of
its territories or possessions or (iii) a domestic trust or estate.
ALL PREFERRED STOCK HOLDERS THAT ARE NON-UNITED STATES PERSONS ARE ADVISED
TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES OF THE EXCHANGE OF PREFERRED STOCK FOR DEBENTURES AND
THE OWNERSHIP, CONVERSION AND DISPOSITION OF DEBENTURES RECEIVED IN THE EXCHANGE
IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.
EXCHANGE OF PREFERRED STOCK FOR DEBENTURES
Subject to the discussion of backup withholding below, if the exchange of
Preferred Stock for Debentures is treated as a transaction in which gain or loss
is recognized (see "Certain Federal Income Tax Considerations -- Exchange of
Preferred Stock for Debentures", above), an exchanging holder that is a non-
United States person generally will not be subject to United States federal
income tax in respect of gain recognized on such exchange unless (i) such gain
is effectively connected with a trade or business conducted by such non-United
States person within the United States (in which case the branch profits tax may
also apply if the holder is a foreign corporation), (ii) in the case of a
non-United States person that is an individual, such holder is present in the
United States for a period or periods aggregating 183 days or more in the
taxable year of the exchange and certain other conditions are satisfied or (iii)
the Company is or has been a "United States real property holding corporation"
for federal income tax purposes within the five-year period ending on the date
of the exchange (which the Company does not believe it has been or is
currently), and certain other conditions are satisfied and no treaty exception
is applicable.
If the exchange of Preferred Stock for Debentures is treated as a dividend
(see "Certain Federal Income Tax Considerations -- Exchange of Preferred Stock
for Debentures"), such dividend generally will be subject to United States
federal withholding tax at a 30% rate or such lower rate as may be specified by
an applicable income tax treaty. Except as may be otherwise provided in an
applicable income tax treaty, a holder that is a non-United States person will
be taxed at ordinary federal income tax rates on a net income basis if such
dividend is effectively connected with the conduct of a trade or business of
such holder within the United States (in which case the branch profits tax may
also apply if the holder is a foreign corporation) and will not be subject to
the withholding tax described in the preceding sentence.
PAYMENTS ON DEBENTURES
Subject to the discussion of backup withholding below, payments of
principal, premium (if any) and interest (including original issue discount) on
a Debenture by the Company or its agent (in its capacity as such) to a
beneficial owner that is a non-United States person will not be subject to
United States federal withholding tax; provided that (a) such person does not
actually or constructively own 10% or more of the
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total combined voting power of all classes of stock of the Company entitled to
vote, (b) such person is not a controlled foreign corporation that is related to
the Company actually or constructively through stock ownership, (c) such person
is not a bank that acquired its Debenture in consideration of an extension of
credit made pursuant to a loan agreement entered into in the ordinary course of
business and (d) either (i) the beneficial owner certifies to the Company or its
agent, under penalties of perjury, in a suitable form that it is a not a United
States person and provides its name and address or (ii) a qualifying securities
clearing organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business and that holds the
Debenture certifies to the Company or its agent under penalties of perjury that
such statement has been received from the beneficial owner in a suitable form by
it or by a qualifying intermediary and furnishes the payor with a copy thereof.
If a beneficial owner of a Debenture who is a non-United States person is
engaged in a trade or business within the United States and interest (including
original issue discount) and premium, if any, on the Debenture is effectively
connected with the conduct of such trade or business, such beneficial owner may
be subject to United States federal income tax on such interest (including
original issue discount) and premium at ordinary federal income tax rates on a
net basis (in which case the branch profits tax may also apply if the holder is
a foreign corporation).
SALE, EXCHANGE OR RETIREMENT OF DEBENTURES OR COMMON STOCK
Subject to the discussion of backup withholding below, any capital gain
realized upon a sale, exchange or retirement of a Debenture or Common Stock
issued upon conversion of a Debenture by a beneficial owner who is a non-United
States person ordinarily will not be subject to United States federal income tax
unless (i) such gain is effectively connected with a trade or business conducted
by such non-United States person within the United States (in which case the
branch profits tax may also apply if the holder is a foreign corporation), (ii)
in the case of a non-United States person that is an individual, such holder is
present in the United States for a period or periods aggregating 183 days or
more in the taxable year of the sale, exchange or retirement and certain other
conditions are met or (iii) the Company is or has been a "United States real
property holding corporation" for federal income tax purposes (which the Company
does not believe it has been or is currently) and such non-United States person
has held, directly or constructively, more than 5% of the outstanding Common
Stock within the five year period ending on the date of the sale, exchange, or
retirement and no treaty exception is applicable.
DIVIDENDS ON COMMON STOCK
Any dividends that may be paid on Common Stock received upon the conversion
of a Debenture will be subject to the rules relating to dividends described
above under "-- Exchange of Preferred Stock for Debentures".
FEDERAL ESTATE TAXES
Debentures beneficially owned by an individual who at the time of death is
neither a citizen nor a resident of the United States will not be subject to
United States federal estate tax as a result of such individual's death,
provided that at the time of death the income from the Debentures was not or
would not have been effectively connected with the conduct by such individual of
a trade or business within the United States and that such individual qualified
for the exemption from United States federal withholding tax (without regard to
the certification requirements) on premium and interest that is described above
under "-- Payments on Debentures".
Common Stock that is beneficially owned by an individual who is neither a
citizen nor a resident of the United States at the time of death will be
included in such holder's gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.
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BACKUP WITHHOLDING AND INFORMATION REPORTING
Information reporting on IRS Form 1099 and backup withholding at a rate of
31% will not apply to payments of principal, premium (if any) and interest
(including original issue discount) made by the Company or a paying agent to a
non-United States holder on a Debenture if the certification described in clause
(d) under "-- Payments on Debentures" above is received, provided that the payor
does not have actual knowledge that the holder is a United States person.
However, interest (including original issue discount) on a Debenture owned by a
holder that is a non-United States person may be required to be reported
annually on IRS Form 1042S.
Generally, dividends on Common Stock paid to holders that are non-United
States persons that are subject to the 30% or a reduced treaty rate of United
States federal withholding tax will be exempt from backup withholding tax.
Otherwise, backup withholding of United States federal income tax at a rate of
31% may apply to dividends paid with respect to Common Stock to holders that are
not "exempt recipients" and that fail to provide certain information (including
the holder's taxpayer identification number) in the manner required by United
States law and applicable regulations.
Payments of the proceeds from the sale by a holder that is a non-United
States person of a Debenture or Common Stock issued upon conversion of a
Debenture made to or through a foreign office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is a
United States person, a controlled foreign corporation for United States tax
purposes or a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
period, information reporting may apply to such payments. Payments of the
proceeds from the sale of a Debenture or Common Stock to or through the United
States office of a broker is subject to information reporting and backup
withholding unless the holder certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding.
LEGAL OPINIONS
The validity of the Debentures will be passed upon for the Company by
Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022, and for the
Dealer Managers by Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022. Shearman & Sterling from time to time represents the Company with respect
to certain legal matters.
EXPERTS
The consolidated financial statements and schedules of the Company
appearing in the Company's Annual Report (Form 10-K) for the year ended December
31, 1993 have been audited by Ernst & Young LLP independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedules are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, provides
in regard to indemnification of directors and officers as follows:
Sec. 145. Indemnification of officers, directors, employees and agents;
insurance
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2)
if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on
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behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Article VII of the Company's By-Laws provides in regard to indemnification
of directors and officers as follows:
Section 1. Nature of Indemnity. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is
or was or has agreed to become a director or officer of the corporation, or
is or was serving or has agreed to serve at the request of the corporation
as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to
have been taken or omitted in such capacity, and may indemnify any person
who was or is a party or is threatened to be made a party to such an action
by reason of the fact that he is or was or has agreed to become an employee
or agent of the corporation, or is or was serving or has agreed to serve at
the request of the corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or on his
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behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding had no reasonable cause to
believe his conduct was unlawful; except that in the case of an action or
suit by or in the right of the corporation to procure a judgment in its
favor (1) such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in the
defense or settlement of such action or suit, and (2) no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless and
only to the extent that the Delaware Court of Chancery or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such
other court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
Section 2. Successful Defense. To the extent that a director, officer,
employee or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
Section 1 hereof or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
Section 3. Determination That Indemnification Is Proper. Any
indemnification of a director or officer of the corporation under Section 1
hereof (unless ordered by a court) shall be made by the corporation unless
a determination is made that indemnification of the director or officer is
not proper in the circumstances because he has not met the applicable
standard of conduct set forth in Section 1 hereof. Any indemnification of
an employee or agent of the corporation under Section 1 hereof (unless
ordered by a court) may be made by the corporation upon a determination
that indemnification of the employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set
forth in Section 1 hereof. Any such determination shall be made (1) by the
board of directors by a majority vote of a quorum consisting of directors
who were not parties too such action, suit or proceeding or (2) if such a
quorum is not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(3) by the stockholders.
Section 4. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by
the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director
or officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized in
this Article. Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and conditions, if any,
as the board of directors deems appropriate. The board of directors may
authorize the corporation's counsel to represent a director, officer,
employee or agent in any action, suit or proceeding, whether or not the
corporation is a party to such action, suit or proceeding.
Section 5. Procedure for Indemnification of Directors or Officers. Any
indemnification of a director or officer of the corporation under Sections
1 and 2, or advance of costs, charges and expenses of a director or officer
under Section 4 of this Article, shall be made promptly, and in any event
within 60 days, upon the written request of the director or officer. If the
corporation fails to respond within 60 days, then the request for
indemnification shall be deemed to be approved. The right to
indemnification or advances as granted by this Article shall be enforceable
by the director or officer in any court of competent jurisdiction if the
corporation denies such request, in whole or in part. Such persons's costs
and
II-3
<PAGE> 56
expenses incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs,
charges and expenses under Section 4 of this Article where the required
undertaking, if any, has been received by the corporation) that the
claimant has not met the standard of conduct set forth in Section 1 of this
Article, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its board of
directors, its independent legal counsel, and its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 of this
Article, nor the fact that there has been an actual determination by the
corporation (including its board of directors, its independent legal
counsel and its stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of
conduct.
Section 6. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
corporation and each director, officer, employee and agent who serves in
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing
with respect to any state of facts then or previously existing or any
action, suit, or proceeding previously or thereafter brought or threatened
based in whole or in part upon any such state of facts. Such a "contract
right" may not be modified retroactively without the consent of such
director, officer, employee or agent.
The indemnification provided by this Article VII shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and administrators
of such a person.
Section 7. Insurance. The corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the corporation, or is or was serving at the request
of the corporation as director or officer of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him or on his behalf in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under the provisions of this Article, provided that such insurance is
available on acceptable terms, which determination shall be made by a vote
of a majority of the entire board of directors.
Section 8. Savings Clause. If this Article or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each director or officer and
may indemnify each employee or agent of the corporation as to costs,
charges and expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an
action by or in the right of the corporation, to the full extent permitted
by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.
II-4
<PAGE> 57
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
provides in regard to the limitation of liability of directors and officers
as follows:
(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the
certificate of incorporation may also contain any or all of the
following matters:
* * * *
(7) A provision eliminating or limiting the personal liability
of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that
such provision shall not eliminate or limit the liability of a
director: (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law; (iii) under section 174 of this Title; or (iv) for
any transaction from which the director derived an improper personal
benefit. No such provision shall eliminate or limit the liability of
a director for any act or omission occurring prior to the date when
such provision becomes effective. All references in this paragraph to
a director shall also be deemed to refer (x) to a member of the
governing body of a corporation which is not authorized to issue
capital stock, and (y) to such other person or persons, if any, who,
pursuant to a provision of the certificate of incorporation in
accordance with subsection (a) of sec. 141 of this title, exercise or
perform any of the powers or duties otherwise conferred or imposed
upon the board of directors by this title.
Article Ninth of the Company's Certificate of Incorporation provides in
regard to the limitation of liability of directors and officers as follows:
NINTH: No director of the corporation shall be 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 shareholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.
The Company's directors and officers are also insured against claims
arising out of the performance of their duties in such capacities.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- --------------- ------------------------------------------------------------------------
<S> <C>
4(a) -- Certificate of Incorporation of the Company, as amended.
4(b) -- By-Laws of the Company, as amended.
4(c) -- Form of Certificate of the Company's Common Stock, par value $1.00
per share (incorporated by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-3 No. 33-38393).
4(d) -- Certificate of Designation of Series A Cumulative Convertible
Preferred Stock, without par value (included in Exhibit 4(a)).
4(e) -- Rights Agreement between the Company and J. Henry Schroder Bank and
Trust Company, as Rights Agent, dated as of February 13, 1986
(incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A (File No. 1-8400) dated February 19, 1986).
</TABLE>
II-5
<PAGE> 58
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- ---------------- ------------------------------------------------------------------------
<S> <C>
4(f) -- Amendment to Rights Agreement, dated as of August 11, 1989, between
the Company and First Chicago Trust Company of New York (as successor
Rights Agent) (incorporated by reference to Exhibit 2 to the
Company's Registration Statement on Form 8, dated August 16, 1989, to
its Registration Statement on Form 8-A (File No. 1-8400) dated
February 19, 1986).
4(g) -- Certificate of Designation of Series A Junior Participating Preferred
Stock, without par value (included in Exhibit 4(a)).
4(h) -- Certificate of Increase, dated April 21, 1989, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(i) -- Certificate of Increase, dated July 24, 1990, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(j) -- Certificate of Increase, dated February 1, 1991, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(k) -- Certificate of Increase, dated January 13, 1992, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(l) -- Certificate of Increase, dated May 24, 1993, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(m) -- Form of Indenture between the Company and The First National Bank of
Chicago, as Trustee.
5 -- Opinion of Debevoise & Plimpton as to the validity of the
Debentures.*
8 -- Tax opinion of Debevoise & Plimpton.*
12 -- Statement Re: Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
23(a) -- Consent of Ernst & Young LLP.
23(b) -- Consents of Debevoise & Plimpton (included in Exhibits 5 and 8).*
24 -- Powers of Attorney.
25 -- Statement of Eligibility and Qualification of the Trustee under the
Trust Indenture Act of 1939.
99(a) -- Proposed Form of Letter of Transmittal.
99(b) -- Proposed Form of Notice of Guaranteed Delivery.
99(c) -- Proposed Form of Letter to Registered Holders and DTC Participants.
99(d) -- Proposed Form of Letter to Clients.
99(e) -- Form of Exchange Agent Agreement.*
99(f) -- Form of Information Agent Agreement.*
</TABLE>
- ---------------
* To be filed by amendment
II-6
<PAGE> 59
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(3) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Item 4, 10(b), 11 or 13 of Form
S-4, within one business day of receipt of such request, and to send the
incorporated documents by first-class mail or equally prompt means. This
includes information contained in documents filed subsequent to the
effective date of the registration statement throughout the date responding
to the request.
(4) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-7
<PAGE> 60
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, AMR Corporation
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fort Worth,
State of Texas, on this 23rd day of August, 1994.
AMR CORPORATION
By /s/ ANNE H. MCNAMARA
Anne H. McNamara
Senior Vice President and General
Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------ ------------------------------
<S> <C> <C>
ROBERT L. CRANDALL Chairman of the Board,
President and Chief Executive
Officer; Director (Principal
Executive Officer)
DONALD J. CARTY Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
HOWARD P. ALLEN
EDWARD A. BRENNAN By /s/ ANNE H. MCNAMARA
Anne H. McNamara
CHRISTOPHER F. EDLEY (Attorney-in Fact)
Date: August 23, 1994
CHARLES T. FISHER, III
DEE J. KELLY Directors
ANN D. MCLAUGHLIN
JOE M. RODGERS
MAURICE SEGALL
EUGENE F. WILLIAMS, JR.
</TABLE>
II-8
<PAGE> 61
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- --------- ------------------------------------------------------------------------
<S> <C>
4(a) -- Certificate of Incorporation of the Company, as amended.
4(b) -- By-Laws of the Company, as amended.
4(c) -- Form of Certificate of the Company's Common Stock, par value $1.00
per share (incorporated by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-3 No. 33-38393).
4(d) -- Certificate of Designation of Series A Cumulative Convertible
Preferred Stock, without par value (included in Exhibit 4(a)).
4(e) -- Rights Agreement between the Company and J. Henry Schroder Bank and
Trust Company, as Rights Agent, dated as of February 13, 1986
(incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A (File No. 1-8400) dated February 19, 1986).
4(f) -- Amendment to Rights Agreement, dated as of August 11, 1989, between
the Company and First Chicago Trust Company of New York (as successor
Rights Agent) (incorporated by reference to Exhibit 2 to the
Company's Registration Statement on Form 8, dated August 16, 1989, to
its Registration Statement on Form 8-A (File No. 1-8400) dated
February 19, 1986).
4(g) -- Certificate of Designation of Series A Junior Participating Preferred
Stock, without par value (included in Exhibit 4(a)).
4(h) -- Certificate of Increase, dated April 21, 1989, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(i) -- Certificate of Increase, dated July 24, 1990, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(j) -- Certificate of Increase, dated February 1, 1991, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(k) -- Certificate of Increase, dated January 13, 1992, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(l) -- Certificate of Increase, dated May 24, 1993, to Certificate of
Designation of Series A Junior Participating Preferred Stock, without
par value (included in Exhibit 4(a)).
4(m) -- Form of Indenture between the Company and The First National Bank of
Chicago, as Trustee.
5 -- Opinion of Debevoise & Plimpton as to the validity of the
Debentures.*
8 -- Tax opinion of Debevoise & Plimpton.*
12 -- Statement Re: Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
23(a) -- Consent of Ernst & Young LLP.
23(b) -- Consents of Debevoise & Plimpton (included in Exhibits 5 and 8).*
24 -- Powers of Attorney.
25 -- Statement of Eligibility and Qualification of the Trustee under the
Trust Indenture Act of 1939.
</TABLE>
<PAGE> 62
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- --------- -----------------------------------------------------------------------
<S> <C>
99(a) -- Proposed Form of Letter of Transmittal.
99(b) -- Proposed Form of Notice of Guaranteed Delivery.
99(c) -- Proposed Form of Letter to Registered Holders and DTC Participants.
99(d) -- Proposed Form of Letter to Clients.
99(e) -- Form of Exchange Agent Agreement.*
99(f) -- Form of Information Agent Agreement.*
</TABLE>
- ---------------
* To be filed by amendment
<PAGE> 1
Exhibit 4(a)
CERTIFICATE OF INCORPORATION
OF
AA INC.
FIRST: The name of the corporation is AA Inc.
SECOND: The registered office or place of business of the corporation in
the State of Delaware is to be located at 100 West 10th Street, in the City of
Wilmington, County of New Castle. The name of its registered agent is The
Corporation Trust Company, 100 West 10th Street, Wilmington, Delaware.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of stock that the corporation shall have
authority to issue is 1,000 shares of Common Stock, par value $1.00 per share.
FIFTH: The names and mailing addresses of the incorporator is as follows:
Connie M. Friesen
299 Park Avenue
New York, New York 10171
SIXTH: The corporation is to have perpetual existence.
SEVENTH: The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatsoever, and no action of the
corporation shall be construed as a constructive assent to such liability.
EIGHTH: The business of the corporation shall be managed by a Board of
Directors.
<PAGE> 2
1. All corporate powers of the corporation shall be exercised by the Board
of Directors, except as otherwise provided by law.
2. Directors need not be stockholders, nor residents of the State of
Delaware.
3. The number of directors which shall constitute the whole Board shall be
such as from time to time shall be fixed by, or in the manner provided in, the
By-Laws, but in no case shall the number be less than three.
4. By-Laws of the corporation for the management of its property, the
regulation and government of its affairs, and for the certification and transfer
of its stock may originally be adopted by the incorporators. Thereafter, the
directors shall have power from time to time to make, alter, or repeal By-Laws,
but any By-Laws made by the Board of Directors may be altered, amended, or
repealed by the stockholders at any annual meeting of stockholders, or at any
special meeting provided that notice of such proposed alteration, amendment or
repeal is included in the notice of such special meeting.
5. The stockholders and directors may hold their meetings and have an
office or offices outside the State of Delaware if the By-Laws so provide.
6. The Board of Directors may, by resolution or resolutions passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of two or more directors which, to the extent provided in said
resolution or resolutions or in the By-Laws of the corporation, shall have and
may exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation, and may have the power to authorize the
seal of the corporation to be affixed to all papers which may require it.
7. The Board of Directors from time to time shall determine whether and to
what extent and at what times and places and under what conditions and
regulations the accounts and books of the corporation, or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account, book or document of the corporation except as
conferred by statute or as authorized by resolution of the Board of Directors.
2
<PAGE> 3
8. The Board of Directors shall have power from time to time to fix the
amount to be reserved by the corporation over and above its capital stock paid
in and to fix and determine and to vary the amount of the working capital of the
corporation, and to direct and determine the use and disposition of the working
capital and of any surplus or net profits over and above the capital stock paid
in.
9. At all meetings of stockholders and at all elections of directors, each
holder of capital stock shall have one vote for each share of capital stock
registered in his name on the books of the corporation.
10. At all meetings of the stockholders the holders of one-third of the
number of shares of stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum requisite
for the election of directors and the transaction of other business, except as
otherwise provided by law.
11. In so far as the same is not contrary to the laws of Delaware, no
contract or other transaction between the corporation and any other corporation,
association, organization, society, or person shall be affected or invalidated
by the fact that any one or more of the directors of this corporation is or are
a director or officer, or directors or officers, of such other corporation,
association, organization, or society, or by the fact that such other
corporation, association, organization, or society, is the owner or holder of
any part of the capital stock of this corporation, or is interested in its
property, and any director or directors, individually or jointly, may be a party
or parties to, or may be interested in, any contract or transaction of this
corporation or in which this corporation is interested; and no contract, act or
transaction of this corporation with any person or persons, firm or corporation,
association, organization, or society, shall be affected or invalidated by the
fact that any director or directors of this corporation is a party or are
parties to or are interested in such contract, act, or transaction, or in any
way connected with such person or persons, firm, corporation, organization,
association or society, and each and every person who may become a director of
this corporation is hereby relieved from any liability that might otherwise
exist from contracting with the
3
<PAGE> 4
corporation for the benefit of himself or any firm, corporation, association,
organization or society, in which he may be in any wise interested.
12. Any contract, transaction or act of the corporation or of the Board of
Directors which shall be ratified by a majority in interest of a quorum of the
stockholders of the corporation having voting power at any annual meeting or
special meeting called for such purpose shall be as valid and as binding as
though ratified by every stockholder of the corporation; provided, however, that
any failure of the stockholders to approve or ratify such contract, transaction
or act, when and if submitted, shall not be deemed in any way to invalidate the
same or to deprive the corporation, its directors or officers, of their right to
proceed with such contract, transaction or action.
NINTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of the Title 8 of the Delaware Code, or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
4
<PAGE> 5
TENTH: No stockholder of the corporation shall have any preemptive or
preferential right, nor shall be entitled as such, as a matter of right, to
subscribe for or purchase any part of any new or additional issue of stock of
the corporation of any class, whether now or hereafter authorized, and whether
issued for money or for a consideration other than money, or of any issue of
securities convertible into stock.
ELEVENTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate in the manner now or
hereafter prescribed by statute; and all rights herein conferred upon the
stockholders are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned has hereunto set her name this 15th day
of February, 1982.
/s/ CONNIE M. FRIESEN
----------------------------
Connie M. Friesen
5
<PAGE> 6
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AA INC.
Pursuant to Section 241 of the
General Corporation Law of the State of Delaware
We, the undersigned, Richard A. Lempert and Anne H. McNamara, Vice
President and Secretary, respectively, of AA Inc., a corporation organized under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certify as follows:
1. Article FIRST of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"FIRST: The name of the Corporation is AMR Corporation."
2. The Corporation has not received any payment for any of its stock.
3. The amendment herein set forth was duly adopted in accordance with
the provisions of Section 241 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, this Certificate has been executed and attested by the
undersigned this 4th day of March, 1982.
/s/ RICHARD A. LEMPERT
-----------------------------
Richard A. Lempert
Vice President
Attest:
/s/ ANNE H. McNAMARA
---------------------------
Anne H. McNamara
Secretary
<PAGE> 7
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AMR CORPORATION
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
We, the undersigned, Richard A. Lempert and Anne H. McNamara, Vice
President and Secretary, respectively, of AMR Corporation, a corporation
organized under the General Corporation Law of the State of Delaware (the
"Corporation"), hereby certify as follows:
1. Article FOURTH of the Certificate of Incorporation of the Corporation is
hereby amended to read in its entirety as follows:
"FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is 70,000,000 shares, of which
10,000,000 shares shall be shares of Preferred Stock without par value
(hereinafter called "Preferred Stock") and 60,000,000 shares shall be
shares of Common Stock of the par value of $1.00 per share (hereinafter
called "Common Stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of each class of stock
shall be governed by the following provisions:
1. The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of Preferred Stock
in one or more
<PAGE> 8
series, with such voting powers, full or limited, or without voting powers
and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of
Directors, and as are not stated and expressed in the Certificate of
Incorporation, including (but without limiting the generality thereof) the
following:
(a) The designation of such series.
(b) The dividend rate of such series, the conditions and dates upon
which such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable or any other class or classes of
stock, and whether such dividend shall be cumulative or non-cumulative.
(c) Whether the shares of such series shall be subject to
redemption by the corporation and, if made subject to such redemption,
the times, prices and other terms and conditions of such redemption.
(d) The terms and amount of any sinking fund provided for the
purpose or redemption of the shares of such series.
(e) Whether or not the shares of such series shall be convertible
into or exchangeable for shares of any other class or classes or of any
other series of any class or classes of stock of the corporation, and,
if provision be made for conversion or exchange, the times, prices,
rates, adjustments, and other terms and conditions of such conversion or
exchange.
(f) The extent, if any, to which the holders of the shares of such
series shall be entitled to vote with respect to the election of
directors or otherwise.
2
<PAGE> 9
(g) The restrictions, if any, on the issue or reissue of any
additional Preferred Stock.
(h) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, the corporation.
2. Except as otherwise required by law and except for such voting
powers with respect to the election of directors or other matters as may be
stated in the resolutions of the Board of Directors creating any series of
Preferred Stock, the holders of any such series shall have no voting power
whatsoever. Any amendment to the Certificate of Incorporation which shall
increase or decrease the authorized stock of any class or classes may be
adopted by the affirmative vote of the holders of a majority of the
outstanding shares of the voting stock of the corporation.
3. No holder of shares of any class of stock of the corporation shall
be entitled as a matter of right, to any preemptive right to subscribe to
any additional issues of stock of the corporation of any class, or any
securities convertible into any class of stock of the corporation.
4. The corporation may from time to time issue and dispose of any of
the authorized and unissued shares of Preferred Stock for such
consideration as may be fixed from time to time by the Board of Directors,
or of Common Stock for such consideration, not less than its par value, as
may be fixed from time to time by the Board of Directors, without action by
the stockholders. The Board of Directors may provide for payment therefor
to be received by the corporation in cash, property or services. Any and
all such shares of the Preferred or Common Stock of the corporation the
issuance of which has been so authorized, and for which consideration so
fixed by the Board of Directors has been paid or delivered, shall be deemed
fully paid stock and shall not be liable to any further call or assessment
thereon."
3
<PAGE> 10
2. The amendment herein set forth was duly adopted in accordance with
the provisions of section 242 of the General Corporation Law of the State
of Delaware.
3. This amendment shall be effective on October 1, 1982.
IN WITNESS WHEREOF, this Certificate has been executed and attested by the
undersigned this 27th day of September, 1982.
/s/ RICHARD A. LEMPERT
-----------------------------
Richard A. Lempert
Vice President &
General Counsel
Attest:
/s/ ANNE H. McNAMARA
---------------------------
Anne H. McNamara
Secretary
4
<PAGE> 11
AMR CORPORATION
$2.1875 CUMULATIVE PREFERRED STOCK
CERTIFICATE OF DESIGNATION
<PAGE> 12
AMR Corporation
Certificate of Designation
Pursuant to Section 151
of the General Corporation Law
of the State of Delaware
$2.1875 Cumulative Preferred Stock
We, Richard A. Lempert and Anne H. McNamara, being respectively the Vice
President and General Counsel, and the Secretary of AMR Corporation, a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "corporation"), do hereby certify:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of the corporation by the provisions of its Certificate of
Incorporation, the Board of Directors has duly adopted the following resolution:
RESOLVED that this Board of Directors, pursuant to authority expressly
vested in it by the provisions of the Certificate of Incorporation of the
corporation, hereby authorizes the issue of a series of Preferred Stock of the
corporation and hereby fixes the designation, preferences and the relative,
participating, optional or other special rights and qualifications, limitations
or restrictions thereof, in addition to those set forth in the Certificate of
Incorporation, as follows:
(1) Five million shares of the Preferred Stock of the corporation shall
constitute a series of Preferred Stock designated as "$2.1875 Cumulative
Preferred Stock" (hereinafter sometimes called "this series").
(2) All shares of this series shall be identical with each other in all
respects.
(3) The holders of shares of this series shall be entitled to receive,
when, as and if declared by the Board of Directors, dividends at the rate of
$2.1875 per share per annum, and no more, payable quarterly on the first day of
January, April, July and October in each year commencing July 1, 1977. In the
case of the original issuance of shares of this series, such dividends shall be
cumulative from the date of issue. In the case of shares of this series issued
in exchange for issued shares, such dividends
<PAGE> 13
shall be cumulative from the quarterly dividend payment date next preceding the
date of issue of such shares to which dividends have been paid, unless the date
of issue is a quarterly dividend payment date or is a date after the record date
for the determination of holders of shares of this series entitled to receive a
quarterly dividend and before such quarterly dividend payment date, in either of
which events such dividends shall be cumulative from such quarterly dividend
date; provided, however, that if dividends shall not be paid to that quarterly
dividend date, then dividends shall be cumulative from the quarterly dividend
date to which dividends have been paid. Accruals of dividends shall not bear
interest.
(4) No dividend shall be declared on any series of Preferred Stock ranking
junior to or on a parity with this series unless there shall likewise be or have
been declared on the shares of this series at the time outstanding like
dividends for all dividend periods coinciding with and ending before the date of
payment of such dividend, ratably in proportion to the respective annual
dividend rates per annum fixed therefor as herein or in the Certificate of
Incorporation provided.
(5) The shares of this series shall be redeemable (a) at the option of the
corporation, in whole or in part, at any time after March 31, 1982, and (b)
pursuant to the sinking fund described below, in both cases at a redemption
price of $25 per share plus any accrued dividends thereon through the date of
redemption. In case of redemption of a part only of this series at the time
outstanding, whether at the option of the corporation or pursuant to the sinking
fund, the shares so to be redeemed shall be selected by lot or by such other
manner as the Board of Directors may determine. Notice of every such redemption
shall be mailed at least 30 days in advance of the date designated for such
redemption to the holders of record of the shares of this series so to be
redeemed at their respective addresses as the same shall appear on the books of
the corporation.
(6) The corporation will redeem pursuant to a sinking fund out of funds
legally available for such purpose (a) 150,000 shares of this series on April 1,
1983, and on each April 1 thereafter to and including April 1, 1992, and (b)
250,000 shares of this series on April 1, 1993 and on each April 1 thereafter so
long as any shares of this series shall remain outstanding. The corporation may
apply to its sinking fund obligation any shares of this series owned by it and
any
2
<PAGE> 14
shares previously redeemed by it (otherwise than through the operation of the
sinking fund) which have not been previously credited against a sinking fund
obligation. The corporation's obligation to make redemptions pursuant to the
sinking fund shall be cumulative.
(7) If, on the redemption date specified in the notice given pursuant to
paragraph (5), the funds necessary for such redemption shall have been set aside
by the corporation, separate and apart from its other funds, in trust for the
pro rata benefit of the holders of the shares of this series so called for
redemption, then, notwithstanding that any certificates for shares of this
series so called for redemption shall not have been surrendered for
cancellation, the shares represented thereby shall no longer be deemed
outstanding, the right to receive dividends thereon shall cease to accrue from
and after the date of redemption so designated and all rights of the holders of
the shares of this series so called for redemption shall cease and terminate,
excepting only the right to receive the redemption price therefor (including
dividends accrued through the redemption date, but without interest). Any moneys
so set aside by the corporation and unclaimed at the end of five years from the
date designated for such redemption shall revert to the general funds of the
corporation, after which reversion the holders of such shares so called for
redemption shall look only to the corporation for payment of the redemption
price.
(8) If, after the giving of the notice required to be given pursuant to
paragraph (5) and before the redemption date specified in such notice, the
corporation shall deposit for the pro rata benefit of the holders of the shares
of this series so called for redemption the funds necessary for such redemption
with a bank or trust company in the Borough of Manhattan, The City of New York,
having a capital and surplus of at least $25,000,000, then, notwithstanding that
any certificates for shares of this series so called for redemption shall not
have been surrendered for cancellation, the shares represented thereby shall no
longer be deemed outstanding, the rights to receive dividends thereon shall
cease to accrue from and after the date of redemption so designated and all
rights of the holders of the shares of this series so called for redemption
shall cease and terminate, excepting only the right to receive the redemption
price therefor (including dividends accrued through the redemption date, but
without interest). Any moneys so deposited by the corporation and unclaimed at
the end of five
3
<PAGE> 15
years from the date designated for such redemption shall revert to the general
funds of the corporation. After such reversion, any such bank or trust company
shall, upon demand, pay over to the corporation such unclaimed amounts and
thereupon such bank or trust company shall be relieved of all responsibility in
respect thereof to such holder and such holder shall look only to the
corporation for the payment of the redemption price. Any interest accrued on
funds so deposited shall be paid from time to time to the corporation for its
own account.
(9) Shares of this series which have been issued and reacquired in any
manner by the corporation shall have the status of authorized and unissued
shares of Preferred Stock and may be reissued as part of this series or may be
reclassified and reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions or restrictions on issuance set forth herein; provided, however, that
shares of this series redeemed by the corporation whether through the operation
of the sinking fund or otherwise may not be reissued as part of this series.
(10) Upon any liquidation, dissolution or winding up of the corporation,
whether voluntary or involuntary, the holders of shares of this series shall be
entitled to receive $25 per share plus any accrued dividends thereon through the
date of payment before any payment shall be made to the holders of any shares of
the corporation ranking junior to this series. In the event the assets of the
corporation available for distribution to the holders of this series upon any
liquidation, dissolution or winding up of the corporation shall be insufficient
to pay in full the amounts to which the holders of this series shall be
entitled, no distribution shall be made on account of any shares of any other
class or series of stock ranking on a parity with this series unless
proportionate amounts shall be paid on account of this series, ratably, in
proportion to the total amounts to which the holders of all such shares are
entitled upon liquidation, dissolution or winding up.
(11) If at any time the corporation shall have failed to pay dividends in
full on this series, thereafter and until dividends in full, including all
accrued dividends on shares of this series outstanding, shall have been declared
and set apart for payment or paid, (a) the corporation, without the affirmative
vote or consent of the
4
<PAGE> 16
holders of at least a majority of this series at the time outstanding voting as
a separate series, shall not redeem (except in accordance with Paragraph (17)
hereof) any shares of this series or any shares ranking on a parity with this
series unless it shall simultaneously redeem all the shares of this series then
outstanding, and (b) neither the corporation nor any subsidiary shall purchase
any shares of this series or any shares ranking on a parity with this series
except in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, in their sole discretion after consideration of
the respective annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine (which determination shall
be final and conclusive) will result in fair and equitable treatment among the
respective series and classes; provided, that (i) the corporation, to meet the
requirements of any retirement or sinking fund provisions with respect to any
such series or classes, may use shares thereof acquired by it prior to such
failure and then held by it as treasury stock and (ii) nothing shall prevent the
corporation from completing the purchase or redemption of shares of this series
or any shares ranking on a parity with or prior to this series for which a
purchase contract was entered into for any retirement or sinking fund purposes,
or the notice of redemption of which was initially published, prior to such
default.
(12) So long as any shares of this series are outstanding the corporation
will not
(a) without the affirmative vote or consent of the holders of at least
a majority of this series at the time outstanding, voting as a separate
series (i) issue additional shares of Preferred Stock ranking on a parity
with this series unless the net earnings of the corporation available under
the General Corporation Law of the State of Delaware for payment of
dividends during 12 calendar months out of the immediately 18 preceding
calendar months are at least 3 times the annual pro forma dividend
requirements on all shares of Preferred Stock which would be outstanding
thereafter, (ii) issue any shares of Preferred Stock ranking junior to this
series or (iii) consolidate or merge with another corporation, unless the
corporation is the surviving corporation and the shares of stock of the
corporation outstanding immediately prior to the effective date of the
consolidation or merger are to be identical outstanding or treasury shares
of stock of the corporation after such effective date;
5
<PAGE> 17
(b) declare, or pay, or set apart for payment, any dividends (other
than dividends payable in stock ranking junior to this series) or make any
distribution on any stock of the corporation ranking junior to this series
and will not redeem, purchase or otherwise acquire, or permit any
subsidiary to purchase or otherwise acquire, any shares of any such junior
stock if at the time of making such declaration, payment, distribution,
redemption, purchase or acquisition the corporation shall be in default
with respect to any dividend payable on, or any obligation to retire,
shares of this series or any Preferred Stock ranking on a parity with this
series, provided that, notwithstanding the foregoing, the corporation may
at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for, or out of the net cash proceeds from the sale of,
other shares of any such junior stock; and
(c) without the affirmative vote or consent of the holders of at least
66-2/3% of the shares of this series at the time outstanding, voting as a
class (i) issue any stock ranking prior to this series or increase the
authorized number of shares of any such other class or series of stock, or
(ii) amend, alter or repeal any of the provisions hereof or of the
Certificate of Incorporation so as adversely to affect the preferences,
rights, or powers of this series.
(13) Whenever dividends payable on the Preferred Stock shall be in default
in an aggregate amount equivalent to six full quarterly dividends, the number of
directors constituting the Board of Directors of the corporation shall be
increased by two, and the holders of this series and of all other series of
Preferred Stock (to the extent provided in the certificates of designation of
such series), voting as a class, shall have the exclusive and special right to
elect two directors of the corporation to fill such newly created directorships.
Whenever such right of the holders of this series shall have vested such right
may be exercised initially either at a special meeting of the holders of this
series and such other series called as provided in paragraph (14), or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders. The right of the holders of this series to vote for the election
of such members of the Board of Directors of the corporation as aforesaid shall
continue until such time as all dividends accumulated on this series shall have
been paid in full, at which time the special right of the holders of this series
6
<PAGE> 18
so to vote separately as a class with such other series for the election of
directors shall terminate.
(14) At any time when such special voting power shall have vested as
provided in paragraph (13), a proper officer of the corporation shall, upon the
written request of the holders of record of at least 10% of the then outstanding
aggregate number of shares of this series and the other series of Preferred
Stock so entitled to vote, addressed to the Secretary of the corporation, call a
special meeting of the holders thereof for the purpose of electing directors
pursuant to paragraph (13). Such meeting shall be held at the earliest
practicable date at such place as shall be specified in the notice of the
meeting. If such meeting shall not be called by the proper officers of the
corporation within twenty days after personal service of such written request
upon the Secretary of the corporation, or within twenty days after mailing the
same within the United States of America, by registered mail addressed to the
Secretary of the corporation at its principal office, then the holders of record
of at least 10% of the then outstanding aggregate number of shares of this
series and of any such other series may designate in writing one of their number
to call such meeting at the expense of the corporation, and such meeting may be
called by such person so designated upon the notice required for annual meetings
of stockholders and shall be held at such place as shall be specified in the
notice of the meeting. Any holder so designated shall have access to the stock
books of the corporation for the purpose of causing meetings of stockholders to
be called pursuant to these provisions. Notwithstanding the provisions of this
paragraph (14), no such special meeting shall be called during the period within
ninety days immediately preceding the date fixed for the next annual meeting of
stockholders.
(15) At any meeting held for the purpose of electing directors at which the
holders of this series and the other series of Preferred Stock so entitled to
vote shall have the special right to elect directors as provided in paragraph
(13), the presence, in person or by proxy, of the holders of 33-1/3% of the then
outstanding aggregate number of shares of this series and such other series
shall be required to constitute a quorum for the election of any director by the
holders of such series. At any such meeting or adjournment thereof, (a) the
absence of a quorum shall not prevent the election of directors other than those
to be elected by such series voting separately and the absence of a quorum for
the election of such other directors shall not
7
<PAGE> 19
prevent the election of the directors to be elected by such series voting
separately, and (b) in the absence of either or both such quorums, a majority of
the holders present in person or by proxy of the class or classes which lack a
quorum shall have power to adjourn the meeting for the election of directors
which they are entitled to elect from time to time without notice other than
announcement at the meeting until a quorum shall be present.
(16) During any period the holders of Preferred Stock have the right to
vote for directors as provided in paragraph (13), (a) the directors so elected
shall continue in office until the next succeeding annual meeting or until their
successors, if any, are elected and qualify or, unless required by applicable
law to continue in office for a longer period, until termination of the right of
the holders of Preferred Stock to vote for directors, and (b) any vacancies in
the Board of Directors shall be filled only by vote of a majority (even if that
be only a single director) of the remaining directors theretofore elected by the
holders of the class or classes of stock which elected the director whose office
shall have become vacant. If and to the extent permitted by applicable law,
immediately upon any termination of the right of the holders of Preferred Stock
to vote for directors as provided in paragraph (13), the term of office of the
directors then in office so elected shall terminate. Whenever the term of office
of the directors so elected shall end and the special voting power vested in the
holders of Preferred Stock as provided in paragraph (13) shall have expired, the
number of directors shall be such number as may be provided for in the by-laws
irrespective of any increase made pursuant to the provisions of paragraph (13).
(17) If in any case the amounts payable with respect to any obligations to
redeem shares of this series or of other series of the Preferred Stock ranking
on a parity with this series are not paid in full in the case of all such series
with respect to which such obligations exist, the number of shares of such
series to be redeemed shall be in proportion to the respective amounts which
would be payable on account of such obligations if all amounts payable were
discharged in full.
(18) For the purposes hereof:
(a) the term "outstanding", when used in reference to shares of stock,
shall mean issued shares, excluding
8
<PAGE> 20
shares held by the corporation or a subsidiary and shares called for
redemption, funds for the redemption of which shall have been segregated or
deposited in trust as provided in Paragraphs 7 and 8;
(b) the amount of dividends "accrued" on any share of Preferred Stock
of any series as at any dividend date shall be deemed to be the amount of
any unpaid dividends accumulated thereon to and including such dividend
date, whether or not earned or declared, and the amount of dividends
"accrued" on any share of Preferred Stock of any series as at any date
other than a dividend date shall be calculated as the amount of any unpaid
dividends accumulated thereon to and including the last preceding dividend
date, whether or not earned or declared, plus an amount calculated on the
basis of the annual dividend rate fixed for the shares of such series for
the period after such last preceding dividend date to and including the
date as of which the calculation is made, based on a 360-day year of twelve
30-day months; and
(c) any series or class of stock of the corporation shall be deemed to
rank
(i) prior to this series or the Preferred Stock, as the case may
be, if the holders of such series or class shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, in preference or priority to the holders of
this series or the Preferred Stock, as the case may be;
(ii) on a parity with this series or the Preferred Stock, as the
case may be, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share thereof be different from
those of this series or the Preferred Stock, if the holders of such
series or class shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority one over the other as between the holders
of such series or class and the holders of this series or the Preferred
Stock; and
9
<PAGE> 21
(iii) junior to this series or the Preferred Stock, as the case may
be, if the rights of the holders of such series or class shall be
subject or subordinate to the rights of the holders of this series or
the Preferred Stock in respect of the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up.
SECOND: The said determination of the designation, preferences and the
relative participating, optional and other special rights and qualifications,
limitations or restrictions thereof relating to said $2.1875 Cumulative
Preferred Stock was duly made by the Board of Directors pursuant to the
provisions of the Certificate of Incorporation of the corporation and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, this Certificate of Designation has been signed by the
Vice President and General Counsel and the Secretary of AMR Corporation, and
said corporation has caused its corporate seal to be hereunto affixed, all as of
the 27th day of September, 1982.
AMR CORPORATION
By /s/ RICHARD A. LEMPERT
--------------------------------------
Vice President and
General Counsel
Attest:
/s/ ANNE H. McNAMARA
---------------------------
Secretary
10
<PAGE> 22
AMR CORPORATION
Certificate of Designation
Pursuant to Section 151
of the General Corporation Law
of the State of Delaware
$2.125 Cumulative Convertible Preferred Stock
We, Albert V. Casey and Anne H. McNamara, being respectively the Chairman
and the Secretary of AMR Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "corporation"), do
hereby certify:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of the corporation by the provisions of its Certificate of
Incorporation, the Board of Directors has duly adopted the following resolution:
RESOLVED that this Board of Directors, pursuant to authority expressly
vested in it by the provisions of the Certificate of Incorporation, hereby
authorizes the issue of a series of Preferred Stock of the corporation and
hereby fixes the designation, preferences and the relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof, in addition to those set forth in the Certificate of Incorporation, as
follows:
(1) Designation. Five million shares of the Preferred Stock of the
corporation shall constitute a series of Preferred Stock designated as "$2.125
Cumulative Convertible Preferred Stock" (hereinafter sometimes called "this
series"). The $2.125 Cumulative Convertible Preferred Stock shall rank on a
parity with the corporation's $2.1875 Cumulative Preferred Stock.
(2) Shares of Series Identical. All shares of this series shall be
identical with each other in all respects.
(3) Dividends. The holders of shares of this series shall be entitled to
receive, when, as and if declared by the Board of Directors, dividends at the
rate of $2.125 per share per annum, and no more, payable quarterly on the first
day of February, May, August and November in each year commencing May 1, 1983.
In the case of the origi-
<PAGE> 23
nal issuance of shares of this series, such dividends shall be cumulative from
the date of issue. In the case of shares of this series issued in exchange for
issued shares, such dividends shall be cumulative from the quarterly dividend
payment date next preceding the date of issue of such shares to which dividends
have been paid, unless the date of issue is a quarterly dividend payment date or
is a date after the record date for the determination of holders of shares of
this series entitled to receive a quarterly dividend and before such quarterly
dividend payment date, in either of which events such dividends shall be
cumulative from such quarterly dividend date; provided, however, that, if
dividends shall not be paid to that quarterly dividend date, then dividends
shall be cumulative from the quarterly dividend date to which dividends have
been paid. Accruals of dividends shall not bear interest.
(4) Dividends on Other Preferred Stock. No dividend shall be declared on
any series of Preferred Stock ranking junior to or on a parity with this series
unless there shall likewise be or have been declared on the shares of this
series at the time outstanding like dividends for all dividend periods
coinciding with and ending before the date of payment of such dividend, ratably
in proportion to the respective annual dividend rates per annum fixed therefor
as herein or in the Certificate of Incorporation provided.
(5) Optional Redemption. Subject to the restrictions in paragraph (13), the
shares of this series are redeemable at the option of the corporation, in whole
or in part, at any time, at the following redemption prices per share if
redeemed during the 12 month period commencing February 1,
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
1983 27.1250
1984 26.9125
1985 26.7000
1986 26.4875
1987 26.2750
1988 26.0625
1989 25.8500
1990 25.6375
1991 25.4250
1992 25.2125
</TABLE>
2
<PAGE> 24
and at $25 per share if redeemed at any time on or after February 1, 1993, plus,
in each case, an amount equal to the dividends accrued and unpaid thereon to the
redemption date; provided, however, that shares of this series shall not be
redeemable prior to February 1, 1985 unless the Closing Price of a share of
Common Stock (determined as provided in subparagraph (c) of paragraph (12))
multiplied by the conversion rate (as defined in subparagraph (b) of paragraph
(12)) then in effect shall have been at least $37.50 on at least 20 consecutive
Trading Days (as defined in subparagraph (c) of paragraph (12)) ending within
five Trading Days prior to the date notice of redemption is given pursuant to
paragraph (7).
(6) Partial Redemptions. In case only a part of this series at the time
outstanding is to be redeemed, the shares to to be redeemed shall be selected by
lot, pro rata or by such other manner as the Board of Directors may determine to
be fair and proper.
(7) Notice of Redemption. At least 30 days in advance of the date
designated for any redemption pursuant to paragraph (5), the corporation shall
mail notice of such redemption to the holders of record of the shares of this
series so to be redeemed at their respective addresses as the same shall appear
on the books of the corporation.
(8) Deposit of Funds for Redemption. On the redemption date specified in
the notice given pursuant to paragraph (7), the corporation shall, and at any
time after such notice shall have been mailed and before such redemption date
the corporation may, deposit for the pro rata benefit of the holders of the
shares of this series so called for redemption the funds necessary for such
redemption with a bank or trust company in the Borough of Manhattan, The City of
New York, having a capital and surplus of at least $50,000,000. Any moneys so
deposited by the corporation and unclaimed at the end of five years from the
date designated for such redemption shall revert to the general funds of the
corporation. After such reversion, any such bank or trust company shall, upon
demand, pay over to the corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect thereof
to such holder and such holder shall look only to the corporation for the
payment of the redemption price. In the event that monies are deposited pursuant
to this paragraph (8) in respect of shares of this series that are converted in
accordance
3
<PAGE> 25
with the provisions of paragraph (12), such monies shall, upon such conversion,
revert to the general funds of the corporation and, upon demand, such bank or
trust company shall pay over to the corporation such monies and thereupon such
bank or trust company shall be relieved of all responsibility to the holders of
such shares in respect thereof. Any interest accrued on funds so deposited
pursuant to this paragraph (8) shall be paid from time to time to the
corporation for its own account.
(9) Termination of Interest. Upon the deposit of funds pursuant to
paragraph (8) in respect of shares of this series called for redemption,
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, the shares represented thereby shall no longer be
deemed outstanding, the rights to receive dividends thereon shall cease to
accrue from and after the date of redemption designated in the notice of
redemption and all rights of the holders of the shares of this series so called
for redemption shall cease and terminate, excepting only the right to receive
the redemption price therefor (including dividends accrued through the
redemption date, but without interest) and the right to convert such shares into
shares of Common Stock until the close of business on the third business day
preceding the redemption date, as provided in paragraph (12).
(10) Reacquired Shares. Shares of this series which have been issued and
reacquired in any manner by the corporation shall have the status of authorized
and unissued shares of Preferred Stock and may be reissued as part of this
series or may be reclassified and reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions or restrictions on issuance set forth herein;
provided, however, that shares of this series redeemed by the corporation may
not be reissued as part of this series.
(11) Liquidation, etc. Upon any liquidation, dissolution or winding up of
the corporation, whether voluntary or involuntary, the holders of shares of this
series shall be entitled to receive $25 per share plus any accrued dividends
thereon through the date of payment before any payment shall be made to the
holders of any shares of the corporation ranking junior to this series. In the
event the assets of the corporation available for
4
<PAGE> 26
distribution to the holders of this series upon any liquidation, dissolution or
winding up of the corporation shall be insufficient to pay in full the amounts
to which the holders of this series shall be entitled, no distribution shall be
made on account of any shares of any other class or series of stock, ranking on
a parity with this series unless proportionate amounts shall be paid on account
of this series, ratably, in proportion to the total amounts to which the holders
of all such shares are entitled upon liquidation, dissolution or winding up.
(12) Convertibility. Any share of this series may be converted at any time,
at the option of the holder thereof, into Common Stock at the rate and on the
other terms and conditions set forth in this paragraph (12).
(a) Subject to the provisions for adjustment hereinafter set forth,
each share of this series shall be convertible at the option of the holder
thereof, in the manner hereinafter set forth, into 1.005025 fully paid and
non-assessable shares of Common Stock. Any holder of shares of this series
desiring to convert the same into Common Stock shall surrender the
certificate or certificates for the shares being converted, duly endorsed
or assigned to the corporation, at the principal office of the corporation
or at a bank or trust company appointed by the corporation for that
purpose, accompanied by a written notice of conversion specifying the
number (in whole shares) of shares to be converted and the name or names in
which such holder wishes the certificate or certificates for Common Stock
to be issued; in case such notice shall specify a name or names other than
that of such holder, such notice shall be accompanied by payment of all
transfer taxes payable upon the issue of Common Stock in such name or
names. The right to convert shares of this series called for redemption
shall terminate at the close of business on the third business day
preceding the date fixed for redemption. Upon conversion of any shares of
this series the holders thereof shall not be entitled to receive any
accumulated, accrued or unpaid dividends in respect of such shares so
converted, provided
5
<PAGE> 27
that such holders shall be entitled to receive any dividends on such shares
of this series paid or declared prior to such conversion if such holder
held such shares on the record date for the payment of such dividend.
(b) The number of shares of Common Stock and the number of other
shares of the corporation, if any, into which each share of this series is
convertible (hereinafter sometimes referred to as the "conversion rate")
shall be adjusted from time to time as follows:
(i) In case the corporation shall (x) pay a dividend or make a
distribution on its Common Stock which is paid or made in shares of
Common Stock or other shares of the corporation, (y) subdivide its
outstanding shares of Common Stock or (z) combine its outstanding shares
of Common Stock into a smaller number of shares, then, in any such
event, the holder of each share of this series shall be entitled to
receive, upon the conversion of such share, the number of shares of the
corporation which such holder would have owned or have been entitled to
receive after the happening of such event had such share been converted
immediately prior to the happening of such event. An adjustment made
pursuant to this subparagraph (b)(i) shall become effective immediately
after the opening of business on the next business day (1) following the
record date, in the case of a dividend or other distribution, and (2)
following the effective date, in the case of a subdivision or
combination.
(ii) In case the corporation shall issue rights or warrants to all
holders of shares of its Common Stock as such entitling them (for a
period expiring within 45 calendar days after the date of issuance) to
subscribe for or purchase Common Stock (or securities convertible into
Common Stock) at a price per share
6
<PAGE> 28
less than the current market price per share (as defined in subparagraph
(c) below) on the record date for the determination of shareholders
entitled to receive the same, then in each such case the number of
shares of Common Stock into which each share of this series shall
thereafter be convertible shall be determined by multiplying the number
of shares of Common Stock into which such share was theretofore
convertible by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares
of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so offered would purchase at such current
market price on such record date. For the purposes of this subparagraph
(b)(ii), the issuance of rights or warrants to subscribe for or purchase
securities convertible into Common Stock shall be deemed to be the
issuance of rights or warrants to purchase the shares of Common Stock
into which such securities are convertible at an aggregate offering
price equal to the aggregate offering price of such securities plus the
minimum aggregate amount (if any) payable upon conversion of such
securities into shares of Common Stock. Any adjustment pursuant to this
subparagraph (b)(ii) shall be made whenever any such rights or warrants
are issued, but, if issued, shall also become effective retroactively
with respect to conversions made between the record date for the
determination of shareholders entitled to receive such rights or
warrants and the date such rights or warrants are issued. For purposes
of this subparagraph (b)(ii) the granting of the right to purchase
Common Stock (whether from treasury shares or otherwise) pursuant to any
dividend
7
<PAGE> 29
or interest reinvestment plan and/or any Common Stock purchase plan
providing for the reinvestment of dividends or interest payable on
securities of the corporation and/or the investment of periodic optional
payments, in any such case at a price per share of not less than 95% of
the current market price per share (determined as provided in such
plans) of the Common Stock, shall not be deemed to constitute an issue
of rights or warrants by the corporation within the meaning of this
subparagraph (b)(ii).
(iii) In case the corporation shall distribute to all holders of
its shares of Common Stock evidences of its indebtedness or assets
(excluding any dividends paid in cash out of retained earnings or
dividends payable in Common Stock) or rights or warrants to subscribe
for securities of the corporation or any of its subsidiaries (other than
shares of Common Stock or securities convertible into Common Stock
referred to in subparagraph (b)(ii) above) then in each such case the
number of shares of Common Stock into which each share of this series
shall thereafter be convertible shall be determined by multiplying the
number of shares of Common Stock into which such share was theretofore
convertible by a fraction, of which the numerator shall be the current
market price per share of Common Stock (as defined in subparagraph (c)
below) on the record date for determination of shareholders entitled to
receive such distribution, and of which the denominator shall be such
current market price per share of Common Stock less the fair value (as
determined by the Board of Directors, whose determination shall be
conclusive, and described in a statement filed with each transfer agent
for the shares of this series) of the portion of such evidences of
indebtedness or assets or rights or warrants to subscribe which are
applicable to one share of Common Stock. An adjustment made pursuant to
this sub-
8
<PAGE> 30
paragraph (b)(iii) shall become effective immediately after the opening
of business on the next business day following the date when any such
distribution is made, but, upon distribution, shall also become
effective retroactively with respect to conversions made between the
record date for the determination of shareholders entitled to receive
such distribution and the date such distribution is made.
(c) For the purpose of any computation under subparagraph (b) above,
the current market price per share of Common Stock on any date shall be
deemed to be the average of the daily Closing Prices for 30 consecutive
Trading Days selected by the corporation commencing not more than 45
Trading Days before the date in question. The term "Closing Price" on any
day shall mean the last sales price, regular way, per share of Common Stock
on such day, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, as reported in the
principal consolidated transaction reporting system covering securities
listed or admitted to trading on the New York Stock Exchange or, if shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system covering securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the
National Quotation Bureau, Inc. or a similar reporting service designated
by the Board of Directors; and the term "Trading Day" shall mean a day on
which the principal national securities exchange on which shares of Common
Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in the Borough of
Manhattan, City and State of New York, are not authorized or obligated by
law or executive order to close.
(d) Notwithstanding the provisions of subparagraph (b) above, no
adjustment in the conversion rate
9
<PAGE> 31
shall be required unless such adjustment (plus any adjustments not
previously made by reason of this subparagraph (d)) would require an
increase or decrease of at least 1% in the number of shares of Common Stock
into which each share of this series is then convertible; provided,
however, that any adjustments which by reason of this subparagraph (d) are
not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this paragraph (12) shall
be made to the nearest one hundredth of a share.
(e) The Board of Directors may make such increases in the conversion
rate, in addition to those required by this paragraph (12), as shall be
determined by it, as evidenced by a resolution of the Board of Directors,
to be advisable in order to avoid or diminish any income tax to any holder
of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock
or from any event treated as such for income tax purposes. The Board of
Directors shall have the power to resolve any ambiguity or correct any
error in this paragraph (12) and its actions in so doing, as evidenced by a
resolution of the Board of Directors, shall be final and conclusive.
(f) In case the corporation shall effect any capital reorganization or
reclassification of its Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of subdivision or combination) or shall consolidate or merge with or
into any other corporation (other than a merger in which the corporation is
the surviving corporation and each share of Common Stock outstanding
immediately prior to such merger is to remain outstanding immediately after
such merger) or shall sell or transfer substantially all its assets to any
other corporation, lawful provision shall be made as a part of the terms of
such transaction whereby the holders of shares of this series shall, if
entitled to convert such shares at any time after the consummation of such
transaction, receive upon conversion thereof in lieu of each share of
Common Stock issuable upon conversion of such shares prior to such
consummation the same kind and amount of
10
<PAGE> 32
stock (or other securities, cash or property, if any) as may be issuable or
distributable in connection with such transaction with respect to each
outstanding share of Common Stock subject to adjustments for subsequent
stock dividends and distributions, subdivisions or combinations of shares,
capital reorganizations, reclassifications, consolidations or mergers as
nearly equivalent as possible to the adjustments provided for in this
paragraph (12).
(g) Whenever the conversion rate is adjusted as herein provided:
(i) the corporation shall compute the adjusted conversion rate and
shall cause to be prepared a certificate signed by a principal financial
officer of the corporation setting forth the adjusted conversion rate
and a brief statement of the facts requiring such adjustment and the
computation thereof; such certificate shall forthwith be filed with each
transfer agent for the shares of this series; and
(ii) a notice stating that the conversion rate has been adjusted
and setting forth the adjusted conversion rate shall, as soon as
practicable, be mailed to the holders of record of outstanding shares of
this series.
(h) In case:
(i) the corporation shall declare a dividend or other distribution
on shares of its Common Stock, other than a cash dividend or a dividend
or other distribution in shares of its Common Stock; or
(ii) the corporation shall authorize the issuance to all holders of
shares of its Common Stock or rights or warrants entitling them to
subscribe for or purchase any shares of its Common Stock or any other
subscription rights or warrants; or
(iii) of any reclassification of the capital stock of the
corporation (other than a subdivision or combination of its outstanding
shares of its Common Stock), or of any consolidation or
11
<PAGE> 33
merger to which the corporation is a party and for which approval of any
shareholders of the corporation is required, or of the sale or transfer
of all or substantially all the assets of the corporation; or
(iv) of the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
then the corporation shall cause to be mailed to each transfer agent for
the shares of this series and to the holders of record of the outstanding
shares of this series, at least 20 days (or 10 days in any case specified
in subparagraph (h)(i) or (h)(ii) above) prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date as of
which the holders of record of shares of Common Stock to be entitled to
such dividend, distribution, rights or warrants are to be determined, or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders of record
of shares of Common Stock shall be entitled to exchange their shares for
securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up. Such notice shall also state whether such
transaction will result in any adjustment in the conversion rate applicable
to the shares of this series and, if so, shall state what the adjusted
conversion rate will be and when it will become effective. The failure to
give the notice required by this subparagraph (h), or any defect therein,
shall not affect the legality or validity of any such dividend,
distribution, right, warrant, reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up, or the vote on any
action authorizing such.
(i) The corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, for the purpose of
issuance upon conversion of the shares of this series, the full number of
shares of Common Stock then deliverable upon the conversion of all shares
of this series then
12
<PAGE> 34
outstanding and shall take all action necessary so that shares of Common
Stock so issued will be validly issued, fully paid and nonassessable.
(j) The corporation will pay any and all stamp or similar taxes that
may be payable in respect of the issuance or delivery of shares of Common
Stock on conversion of shares of this series. The corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of shares of Common Stock in
a name other than that in which the shares of this series so converted were
registered, and no such issuance or delivery shall be made unless and until
the person requesting such issuance has paid to the corporation the amount
of any such tax or has established to the satisfaction of the corporation
that such tax has been paid.
(k) No fractional shares or scrip representing fractional shares shall
be issued upon the conversion of shares of this series. If any such
conversion would otherwise require the issuance of a fractional share, an
amount equal to such fraction multiplied by the Closing Price per share of
Common Stock (determined as provided in subparagraph (c) above) on the day
of conversion shall be paid to the holder in cash by the corporation.
(l) The certificate of any independent firm of public accountants of
recognized standing selected by the Board of Directors shall be presumptive
evidence of the correctness of any computation made under this paragraph
(12).
(13) Restrictions on Redemption or Purchase of Preferred Stock. If at any
time the corporation shall have failed to pay dividends in full on this series,
thereafter and until dividends in full, including all accrued dividends on
shares of this series outstanding, shall have been declared and set apart for
payment or paid, (a) the corporation, without the affirmative vote or consent of
the holders of at least a majority of this series at the time outstanding voting
as a separate series, shall not redeem any shares of this series or any shares
ranking on a parity with this series unless it shall simultaneously redeem all
the shares
13
<PAGE> 35
of this series then outstanding, and (b) neither the corporation nor any
subsidiary shall purchase any shares of this series or any shares ranking on a
parity with this series except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, in their sole
discretion after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine (which determination shall be final and conclusive) will result in
fair and equitable treatment among the respective series and classes; provided,
however, that (i) the corporation, to meet the requirements of any retirement or
sinking fund provisions with respect to any such series or classes, may use
shares thereof acquired by it prior to such failure and then held by it as
treasury stock and (ii) nothing shall prevent the corporation from completing
the purchase or redemption of shares of this series or any shares ranking on a
parity with or prior to this series for which a purchase contract was entered
into for any retirement or sinking fund purposes, or the notice of redemption of
which was initially mailed or published, prior to such default.
(14) Certain Restrictions; Right to Vote on Certain Matters. So long as any
shares of this series are outstanding the corporation will not
(a) declare, or pay, or set apart for payment, any dividends (other
than dividends payable in stock ranking junior to this series) or make any
distribution on any stock of the corporation ranking junior to this series
and will not redeem, purchase or otherwise acquire, or permit any
subsidiary to purchase or otherwise acquire, any shares of any such junior
stock if at the time of making such declaration, payment, distribution,
redemption, purchase or acquisition the corporation shall be in default
with respect to any dividend payable on, or any obligation to retire,
shares of this series or any Preferred Stock ranking on a parity with this
series, provided that, notwithstanding the foregoing, the corporation may
at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for, or out of the net cash proceeds from the sale of,
other shares of any such junior stock;
14
<PAGE> 36
(b) without the affirmative vote or consent of the holders of at least
a majority of the shares of this series and of all other series of
Preferred Stock ranking on a parity with this series (to the extent the
certificates of designation of such series require such series to vote on
the matters covered by this subparagraph (b)) at the time outstanding,
voting as a class, issue shares of any class or series of stock ranking on
a parity with this series (other than the 10,000,000 shares of Preferred
Stock authorized for issuance at the time of the initial issuance of this
series), unless the net earnings of the corporation available under the
General Corporation Law of the State of Delaware for payment of dividends
during 12 calendar months out of the immediately 18 preceding calendar
months are at least 3 times the annual pro forma dividend requirements on
all shares of Preferred Stock which would be outstanding thereafter; and
(c) without the affirmative vote or consent of the holders of at least
66-2/3% of the shares of this series at the time outstanding, voting as a
class (i) issue any class or series of stock ranking prior to this series
or increase the authorized number of shares of any such prior class or
series of stock, or (ii) amend, alter or repeal any of the provisions
hereof or of the Certificate of Incorporation so as adversely to affect the
preferences, rights, or powers of this series.
(15) Right to Elect Directors When Dividends in Arrears. Whenever dividends
payable on the Preferred Stock shall be in default in an aggregate amount
equivalent to six full quarterly dividends, the number of directors constituting
the Board of Directors of the corporation shall be increased by two, and the
holders of this series and of all other series of Preferred Stock (to the extent
provided in the certificates of designation of such series), voting as a class,
shall have the exclusive and special right to elect two directors of the
corporation to fill such newly created directorships. Whenever such right of the
holders of this series shall have vested, such right may be exercised initially
either at a special meeting of the holders of this series and such other series
called as provided in paragraph (16), or at any annual meeting of stockholders,
and thereafter at annual meetings of stockholders. The right of the holders of
this series to vote for the election of such members of the Board of Directors
of the corporation as aforesaid shall continue until such
15
<PAGE> 37
time as all dividends accumulated on this series shall have been paid in full,
at which time the special right of the holders of this series so to vote
separately as a class with such other series for the election of directors shall
terminate.
(16) Notice of Meetings of Holders. At any time when such special voting
power shall have vested as provided in paragraph (15), a proper officer of the
corporation shall, upon the written request of the holders of record of at least
10% of the then outstanding aggregate number of shares of this series and the
other series of Preferred Stock so entitled to vote, addressed to the Secretary
of the corporation, call a special meeting of the holders thereof for the
purpose of electing directors pursuant to paragraph (15). Such meeting shall be
held at the earliest practicable date at such place as shall be specified in the
notice of the meeting. If such meeting shall not be called by the proper
officers of the corporation within twenty days after personal service of such
written request upon the Secretary of the corporation, or within twenty days
after mailing the same within the United States of America, by registered mail
addressed to the Secretary of the corporation at its principal office, then the
holders of record of at least 10% of the then outstanding aggregate number of
shares of this series and of any such other series may designate in writing one
of their number to call such meeting at the expense of the corporation, and such
meeting may be called by such person so designated upon the notice required for
annual meetings of stockholders and shall be held at such place as shall be
specified in the notice of the meeting. Any holder so designated shall have
access to the stock books of the corporation for the purpose of causing meetings
of stockholders to be called pursuant to these provisions. Notwithstanding the
provisions of this paragraph (16), no such special meeting shall be called
during the period within ninety days immediately preceding the date fixed for
the next annual meeting of stockholders.
(17) Procedures for Meetings of Holders. At any meeting held for the
purpose of electing directors at which the holders of this series and the other
series of Preferred Stock so entitled to vote shall have the special right to
elect directors as provided in paragraph (15), the presence, in person or by
proxy, of the holders of 33-1/3% of the then outstanding aggregate number of
shares
16
<PAGE> 38
of this series and such other series shall be required to constitute a quorum
for the election of any director by the holders of such series. At any such
meeting or adjournment thereof, (a) the absence of a quorum shall not prevent
the election of directors other than those to be elected by such series voting
separately and the absence of a quorum for the election of such other directors
shall not prevent the election of the directors to be elected by such series
voting separately, and (b) in the absence of either or both such quorums, a
majority of the holders present in person or by proxy of the class or classes
which lack a quorum shall have power to adjourn the meeting for the election of
directors which they are entitled to elect from time to time without notice
other than announcement at the meeting until a quorum shall be present.
(18) Term of Directors Elected by Holders. During any period the holders of
Preferred Stock have the right to vote for directors as provided in paragraph
(15), (a) the directors so elected shall continue in office until the next
succeeding annual meeting or until their successors, if any, are elected and
qualify or, unless required by applicable law to continue in office for a longer
period, until termination of the right of the holders of Preferred Stock to vote
for directors, and (b) any vacancies in the Board of Directors shall be filled
only by vote of a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the class or classes
of stock which elected the director whose office shall have become vacant. If
and to the extent permitted by applicable law, immediately upon any termination
of the right of the holders of Preferred Stock to vote for directors as provided
in paragraph (15), the term of office of the directors then in office so elected
shall terminate. Whenever the term of office of the directors so elected shall
end and the special voting power vested in the holders of Preferred Stock as
provided in paragraph (15) shall have expired, the number of directors shall be
such number as may be provided for in the by-laws irrespective of any increase
made pursuant to the provisions of paragraph (15).
(19) Proportionate Redemption of Preferred Stock. If in any case the
amounts payable with respect to any obligations to redeem shares of this series
or of other series of the Preferred Stock ranking on a parity with this series
are not paid in full in the case of all such
17
<PAGE> 39
series with respect to which such obligations exist, the number of shares of
such series to be redeemed shall be in proportion to the respective amounts
which would be payable on account of such obligations if all amounts payable
were discharged in full.
(20) Certain Definitions. For the purposes hereof:
(a) the term "outstanding", when used in reference to shares of stock,
shall mean issued shares, excluding shares held by the corporation or a
subsidiary and, except as to the right to convert, which shall be governed
by the provisions of subparagraph (a) of paragraph (12), shares of this
series called for redemption, if funds for such redemption shall have been
deposited in trust as provided in paragraph (8);
(b) the amount of dividends "accrued" on any share of Preferred Stock
of any series as at any dividend date shall be deemed to be the amount of
any unpaid dividends accumulated thereon to and including such dividend
date, whether or not earned or declared, and the amount of dividends
"accrued" on any share of Preferred Stock of any series as at any date
other than a dividend date shall be calculated as the amount of any unpaid
dividends accumulated thereon to and including the last preceding dividend
date, whether or not earned or declared, plus an amount calculated on the
basis of the annual dividend rate fixed for the shares of such series for
the period after such last preceding dividend date to and including the
date as of which the calculation is made, based on a 360-day year of twelve
30-day months; and
(c) any series or class of stock of the corporation shall be deemed to
rank
(i) prior to this series or the Preferred Stock, as the case may
be, if the holders of such series or class shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, in preference or priority to the holders of
this series or the Preferred Stock, as the case may be;
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<PAGE> 40
(ii) on a parity with this series or the Preferred Stock, as the
case may be, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share thereof be different from
those of this series or the Preferred Stock, if the holders of such
series or class shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority one over the other as between the holders
of such series or class and the holders of this series or the Preferred
Stock; and
(iii) junior to this series or the Preferred Stock, as the case may
be, if the rights of the holders of such series or class shall be
subject or subordinate to the rights of the holders of this series or
the Preferred Stock in respect of the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up.
SECOND: That said determination of the designation, preferences and the
relative participating, optional and other special rights and qualifications,
limitations or restrictions thereof relating to said $2.125 Cumulative
Convertible Preferred Stock was duly made by the Board of Directors pursuant to
the provisions of the Certificate of Incorporation of the corporation and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, this Certificate of Designation has been signed by the
Chairman and the Secretary of AMR Corporation, and said corporation has caused
its corporate seal to be hereunto affixed, all as of the 27th day of January,
1983.
AMR CORPORATION
By /s/ ALBERT V. CASEY
---------------------------------
Chairman
Attest:
/s/ ANNE H. McNAMARA
- -------------------------------
Secretary
19
<PAGE> 41
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AMR CORPORATION
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
We, the undersigned, Richard A. Lempert and Anne H. McNamara, Senior Vice
President and Secretary, respectively, of AMR Corporation, a corporation
organized under the General Corporation Law of the State of Delaware (the
"Corporation"), hereby certify as follows:
1. Article FOURTH of the Certificate of Incorporation of the Corporation is
hereby amended to read in its entirety as follows:
"FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is 120,000,000 shares, of which
20,000,000 shares shall be shares of Preferred Stock without par value
(hereinafter called "Preferred Stock") and 100,000,000 shares shall be
shares of Common Stock of the par value of $1.00 per share (hereinafter
called "Common Stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of each class of stock
shall be governed by the following provisions:
1. The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of Preferred Stock
in one or more
<PAGE> 42
series, with such voting powers, full or limited, or without voting powers
and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of
Directors, and as are not stated and expressed in the Certificate of
Incorporation, including (but without limiting the generality thereof) the
following:
(a) The designation of such series.
(b) The dividend rate of such series, the conditions and dates upon
which such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes of
stock, and whether such dividend shall be cumulative or non-cumulative.
(c) Whether the shares of such series shall be subject to
redemption by the corporation and, if made subject to such redemption,
the times, prices and other terms and conditions of such redemption.
(d) The terms and amount of any sinking fund provided for the
purpose or redemption of the shares of such series.
(e) Whether or not the shares of such series shall be convertible
into or exchangeable for shares of any other class or classes or of any
other series of any class or classes of stock of the corporation, and,
if provision be made for conversion or exchange, the times, prices,
rates, adjustments, and other terms and conditions of such conversion or
exchange.
(f) The extent, if any, to which the holders of the shares of such
series shall be entitled to vote with respect to the election of
directors or otherwise.
2
<PAGE> 43
(g) The restrictions, if any, on the issue or reissue of any
additional Preferred Stock.
(h) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, the corporation.
2. Except as otherwise required by law and except for such voting
powers with respect to the election of directors or other matters as may be
stated in the resolutions of the Board of Directors creating any series of
Preferred Stock, the holders of any such series shall have no voting power
whatsoever. Any amendment to the Certificate of Incorporation which shall
increase or decrease the authorized stock of any class or classes may be
adopted by the affirmative vote of the holders of a majority of the
outstanding shares of the voting stock of the corporation.
3. No holder of shares of any class of stock of the corporation shall
be entitled as a matter of right, to any preemptive right to subscribe to
any additional issues of stock of the corporation of any class, or any
securities convertible into any class of stock of the corporation.
4. The corporation may from time to time issue and dispose of any of
the authorized and unissued shares of Preferred Stock for such
consideration as may be fixed from time to time by the Board of Directors,
or of Common Stock for such consideration, not less than its par value, as
may be fixed from time to time by the Board of Directors, without action by
the stockholders. The Board of Directors may provide for payment therefor
to be received by the corporation in cash, property or services. Any and
all such shares of the Preferred or Common Stock of the corporation the
issuance of which has been so authorized, and for which consideration so
fixed by the Board of Directors has been paid or delivered, shall be deemed
fully paid stock and shall not be liable to any further call or assessment
thereon."
3
<PAGE> 44
2. The amendment herein set forth was duly adopted in accordance with
the provisions of section 242 of the General Corporation Law of the State of
Delaware.
3. This amendment shall be effective on June 10, 1983.
IN WITNESS WHEREOF, this Certificate has been executed and attested by the
undersigned this 29th day of June, 1983.
/s/ RICHARD A. LEMPERT
----------------------------
Richard A. Lempert
Senior Vice President
& General Counsel
Attest:
/s/ ANNE H. MCNAMARA
--------------------------
Anne H. McNamara
Secretary
<PAGE> 45
CERTIFICATE OF CHANGE OF ADDRESS OF
REGISTERED OFFICE AND OF REGISTERED AGENT
PURSUANT TO SECTION 134 OF TITLE 8 OF THE DELAWARE CODE
To: DEPARTMENT OF STATE
Division of Corporations
Townsend Building
Federal Street
Dover, Delaware 19903
Pursuant to the provisions of Section 134 of Title 8 of the Delaware Code,
the undersigned Agent for service of process, in order to change the address of
the registered office of the corporations for which it is registered agent,
hereby certifies that:
1. The name of the agent is: The Corporation Trust Company
2. The address of the old registered office was:
100 West Tenth Street
Wilmington, Delaware 19801
3. The address to which the registered office is to be changed is:
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
The new address will be effective on July 30, 1984.
4. The names of the corporations represented by said agent are set forth on
the list annexed to this certificate and made a part hereof by
reference.
IN WITNESS WHEREOF, said agent has caused this certificate to be signed on
its behalf by its Vice-President and Assistant Secretary this 25th day of July,
1984.
THE CORPORATION TRUST COMPANY
-----------------------------------
(Name of Registered Agent)
By VIRGINIA COLWELL
---------------------------------
(Vice-President)
ATTEST:
/s/
- -----------------------------------
(Assistant Secretary)
<PAGE> 46
STATE OF DELAWARE -- DIVISION OF CORPORATIONS
CHANGE OF ADDRESS FILING FOR
CORPORATION TRUST AS OF JULY 27, 1984
DOMESTIC
<TABLE>
<S> <C> <C>
0931934 INTERNATIONAL SOFTWARE ENTERPRISES -- USA, INC. 02/12/1982 D DE
0931935 PLAZA RESOURCES COMPANY 02/12/1982 D DE
0931939 NEW VISIONS PRODUCTIONS LIMITED 02/12/1982 D DE
0931940 PPA EXPORTS, INC. 02/12/1982 D DE
0931943 QUALITY OPERATIONS, INC. 02/12/1982 D DE
0931944 LOCKWOOD DIPPLE & GREEN OF ALASKA INCORPORATED 02/12/1982 D DE
0931945 JOHN BROWN PROPERTIES, LTD. 02/12/1982 D DE
0931946 POLYDRAIN INCORPORATED 02/12/1982 D DE
0931952 TWIN CREEKS CORPORATION 02/12/1982 D DE
0931953 WEAVER EXPLORATION (AUSTRALIA) LIMITED 02/12/1982 D DE
0931954 SOUTHERN LOUISIANA NATURAL GAS COMPANY 02/12/1982 D DE
0931956 MORGANITE W.A.R.M. INCORPORATED 02/12/1982 D DE
0931980 TENDER INTERNATIONAL CORPORATION 02/16/1982 D DE
0931981 AMR CORPORATION 02/16/1982 D DE
0931990 PACCAR RAIL LEASING INC 02/16/1982 D DE
0931998 ENVIRONMENTAL PURIFICATION SYSTEMS, INC. 02/16/1982 D DE
0932001 X CO. OF COLORADO, INC. 02/16/1982 D DE
0932003 VETERINARY SCIENCE, INC. 02/16/1982 D DE
0932004 BAYFIELD CORPORATION 02/16/1982 D DE
0932025 COMPAQ COMPUTER CORPORATION 02/16/1982 D DE
0932026 ACUSHNET ELECTRONICS CO., INC. 02/16/1982 D DE
0932029 GEICO ANNUITY AND INSURANCE COMPANY 02/16/1982 D DE
0932031 USAIR GROUP, INC. 02/16/1982 D DE
0932039 PAN-TEK INTERNATIONAL, INC. 02/16/1982 D DE
0932041 RAMPAR INTERNATIONAL, INC. 02/16/1982 D DE
0932043 MAJOR MUSIC CORPORATION 02/16/1982 D DE
0932044 BIO-TECHNICAL RESOURCES, INC. 02/16/1982 D DE
0932045 ANACONDA PERU INC. 02/16/1982 D DE
0932047 IAMS FOOD COMPANY DISC, INC. 02/16/1982 D DE
0932048 INTERNATIONAL DISPLAY SYSTEMS, INC. 02/16/1982 D DE
0932049 PORT CITY BARGE CO. 02/16/1982 D DE
0932050 FEA ENTERPRISES, INC. 02/16/1982 D DE
0932053 DENVER-ALASKA OIL COMPANY 02/16/1982 D DE
0932074 KOCKS, INC. 02/17/1982 D DE
0932084 H.K.S. SERVICES, INC. 02/17/1982 D DE
0932085 DION INTERNATIONAL TRUCKS, INC. 02/17/1982 D DE
0932086 H. D. COPELAND INTERNATIONAL TRUCKS, INC. 02/17/1982 D DE
0932087 J.I.B. HOLDINGS INC. 02/17/1982 D DE
0932088 SOLOMAT CORPORATION 02/17/1982 D DE
0932089 LANCASTER COSMETICS INC. 02/17/1982 D DE
0932090 IADS OPERATIONS, INC. 02/17/1982 D DE
0932091 TWENTY-EIGHTH SHELF CORPORATION 02/17/1982 D DE
0932092 IMPORTS FROM SWITZERLAND LIMITED 02/17/1982 D DE
0932093 KUWAM CORPORATION 02/17/1982 D DE
0932107 EUROSTYLE IMPORTS, INC. 02/17/1982 D DE
0932127 NUCLEAR DATA EXPORT CORP. (DISC) 02/17/1982 D DE
0932128 EURO-METRE, INC. 02/17/1982 D DE
</TABLE>
<PAGE> 47
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
AMR CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Richard A. Lampert, Senior Vice President and General Counsel, and Anne
H. McNamara, Corporate Secretary, of AMR Corporation, a corporation organized
and existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 151 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the said Corporation, the said
Board of Directors on February 13, 1986, adopted the following resolution
creating a series of six hundred and ten thousand (610,000) shares of Preferred
Stock designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Certificate of
Incorporation, as amended, a series of Preferred Stock of the Corporation be,
and it hereby is, created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
1. Designation and Amount. The shares of such series shall be designated as
"Series A Junior Participating Preferred Stock" (the "Series A Preferred Stock")
and the number of shares constituting such series shall be 610,000.
2. Dividends and Distributions.
(i) The holders of shares of Series A Preferred Stock, in preference
to the holders of Common Stock and
<PAGE> 48
of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the fifteenth day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $5 or (b) subject
to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock
of the Corporation or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock.
In the event the Corporation shall at any time after the date hereof
declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into
a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(ii) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in subparagraph (i) of this paragraph
2 immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment
2
<PAGE> 49
Date, a dividend of $5 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(iii) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred
Stock, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time after the date
hereof declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number
3
<PAGE> 50
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a vote
of shareholders of the Corporation.
(iii) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock and any other capital stock of the Corporation having general voting
rights as set forth herein) for taking any corporate action.
4. Certain Restrictions.
(i) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in paragraph 2 of this
Section are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:
(a) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(b) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(c) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior
4
<PAGE> 51
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(d) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under
subparagraph (i) of this paragraph 4, purchase or otherwise acquire such
shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Series Preferred
Stock and may be reissued as part of a new series of Series Preferred Stock to
be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (a)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
5
<PAGE> 52
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (b) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time after the date hereof declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (a) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the date hereof declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
6
<PAGE> 53
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.
9. Rank. The Series A Preferred Stock shall rank junior with respect to
payment of dividends and on liquidation to all other series of the Corporation's
preferred stock outstanding on the date hereof and to all such other series that
specifically provide that they shall rank senior to the Series A Preferred
Stock.
10. Amendment. The Restated Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of two-thirds
of the outstanding shares of Series A Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate, and
do affirm the foregoing as true under the penalties of perjury, this 26th day of
February, 1986.
/s/ RICHARD A. LEMPERT
-------------------------
Richard A. Lempert
Senior Vice President and
General Counsel
[SEAL]
Attest:
/s/ ANNE H. McNAMARA
--------------------------
Anne H. McNamara
Corporate Secretary
7
<PAGE> 54
CERTIFICATE OF DESIGNATIONS
OF
PREFERRED AUCTION RATE STOCK
SERIES A
OF
AMR CORPORATION
------------------------------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------------------------------------
AMR CORPORATION, a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), HEREBY CERTIFIES that the following
resolutions were duly adopted by the Board of Directors of the Corporation
pursuant to authority conferred upon the Board of Directors by the provisions of
the Certificate of Incorporation of the Corporation which authorizes the
issuance of up to 20,000,000 shares of preferred stock without par value at a
meeting of the Board of Directors duly held on May 20, 1987:
1. The Board of Directors on May 20, 1987 adopted the following resolution
designating three series of preferred stock without par value of the Corporation
(for purposes of paragraphs 1 through 3 of this Certificate of Designations,
such three series are collectively referred to as "Preferred"):
"RESOLVED, that there are hereby designated three series of Preferred,
entitled as follows:
Preferred Auction Rate Stock, Series A
Preferred Auction Rate Stock, Series B
Preferred Auction Rate Stock, Series C
respectively, each such Series to consist of 100 shares."
2. The Board of Directors on May 20, 1987 adopted the following resolutions
designating a Preferred Stock Committee of the Board of Directors and
authorizing such committee to act on behalf of the Board of Directors in
<PAGE> 55
connection with the issuance of any such series of Preferred:
"RESOLVED, that the Board of Directors hereby appoints a Preferred Stock
Committee, to be composed of such directors as shall be designated by the Board
of Directors by separate resolutions adopted by a majority of the whole Board of
Directors on the date hereof or from time to time hereafter, which Committee
shall have the powers set forth in these resolutions; that two members of the
Preferred Stock Committee constitute a quorum and are necessary and sufficient
to transact business; that the act of a majority of those present at any meeting
shall be the act of the Preferred Stock Committee; that notice of each meeting
of the Preferred Stock Committee shall be given by any member causing to be
delivered, not less than two hours prior to the meeting, to the office of each
member shown on the records of the Corporation, written or telephonic notice of
the location, date, time and purpose of the meeting; that a written waiver of
notice signed by each member, whether before or after the meeting, shall be
deemed equivalent to notice; that attendance by a member at a meeting shall
constitute waiver of notice of such meeting; that attendance at and
participation in a meeting may take place by conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other; and that a written report of any actions taken by
the Preferred Stock Committee shall be delivered at the next meeting of the
Board of Directors; and
RESOLVED, that the Preferred Stock Committee be and hereby is authorized
and empowered with full power and authority to act on behalf and in the stead of
the Board of Directors in connection with the issuance of any series of the
Preferred as herein designated and to fix the dividend rates (including the
dividend determination auction procedures) and dividend payment dates and to
declare dividends payable on any series of Preferred, to the fullest extent
permitted by Section 141(c) of the Delaware General Corporation Law as it now
exists or is hereafter amended."
3. The Board of Directors on May 20, 1987 adopted the following resolutions
fixing the voting rights of each such series of Preferred:
"RESOLVED, that the shares of each series of the Preferred shall have no
voting powers, either general or special, except that:
-2-
<PAGE> 56
(a) Whenever, at any time or times, dividends payable on any series of
Preferred shall be in arrears for such number of dividend periods which
shall in the aggregate contain not less than 540 days on the shares of such
series at the time outstanding, the record holders of such series (voting
separately as a class with (i) the record holders of any other series of
Preferred theretofore granted voting rights as a result of such a dividend
arrearage with respect to such other series and (ii) the record holders of
all other series of preferred stock subsequently issued if so provided in
the certificate of designations with respect thereto), will be entitled to
vote for the election of two additional directors of the Corporation at the
Corporation's next annual meeting of stockholders. At elections for such
directors, each record holder of such series shall be entitled to one vote
for each share held (the record holders of shares of any other series of
preferred stock then entitled to vote being entitled to such number of
votes, if any, for each share of stock held as may be granted to them).
Upon the vesting of such right of the holders of such series, the maximum
authorized number of members of this Board of Directors shall automatically
be increased by two and the two vacancies so created shall be filled by
vote of the record holders of such outstanding series (either alone or
together with the holders of shares of any one or more other series of
preferred stock then entitled to vote) as hereinafter set forth. The right
of the holders of such series, voting separately as a class, to elect
(either alone or together with the holders of shares of any one or more
other series of preferred stock then entitled to vote) members of this
Board of Directors as aforesaid shall continue until such time as all
dividends accumulated on such series shall have been paid in full, at
which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned.
Upon any termination of the right of the holders of all series of
Preferred and any other such preferred stock to elect directors, the term
of office of all directors then in office elected by the holders of such
preferred voting as a class shall, to the extent permitted by law,
terminate immediately. If the office of any director elected by the holders
of preferred stock so voting as a class becomes vacant by reason of death,
resignation, retirement, disqualification or removal from office, or
otherwise, the remaining director elected by the holders of preferred stock
so voting as a class may choose a successor who shall hold office for the
unexpired term in respect of
-3-
<PAGE> 57
which such vacancy occurred. Whenever the term of office of the directors
elected by the holders of preferred stock so voting as a class shall end
and the special voting powers vested in the holders of preferred stock
shall have expired, the number of directors shall be such number as may be
provided for in the By-Laws irrespective of any increase made pursuant to
the provisions of this resolution.
(b) So long as any shares of any series of Preferred remain
outstanding, the consent of the record holders of at least two-thirds of
the shares of such series outstanding at the time (voting separately as a
class) given in person or by proxy, either in writing or at any special or
annual meeting called for the purpose, shall be necessary to permit, effect
or validate the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate of
Incorporation, as amended, of the Corporation or of the resolutions set
forth in any Certificate of Designations for any series of Preferred
designating such series and the preferences and privileges, relative,
participating, optional and other special rights and qualifications,
limitations and restrictions thereof if, and only if, the foregoing action,
would (i) adversely affect any right, preference, privilege or power of
shares of such series or (ii) increase the rights, preferences, privileges
or powers of shares of any other series of the Preferred if such increase
is not applicable to such first series; provided, however, that any
increase in the amount of authorized preferred stock (other than the
Preferred or the creation and issuance of other series of preferred stock,
or any increase in the amount of authorized shares of any other series of
preferred stock, in each case ranking on a parity with or junior to such
series with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
adversely affect such rights, preferences, privileges or voting powers.
(c) So long as any shares of any series of Preferred remain
outstanding, the consent of the record holders of at least two-thirds of
the shares of all series of Preferred outstanding at the time (voting
separately as a class) given in person or by proxy, either in writing or at
any special or annual meeting called for such purpose, shall be necessary
to permit, effect or validate the authorization, creation or issuance, or
any increase in the authorized or issued amount, of any class or series of
stock ranking senior to any share of the Preferred with respect to
-4-
<PAGE> 58
the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up.
(d) The foregoing voting provisions shall not apply to any series of
Preferred if, at or prior to the time when the act with respect to which
such vote would otherwise be required shall be effected, all outstanding
shares of such series shall have been redeemed or sufficient funds shall
have been deposited in trust to effect such a redemption.
4. The Board of Directors on May 20, 1987, adopted the following
resolution, with the preferences and rights set forth therein relating to the
Initial Dividend Rate (as defined in such resolution) having been fixed by a
special committee of the Board of Directors pursuant to authorization delegated
to it by the Board of Directors:
"RESOLVED, that the issue of up to 100 shares of Preferred Auction Rate
Stock, Series A, without par value of the Corporation is hereby authorized and
the preferences and privileges, relative, participating, optional and other
special rights, and qualifications, limitations and restrictions of all 100
shares of such series, in addition to those set forth in the Certificate of
Incorporation of the Corporation, are hereby fixed as follows:
PREFERRED AUCTION RATE STOCK,
SERIES A
PART 1
1. Number of shares. (a) The designation of the series of preferred stock
without par value provided for herein shall be "Preferred Auction Rate Stock,
Series A" (hereinafter referred to as the "Series A Preferred"), and the number
of authorized shares constituting Series A Preferred is 100. No fractional
shares of Series A Preferred will be issued.
(b) All shares of Series A Preferred redeemed or purchased by the
Corporation (which shall not be deemed to include purchases by an Affiliate, as
defined in Section 1 of Part II hereof) shall be retired and cancelled and shall
be restored to the status of authorized but unissued shares of preferred stock,
without designation as to series, and
-5-
<PAGE> 59
may thereafter be issued, but not as shares of Series A Preferred.
(c) The Series A Preferred shall rank on a parity as to dividends and upon
liquidation with all other series of Preferred issued by the Corporation.
2. Dividends.
(a) The Holders (all capitalized terms used in this Part I and not
otherwise defined shall have the meanings provided in Section 6 of this Part I)
shall be entitled to receive, when, as, and if declared by the Board of
Directors of the Corporation (or a committee thereof authorized by the Board of
Directors to so act), out of funds legally available therefor, cumulative cash
dividends at the Applicable Rate per annum, determined as set forth below, and
no more, payable on the respective dates set forth below.
(b) (i) Dividends on shares of Series A Preferred at the Applicable Rate
per annum as described in subsections (c)(i) and (c)(ii) of this Section 2,
shall accrue from the Date of Original Issue and shall be payable initially on
July 9, 1987 (or such other date as is designated by a resolution of the Board
of Directors of the Corporation (or a committee thereof authorized to so act)
prior to the Date of Original Issue) and on each succeeding seventh Thursday
after such date (in each case, the "Normal Day"); provided, however, that (i) if
the Normal Day is not a Business Day or (ii) the following Friday is not a
Business Day, the Dividend Payment Date will be the first Business Day preceding
such Normal Day that is immediately followed by a day that is a Business Day.
Although any particular Dividend Payment Date may not occur on the originally
scheduled Normal Day because of the above-mentioned provisos, the next
succeeding Dividend Payment Date shall be, subject to such provisos, the seventh
Thursday following the originally designated Normal Day for the prior Dividend
Period. Notwithstanding the foregoing, in the event of a change in Federal law
lengthening the minimum holding period (currently found in Section 246(c) of the
Internal Revenue Code of 1986, as amended) required for taxpayers to be entitled
to the dividends-received deduction on preferred stock held by non-affiliated
corporations (currently found in Section 243(a) of such Code) (the "Minimum
Holding Period"), the Board of Directors of the Corporation shall increase the
period of time between Dividend Payment Dates so as to increase uniformly the
number of days (such number
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of days without giving effect to the provisos in the first sentence of this
Section 2(b)(i) being "Dividend Period Days") in Dividend Periods commencing
after the date of such change in law (and in any event commencing no earlier
than 21 days after such action by the Board of Directors of the Corporation) to
equal or exceed the then current Minimum Holding Period; provided that the
number of Dividend Period Days shall not exceed by more than nine days the
length of such then current Minimum Holding Period and shall be evenly divisible
by seven, and the maximum number of Dividend Period Days shall not exceed 98
days. If as a result of applying the above procedures for determining a Dividend
Payment Date, the number of days in a Dividend Period would not satisfy the
Minimum Holding Period, the Corporation's Board of Directors may fix the
Dividend Payment Date on the first Business Day following the Normal Day which
is next succeeded by a Business Day. Upon any such change in the number of
Dividend Period Days as a result of a change in law, the Corporation will give
notice of such change to the Auction Company and to the Holders at such Holders'
addresses as the same appears on the stock transfer books of the Corporation.
The first date of payment of dividends is the "Initial Dividend Payment Date"
and each date of payment of dividends is a "Dividend Payment Date".
(ii) As long as a Permanent Auction Termination Date has not occurred with
respect to the Series A Preferred, the Corporation shall deposit with the
Auction Company not later than 12:00 noon, New York City time, on the Business
Day next preceding each Dividend Payment Date an aggregate amount of funds
available on such Business Day or the next Business Day in The City of New York,
New York, equal to the dividends to be paid to all Holders on such Dividend
Payment Date. All such moneys shall be held in trust for the payment of such
dividends by the Auction Company for the benefit of the Holders specified in
subsection (b)(iii) of this Section 2.
(iii) Each dividend shall be paid to the Holders as their names appear on
the stock transfer books of the Corporation on the Business Day next preceding
the Dividend Payment Date thereof; provided, however, that if a Permanent
Auction Termination Date has occurred in respect of the Series A Preferred or
such dividend payment is in respect of dividends in arrears, such dividend shall
be paid to the Holders as their names appear on the stock transfer books of the
Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation. Dividends
in arrears for
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any past Dividend Period may be declared and paid at any time without reference
to any regular Dividend Payment Date.
(c) (i) The dividend rate (the "Initial Dividend Rate") on shares of Series
A Preferred during the period commencing on the Date of Original Issue to and
including the day immediately preceding the Initial Dividend Payment Date (the
"Initial Dividend Period") shall be 5.45%. Commencing on the Initial Dividend
Payment Date, the dividend rate on shares of Series A Preferred for each
subsequent dividend period (a "Subsequent Dividend Period") and the Initial
Dividend Period or any Subsequent Dividend Period being a "Dividend Period")
thereafter, which subsequent Dividend Period shall commence on each Dividend
Payment Date and shall end on and include the date immediately preceding the
next succeeding Dividend Payment Date, shall be, except as provided in
subsection (c)(ii) of this Section 2, equal to the rate per annum that results
from implementation of the Auction Procedures described in Part II hereto (which
Part II is hereby incorporated by reference herein and made a part hereof).
(ii) In the event of any failure by the Corporation to deposit (in funds
available on such Business Day or the next Business Day in the City of New York,
New York) with the Auction Company by 12:00 noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date, the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend Payment
Date on any share of Series A Preferred or (ii) on the Business Day next
preceding any redemption date for Series A Preferred, the redemption price to be
paid on such redemption date, including an amount equal to accrued and unpaid
dividends thereon (whether or not earned or declared) for any share of Series A
Preferred, after a notice of redemption has been given as provided in subsection
C of Section 3 of this Part I, then, except as provided in the next following
sentence, the dividend rate for each Dividend Period commencing after the date
of any such failure shall be equal to the Alternate Rate for such Dividend
Period. To the extent that the Corporation has remedied any such failure to pay
dividends, and is not in arrears on any other dividends payable on shares of
Series A Preferred, and/or has remedied any such failure to pay such redemption
price, in each case prior to the second Business Day preceding the fifth
Dividend Payment Date following such failure, Auctions shall be reinstated for
Series A Preferred on the first Auction Date following such remedy and the
Applicable Rate for Series A Preferred shall again be the rate per annum that
results from the
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implementation of the Auction Procedures; to the extent such failure is not so
remedied by such date, Auctions for such Series will be permanently discontinued
and the Applicable Rate for all future Dividend Periods for such Series shall be
the Alternate Rate for each such Dividend Period.
(iii) The amount of dividends per share of Series A Preferred payable for
any Dividend Period shall be computed by multiplying the Applicable Rate for
such Dividend Period by a fraction the numerator of which shall be the number of
days in the Dividend Period such share was outstanding and the denominator of
which shall be 360, and then multiplying the rate so obtained by $500,000 per
share of Series A Preferred.
(d)(i) So long as any shares of Series A Preferred are outstanding, no full
dividends shall be declared or paid or set apart for payment on the preferred
stock of any series ranking, as to dividends, on a parity with Series A
Preferred for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on shares of Series A Preferred for
all Dividend Periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of Series A Preferred and any other series of preferred stock ranking
on a parity as to dividends with Series A Preferred, all dividends declared on
Series A Preferred and any other series of preferred stock ranking on a parity
as to dividends with Series A Preferred shall be declared pro rata so that the
amount of dividends declared per share on Series A Preferred and such other
series of preferred stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of Series A Preferred and such
other series of preferred stock bear to each other.
(ii) So long as any shares of Series A Preferred are outstanding, no
dividend (other than dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock or any
other stock ranking junior to Series A Preferred as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
distribution declared or made upon the common stock or upon any other stock of
the Corporation ranking junior to or on a parity with Series A Preferred as to
dividends, nor shall any common stock or any other stock of the Corporation
ranking junior to or on a
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parity with Series A Preferred as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to Series A Preferred as to dividends and upon
liquidation), unless, in each case, the full cumulative dividends on all
outstanding shares of Series A Preferred shall have been paid through the most
recent Dividend Payment Date.
(e) Any dividend payment made on shares of Series A Preferred shall first
be credited against the dividends accrued with respect to the earliest Dividend
Period for which dividends have not been paid. Holders of shares of Series A
Preferred shall not be entitled to (i) any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as herein provided,
on the Series A Preferred, or (ii) any interest, or sum of money in lieu of
interest, in respect of any dividend payment or payments on the Series A
Preferred which may be in arrears.
3. Redemption. Shares of Series A Preferred shall be redeemable by the
Corporation as provided below:
A. Optional Redemption.
(a) At the option of the Corporation, shares of Series A Preferred may be
redeemed as a whole on any Dividend Payment Date or in part from time to time on
the second Business Day next preceding any Dividend Payment Date, out of funds
legally available therefor, at a redemption price of:
(i) $507,500 per share if redeemed on or before the first anniversary
of the Date of Original Issue;
(ii) $505,000 per share if redeemed thereafter and on or before the
second anniversary of the Date of Original Issue;
(iii) $502,500 per share if redeemed thereafter and on or before the
third anniversary of the Date of Original Issue; and
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(iv) $500,000 per share if redeemed thereafter;
plus, in each case, an amount equal to accrued and unpaid dividends thereon
(whether or not earned or declared) to (but not including) the date fixed for
redemption.
(b) At the option of the Corporation, shares of Series A Preferred may be
redeemed, as a whole but not in part, on any Dividend Payment Date, out of funds
legally available therefor, at a redemption price of $500,000 per share, plus an
amount equal to accrued and unpaid dividends thereon (whether or not earned or
declared) to the date fixed for redemption, if the Applicable Rate with respect
to the Dividend Period ending on the day immediately preceding such Dividend
Payment Date shall equal or exceed the Aa Composite Commercial Paper Rate on the
date of determination of such Applicable Rate.
B. Allocation. If fewer than all the outstanding shares of Series A
Preferred are to be redeemed pursuant to Section 3A(a), the number of shares to
be redeemed shall be determined by the Board of Directors of the Corporation. To
the extent that there is one Holder of all shares of Series A Preferred, such
Holder shall determine which of its shares of Series A Preferred are to be
redeemed in the case of a partial redemption. To the extent there is more than
one Holder for all shares of Series A Preferred, then in the case of a partial
redemption, the shares to be redeemed shall be determined by the Board of
Directors among the then current Holders by lot or such other method deemed by
the Board of Directors to be fair and equitable.
C. Notice of Redemption; Other Redemption Procedures.
(a) Whenever shares of Series A Preferred are to be redeemed pursuant to
this Section 3, a notice of such redemption shall be mailed, by first-class
mail, postage prepaid, or delivered to each Holder of the shares to be redeemed
at such Holder's address as the same appears on the stock transfer books of the
Corporation. Such notice shall be mailed or delivered not less than 20 days and
not more than 45 days prior to the date fixed for redemption. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of Series A
Preferred to be redeemed; (iii) the redemption price; (iv) the place or places
where such shares of Series A Preferred are to be surrendered for payment of the
redemption price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemp-
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tion date; and (vi) the provision of this Section 3 under which the redemption
is made. If fewer than all shares of Series A Preferred held by a Holder are to
be redeemed, the notice mailed or delivered to such Holder shall specify the
number of shares to be redeemed from such Holder. Except as required by the
applicable law, no defect in the notice of redemption or in the mailing thereof
shall affect the validity of the redemption proceedings.
(b) On and after the date specified in a notice of redemption, the Holder
of shares of Series A Preferred specified for redemption, upon presentation and
surrender at the office of the Auction Company (or any successor redemption
agent) designated in such notice of redemption of the certificate or
certificates evidencing the shares of Series A Preferred held by such holder and
called for redemption, properly endorsed in blank for transfer or accompanied by
proper instruments of assignment or transfer in blank, bearing all necessary
transfer tax stamps thereto affixed and cancelled, shall be entitled to receive
therefor the applicable redemption price hereinbefore specified. If less than
all of the shares represented by one share certificate are to be redeemed, the
Corporation shall issue a new share certificate for the shares not redeemed.
(c) If the Corporation shall give a notice of redemption, then, by 12:00
noon (New York City time) on the Business Day next preceding the date fixed for
redemption, the Corporation shall deposit with the Auction Company (or any
successor redemption agent) an aggregate amount of funds available on the next
Business Day equal to the aggregate redemption price of the shares of the Series
A Preferred called for redemption in such notice of redemption and shall give
the Auction Company (or any successor redemption agent) irrevocable instructions
and authority to pay the redemption price to the Holders of the shares of the
Series A Preferred called for redemption upon surrender of the certificate or
certificates therefor. All such moneys so deposited will be held in trust by the
Auction Company for the benefit of the Holders of the shares to be redeemed.
Upon the earlier of the date of such deposit or the payment of the redemption
price, all rights of the Holders of the shares so called for redemption shall
cease and terminate, except the right of the Holders of such shares, upon
surrender of such shares, to receive the redemption price thereof, but without
any interest, and such shares shall no longer be deemed to be outstanding for
any purposes. The Corporation shall be entitled to receive, promptly after the
date fixed for redemption, any funds so deposited and interest thereon in
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excess of the aggregate redemption price of the shares of the Series A Preferred
called for redemption on such date. Any funds so deposited which are unclaimed
at the end of two years from such redemption date shall, to the extent permitted
by law, be repaid to the Corporation, after which the holders of shares of the
Series A Preferred so called for redemption shall look only to the Corporation
for payment thereof, without any interest payable thereon. The Corporation shall
be entitled to receive, from time to time after the date fixed for redemption,
any interest on the funds so deposited and held by the Auction Company (or any
successor redemption agent).
(d) Notwithstanding any other provisions of this Section 3, if any
dividends on any share of Preferred are in arrears, no shares of Preferred may
be redeemed unless all outstanding shares of Preferred are simultaneously
redeemed, nor may any shares of Preferred be purchased or otherwise acquired by
the Corporation except in accordance with a purchase offer on the same terms
made by the Corporation for all outstanding shares of Preferred.
(e) Except as set forth in this Section 3 with respect to redemptions and
subject to subsection (d) of this Section 3 and to the limitations contained in
Part II, nothing contained herein shall limit any legal right of the Corporation
or any Affiliate to purchase or otherwise acquire any shares of Series A
Preferred at any price, whether higher or lower than the redemption price.
Shares of Series A Preferred which have been redeemed, purchased or otherwise
acquired by the Corporation are not subject to reissuance and shall be retired.
4. Liquidation.
(a) Upon a liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series A
Preferred then outstanding shall be entitled, whether from capital or surplus
before any assets of the Corporation shall be distributed among or paid over to
the holders of stock junior to the Series A Preferred as to liquidation payments
but after distribution of such assets among, or payment thereof over to,
creditors of the Corporation and to holders of any stock of the Corporation with
liquidation rights senior to the Series A Preferred, to be paid $500,000 per
share, plus, in each such case, an amount equal to all accrued and unpaid
dividends thereon (whether or not earned or declared) to the date of final
distribution. After any such payment in full,
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the holders of shares of the Series A Preferred shall not be entitled to any
further participation in any distribution of assets of the Corporation.
(b) Neither the merger or consolidation of the Corporation into or with any
other corporation or the merger or consolidation of any other corporation into
or with the Corporation, shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, for the purposes of this Section 4.
(c) If, upon any such liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets of the Corporation
shall be insufficient to make the full payments required by subsection (a) of
this Section 4, no such distribution shall be made on account of any shares of
any other class or series of preferred stock ranking on a parity with the shares
of Series A Preferred upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
Series A Preferred, ratably, in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
(d) Subject to the rights of the holders of shares of any series or class
or classes of stock ranking on a parity with or prior to the shares of Series A
Preferred upon liquidation, dissolution or winding up, upon any liquidation,
dissolution or winding up of the Corporation, after payment shall have been made
in full to the Holders of the shares of Series A Preferred as provided in this
Section 4, but not prior thereto, any other series or class or classes of stock
ranking junior to the shares of Series A Preferred upon liquidation shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the Holders of the shares of Series A Preferred shall not be entitled to share
therein.
5. Ranking. For purposes of this resolution, any stock of any class or
classes of the Corporation shall be deemed to rank:
(a) prior to the shares of Series A Preferred either as to dividends
or upon liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the
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Corporation, as the case may be, in preference or priority to the Holders
of shares of Series A Preferred.
(b) on a parity with shares of Series A Preferred either as to
dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of Series A Preferred, if the
holders of such stock shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority, one over the
other, as between the holders of such stock and the Holders of shares of
Series A Preferred; and
(c) junior to shares of Series A Preferred either as to dividends or
upon liquidation, if such class shall be common stock or if the Holders of
shares of Series A Preferred shall be entitled to receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders
of shares of such class or classes.
6. Definitions. As used herein, the following terms shall have the
following meanings (with terms defined in the singular having the same meanings
when used in the plural and vice versa):
(a) "Aa Composite Commercial Paper Rate," on any date, shall mean (i)
the interest equivalent of the 60-day rate on commercial paper placed on
behalf of issuers whose corporate bonds are rated "Aa" by Moody's, "AA" by
S&P, or the equivalent of such rating by another rating agency, as made
available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the Business Day immediately preceding such date, or (ii) if
the Federal Reserve Bank of New York does not make available such a rate,
then the arithmetic average of the interest equivalent of the 60-day rate
on commercial paper placed on behalf of such issuers, as quoted on a
discount basis or otherwise by two nationally recognized commercial paper
placement agents or dealers selected by the Corporation to the Auction
Company prior to the close of business on the Business Day immediately
preceding such date. If the Board of Directors of the Corporation shall
increase the number of Dividend Period Days in accordance with Section 2(b)
(i) of this Part I, with
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the result that (A) the number of Dividend Period Days shall be less than
70, such rate shall be the interest equivalent of the 60-day rate on such
commercial paper, or (B) the number of Dividend Period Days shall be 70 or
more but less than 85, such rate shall be the arithmetic average of the
interest equivalent of the 60-day and 90-day rates on such commercial
paper, or (C) the number of Dividend Period Days shall be 85 or more but
less than or equal to 98, such rate shall be the interest equivalent of the
90-day rate on such commercial paper. For the purposes of such definition,
"interest equivalent" means a rate for commercial paper which is (A) if the
provided rate is made available on an interest bearing basis, such provided
rate and (B) if the provided rate is made available on a discount basis (a
"discount rate") a rate equal to the quotient (rounded upwards to the next
higher one-thousandth of one percent (.001 of 1%) of (A) the discount rate
(expressed as a decimal) divided by (B) the difference between (x) 1.00 and
(y) a fraction the numerator of which shall be the product of the discount
rate (expressed as a decimal) times the number of days in which such
commercial paper matures and the denominator of which shall be 360.
(b) "Alternate Rate" shall mean for any Dividend Period 150% of LIBOR
determined for such Dividend Period.
(c) "Applicable Rate" shall mean the dividend rate applicable to the
Series A Preferred in effect during a Dividend Period as determined
pursuant to Sections 2(c)(i) and (ii) of this Part I.
(d) "Auction" shall mean the periodic implementation of the Auction
Procedures.
(e) "Auction Company" shall mean the bank or trust company or other
entity appointed as such by a resolution of the Board of Directors of the
Corporation.
(f) "Auction Date" shall mean the Business Day next preceding a
Dividend Payment Date.
(g) "Auction Procedures" shall mean the procedures for conducting
Auctions set forth in Part II hereof.
(h) "Board of Directors" shall mean the Board of Directors of the
Corporation or any duly authorized committee thereof.
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(i) "Business Day" shall mean a day on which the New York Stock
Exchange, Inc. is open for trading and is not a day on which banks in The
City of New York are authorized or required by law or order to close.
(j) "Corporation" shall mean AMR Corporation, a Delaware corporation.
(k) "Date of Original Issue" shall mean the date on which the
Corporation originally issues shares of Series A Preferred.
(l) "Dividend Payment Date" shall have the meaning specified in
Section 2(b)(i) of this Part I.
(m) "Dividend Period" shall have the meaning specified in Section
2(c)(i) of this Part I.
(n) "Dividend Period Days" shall have the meaning specified in Section
2(b)(i) of this Part I.
(o) "Holder" shall mean a holder of shares of Series A Preferred as
the same appears on the stock transfer books of the Corporation.
(p) "Initial Dividend Payment Date" shall have the meaning specified
in Section 2(b)(i) of this Part I.
(q) "Initial Dividend Period" shall have the meaning specified in
Section 2(c)(i) of this Part I.
(r) "Initial Dividend Rate" shall have the meaning specified in
Section 2(c)(i) of this Part I.
(s) "LIBOR" shall mean for any Dividend Period the arithmetic average
(rounded to the next higher 1/16 of 1%), computed by the Corporation, of
the respective rates per annum quoted by each of the principal London
offices of Bankers Trust Company, Citibank, N.A., Barclays Bank plc and
National Westminister Bank plc, or their respective successors (the
"Reference Banks"), at which United States dollar deposits for a
two-month period in the amount of U.S.$10,000,000 are offered by such
Reference Banks to leading banks in the London interbank market, at
approximately 11:00 A.M. (London time) on the first day of such Dividend
Period, or if such day is not a day on which dealings in United States
dollars are transacted in the London interbank market, then on the next
preceding day on which such dealings are transacted in such market. If
any Reference Bank does
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not quote a rate required to determine LIBOR, LIBOR shall be determined on
the basis of the quotation or quotations furnished by the remaining
Reference Bank or Reference Banks and any Substitute Reference Bank or
Substitute Reference Banks (as defined below) selected by the Corporation
to provide such quotation or quotations not being supplied by any Reference
Bank or Reference Banks, as the case may be, or, if the Corporation does
not select any Substitute Reference Bank or Substitute Reference Banks, by
the remaining Reference Bank or Reference Banks. However, if the Board of
Directors of the Corporation shall, pursuant to Section 2(b)(i) of this
Part I, increase the number of Dividend Period Days, in the event of a
change in the dividend received deduction holding period, with the result
that (i) the Dividend Period Days after such adjustment shall be 70 or more
days but fewer than 85 days, LIBOR shall be based on the arithmetic average
(rounded to the next higher 1/16 of 1%) of the rates per annum quoted for
such United States dollar deposits for two-and three-month periods or (ii)
the Dividend Period Days after such adjustment shall be 85 or more days but
98 or fewer days, such rate shall be based on the rates per annum quoted
for such United States dollar deposits for a three-month period. For the
purposes of the foregoing, "Substitute Reference Bank" shall mean the
principal London offices of The Chase Manhattan Bank, N.A. or Morgan
Guaranty Trust Company of New York, or their respective successors or, if
none of such Substitute Reference Banks are engaged in dealings in United
States dollars in the London interbank market, then a bank or banks,
selected by the Corporation, engaged in dealings in United States dollars
in the London interbank market. For each Dividend Period for which the rate
is to be the Alternate Rate, the Corporation will obtain the rates from the
Reference Banks, determine LIBOR and the Alternate Rate and notify the
Auction Company of such determination.
(t) "Minimum Holding Period" shall have the meaning specified in
Section 2(b)(i) of this Part I.
(u) "Normal Day" shall have the meaning specified in Section 2(b)(i)
of this Part I.
(v) "Permanent Auction Termination Date" shall mean the second
Business Day preceding the fifth Dividend Payment Date following any
failure by the Corporation to pay in a timely manner to the Auction Company
the full amount of any dividend for Series A Preferred when due or the
redemption price, when due, of any shares of Series A Preferred after the
Corporation has given notice of redemption, if and
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only if, such failure has not theretofore been remedied and the Corporation
is not then in arrears on any dividends payable on Series A Preferred.
(w) "Preferred" shall mean the Series A Preferred, together with the
series of preferred stock of the Corporation designated as "Preferred
Auction Rate Stock, Series B" and "Preferred Auction Rate Stock, Series C".
(x) "Series A Preferred" shall mean the series of preferred stock,
without par value, of the Corporation designated as "Preferred Auction Rate
Stock, Series A".
(y) "Subsequent Dividend Period" shall have the meaning specified in
Section 2(c)(i) of this Part I.
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PART II
AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms used in this Part II and not defined in this Section 1
shall have the respective meanings specified in Part I hereof. As used in this
Part II, the following terms shall have the following meanings, unless the
context otherwise requires, with all references to the singular to include the
plural and all references to the plural to include the singular:
(a) "Affiliate" shall mean any Person known to the Auction Company to
be controlled by, in control of, or under common control with the
Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository
that will act on behalf of a Bidder (as identified in such Bidder's
Purchaser's Letter).
(c) "Applicable Rate" shall mean the dividend rate applicable to the
Shares for a Dividend Period to the extent determined pursuant to the
procedures set forth herein.
(d) "Auction" shall mean the periodic auction in respect of the Shares
conducted in accordance with the procedures set forth in this Part II.
(e) "Auction Company" shall mean Manufacturers Hanover Trust Company
or any successor thereto as Auction Company to the extent such successor
has entered into an agreement with the Corporation similar to the Auction
Company Agreement.
(f) "Auction Company Agreement" shall mean the Auction Company
Agreement between the Corporation and Manufacturers Hanover Trust Company
as Auction Company pursuant to which Manufacturers Hanover Trust Company
agrees, inter alia, to perform the duties of the Auction Company in
connection with the Auctions.
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(g) "Auction Date" shall mean the Business Day next preceding a
Dividend Payment Date.
(h) "Auction Placement Agent" shall mean any entity permitted by law
to perform the functions of an Auction Placement Agent in Auctions which
has been selected by the Corporation and has entered into an Auction
Placement Agent Agreement with the Auction Company that remains in effect.
(i) "Auction Placement Agent Agreement" shall mean an agreement
between the Auction Company and an Auction Placement Agent pursuant to
which such Action Placement Agent agrees to follow the procedures set forth
herein in respect of Auctions.
(j) "Available Shares" shall have the meaning specified in Section
4(b)(i).
(k) "Bid" shall mean the offer of an Existing Holder or Potential
Holder to continue to hold or purchase, as the case may be, a Share or
Shares if the Applicable Rate equals or exceeds the Specified Rate
contained in such Bid. Such offers from the same Person specifying
different Specified Rates shall each constitute a separate Bid.
(l) "Bidder" shall mean each Existing Holder and Potential Holder
placing an Order.
(m) "Clearing Bid" shall have the meaning specified in Section 4(b).
(n) "Eligible Person" shall mean those Persons (i) who qualify as
"accredited investors" under Regulation D promulgated under the Securities
Act of 1933, as amended, (ii) who otherwise satisfy the requirements set
forth in the Auction Placement Agent Agreements as persons from whom
Auction Placement Agents may solicit Orders or who constitute Affiliates of
the Corporation, and (iii) who have executed and delivered a Purchaser's
Letter, which remains in full force and effect.
(o) "Existing Holder" shall mean on any Auction Date an Eligible
Person if and to the extent then listed as the beneficial owner of Shares
in the records of the Auction Company.
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<PAGE> 75
(p) "Hold Order" shall have the meaning specified in Section
2(a)(iii).
(q) "Maximum Rate" at any Auction shall mean the applicable Rate
Multiple times the Aa Composite Commercial Paper Rate determined at the
close of business on the Business Day immediately preceding the related
Auction Date.
(r) "Order" shall mean the placing with the Placement Agent of (x) a
Hold Order, a Bid or Bids and/or a Sell Order by an Existing Holder and (y)
a Bid by a Potential Holder.
(s) "Outstanding" shall mean, as of any date, Shares theretofore
issued by the Corporation except, without duplication, (i) any Shares
theretofore cancelled or delivered to the Auction Company for cancellation,
or redeemed by, or as to which a notice of redemption has been given by,
the Corporation, (ii) any Shares as to which the Corporation is an Existing
Holder and (iii) any Shares represented by any certificate in lieu of which
a new certificate has been executed and delivered by the Corporation.
(t) "Owned Shares" of any Existing Holder shall mean the Shares as to
which it is listed as beneficial owner in the records of the Auction
Company.
(u) "Person" shall mean a corporation, a trust, a pension fund, an
institutional investor or other similar entity.
(v) "Potential Holder" shall mean any Eligible Person who has
submitted a Bid (or, in the case of an Existing Holder, a Bid for Shares
other than Owned Shares).
(w) "Prevailing Rating" of the Shares shall be (i) AA/aa or Above if
the Shares have a rating of AA- or better by Standard & Poor's Corporation
("Standard & Poor's") or aa3 or better by Moody's Investors Service, Inc.
("Moody's"), or the equivalent of either or both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, (ii) if not AA/aa or Above, then A/a if the
Shares have a rating A- or better and lower than AA- by Standard & Poor's
or a3 or better and lower than aa3 by Moody's or the equivalent of either
or both of such ratings by such agencies or a substitute rating
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<PAGE> 76
agency or substitute rating agencies selected as provided below, (iii) if
not AA/aa or Above or A/a, then BBB/baa if the Shares have a rating of BBB-
or better and lower than A- by Standard & Poor's or baa3 or better and
lower than a3 by Moody's or the equivalent of either or both of such
ratings by such agencies or a substitute rating agency or substitute rating
agencies selected as provided below and (iv) if not AA/aa or Above, A/a or
BBB/baa, then Below BBB/baa. The Corporation will take all reasonable
action necessary to enable Standard & Poor's or Moody's to provide a rating
for the Shares. If neither Standard & Poor's nor Moody's shall make such a
rating available, Bankers Trust Company or its successor shall select a
nationally recognized statistical rating organization (as that term is used
in the rules and regulations of the Securities and Exchange Commission
under the Security Exchange Act of 1934, as amended) to act as substitute
rating agency, and the Corporation shall take all reasonable action to
enable such rating agency to provide a rating for the Shares.
(x) "Purchaser's Letter" shall mean a letter addressed to the
Corporation, the Auction Company, an Auction Placement Agent and an Agent
Member in which a Person agrees, among other things, to offer to purchase,
purchase, offer to sell and/or sell Shares as set forth therein.
(y) "Rate Multiple" on any Auction Date for the Shares shall mean the
percentage determined below based on the Prevailing Rating of the Shares in
effect at the close of business of the Business Day immediately preceding
such Auction Date:
<TABLE>
<CAPTION>
Prevailing Rating Percentage
----------------- ----------
<S> <C>
AA/aa or Above 110%
A/a 120%
BBB/baa 130%
Below BBB/baa 150%
</TABLE>
(g) "Securities Depository" shall mean The Depository Trust Company
and its successors and assigns or any other securities depository selected
by the Corporation which agrees to follow the procedures required to be
followed by such securities depository in connection with Shares.
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<PAGE> 77
(aa) "Sell Order" shall have the meaning specified in Section
2(a)(iii).
(bb) "Shares" shall mean shares of Preferred Auction Rate Stock,
Series A issued by the Corporation.
(cc) "Specified Rate" shall mean with respect to each Bid the rate
specified by the Existing Holder or Potential Holder making such Bid as the
dividend rate below which it is not offering to continue to hold or
purchase the Shares subject to such Bid.
(dd) "Submissions Deadline" shall mean 2:00 p.m., New York City time,
on any Auction Date or such other time on any Auction Date (as specified by
the Auction Company from time to time) by which each Auction Placement
Agent is required to submit Orders to the Auction Company.
(ee) "Submitted Bid" shall have the meaning specified in Section 4(b).
(ff) "Submitted Hold Order" shall have the meaning specified in
Section 4(b).
(gg) "Submitted Order" shall have the meaning specified in Section
4(b).
(hh) "Submitted Sell Order" shall have the meaning specified in
Section 4(b).
(ii) "Winning Bid Rate" shall have the meaning specified in Section
4(b)(iii).
Section 2. Orders by Existing Holders and Potential Holders.
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) Each Existing Holder may submit to an Auction Placement Agent by
telephone information as to the number of Owned Shares of such Existing
Holder, if any, that such Existing Holder:
(A) desires to continue to hold without regard to the Applicable
Rate for the next succeeding Dividend Period;
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<PAGE> 78
(B) elects to continue to hold if the Applicable Rate for the next
succeeding Dividend Period is not less than the rate per annum specified
by such Existing Holder to the Auction Placement Agent; and/or
(C) offers to sell without regard to the Applicable Rate for the
next succeeding Dividend Period.
(ii) Each Auction Placement Agent shall diligently attempt to contact
by telephone such number of Eligible Persons, including Persons who are not
Existing Holders, as such Auction Placement Agent shall in good faith deem
appropriate in order to obtain a commercially reasonable and competitive
Applicable Rate for the next succeeding Dividend Period. Each Auction
Placement Agent shall transmit to the Auction Company pursuant to Section 3
hereof the number of Shares, if any, any such Person offers to purchase if
the Applicable Rate for the next Dividend Period is not less than the rate
per annum specified by such Person to such Auction Placement Agent.
(iii) Any Order containing the information referred to in Section
2(a)(i)(A) is hereafter referred to as a "Hold Order" and an Order
containing the information referred to in Section 2(a)(i)(C) is hereinafter
referred to as a "Sell Order".
(b)(i) A Bid by an Existing Holder submitted to the Auction Company by an
Auction Placement Agent on its behalf shall constitute an irrevocable offer to
sell:
(A) the number of Shares specified in such Bid if the Winning Bid Rate
determined on such Auction Date is less than the Specified Rate;
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(b)(iv) if the Winning Bid Rate determined on such
Auction Date is equal to the Specified Rate; or
(C) the specified number of Shares or a lesser number, as determined
pursuant to Section
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<PAGE> 79
5(c)(ii) if the Specified Rate is higher than the Maximum Rate and a
Clearing Bid does not exist.
(ii) A Sell Order by an Existing Holder submitted to the Auction Company by
an Auction Placement Agent on its behalf shall constitute an irrevocable offer
to sell:
(A) the number of Shares specified in such Sell Order; or
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(c)(ii), if a Clearing Bid does not exist.
(iii) A Bid by a Potential Holder submitted to the Auction Company by an
Auction Placement Agent on its behalf shall constitute an irrevocable offer to
purchase:
(A) the number of Shares specified in such Bid if the Winning Bid Rate
determined on such Auction Date is higher than the Specified Rate; or
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(b)(v), if the Winning Bid Rate determined on such
Auction Date is equal to the Specified Rate.
Section 3. Submission of Orders by Auction Placement Agents to Auction Company.
(a) Each Auction Placement Agent shall submit in writing or by telecopier
to the Auction Company prior to the Submission Deadline on each Auction Date all
Orders obtained by such Auction Placement Agent, and specifying with respect to
each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of Shares that are the subject of the Order;
(iii) to the extent that the Bidder is an Existing Holder the number
of Owned Shares of such Existing Holder, if any, subject to any:
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<PAGE> 80
(A) Hold Order place by such Existing Holder;
(B) Bid placed by such Existing Holder and the Specified Rate for
each such Bid; and
(C) Sell Order place by such Existing Holder; and
(iv) to the extent such Bidder is a Potential Holder, the Specified
Rate for each such bid.
(b) If any rate contained in any Bid contains more than three figures to
the right of the decimal point, the Auction Company shall round such rate up to
the next highest one-thousandth (.001) of 1%.
(c) If an Order or Orders covering all Owned Shares of an Existing Holder
are not submitted to the Auction Company prior to the Submission Deadline, the
Auction Company shall deem a Hold Order to have been submitted on behalf of such
Existing Holder covering the number of owned shares of such Existing Holder not
subject to Orders submitted to the Auction Company.
(d) If one or more Orders submitted on behalf of an Existing Holder to the
Auction Company purport to cover more Owned Shares than actually held by such
Existing Holder, such Orders shall be considered valid as follows and in the
following order of priority:
(i) any Hold Order shall be considered valid up to and including the
number of Owned Shares of such Existing Holder; provided that if more than
one Hold Order is submitted on behalf of such Existing Holder and the
number of Owned Shares subject to such Hold Orders exceeds the number of
Owned Shares of such Existing Holder, the number of Owned Shares subject to
each such Hold Order shall be reduced pro rata so that such Hold Orders
shall cover the number of Owned Shares of such Existing Holder;
(ii) (A) any Bid shall be considered valid up to and including the
excess of the number of Owned Shares of such Existing Holder over the
number of Owned Shares subject to any and all Hold Orders referred to in
clause (i) above, (B) subject to subclause (A), if more than one Bid with
the same Specified Rate is submitted on behalf of such Existing Holder and
the number of
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<PAGE> 81
Owned Shares subject to such Bids is greater than such excess, such Bids
shall be considered valid up to the amount of such excess and, the number
of Owned Shares subject to each Bid with the same Specified Rate shall be
reduced to pro rata to cover the number of Owned Shares equal to such
excess, (C) subject to subclause (A), if more than one Bid with different
Specified Rates is submitted on behalf of such Existing Holder, such Bids
shall be considered valid in the ascending order of their respective rates
up to the amount of such excess, and in any such event the number, if any,
of such Owned Shares subject to Bids not valid under this clause (ii) shall
be treated as the subject of a Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Owned Shares of such Existing Holder over the sum
of Owned Shares of such Existing Holder subject to Hold Orders referred to
in clause (i) above and valid Bids referred to in clause (ii) above;
provided that if more than one Sell Order is submitted on behalf of any
Existing Holder and the number of Owned Shares subject to such Sell Orders
is greater than such excess, such Sell Orders shall be reduced pro rata so
that such Orders shall cover a number of shares equal to such excess.
Section 4. Determination of Clearing Bid,
Winning Bid Rate and Applicable Rate.
(a) As early as possible on the Auction Date and in any event not later
than the Submission Deadline, the Auction Company shall determine the Aa
Composite Commercial Paper Rate and the Maximum Rate for such Auction Date and
shall advise the Corporation and the Auction Placement Agents thereof.
(b) Promptly after the Submission Deadline on each Auction Date, the
Auction Company shall assemble all Orders submitted or deemed submitted to it by
the Auction Placement Agents on such date (each a "Submitted Order" and each
Hold Order, Bid and Sell Order contained in a Submitted Order, a "Submitted Hold
Order", a "Submitted Bid" or a "Submitted Sell Order", as the case may be) and
shall determine:
(i) the number, if any, of Shares available to be purchased pursuant
to Bids on such Auction Date, which
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<PAGE> 82
number shall equal the excess of (A) the total number of Outstanding Shares
over (B) the total number of Outstanding Shares subject to Submitted Hold
Orders (such excess number is hereinafter referred to as the "Available
Shares");
(ii) from the Submitted Orders, whether, subject to compliance with
the requirements of Section 5(g) hereof, (A) the number of Shares subject
to Submitted Bids with a Specified Rate equal to or less than the Maximum
Rate equals or exceeds (B) the Available Shares (if such equality or excess
exists, other than because the Available Shares are zero, a "Clearing Bid"
exists);
(iii) if a Clearing Bid exists, the lowest Specified Rate (such lowest
rate, the "Winning Bid Rate") contained in the Submitted Bids which if the
Auction Company accepted same would result in: (A) each Existing Holder
with Submitted Bids with Specified Rates equal to or lower than such lowest
rate continuing to hold Owned Shares in a number which, when added to (B)
the number of Shares subject to Submitted Bids with Specified Rates equal
to or lower than such lowest rate from Potential Holders would equal (C) a
number of Shares not less than the Available Shares.
(c) Promptly upon the Auction Company making the determinations described
in clauses (a) and (b) of this Section 4, the Auction Company shall determine
the Applicable Rate for the next succeeding Dividend Period as follows:
(i) if a Clearing Bid exists, the Applicable Rate shall be equal to
the Winning Bid Rate;
(ii) if a Clearing Bid does not exist (other than because all the
Outstanding Shares are subject to Submitted Hold Orders), the Applicable
Rate shall be equal to the Maximum Rate; or
(iii) if all the Outstanding Shares are subject to Submitted Hold
Orders, the Applicable Rate shall be equal to 59% of the Aa Composite
Commercial Paper Rate determined on the Business Day immediately preceding
the related Auction Date.
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<PAGE> 83
Section 5. Acceptance and Rejection of Submitted Bids
and Submitted Sell Orders; Allocation of Shares.
After giving effect to the determinations required to be made pursuant to
Section 4, Submitted Bids and Submitted Sell Orders shall be accepted or
rejected and the Auction Company shall take such other actions as set forth
below in this Section 5.
(a) If all Owned Shares are subject to submitted Hold Orders, all Submitted
Bids shall be rejected.
(b) If a Clearing Bid exists, subject to Sections 5(d) and 5(e) and subject
to compliance with the requirements of Section 5(g), Submitted Bids and
Submitted Sell Orders shall be accepted and/or rejected in the following order
of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Order of each Existing Holder shall be
accepted;
(ii) the Submitted Bid of each Existing Holder with a Specified Rate
lower than the Winning Bid Rate shall be accepted;
(iii) the Submitted Bid of each Potential Holder, with a Specified
Rate lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bid of each Existing Holder with a Specified Rate
equal to the Winning Bid Rate shall be accepted only for a number of Shares
equal, for each such Existing Holder, to the lesser of (A) the number of
Shares of such Existing Holder subject to such Submitted Bid and (B) the
number obtained by multiplying (x) the number of shares equal to the excess
of the Available Shares over the number of Shares subject to Submitted Bids
accepted pursuant to clauses (ii) and (iii) of this Section 5(b) by (y) a
fraction the numerator of which is the number of Shares subject to such
Submitted Bid and the denominator of which is the number of Shares subject
to all Submitted Bids by Existing Holders with a Specified Rate equal to
the Winning Bid Rate; and
(v) the Submitted Bid of each Potential Holder with a Specified Rate
equal to the Winning Bid Rate shall be accepted only in an amount equal to
the number
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<PAGE> 84
of Shares obtained by multiplying (A) the number equal to the excess of the
Available Shares over the total number of Shares subject to Submitted Bids
accepted pursuant to clauses (ii), (iii) and (iv) of this Section 5(b) by
(B) a fraction the numerator of which is the number of Shares subject to
such Submitted Bid and the denominator of which is the number of Shares
subject to all Submitted Bids by Potential Holders with a Specified Rate
equal to the Winning Bid Rate.
(c) If a Clearing Bid does not exist and Section 5(a) is inapplicable,
subject to Sections 5(d) and 5(e) and subject to compliance with the provisions
of Section 5(g), Submitted Orders shall be accepted and/or rejected in the
following order of priority and all other Submitted Bids and Submitted Sell
Orders shall be rejected:
(i) the Submitted Bid of each Existing Holder and Potential Holder
with a Specified Rate equal to or lower than the Maximum Rate shall be
accepted; and
(ii) the Submitted Bid of each Existing Holder with a Specified Rate
higher than the Maximum Rate shall be accepted and the Submitted Sell Order
of each Existing Holder shall be rejected, in each case only for the number
of Shares equal to the number of Shares obtained by multiplying (A) the
excess of the Available Shares over the number of Shares the subject of
Submitted Bids accepted pursuant to clause (i) of this Section 5(c) by (B)
a fraction the numerator of which shall be the number of Owned Shares of
such Existing Holder subject to such Submitted Bid or Submitted Sell Order,
and the denominator of which shall be the number of Shares the subject of
all such Submitted Bids and Submitted Sell Orders.
(d) If on any Auction Date as a result of the procedures described in
Sections 5(b) and 5(c) any Existing Holder would be entitled or required to sell
a fraction of an Owned Share, the Auction Company shall in such manner as it
shall determine in its sole discretion, round up or down the number of Owned
Shares to be sold or continued to be held by an Existing Holder on such Auction
Date so that the number of Shares held or sold by each Existing Holder shall be
whole Shares.
(e) If on any Auction Date, as a result of the procedures described in
Section 5(b), any Potential Holder would be entitled or required to purchase a
fraction of a
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<PAGE> 85
Share, the Auction Company shall, in such manner as it shall determine in its
sole discretion, allocate Shares for purchase among Potential Holders so that
only whole Shares are purchased, even if such allocation results in one or more
Potential Holders not purchasing Shares on such Auction Date.
(f) Each Existing Holder shall continue to hold for the next succeeding
Dividend Period Owned Shares subject on the Auction Date preceding such Dividend
Period to (A) a Submitted Hold Order, (B) a Submitted Bid to the extent accepted
pursuant to Section 5(b) or 5(c), as modified pursuant to Section 5(d), and (C)
a Submitted Sell Order to the extent rejected pursuant to Section 5(c)(ii), as
modified pursuant to Section 5(d). Each Existing Holder shall be required to
sell Owned Stock subject on an Auction Date to (A) a Submitted Sell Order to the
extent not rejected pursuant to Section 5(c)(ii) and (B) a Submitted Bid to the
extent not accepted pursuant to Section 5(b) or 5(c). Each Potential Holder
shall be required to purchase the Shares subject to a Submitted Bid made by such
Potential Holder to the extent such Submitted Bid is accepted pursuant to
Section 5(b) or 5(c).
(g) The Corporation shall not submit an Order, and no Affiliate shall
submit a Bid, at any Auction.
(h) Based on the result of an Auction, the Auction Company shall give the
notices specified in paragraph (a) of the Settlement Procedures, as defined in
the Auction Company Agreement.
Section 6. Miscellaneous.
The Board of Directors of the Corporation may interpret the provisions of
these procedures to resolve any inconsistency or ambiguity, remedy any formal
defect or make any other changes or modification that does not adversely affect
the rights of an Existing Holder and if such inconsistency or ambiguity reflects
an incorrect provison hereof, the Board of Directors may authorize the filing of
a Certificate of Correction."
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<PAGE> 86
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by John C. Pope, its Senior Vice President, and attested by Anne H.
McNamara, its Secretary, this 21 day of May, 1987.
AMR CORPORATION
By /s/ JOHN C. POPE
----------------------------
ATTEST:
By /s/ ANNE H. McNAMARA
-----------------------------
Secretary
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<PAGE> 87
CERTIFICATE OF DESIGNATIONS
OF
PREFERRED AUCTION RATE STOCK
SERIES B
OF
AMR CORPORATION
------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------
AMR CORPORATION, a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), HEREBY CERTIFIES that the following
resolutions were duly adopted by the Board of Directors of the Corporation and
by the Preferred Stock Committee of the Board of Directors, respectively,
pursuant to authority conferred upon the Board of Directors by the provisions of
the Certificate of Incorporation of the Corporation which authorizes the
issuance of up to 20,000,000 shares of preferred stock without par value and
pursuant to authority conferred upon the Preferred Stock Committee of the Board
of Directors by Section 141(c) of the General Corporation Law of the State of
Delaware, by Article VI, Section 7 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth herein, at a meeting of the
Board of Directors duly held on May 20, 1987 and at a meeting of the Preferred
Stock Committee thereof duly held on May 27, 1987:
1. The Board of Directors on May 20, 1987 adopted the following
resolution designating three series of preferred stock without par value of
the Corporation (for purposes of paragraph 1 through 3 of this Certificate
of Designations, such three series are collectively referred to as
"Preferred"):
"RESOLVED, that there are hereby designated three series of
Preferred, entitled as follows:
<PAGE> 88
Preferred Auction Rate Stock, Series A
Preferred Auction Rate Stock, Series B
Preferred Auction Rate Stock, Series C
respectively, each such Series to consist of 100 shares."
2. The Board of Directors on May 20, 1987 adopted the following
resolutions designating a Preferred Stock Committee of the Board of
Directors and authorizing such committee to act on behalf of the Board of
Directors in connection with the issuance of any such series of Preferred:
"RESOLVED, that the Board of Directors hereby appoints a Preferred
Stock Committee, to be composed of such directors as shall be designated
by the Board of Directors by separate resolutions adopted by a majority
of the whole Board of Directors on the date hereof or from time to time
hereafter, which Committee shall have the powers set forth in these
resolutions; that two members of the Preferred Stock Committee
constitute a quorum and are necessary and sufficient to transact
business; that the act of a majority of those present at any meeting
shall be the act of the Preferred Stock Committee; that notice of each
meeting of the Preferred Stock Committee shall be given by any member
causing to be delivered, not less than two hours prior to the meeting,
to the office of each member shown on the records of the Corporation,
written or telephonic notice of the location, date, time and purpose of
the meeting; that a written waiver of notice signed by each member,
whether before or after the meeting, shall be deemed equivalent to
notice; that attendance by a member at a meeting shall constitute waiver
of notice of such meeting; that attendance at and participation in a
meeting may take place by conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other; and that a written report of any actions taken by the
Preferred Stock Committee shall be delivered at the next meeting of the
Board of Directors; and
RESOLVED, that the Preferred Stock Committee be and hereby is
authorized and empowered with full power and authority to act on behalf
and in the stead of the Board of Directors in connection with the
issuance of any series of the Preferred as herein designated and to fix
the dividend rates (including the dividend determination auction
procedures) and dividend payment dates and to declare dividends payable
on any series of Preferred, to the fullest extent
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<PAGE> 89
permitted by Section 141(c) of the Delaware General Corporation Law as
it now exists or is hereafter amended."
3. The Board of Directors on May 20, 1987 adopted the following
resolutions fixing the voting rights of each such series of Preferred:
"RESOLVED, that the shares of each series of the Preferred shall
have no voting powers, either general or special, except that:
(a) Whenever, at any time or times, dividends payable on any
series of Preferred shall be in arrears for such number of dividend
periods which shall in the aggregate contain not less than 540 days
on the shares of such series at the time outstanding, the record
holders of such series (voting separately as a class with (i) the
record holders of any other series of Preferred theretofore granted
voting rights as a result of such a dividend arrearage with respect
to such other series and (ii) the record holders of all other series
of preferred stock subsequently issued if so provided in the
certificate of designations with respect thereto), will be entitled
to vote for the election of two additional directors of the
Corporation at the Corporation's next annual meeting of stockholders.
At elections for such directors, each record holder of such series
shall be entitled to one vote for each share held (the record holders
of shares of any other series of preferred stock then entitled to
vote being entitled to such number of votes, if any, for each share
of stock held as may be granted to them). Upon the vesting of such
right of the holders of such series, the maximum authorized number of
members of this Board of Directors shall automatically be increased
by two and the two vacancies so created shall be filled by vote of
the record holders of such outstanding series (either alone or
together with the holders of shares of any one or more other series
of preferred stock then entitled to vote) as hereinafter set forth.
The right of the holders of such series, voting separately as a
class, to elect (either alone or together with the holders of shares
of any one or more other series of preferred stock then entitled to
vote) members of this Board of Directors as aforesaid shall continue
until such time as all dividends accumulated on such series shall
have been paid in full, at which time such right shall terminate,
except as herein or by law expressly provided, subject to revesting
in the event of each and every subsequent default of the character
above mentioned.
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Upon any termination of the right of the holders of all series
of Preferred and any other such preferred stock to elect directors,
the term of office of all directors then in office elected by the
holders of such preferred voting as a class shall, to the extent
permitted by law, terminate immediately. If the office of any
director elected by the holders of preferred stock so voting as a
class becomes vacant by reason of death, resignation, retirement,
disqualification or removal from office, or otherwise, the remaining
director elected by the holders of preferred stock so voting as a
class may choose a successor who shall hold office for the unexpired
term in respect of which such vacancy occurred. Whenever the term of
office of the directors elected by the holders of preferred stock so
voting as a class shall end and the special voting powers vested in
the holders of preferred stock shall have expired, the number of
directors shall be such number as may be provided for in the By-Laws
irrespective of any increase made pursuant to the provisions of this
resolution.
(b) So long as any shares of any series of Preferred remain
outstanding, the consent of the record holders of at least two-thirds
of the shares of such series outstanding at the time (voting
separately as a class) given in person or by proxy, either in writing
or at any special or annual meeting called for the purpose, shall be
necessary to permit, effect or validate the amendment, alteration or
repeal, whether by merger, consolidation or otherwise, of any of the
provisions of the Certificate of Incorporation, as amended, of the
Corporation or of the resolutions set forth in any Certificate of
Designations for any series of Preferred designating such series and
the preferences and privileges, relative, participating, optional and
other special rights and qualifications, limitations and restrictions
thereof if, and only if, the foregoing action would (i) adversely
affect any right, preference, privilege or power of shares of such
series or (ii) increase the rights, preferences, privileges or powers
of shares of any other series of the Preferred if such increase is
not applicable to such first series; provided, however, that any
increase in the amount of authorized preferred stock (other than the
Preferred) or the creation and issuance of other series of preferred
stock, or any increase in the amount of authorized shares of any
other series of preferred stock, in each case ranking on a parity
with or junior to such series with respect to the payment of
dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to adversely affect
such rights, preferences, privileges or voting powers.
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(c) So long as any shares of any series of Preferred remain
outstanding, the consent of the record holders of at least two-thirds
of the shares of all series of Preferred outstanding at the time
(voting separately as a class) given in person or by proxy, either in
writing or at any special or annual meeting called for such purpose,
shall be necessary to permit, effect or validate the authorization,
creation or issuance, or any increase in the authorized or issued
amount, of any class or series of stock ranking senior to any share
of the Preferred with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up.
(d) The foregoing voting provisions shall not apply to any
series of Preferred if, at or prior to the time when the act with
respect to which such vote would otherwise be required shall be
effected, all outstanding shares of such series shall have been
redeemed or sufficient funds shall have been deposited in trust to
effect such a redemption."
4. The Board of Directors on May 20, 1987, adopted the following
resolution:
"RESOLVED, that the issue of up to 100 shares of Preferred Auction
Rate Stock, Series B, without par value of the Corporation is hereby
authorized and the preferences and privileges, relative, participating,
optional and other special rights, and qualification, limitations and
restrictions of all 100 shares of such series, in addition to those set
forth in the Certificate of Incorporation of the Corporation, are hereby
fixed as follows:
Preferred Auction Rate Stock,
Series B
PART 1
1. Number of Shares. (a) The designation of the series of preferred stock
without par value provided for herein shall be "Preferred Auction Rate Stock,
Series B" (hereinafter referred to as the "Series B Preferred"), and the number
of authorized shares constituting Series B Preferred is 100. No fractional
shares of Series B Preferred will be issued.
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(b) All shares of Series B Preferred redeemed or purchased by the
Corporation (which shall not be deemed to include purchases by an Affiliate, as
defined in Section 1 of Part II hereof) shall be retired and cancelled and shall
be restored to the status of authorized but unissued shares of preferred stock,
without designation as to series, and may thereafter be issued, but not as
shares of Series B Preferred.
(c) The Series B Preferred shall rank on a parity as to dividends and upon
liquidation with all other series of Preferred issued by the Corporation.
2. Dividends.
(a) The Holders (all capitalized terms used in this Part I and not
otherwise defined shall have the meanings provided in Section 6 of this Part I)
shall be entitled to receive, when, as, and if declared by the Board of
Directors of the Corporation (or a committee thereof authorized by the Board of
Directors to so act), out of funds legally available therefor, cumulative cash
dividends at the Applicable Rate per annum, determined as set forth below, and
no more, payable on the respective dates set forth below.
(b) (i) Dividends on shares of Series B Preferred at the Applicable Rate
per annum as described in subsections (c)(i) and (c)(ii) of this Section 2,
shall accrue from the Date of Original Issue and shall be payable initially on
July 14, 1987 (of such other date as is designed by a resolution of the Board of
Directors of the Corporation (or a committee thereof authorized to so act) prior
to the Date of Original Issue) and on each succeeding seventh Tuesday after such
date (in each case, the "Normal Day"); provided, however, that (i) if the Normal
Day is not a Business Day, (ii) the following Wednesday is not a Business Day or
(iii) both the immediately preceding Monday and Friday are not Business Days,
the Dividend Payment Date will be the first Business Day that is (a) preceded by
a Business Day that is, or falls after, such preceding Friday and (b) is
immediately followed by a day that is a Business Day. Although any particular
Dividend Payment Date may not occur on the originally scheduled Normal Day
because of the above-mentioned provisos, the next succeeding Dividend Payment
Date shall be, subject to such provisos, the seventh Tuesday following the
originally designated Normal Day for the prior Dividend Period. Notwithstanding
the foregoing, in the event of a change in Federal law lengthening the minimum
holding period
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(currently found in Section 246(c) of the Internal Revenue Code of 1986, as
amended) required for taxpayers to be entitled to the dividends-received
deduction on preferred stock held by non-affiliated corporations (currently
found in Section 243(a) of such Code) (the "Minimum Holding Period"), the Board
of Directors of the Corporation shall increase the period of time between
Dividend Payment Dates so as to increase uniformly the number of days (such
number of days without giving effect to the provisos in the first sentence of
this Section 2(b)(i) being "Dividend Period Days") in Dividend Periods
commencing after the date of such change in law (and in any event commencing no
earlier than 21 days after such action by the Board of Directors of the
Corporation) to equal or exceed the then current Minimum Holding Period;
provided that the number of Dividend Period Days shall not exceed by more than
nine days the length of such then current Minimum Holding Period and shall be
evenly divisible by seven, and the maximum number of Dividend Period Days shall
not exceed 98 days. If as a result of applying the above procedures for
determining a Dividend Payment Date, the number of days in a Dividend Period
would not satisfy the Minimum Holding Period, the Corporation's Board of
Directors may fix the Dividend Payment Date on the first Business Day following
the Normal Day which is next succeeded by a Business Day. Upon any such change
in the number of Dividend Period Days as a result of a change in law, the
Corporation will give notice of such change to the Auction Company and to the
Holders at such Holders' addresses as the same appears on the stock transfer
books of the Corporation. The first date of payment of dividends is the "Initial
Dividend Payment Date" and each date of payment of dividends is a "Dividend
Payment Date".
(ii) As long as a Permanent Auction Termination Date has not occurred with
respect to the Series B Preferred, the Corporation shall deposit with the
Auction Company not later than 12:00 noon, New York City time, on the Business
Day next preceding each Dividend Payment Date an aggregate amount of funds
available on such Business Day or the next Business Day in The City of New York,
New York, equal to the dividends to be paid to all Holders on such Dividend
Payment Date. All such moneys shall be held in trust for the payment of such
dividends by the Auction Company for the benefit of the Holders specified in
subsection (b)(iii) of this Section 2.
(iii) Each dividend shall be paid to the Holders as their names appear on
the stock transfer books of the Corporation on the Business Day next preceding
the Dividend
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Payment Date thereof; provided, however, that if a Permanent Auction
Termination Date has occurred in respect of the Series B Preferred or such
dividend payment is in respect of dividends in arrears, such dividend shall be
paid to the Holders as their names appear on the stock transfer books of the
Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
Dividends in arrears for any past Dividend Period may be declared and paid at
any time without reference to any regular Dividend Payment Date.
(c)(i) The dividend rate (the "Initial Dividend Rate") on shares of Series
B Preferred during the period commencing on the Date of Original Issue to and
including the day immediately preceding the Initial Dividend Payment Date (the
"Initial Dividend Period") shall be established by resolution of a committee of
the Board of Directors of the Corporation authorized to so act prior to the Date
of Original Issue. Commencing on the Initial Dividend Payment Date, the dividend
rate on shares of Series B Preferred for each subsequent dividend period (a
"Subsequent Dividend Period"; and the Initial Dividend Period or any Subsequent
Dividend Period being a "Dividend Period") thereafter, which subsequent Dividend
Period shall commence on each Dividend Payment Date and shall end on and include
the date immediately preceding the next succeeding Dividend Payment Date, shall
be, except as provided in subsection (c)(ii) of this Section 2, equal to the
rate per annum that results from implementation of the Auction Procedures
described in Part II hereto (which Part II is hereby incorporated by reference
herein and made a part hereof).
(ii) In the event of any failure by the Corporation to deposit (in funds
available on such Business Day or the next Business Day in The City of New York,
New York) with the Auction Company by 12:00 noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date, the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend Payment
Date on any share of Series B Preferred of (ii) on the Business Day next
preceding any redemption date for Series B Preferred, the redemption price to be
paid on such redemption date, including an amount equal to accrued and unpaid
dividends thereon (whether or not earned or declared) for any share of Series B
Preferred, after a notice of redemption has been given as provided in subsection
C of Section 3 of this Part I, then, except as provided in the next following
sentence, the dividend rate for each Dividend Period commencing after the date
of any such failure shall be equal to the Alternate
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Rate for such Dividend Period. To the extent that the Corporation has remedied
any such failure to pay dividends, and is not in arrears on any other dividends
payable on shares of Series B Preferred, and/or has remedied any such failure to
pay such redemption price, in each case prior to the second Business Day
preceding the fifth Dividend Payment Date following such failure, Auctions shall
be reinstated for Series B Preferred on the first Auction Date following such
remedy and the Applicable Rate for Series B Preferred shall again be the rate
per annum that results from the implementation of the Auction Procedures; to the
extent such failure is not so remedied by such date, Auctions for such Series
will be permanently discontinued and the Applicable Rate for all future Dividend
Periods for such Series shall be the Alternate Rate for each such Dividend
Period.
(iii) The amount of dividends per share of Series B Preferred payable for
any Dividend Period shall be computed by multiplying the Applicable Rate for
such Dividend Period by a fraction the numerator of which shall be the number of
days in the Dividend Period such share was outstanding and the denominator of
which shall be 360, and then multiplying the rate so obtained by $500,000 per
share of Series B Preferred.
(d)(i) So long as any shares of Series B Preferred are outstanding, no full
dividends shall be declared or paid or set apart for payment on the preferred
stock of any series ranking, as to dividends, on a parity with Series B
Preferred for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on shares of Series B Preferred for
all Dividend Periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of Series B Preferred and any other series of preferred stock ranking
on a parity as to dividends with Series B Preferred, all dividends declared on
Series B Preferred and any other series of preferred stock ranking on a parity
as to dividends with Series B Preferred shall be declared pro rata so that the
amount of dividends declared per share on Series B Preferred and such other
series of preferred stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of Series B Preferred and such
other series of preferred stock bear to each other.
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(ii) So long as any shares of Series B Preferred are outstanding, no
dividend (other than dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock or any
other stock ranking junior to Series B Preferred as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
distribution declared or made upon the common stock or upon any other stock of
the Corporation ranking junior to or on a parity with Series B Preferred as to
dividends, nor shall any common stock or any other stock of the Corporation
ranking junior to or on a parity with Series B Preferred as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to
Series B Preferred as to dividends and upon liquidation), unless, in each case,
the full cumulative dividends on all outstanding shares of Series B Preferred
shall have been paid through the most recent Dividend Payment Date.
(e) Any dividend payment made on shares of Series B Preferred shall first
be credited against the dividends accrued with respect to the earliest Dividend
Period for which dividends have not been paid. Holders of shares of Series B
Preferred shall not be entitled to (i) any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as herein provided,
on the Series B Preferred, or (ii) any interest, or sum of money in lieu of
interest, in respect of any dividend payment or payments on the Series B
Preferred which may be in arrears.
3. Redemption. Shares of Series B Preferred shall be redeemable by the
Corporation as provided below:
A. Optional Redemption.
(a) At the option of the Corporation, shares of Series B Preferred may be
redeemed as a whole on any Dividend Payment Date or in part from time to time on
the second Business Day next preceding any Dividend Payment Date, out of funds
legally available therefor, at a redemption price of:
(i) $507,500 per share if redeemed on or before the first anniversary
of the Date of Original Issue;
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(ii) $505,000 per share if redeemed thereafter and on or before the
second anniversary of the Date of Original Issue;
(iii) $502,500 per share if redeemed thereafter and on or before the
third anniversary of the Date of Original Issue; and
(iv) $500,000 per share if redeemed thereafter;
plus, in each case, an amount equal to accrued and unpaid dividends thereon
(whether or not earned or declared) to (but not including) the date fixed for
redemption.
(b) At the option of the Corporation, shares of Series B Preferred may be
redeemed, as a whole but not in part, on any Dividend Payment Date, out of funds
legally available therefor, at a redemption price of $500,000 per share, plus an
amount equal to accrued and unpaid dividends thereon (whether or not earned or
declared) to the date fixed for redemption, if the Applicable Rate with respect
to the Dividend Period ending on the day immediately preceding such Dividend
Payment Date shall equal or exceed the Aa Composite Commercial Paper Rate on the
date of determination of such Applicable Rate.
B. Allocation. If fewer than all the outstanding shares of Series B
Preferred are to be redeemed pursuant to Section 3A(a), the number of shares to
be redeemed shall be determined by the Board of Directors of the Corporation. To
the extent that there is one Holder of all shares of Series B Preferred, such
Holder shall determine which of its shares of Series B Preferred are to be
redeemed in the case of a partial redemption. To the extent there is more than
one Holder for all shares of Series B Preferred, then in the case of a partial
redemption, the shares to be redeemed shall be determined by the Board of
Directors among the then current Holders by lot or such other method deemed by
the Board of Directors to be fair and equitable.
C. Notice of Redemption; Other Redemption Procedures.
(a) Whenever shares of Series B Preferred are to be redeemed pursuant to
this Section 3, a notice of such redemption shall be mailed, by first-class
mail, postage prepaid, or delivered to each Holder of the shares to be redeemed
at such Holder's address as the same appears on the stock transfer books of the
Corporation. Such notice shall
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be mailed or delivered not less than 20 days and not more than 45 days prior to
the date fixed for redemption. Each such notice shall state: (i) the redemption
date; (ii) the number of shares of Series B Preferred to be redeemed; (iii) the
redemption price; (iv) the place or places where such shares of Series B
Preferred are to be surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date; and (vi) the provision of this Section 3 under which the redemption is
made. If fewer than all shares of Series B Preferred held by a Holder are to be
redeemed, the notice mailed or delivered to such Holder shall specify the number
of shares to be redeemed from such Holder. Except as required by the applicable
law, no defect in the notice of redemption or in the mailing thereof shall
affect the validity of the redemption proceedings.
(b) On and after the date specified in a notice of redemption, the Holder
of shares of Series B Preferred specified for redemption, upon presentation and
surrender at the office of the Auction Company (or any successor redemption
agent) designated in such notice of redemption of the certificate or
certificates evidencing the shares of Series B Preferred held by such holder and
called for redemption, properly endorsed in blank for transfer or accompanied by
proper instruments of assignment or transfer in blank, bearing all necessary
transfer tax stamps thereto affixed and cancelled, shall be entitled to receive
therefor the applicable redemption price hereinbefore specified. If less than
all of the shares represented by one share certificate are to be redeemed, the
Corporation shall issue a new share certificate for the shares not redeemed.
(c) If the Corporation shall give a notice of redemption, then, by 12:00
noon (New York City time) on the Business Day next preceding the date fixed for
redemption, the Corporation shall deposit with the Auction Company (or any
successor redemption agent) an aggregate amount of funds available on the next
Business Day equal to the aggregate redemption price of the shares of the Series
B Preferred called for redemption in such notice of redemption and shall give
the Auction Company (or any successor redemption agent) irrevocable instructions
and authority to pay the redemption price to the Holders of the shares of the
Series B Preferred called for redemption upon surrender of the certificate or
certificates therefor. All such moneys so deposited will be held in trust by the
Auction Company for the benefit of the Holders of the shares to be redeemed.
Upon the earlier of the date of such deposit or the payment of the redemption
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price, all rights of the Holders of the shares so called for redemption shall
cease and terminate, except the right of the Holders of such shares, upon
surrender of such shares, to receive the redemption price thereof, but without
any interest, and such shares shall no longer be deemed to be outstanding for
any purposes. The Corporation shall be entitled to receive, promptly after the
date fixed for redemption, any funds so deposited and interest thereon in excess
of the aggregate redemption price of the shares of the Series B Preferred called
for redemption on such date. Any funds so deposited which are unclaimed at the
end of two years from such redemption date shall, to the extent permitted by
law, be repaid to the Corporation, after which the holders of shares of the
Series B Preferred so called for redemption shall look only to the Corporation
for payment thereof, without any interest payable thereon. The Corporation shall
be entitled to receive, from time to time after the date fixed for redemption,
any interest on the funds so deposited and held by the Auction Company (or any
successor redemption agent).
(d) Notwithstanding any other provisions of this Section 3, if any
dividends on any share of Preferred are in arrears, no shares of Preferred may
be redeemed unless all outstanding shares of Preferred are simultaneously
redeemed, nor may any shares of Preferred be purchased or otherwise acquired by
the Corporation except in accordance with a purchase offer on the same terms
made by the Corporation for all outstanding shares of Preferred.
(e) Except as set forth in this Section 3 with respect to redemptions and
subject to subsection (d) of this Section 3 and to the limitations contained in
Part II, nothing contained herein shall limit any legal right of the Corporation
or any Affiliate to purchase or otherwise acquire any shares of Series B
Preferred at any price, whether higher or lower than the redemption price.
Shares of Series B Preferred which have been redeemed, purchased or otherwise
acquired by the Corporation are not subject to reissuance and shall be retired.
4. Liquidation.
(a) Upon a liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series B
Preferred then outstanding shall be entitled, whether from capital or surplus
before any assets of the Corporation shall be distributed among or paid over to
the holders of stock
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junior to the Series B Preferred as to liquidation payments but after
distribution of such assets among, or payment thereof over to, creditors of the
Corporation and to holders of any stock of the Corporation with liquidation
rights senior to the Series B Preferred, to be paid $500,000 per share, plus, in
each such case, an amount equal to all accrued and unpaid dividends thereon
(whether or not earned or declared) to the date of final distribution. After any
such payment in full, the holders of shares of the Series B Preferred shall not
be entitled to any further participation in any distribution of assets of the
Corporation.
(b) Neither the merger or consolidation of the Corporation into or with any
other corporation or the merger or consolidation of any other corporation into
or with the Corporation, shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, for the purposes of this Section 4.
(c) If, upon any such liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets of the Corporation
shall be insufficient to make the full payments required by subsection (a) of
this Section 4, no such distribution shall be made on account of any shares of
any other class or series of preferred stock ranking on a parity with the shares
of Series B Preferred upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
Series B Preferred, ratably, in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
(d) Subject to the rights of the holders of shares of any series or class
or classes of stock ranking on a parity with or prior to the shares of Series B
Preferred upon liquidation, dissolution or winding up, upon any liquidation,
dissolution or winding up of the Corporation, after payment shall have been made
in full to the Holders of the shares of Series B Preferred as provided in this
Section 4, but not prior thereto, any other series or class or classes of stock
ranking junior to the shares of Series B Preferred upon liquidation shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the Holders of the shares of Series B Preferred shall not be entitled to share
therein.
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5. Ranking. For purposes of this resolution, any stock of any class or
classes of the Corporation shall be deemed to rank:
(a) prior to the shares of Series B Preferred either as to dividends
or upon liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may
be, in preference or priority to the Holders of shares of Series B
Preferred.
(b) on a parity with shares of Series B Preferred either as to
dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of Series B Preferred, if the
holders of such stock shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority, one over the
other, as between the holders of such stock and the Holders of shares of
Series B Preferred; and
(c) junior to shares of Series B Preferred either as to dividends or
upon liquidation, if such class shall be common stock or if the Holders of
shares of Series B Preferred shall be entitled to receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders
of shares of such class or classes.
6. Definitions. As used herein, the following terms shall have the
following meanings (with terms defined in the singular having the same meanings
when used in the plural and vice versa):
(a) "Aa Composite Commercial Paper Rate," on any date, shall mean (i)
the interest equivalent of the 60-day rate on commercial paper placed on
behalf of issuers whose corporate bonds are rated "Aa" by Moody's, "AA" by
S&P, or the equivalent of such rating by another rating agency, as made
available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the Business Day immediately preceding such date, or (ii) if
the Federal Reserve
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Bank of New York does not make available such a rate, then the arithmetic
average of the interest equivalent of the 60-day rate on commercial paper
placed on behalf of such issuers, as quoted on a discount basis or
otherwise by two nationally recognized commercial paper placement agents or
dealers selected by the Corporation to the Auction Company prior to the
close of business on the Business Day immediately preceding such date. If
the Board of Directors of the Corporation shall increase the number of
Dividend Period Days in accordance with Section 2(b)(i) of this Part I,
with the result that (A) the number of Dividend Period Days shall be less
than 70, such rate shall be the interest equivalent of the 60-day rate on
such commercial paper, or (B) the number of Dividend Period Days shall be
70 or more but less than 85, such rate shall be the arithmetic average of
the interest equivalent of the 60-day and 90-day rates on such commercial
paper, or (C) the number of Dividend Period Days shall be 85 or more but
less than or equal to 98, such rate shall be the interest equivalent of the
90-day rate on such commercial paper. For the purposes of such definition,
"interest equivalent" means a rate for commercial paper which is (A) if the
provided rate is made available on an interest bearing basis, such provided
rate and (B) if the provided rate is made available on a discount basis (a
"discount rate") a rate equal to the quotient (rounded upwards to the next
higher one-thousandth of one percent (.001 of 1%) of (A) the discount rate
(expressed as a decimal) divided by (B) the difference between (x) 1.00 and
(y) a fraction the numerator of which shall be the product of the discount
rate (expressed as a decimal) times the number of days in which such
commercial paper matures and the denominator of which shall be 360.
(b) "Alternate Rate" shall mean for any Dividend Period 150% of LIBOR
determined for such Dividend Period.
(c) "Applicable Rate" shall mean the dividend rate applicable to the
Series B Preferred in effect during a Dividend Period as determined
pursuant to Sections 2(c)(i) and (ii) of this Part I.
(d) "Auction" shall mean the periodic implementation of the Auction
Procedures.
(e) "Auction Company" shall mean the bank or trust company or other
entity appointed as such by a resolution of the Board of Directors of the
Corporation.
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(f) "Auction Date" shall mean the Business Day next preceding a
Dividend Payment Date.
(g) "Auction Procedures" shall mean the procedures for conducting
Auctions set forth in Part II hereof.
(h) "Board of Directors" shall mean the Board of Directors of the
Corporation or any duly authorized committee thereof.
(i) "Business Day" shall mean a day on which the New York Stock
Exchange, Inc. is open for trading and is not a day on which banks in The
City of New York are authorized or required by law or order to close.
(j) "Corporation" shall mean AMR Corporation, a Delaware corporation.
(k) "Date of Original Issue" shall mean the date on which the
Corporation originally issues shares of Series B Preferred.
(l) "Dividend Payment Date" shall have the meaning specified in
Section 2(b)(i) of this Part I.
(m) "Dividend Period" shall have the meaning specified in Section
2(c)(i) of this Part I.
(n) "Dividend Period Days" shall have the meaning specified in Section
2(b)(i) of this Part I.
(o) "Holder" shall mean a holder of shares of Series B Preferred as
the same appears on the stock transfer books of the Corporation.
(p) "Initial Dividend Payment Date" shall have the meaning specified
in Section 2(b)(i) of this Part I.
(q) "Initial Dividend Period" shall have the meaning specified in
Section 2(c)(i) of this Part I.
(r) "Initial Dividend Rate" shall have the meaning specified in
Section 2(c)(i) of this Part I.
(s) "LIBOR" shall mean for any Dividend Period the arithmetic average
(rounded to the next higher 1/16 of 1%), computed by the Corporation, of
the respective rates per annum quoted by each of the principal London
offices of Bankers Trust Company, Citibank, N.A., Barclays Bank plc and
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National Westminster Bank plc, or their respective successors (the
"Reference Banks"), at which United States dollar deposits for a two-month
period in the amount of U.S. $10,000,000 are offered by such Reference
Banks to leading banks in the London interbank market, at approximately
11:00 A.M. (London time) on the first day of such Dividend Period, or if
such day is not a day on which dealings in United States dollars are
transacted in the London interbank market, then on the next preceding day
on which such dealings are transacted in such market. If any Reference Bank
does not quote a rate required to determine LIBOR, LIBOR shall be
determined on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Reference Banks and any Substitute Reference
Bank or Substitute Reference Banks (as defined below) selected by the
Corporation to provide such quotation or quotations not being supplied by
any Reference Bank or Reference Banks, as the case may be, or, if the
Corporation does not select any Substitute Reference Bank or Substitute
Reference Banks, by the remaining Reference Bank or Reference Banks.
However, if the Board of Directors of the Corporation shall, pursuant to
Section 2(b)(i) of this Part I, increase the number of Dividend Period
Days, in the event of a change in the dividend received deduction holding
period, with the result that (i) the Dividend Period Days after such
adjustment shall be 70 or more days but fewer than 85 days, LIBOR shall be
based on the arithmetic average (rounded to the next higher 1/16 of 1%) of
the rates per annum quoted for such United States dollar deposits for two-
and three-month periods or (ii) the Dividend Period Days after such
adjustment shall be 85 or more days but 98 or fewer days, such rate shall
be based on the rates per annum quoted for such United States dollar
deposits for a three-month period. For the purposes of the foregoing,
"Substitute Reference Bank" shall mean the principal London offices of The
Chase Manhattan Bank, N.A. or Morgan Guaranty Trust Company of New York, or
their respective successors or, if none of such Substitute Reference Banks
are engaged in dealings in United States dollars in the London interbank
market, then a bank or banks, selected by the Corporation, engaged in
dealings in United States dollars in the London interbank market. For each
Dividend Period for which the rate is to be the Alternate Rate, the
Corporation will obtain the rates from the Reference Banks, determine LIBOR
and the Alternate Rate and notify the Auction Company of such
determination.
(t) "Minimum Holding Period" shall have the meaning specified in
Section 2(b)(i) of this Part I.
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(u) "Normal Day" shall have the meaning specified in Section 2(b)(i)
of this Part I.
(v) "Permanent Auction Termination Date" shall mean the second
Business Day preceding the fifth Dividend Payment Date following any
failure by the Corporation to pay in a timely manner to the Auction Company
the full amount of any dividend for Series B Preferred when due or the
redemption price, when due, of any shares of Series B Preferred after the
Corporation has given notice of redemption, if and only if, such failure
has not theretofore been remedied and the Corporation is not then in
arrears on any dividends payable on Series B Preferred.
(w) "Preferred" shall mean the Series B Preferred, together with the
series of preferred stock of the Corporation designated as "Preferred
Auction Rate Stock, Series A" and "Preferred Auction Rate Stock, Series C."
(x) "Series B Preferred" shall mean the series of preferred stock,
without par value, of the Corporation designated as "Preferred Auction Rate
Stock, Series B."
(y) "Subsequent Dividend Period" shall have the meaning specified in
Section 2(c)(i) of this Part I.
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PART II
AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms used in this Part II and not defined in this Section 1
shall have the respective meanings specified in Part I hereof. As used in this
Part II, the following terms shall have the following meanings, unless the
context otherwise requires, with all references to the singular to include the
plural and all references to the plural to include the singular:
(a) "Affiliate" shall mean any Person known to the Auction Company to
be controlled by, in control of, or under common control with the
Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository
that will act on behalf of a Bidder (as identified in such Bidder's
Purchaser's Letter).
(c) "Applicable Rate" shall mean the dividend rate applicable to the
Shares for a Dividend Period to the extent determined pursuant to the
procedures set forth herein.
(d) "Auction" shall mean the periodic auction in respect of the Shares
conducted in accordance with the procedures set forth in this Part II.
(e) "Auction Company" shall mean Manufacturers Hanover Trust Company
or any successor thereto as Auction Company to the extent such successor
has entered into an agreement with the Corporation similar to the Auction
Company Agreement.
(f) "Auction Company Agreement" shall mean the Auction Company
Agreement between the Corporation and Manufacturers Hanover Trust Company
as Auction Company pursuant to which Manufacturers Hanover Trust Company
agrees, inter alia, to perform the duties of the Auction Company in
connection with the Auctions.
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(g) "Auction Date" shall mean the Business Day next preceding a
Dividend Payment Date.
(h) "Auction Placement Agent" shall mean any entity permitted by law
to perform the functions of an Auction Placement Agent in Auctions which
has been selected by the Corporation and has entered into an Auction
Placement Agent Agreement with the Auction Company that remains in effect.
(i) "Auction Placement Agent Agreement" shall mean an agreement
between the Auction Company and an Auction Placement Agent pursuant to
which such Auction Placement Agent agrees to follow the procedures set
forth herein in respect of Auctions.
(j) "Available Shares" shall have the meaning specified in Section
4(b)(i).
(k) "Bid" shall mean the offer of an Existing Holder or Potential
Holder to continue to hold or purchase, as the case may be, a Share or
Shares if the Applicable Rate equals or exceeds the Specified Rate
contained in such Bid. Such offers from the same Person specifying
different Specified Rates shall each constitute a separate Bid.
(l) "Bidder" shall mean each Existing Holder and Potential Holder
placing an Order.
(m) "Clearing Bid" shall have the meaning specified in Section 4(b).
(n) "Eligible Person" shall mean those Persons (i) who qualify as
"accredited investors" under Regulation D promulgated under the Securities
Act of 1933, as amended, (ii) who otherwise satisfy the requirements set
forth in the Auction Placement Agent Agreements as persons from whom
Auction Placement Agents may solicit Orders or who constitute Affiliates of
the Corporation, and (iii) who have executed and delivered a Purchaser's
Letter, which remains in full force and effect.
(o) "Existing Holder" shall mean on any Auction Date an Eligible
Person if and to the extent then listed as the beneficial owner of Shares
in the records of the Auction Company.
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(p) "Hold Order" shall have the meaning specified in Section
2(a)(iii).
(q) "Maximum Rate" at any Auction shall mean the applicable Rate
Multiple times the Aa Composite Commercial Paper Rate determined at the
close of business on the Business Day immediately preceding the related
Auction Date.
(r) "Order" shall mean the placing with the Placement Agent of (x) a
Hold Order, a Bid or Bids and/or a Sell Order by an Existing Holder and (y)
a Bid by a Potential Holder.
(s) "Outstanding" shall mean, as of any date, Shares theretofore
issued by the Corporation except, without duplication, (i) any Shares
theretofore cancelled or delivered to the Auction Company for cancellation,
or redeemed by, or as to which a notice of redemption has been given by,
the Corporation, (ii) any Shares as to which the Corporation is an Existing
Holder and (iii) any Shares represented by any certificate in lieu of which
a new certificate has been executed and delivered by the Corporation.
(t) "Owned Shares" of any Existing Holder shall mean the Shares as to
which it is listed as beneficial owner in the records of the Auction
Company.
(u) "Person" shall mean a corporation, a trust, a pension fund, an
institutional investor or other similar entity.
(v) "Potential Holder" shall mean any Eligible Person who has
submitted a Bid (or, in the case of an Existing Holder, a Bid for Shares
other than Owned Shares).
(w) "Prevailing Rating" of the Shares shall be (i) AA/aa or Above if
the Shares have a rating of AA- or better by Standard & Poor's Corporation
("Standard & Poor's") or aa3 or better by Moody's Investors Service, Inc.
("Moody's"), or the equivalent of either or both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, (ii) if not AA/aa or Above, then A/a if the
Shares have a rating of A- or better and lower than AA- by Standard &
Poor's or a3 or better and lower than aa3 by Moody's or the equivalent of
either or both of such ratings by such agencies or a substitute rating
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agency or substitute rating agencies selected as provided below, (iii) if
not AA/aa or Above or A/a, then BBB/baa if the Shares have a rating of BBB-
or better and lower than A- by Standard & Poor's or baa3 or better and
lower than a3 by Moody's or the equivalent of either or both of such
ratings by such agencies or a substitute rating agency or substitute rating
agencies selected as provided below and (iv) if not AA/aa or Above, A/a or
BBB/baa, then Below BBB/baa. The Corporation will take all reasonable
action necessary to enable Standard & Poor's or Moody's to provide a rating
for the Shares. If neither Standard & Poor's nor Moody's shall make such a
rating available, Bankers Trust Company or its successor shall select a
nationally recognized statistical rating organization (as that term is used
in the rules and regulations of the Securities and Exchange Commission
under the Security Exchange Act of 1934, as amended) to act as substitute
rating agency, and the Corporation shall take all reasonable action to
enable such rating agency to provide a rating for the Shares.
(x) "Purchaser's Letter" shall mean a letter addressed to the
Corporation, the Auction Company, an Auction Placement Agent and an Agent
Member in which a Person agrees, among other things, to offer to purchase,
purchase, offer to sell and/or sell Shares as set forth therein.
(y) "Rate Multiple" on any Auction Date for the Shares shall mean the
percentage determined below based on the Prevailing Rating of the Shares in
effect at the close of business of the Business Day immediately preceding
such Auction Date:
<TABLE>
<CAPTION>
Prevailing Rating Percentage
----------------------------------------------------------------------
<S> <C>
AA/aa or Above 110%
A/a 120%
BBB/baa 130%
Below BBB/baa 150%
</TABLE>
(z) "Securities Depository" shall mean The Depository Trust Company
and its successors and assigns or any other securities depository selected
by the Corporation which agrees to follow the procedures required to be
followed by such securities depository in connection with Shares.
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<PAGE> 110
(aa) "Sell Order" shall have the meaning specified in Section
2(a)(iii).
(bb) "Shares" shall mean shares of Preferred Auction Rate Stock,
Series B issued by the Corporation.
(cc) "Specified Rate" shall mean with respect to each Bid the rate
specified by the Existing Holder or Potential Holder making such Bid as the
dividend rate below which it is not offering to continue to hold or
purchase the Shares subject to such Bid.
(dd) "Submission Deadline" shall mean 2:00 p.m., New York City time,
on any Auction Date or such other time on any Auction Date (as specified by
the Auction Company from time to time) by which each Auction Placement
Agent is required to submit Orders to the Auction Company.
(ee) "Submitted Bid" shall have the meaning specified in Section 4(b).
(ff) "Submitted Hold Order" shall have the meaning specified in
Section 4(b).
(gg) "Submitted Order" shall have the meaning specified in Section
4(b).
(hh) "Submitted Sell Order" shall have the meaning specified in
Section 4(b).
(ii) "Winning Bid Rate" shall have the meaning specified in Section
4(b)(iii).
Section 2. Orders by Existing Holders and Potential Holders.
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) Each Existing Holder may submit to an Auction Placement Agent by
telephone information as to the number of Owned Shares of such Existing
Holder, if any, that such Existing Holder:
(A) desires to continue to hold without regard to the Applicable
Rate for the next succeeding Dividend Period;
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(B) elects to continue to hold if the Applicable Rate for the next
succeeding Dividend Period is not less than the rate per annum specified
by such Existing Holder to the Auction Placement Agent; and/or
(C) offers to sell without regard to the Applicable Rate for the
next succeeding Dividend Period.
(ii) Each Auction Placement Agent shall diligently attempt to contact
by telephone such number of Eligible Persons, including Persons who are not
Existing Holders, as such Auction Placement Agent shall in good faith deem
appropriate in order to obtain a commercially reasonable and competitive
Applicable Rate for the next succeeding Dividend Period. Each Auction
Placement Agent shall transmit to the Auction Company pursuant to Section 3
hereof the number of Shares, if any, any such Person offers to purchase if
the Applicable Rate for the next Dividend Period is not less than the rate
per annum specified by such Person to such Auction Placement Agent.
(iii) Any Order containing the information referred to in Section 2(a)
(i)(A) is hereafter referred to as a "Hold Order" and an Order containing
the information referred to in Section 2(a)(i)(C) is hereinafter referred
to as a "Sell Order".
(b)(i) A Bid by an Existing Holder submitted to the Auction Company by an
Auction Placement Agent on its behalf shall constitute an irrevocable offer to
sell:
(A) the number of Shares specified in such Bid if the Winning Bid Rate
determined on such Auction Date is less than the Specified Rate;
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(b)(iv) if the Winning Bid Rate determined on such
Auction Date is equal to the Specified Rate; or
(C) the specified number of Shares or a lesser number, as determined
pursuant to Section
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5(c)(ii) if the Specified Rate is higher than the Maximum Rate and a
Clearing Bid does not exist.
(ii) A Sell Order by an Existing Holder submitted to the Auction Company by
an Auction Placement Agent on its behalf shall constitute an irrevocable offer
to sell:
(A) the number of Shares specified in such Sell Order; or
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(c)(ii), if a Clearing Bid does not exist.
(iii) A Bid by a Potential Holder submitted to the Auction Company by an
Auction Placement Agent on its behalf shall constitute an irrevocable offer to
purchase:
(A) the number of Shares specified in such Bid if the Winning Bid Rate
determined on such Auction Date is higher than the Specified Rate; or
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(b)(v), if the Winning Bid Rate determined on such
Auction Date is equal to the Specified Rate.
Section 3. Submission of Orders by Auction Placement Agents to Auction Company.
(a) Each Auction Placement Agent shall submit in writing or by telecopier
to the Auction Company prior to the Submission Deadline on each Auction Date all
Orders obtained by such Auction Placement Agent, and specifying with respect to
each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of Shares that are the subject of the Order;
(iii) to the extent that the Bidder is an Existing Holder the number
of Owned Shares of such Existing Holder, if any, subject to any:
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(A) Hold Order placed by such Existing Holder;
(B) Bid placed by such Existing Holder and the Specified Rate for
each such Bid; and
(C) Sell Order placed by such Existing Holder; and
(iv) to the extent such Bidder is a Potential Holder, the Specified
Rate for each such Bid.
(b) If any rate contained in any Bid contains more than three figures to
the right of the decimal point, the Auction Company shall round such rate up to
the next highest one-thousandth (.001) of 1%.
(c) If an Order or Orders covering all Owned Shares of an Existing Holder
are not submitted to the Auction Company prior to the Submission Deadline, the
Auction Company shall deem a Hold Order to have been submitted on behalf of such
Existing Holder covering the number of Owned Shares of such Existing Holder not
subject to Orders submitted to the Auction Company.
(d) If one or more Orders submitted on behalf of an Existing Holder to the
Auction Company purport to cover more Owned Shares than actually held by such
Existing Holder, such Orders shall be considered valid as follows and in the
following order of priority:
(i) any Hold Order shall be considered valid up to and including the
number of Owned Shares of such Existing Holder; provided that if more than
one Hold Order is submitted on behalf of such Existing Holder and the
number of Owned Shares subject to such Hold Orders exceeds the number of
Owned Shares of such Existing Holder, the number of Owned Shares subject to
each such Hold Order shall be reduced pro rata so that such Hold Orders
shall cover the number of Owned Shares of such Existing Holder;
(ii) (A) any Bid shall be considered valid up to and including the
excess of the number of Owned Shares of such Existing Holder over the
number of Owned Shares subject to any and all Hold Orders referred to in
clause (i) above, (B) subject to subclause (A), if more than one Bid with
the same Specified Rate is submitted on behalf of such Existing Holder and
the number of
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Owned Shares subject to such Bids is greater than such excess, such Bids
shall be considered valid up to the amount of such excess and, the number
of Owned Shares subject to each Bid with the same Specified Rate shall be
reduced pro rata to cover the number of Owned Shares equal to such excess,
(C) subject to subclause (A), if more than one Bid with different Specified
Rates is submitted on behalf of such Existing Holder, such Bids shall be
considered valid in the ascending order of their respective rates up to the
amount of such excess, and in any such event the number, if any, of such
Owned Shares subject to Bids not valid under this clause (ii) shall be
treated as the subject of a Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Owned Shares of such Existing Holder over the sum
of Owned Shares of such Existing Holder subject to Hold Orders referred to
in clause (i) above and valid Bids referred to in clause (ii) above;
provided that if more than one Sell Order is submitted on behalf of any
Existing Holder and the number of Owned Shares subject to such Sell Orders
is greater than such excess, such Sell Orders shall be reduced pro rata so
that such Orders shall cover a number of shares equal to such excess.
Section 4. Determination of Clearing Bid, Winning Bid Rate and Applicable Rate.
(a) As early as possible on the Auction Date and in any event not later
than the Submission Deadline, the Auction Company shall determine the Aa
Composite Commercial Paper Rate and the Maximum Rate for such Auction Date and
shall advise the Corporation and the Auction Placement Agents thereof.
(b) Promptly after the Submission Deadline on each Auction Date, the
Auction Company shall assemble all Orders submitted or deemed submitted to it by
the Auction Placement Agents on such date (each a "Submitted Order" and each
Hold Order, Bid and Sell Order contained in a Submitted Order, a "Submitted Hold
Order", a "Submitted Bid" or a "Submitted Sell Order", as the case may be) and
shall determine:
(i) the number, if any, of Shares available to be purchased pursuant
to Bids on such Auction Date, which
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number shall equal the excess of (A) the total number of Outstanding Shares
over (B) the total number of Outstanding Shares subject to Submitted Hold
Orders (such excess number is hereinafter referred to as the "Available
Shares");
(ii) from the Submitted Orders, whether, subject to compliance with
the requirements of Section 5(g) hereof, (A) the number of Shares subject
to Submitted Bids with a Specified Rate equal to or less than the Maximum
Rate equals or exceeds (B) the Available Shares (if such equality or excess
exists, other than because the Available Shares are zero, a "Clearing Bid"
exists);
(iii) if a Clearing Bid exists, the lowest Specified Rate (such lowest
rate, the "Winning Bid Rate") contained in the Submitted Bids which if the
Auction Company accepted same would result in: (A) each Existing Holder
with Submitted Bids with Specified Rates equal to or lower than such lowest
rate continuing to hold Owned Shares in a number which, when added to (B)
the number of Shares subject to Submitted Bids with Specified Rates equal
to or lower than such lowest rate from Potential Holders would equal (C) a
number of Shares not less than the Available Shares.
(c) Promptly upon the Auction Company making the determinations described
in clauses (a) and (b) of this Section 4, the Auction Company shall determine
the Applicable Rate for the next succeeding Dividend Period as follows:
(i) if a Clearing Bid exists, the Applicable Rate shall be equal to
the Winning Bid Rate;
(ii) if a Clearing Bid does not exist (other than because all the
Outstanding Shares are subject to Submitted Hold Orders), the Applicable
Rate shall be equal to the Maximum Rate; or
(iii) if all the Outstanding Shares are subject to Submitted Hold
Orders, the Applicable Rate shall be equal to 59% of the Aa Composite
Commercial Paper Rate determined on the Business Day immediately preceding
the related Auction Date.
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Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders;
Allocation of Shares.
After giving effect to the determinations required to be made pursuant to
Section 4, Submitted Bids and Submitted Sell Orders shall be accepted or
rejected and the Auction Company shall take such other actions as set forth
below in this Section 5.
(a) If all Owned Shares are subject to submitted Hold Orders, all Submitted
Bids shall be rejected.
(b) If a Clearing Bid exists, subject to Sections 5(d) and 5(e) and subject
to compliance with the requirements of Section 5(g), Submitted Bids and
Submitted Sell Orders shall be accepted and/or rejected in the following order
of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Order of each Existing Holder shall be
accepted;
(ii) the Submitted Bid of each Existing Holder with a Specified Rate
lower than the Winning Bid Rate shall be accepted;
(iii) the Submitted Bid of each Potential Holder, with a Specified
Rate lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bid of each Existing Holder with a Specified Rate
equal to the Winning Bid Rate shall be accepted only for a number of Shares
equal, for each such Existing Holder, to the lesser of (A) the number of
Shares of such Existing Holder subject to such Submitted Bid and (B) the
number obtained by multiplying (x) the number of shares equal to the excess
of the Available Shares over the number of Shares subject to Submitted Bids
accepted pursuant to clauses (ii) and (iii) of this Section 5(d) by (y) a
fraction the numerator of which is the number of Shares subject to such
Submitted Bid and the denominator of which is the number of Shares subject
to all Submitted Bids by Existing Holders with a Specified Rate equal to
the Winning Bid Rate; and
(v) the Submitted Bid of each Potential Holder with a Specified Rate
equal to the Winning Bid Rate shall be accepted only in an amount equal to
the number
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of Shares obtained by multiplying (A) the number equal to the excess of the
Available Shares over the total number of Shares subject to Submitted Bids
accepted pursuant to clauses (ii), (iii) and (iv) of this Section 5(b) by
(B) a fraction the numerator of which is the number of Shares subject to
such Submitted Bid and the denominator of which is the number of Shares
subject to all Submitted Bids by Potential Holders with a Specified Rate
equal to the Winning Bid Rate.
(c) If a Clearing Bid does not exist and Section 5(a) is inapplicable,
subject to Sections 5(d) and 5(e) and subject to compliance with the provisions
of Section 5(g), Submitted Orders shall be accepted and/or rejected in the
following order of priority and all other Submitted Bids and Submitted Sell
Orders shall be rejected:
(i) the Submitted Bid of each Existing Holder and Potential Holder
with a Specified Rate equal to or lower than the Maximum Rate shall be
accepted; and
(ii) the Submitted Bid of each Existing Holder with a Specified Rate
higher than the Maximum Rate shall be accepted and the Submitted Sell Order
of each Existing Holder shall be rejected, in each case only for the number
of Shares equal to the number of Shares obtained by multiplying (A) the
excess of the Available Shares over the number of Shares the subject of
Submitted Bids accepted pursuant to clause (i) of this Section 5(c) by (B)
a fraction the numerator of which shall be the number of Owned Shares of
such Existing Holder subject to such Submitted Bid or Submitted Sell Order,
and the denominator of which shall be the number of Shares the subject of
all such Submitted Bids and Submitted Sell Orders.
(d) If on any Auction Date as a result of the procedures described in
Sections 5(b) and 5(c) any Existing Holder would be entitled or required to sell
a fraction of an Owned Share, the Auction Company shall in such manner as it
shall determine in its sole discretion, round up or down the number of Owned
Shares to be sold or continued to be held by an Existing Holder on such Auction
Date so that the number of Shares held or sold by each Existing Holder shall be
whole Shares.
(e) If on any Auction Date, as a result of the procedures described in
Section 5(b), any Potential Holder would be entitled or required or purchase a
fraction of a
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Share, the Auction Company shall, in such manner as it shall determine in its
sole discretion, allocate Shares for purchase among Potential Holders so that
only whole Shares are purchased, even if such allocation results in one or more
Potential Holders not purchasing Shares on such Auction Date.
(f) Each Existing Holder shall continue to hold for the next succeeding
Dividend Period Owned Shares subject on the Auction Date preceding such Dividend
Period to (A) a Submitted Hold Order, (B) a Submitted Bid to the extent accepted
pursuant to Section 5(b) or 5(c), as modified pursuant to Section 5(d), and (C)
a Submitted Sell Order to the extent rejected pursuant to Section 5(c)(ii), as
modified pursuant to Section 5(d). Each Existing Holder shall be required to
sell Owned Stock subject on an Auction Date to (A) a Submitted Sell Order to the
extent not rejected pursuant to Section 5(c)(ii) and (B) a Submitted Bid to the
extent not accepted pursuant to Section 5(b) or 5(c). Each Potential Holder
shall be required to purchase the Shares subject to a Submitted Bid made by such
Potential Holder to the extent such Submitted Bid is accepted pursuant to
Section 5(b) or 5(c).
(g) The Corporation shall not submit an Order, and no Affiliate shall
submit a Bid, at any Auction.
(h) Based on the result of an Auction, the Auction Company shall give the
notices specified in paragraph (a) of the Settlement Procedures, as defined in
the Auction Company Agreement.
Section 6. Miscellaneous.
The Board of Directors of the Corporation may interpret the provisions of
these procedures to resolve any inconsistency or ambiguity, remedy any formal
defect or make any other changes or modification that does not adversely affect
the rights of an Existing Holder and if such inconsistency or ambiguity reflects
an incorrect provision hereof, the Board of Directors may authorize the filing
of a Certificate of Correction."
5. The Preferred Stock Committee of the Board of Directors on May 27, 1987,
pursuant to the authority conferred upon the Preferred Stock Committee of the
Board of
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Directors by Section 141(c) of the General Corporation Law of the State of
Delaware, by Article VI, Section 7 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, established the Initial
Dividend Rate (as defined in the preceding resolution) for Series B Preferred as
5.40% per annum.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by John C. Pope, its Senior Vice President, and attested by Anne H.
McNamara, its Secretary, this 27th day of May, 1987.
AMR CORPORATION
By /s/ JOHN C. POPE
----------------------------------
ATTEST:
By /s/ ANNE H. McNAMARA
- ------------------------------------
Secretary
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CERTIFICATE OF DESIGNATIONS
OF
PREFERRED AUCTION RATE STOCK
SERIES C
OF
AMR CORPORATION
------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------
AMR CORPORATION, a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), HEREBY CERTIFIES that the following
resolutions were duly adopted by the Board of Directors of the Corporation and
by the Preferred Stock Committee of the Board of Directors, respectively,
pursuant to authority conferred upon the Board of Directors by the provisions of
the Certificate of Incorporation of the Corporation which authorizes the
issuance of up to 20,000,000 shares of preferred stock without par value and
pursuant to authority conferred upon the Preferred Stock Committee of the Board
of Directors by Section 141(c) of the General Corporation Law of the State of
Delaware, by Article VI, Section 7 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth herein, at a meeting of the
Board of Directors duly held on May 20, 1987 and at a meeting of the Preferred
Stock Committee thereof duly held on June 1, 1987:
1. The Board of Directors on May 20, 1987 adopted the following resolution
designating three series of preferred stock without par value of the Corporation
(for purposes of paragraphs 1 through 3 of this Certificate of Designations,
such three series are collectively referred to as "Preferred"):
"RESOLVED, that there are hereby designated three series of Preferred,
entitled as follows:
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Preferred Auction Rate Stock, Series A
Preferred Auction Rate Stock, Series B
Preferred Auction Rate Stock, Series C
respectively, each such Series to consist of 100 shares."
2. The Board of Directors on May 20, 1987 adopted the following resolutions
designating a Preferred Stock Committee of the Board of Directors and
authorizing such Committee to act on behalf of the Board of Directors in
connection with the issuance of any such series of Preferred;
"RESOLVED, that the Board of Directors hereby appoints a Preferred Stock
Committee, to be composed of such directors as shall be designated by the Board
of Directors by separate resolutions adopted by a majority of the whole Board of
Directors on the date hereof or from time to time hereafter, which Committee
shall have the powers set forth in these resolutions; that two members of the
Preferred Stock Committee constitute a quorum and are necessary and sufficient
to transact business; that the act of a majority of those present at any meeting
shall be the act of the Preferred Stock Committee; that notice of each meeting
of the Preferred Stock Committee shall be given by any member causing to be
delivered, not less than two hours prior to the meeting, to the office of each
member shown on the records of the Corporation, written or telephonic notice of
the location, date, time and purpose of the meeting; that a written waiver of
notice signed by each member, whether before or after the meeting, shall be
deemed equivalent to notice; that attendance by a member at a meeting shall
constitute waiver of notice of such meeting; that attendance at and
participation in a meeting may take place by conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other; and that a written report of any actions taken by
the Preferred Stock Committee shall be delivered at the next meeting of the
Board of Directors; and
RESOLVED, that the Preferred Stock Committee be and hereby is authorized
and empowered with full power and authority to act on behalf and in the stead of
the Board of Directors in connection with the issuance of any series of the
Preferred as herein designated and to fix the dividend rates (including the
dividend determination auction procedures) and dividend payment dates and to
declare dividends payable on any series of Preferred, to the fullest extent
permitted by Section 141(c) of the Delaware General Corporation Law as it now
exists or is hereafter amended."
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3. The Board of Directors on May 20, 1987 adopted the following resolutions
fixing the voting rights of each such series of Preferred:
"RESOLVED, that the shares of each series of the Preferred shall have no
voting powers, either general or special, except that:
(a) Whenever, at any time or times, dividends payable on any series of
Preferred shall be in arrears for such number of dividend periods which shall in
the aggregate contain not less than 540 days on the shares of such series at the
time outstanding, the record holders of such series (voting separately as a
class with (i) the record holders of any other series of Preferred theretofore
granted voting rights as a result of such a dividend arrearage with respect to
such other series and (ii) the record holders of all other series of preferred
stock subsequently issued if so provided in the certificate of designations with
respect thereto), will be entitled to vote for the election of two additional
directors of the Corporation at the Corporation's next annual meeting of
stockholders. At elections for such directors, each record holder of such series
shall be entitled to one vote for each share held (the record holders of shares
of any other series of preferred stock then entitled to vote being entitled to
such number of votes, if any, for each share of stock held as may be granted to
them). Upon the vesting of such right of the holders of such series, the maximum
authorized number of members of this Board of Directors shall automatically be
increased by two and the two vacancies so created shall be filled by vote of the
record holders of such outstanding series (either alone or together with the
holders of shares of any one or more other series of preferred stock then
entitled to vote) as hereinafter set forth. The right of the holders of such
series, voting separately as a class, to elect (either alone or together with
the holders of shares of any one or more other series of preferred stock then
entitled to vote) members of this Board of Directors as aforesaid shall continue
until such time as all dividends accumulated on such series shall have been paid
in full, at which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned.
Upon any termination of the right of the holders of all series of Preferred
and any other such preferred stock to elect directors, the term of office of all
directors then in office elected by the holders of such preferred
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voting as a class shall, to the extent permitted by law, terminate immediately.
If the office of any director elected by the holders of preferred stock so
voting as a class becomes vacant by reason of death, resignation, retirement,
disqualification or removal from office, or otherwise, the remaining director
elected by the holders of preferred stock so voting as a class may choose a
successor who shall hold office for the unexpired term in respect of which such
vacancy occurred. Whenever the term of office of the directors elected by the
holders of preferred stock so voting as a class shall end and the special voting
powers vested in the holders of preferred stock shall have expired, the number
of directors shall be such number as may be provided for in the By-Laws
irrespective of any increase made pursuant to the provisions of this resolution.
(b) So long as any shares of any series of Preferred remain outstanding,
the consent of the record holders of at least two-thirds of the shares of such
series outstanding at the time (voting separately as a class) given in person or
by proxy, either in writing or at any special or annual meeting called for the
purpose, shall be necessary to permit, effect or validate the amendment,
alteration or repeal, whether by merger, consolidation or otherwise, of any of
the provisions of the Certificate of Incorporation, as amended, of the
Corporation or of the resolutions set forth in any Certificate of Designations
for any series of Preferred designating such series and the preferences and
privileges, relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereof if, and only if, the
foregoing action would (i) adversely affect any right, preference, privilege or
power of shares of such series or (ii) increase the rights, preferences,
privileges or powers of shares of any other series of the Preferred if such
increase is not applicable to such first series; provided, however, that any
increase in the amount of authorized preferred stock (other than the Preferred)
or the creation and issuance of other series of preferred stock, or any increase
in the amount of authorized shares of any other series of preferred stock, in
each case ranking on a parity with or junior to such series with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to adversely affect such rights,
preferences, privileges or voting powers.
(c) So long as any shares of any series of Preferred remain outstanding,
the consent of the record holders of at least two-thirds of the shares of all
series of Pre-
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ferred outstanding at the time (voting separately as a class) given in person or
by proxy, either in writing or at any special or annual meeting called for such
purpose, shall be necessary to permit, effect or validate the authorization,
creation or issuance, or any increase in the authorized or issued amount, of any
class or series of stock ranking senior to any share of the Preferred with
respect to the payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up.
(d) The foregoing voting provisions shall not apply to any series of
Preferred if, at or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all outstanding shares of
such series shall have been redeemed or sufficient funds shall have been
deposited in trust to effect such a redemption."
4. The Board of Directors on May 20, 1987, adopted the following
resolution:
"RESOLVED, that the issue of up to 100 shares of Preferred Auction Rate
Stock, Series C, without par value of the Corporation is hereby authorized and
the preferences and privileges, relative, participating, optional and other
special rights, and qualifications, limitations and restrictions of all 100
shares of such series, in addition to those set forth in the Certificate of
Incorporation of the Corporation, are hereby fixed as follows:
Preferred Auction Rate Stock
Series C
PART I
1. Number of Shares. (a) The designation of the series of preferred stock
without par value provided for herein shall be "Preferred Auction Rate Stock,
Series C" (hereinafter referred to as the "Series C Preferred"), and the number
of authorized shares constituting Series C Preferred is 100. No fractional
shares of Series C Preferred will be issued.
(b) All shares of Series C Preferred redeemed or purchased by the
Corporation (which shall not be deemed to include purchases by an Affiliate, as
defined in Section I of Part II hereof) shall be retired and cancelled and shall
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be restored to the status of authorized but unissued shares of preferred stock,
without designation as to series, and may thereafter be issued, but not as
shares of Series C Preferred.
(c) The Series C Preferred shall rank on a parity as to dividends and upon
liquidation with all other series of Preferred issued by the Corporation.
2. Dividends.
(a) The Holders (all capitalized terms used in this Part I and not
otherwise defined shall have the meanings provided in Section 6 of this Part I)
shall be entitled to receive, when, as, and if declared by the Board of
Directors of the Corporation (or a committee thereof authorized by the Board of
Directors to so act), out of funds legally available therefor, cumulative cash
dividends at the Applicable Rate per annum, determined as set forth below, and
no more, payable on the respective dates set forth below.
(b) (i) Dividends on shares of Series C Preferred at the Applicable Rate
per annum as described in subsections (c)(i) and (c)(ii) of this Section 2,
shall accrue from the Date of Original Issue and shall be payable initially on
July 21, 1987 (or such other date as is designated by a resolution of the Board
of Directors of the Corporation (or a committee thereof authorized to so act)
prior to the Date or Original Issue) and on each succeeding seventh Tuesday
after such date (in each case, the "Normal Day"); provided, however, that (i) if
the Normal Day is not a Business Day, (ii) the following Wednesday is not a
Business Day or (iii) both the immediately preceding Monday and Friday are not
Business Days, the Dividend Payment Date will be the first Business Day that is
(a) preceded by a Business Day that is, or falls after, such preceding Friday
and (b) is immediately followed by a day that is a Business Day. Although any
particular Dividend Payment Date may not occur on the originally scheduled
Normal Day because of the above-mentioned provisos, the next succeeding Dividend
Payment Date shall be, subject to such provisos, the seventh Tuesday following
the originally designated Normal Day for the prior Dividend Period.
Notwithstanding the foregoing, in the event of a change in Federal law
lengthening the minimum holding period (currently found in Section 246(c) of the
Internal Revenue Code of 1986, as amended) required for taxpayers to be entitled
to the dividends-received deduction on preferred stock held by non-affiliated
corporations (currently found
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in Section 243(a) of such Code) (the "Minimum Holding Period"), the Board of
Directors of the Corporation shall increase the period of time between Dividend
Payment Dates so as to increase uniformly the number of days (such number of
days without giving effect to the provisos in the first sentence of this Section
2(b)(i) being "Dividend Period Days") in Dividend Periods commencing after the
date of such change in law (and in any event commencing no earlier than 21 days
after such action by the Board of Directors of the Corporation) to equal or
exceed the then current Minimum Holding Period; provided that the number of
Dividend Period Days shall not exceed by more than nine days the length of such
then current Minimum Holding Period and shall be evenly divisible by seven, and
the maximum number of Dividend Period Days shall not exceed 98 days. If as a
result of applying the above procedures for determining a Dividend Payment Date,
the number of days in a Dividend Period would not satisfy the Minimum Holding
Period, the Corporation's Board of Directors may fix the Dividend Payment Date
on the first Business Day following the Normal Day which is next succeeded by a
Business Day. Upon any such change in the number of Dividend Period Days as a
result of a change in law, the Corporation will give notice of such change to
the Auction Company and to the Holders at such Holders' addresses as the same
appears on the stock transfer books of the Corporation. The first date of
payment of dividends is the "Initial Dividend Payment Date" and each date of
payment of dividends is a "Dividend Payment Date".
(ii) As long as a Permanent Auction Termination Date has not occurred with
respect to the Series C Preferred, the Corporation shall deposit with the
Auction Company not later than 12:00 noon, New York City time, on the Business
Day next preceding each Dividend Payment Date an aggregate amount of funds
available on such Business Day or the next Business Day in The City of New York,
New York, equal to the dividends to be paid to all Holders on such Dividend
Payment Date. All such moneys shall be held in trust for the payment of such
dividends by the Auction Company for the benefit of the Holders specified in
subsection (b)(iii) of this Section 2.
(iii) Each dividend shall be paid to the Holders as their names appear on
the stock transfer books of the Corporation on the Business Day next preceding
the Dividend Payment Date thereof; provided, however, that if a Permanent
Auction Termination Date has occurred in respect of the Series C Preferred or
such dividend payment is in respect of dividends in arrears, such dividend shall
be paid to the
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Holders as their names appear on the stock transfer books of the Corporation on
such date, not exceeding 15 days preceding the payment date thereof, as may be
fixed by the Board of Directors of the Corporation. Dividends in arrears for any
past Dividend Period may be declared and paid at any time without reference to
any regular Dividend Payment Date.
(c)(i) The dividend rate (the "Initial Dividend Rate") on shares of Series
C Preferred during the period commencing on the Date of Original Issue to and
including the day immediately preceding the Initial Dividend Payment Date (the
"Initial Dividend Period") shall be established by resolution of a committee of
the Board of Directors of the Corporation authorized to so act prior to the Date
of Original Issue. Commencing on the Initial Dividend Payment Date, the dividend
rate on shares of Series C Preferred for each subsequent dividend period (a
"Subsequent Dividend Period"; and the Initial Dividend Period or any Subsequent
Dividend Period being a "Dividend Period") thereafter, which subsequent Dividend
Period shall commence on each Dividend Payment Date and shall end on and include
the date immediately preceding the next succeeding Dividend Payment Date, shall
be, except as provided in subsection (c)(ii) of this Section 2, equal to the
rate per annum that results from implementation of the Auction Procedures
described in Part II hereto (which Part II is hereby incorporated by reference
herein and made a part hereof).
(ii) In the event of any failure by the Corporation to deposit (in funds
available on such Business Day or the next Business Day in the City of New York,
New York), with the Auction Company by 12:00 noon, New York City time, (i) on
the Business Day next preceding any Dividend Payment Date, the full amount of
any dividend (whether or not earned or declared) to be paid on such Dividend
Payment Date on any share of Series C Preferred or (ii) on the Business Day next
preceding any redemption date for Series C Preferred, the redemption price to be
paid on such redemption date, including an amount equal to accrued and unpaid
dividends thereon (whether or not earned or declared) for any share of Series C
Preferred, after a notice of redemption has been given as provided in subsection
C of Section 3 of this Part I, then, except as provided in the next following
sentence, the dividend rate for each Dividend Period commencing after the date
of any such failure shall be equal to the Alternate Rate for such Dividend
Period. To the extent that the Corporation has remedied any such failure to pay
dividends, and is not in arrears on any other dividends payable on shares of
Series C Preferred, and/or has remedied any such
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failure to pay such redemption price, in each case prior to the second Business
Day preceding the fifth Dividend Payment Date following such failure, Auctions
shall be reinstated for Series C Preferred on the first Auction Date following
such remedy and the Applicable Rate for Series C Preferred shall again be the
rate per annum that results from the implementation of the Auction Procedures;
to the extent such failure is not so remedied by such date, Auctions for such
Series will be permanently discontinued and the Applicable Rate for all future
Dividend Periods for such Series shall be the Alternate Rate for each such
Dividend Period.
(iii) The amount of dividends per share of Series C Preferred payable for
any Dividend Period shall be computed by multiplying the Applicable Rate for
such Dividend Period by a fraction the numerator of which shall be the number of
days in the Dividend Period such share was outstanding and the denominator of
which shall be 360, and then multiplying the rate so obtained by $500,000 per
share of Series C Preferred.
(d)(i) So long as any shares of Series C Preferred are outstanding, no full
dividends shall be declared or paid or set apart for payment on the preferred
stock of any series ranking, as to dividends, on a parity with Series C
Preferred for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on shares of Series C Preferred for
all Dividend Periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of Series C Preferred and any other series of preferred stock ranking
on a parity as to dividends with Series C Preferred, all dividends declared on
Series C Preferred and any other series of preferred stock ranking on a parity
as to dividends with Series C Preferred shall be declared pro rata so that the
amount of dividends declared per share on Series C Preferred and such other
series of preferred stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of Series C Preferred and such
other series of preferred stock bear to each other.
(ii) So long as any shares of Series C Preferred are outstanding, no
dividend (other than dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock or any
other stock ranking junior or Series C Preferred as to
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dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution declared or made upon the common stock or upon any
other stock of the Corporation ranking junior to or on a parity with Series C
Preferred as to dividends, nor shall any common stock or any other stock of the
Corporation ranking junior to or on a parity with Series C Preferred as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking junior to
Series C Preferred as to dividends and upon liquidation), unless, in each case,
the full cumulative dividends on all outstanding shares of Series C Preferred
shall have been paid through the most recent Dividend Payment Date.
(e) Any dividend payment made on shares of Series C Preferred shall first
be credited against the dividends accrued with respect to the earliest Dividend
Period for which dividends have not been paid. Holders of shares of Series C
Preferred shall not be entitled to (i) any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as herein provided,
on the Series C Preferred, or (ii) any interest, or sum of money in lieu of
interest, in respect of any dividend payment or payments on the Series C
Preferred which may be in arrears.
3. Redemption. Shares of Series B Preferred shall be redeemable by the
Corporation as provided below:
A. Optional Redemption.
(a) At the option of the Corporation, shares of Series C Preferred may be
redeemed as a whole on any Dividend Payment Date or in part from time to time on
the second Business Day next preceding any Dividend Payment Date, out of funds
legally available therefor, at a redemption price of:
(i) $507,500 per share if redeemed on or before the first anniversary
of the Date of Original Issue;
(ii) $505,000 per share if redeemed thereafter and on or before the
second anniversary of the Date of Original Issue;
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(iii) $502,500 per share if redeemed thereafter and on or before the
third anniversary of the Date of Original Issue; and
(iv) $500,000 per share if redeemed thereafter;
plus, in each case, an amount equal to accrued and unpaid dividends thereon
(whether or not earned or declared) to (but not including) the date fixed for
redemption.
(b) At the option of the Corporation, shares of Series C Preferred may be
redeemed, as a whole but not in part, on any Dividend Payment Date, out of funds
legally available therefor, at a redemption price of $500,000 per share, plus an
amount equal to accrued and unpaid dividends thereon (whether or not earned or
declared) to the date fixed for redemption, if the Applicable Rate with respect
to the Dividend Period ending on the day immediately preceding such Dividend
Payment Date shall equal or exceed the Aa Composite Commercial Paper Rate on the
date of determination of such Applicable Rate.
B. Allocation. If fewer than all the outstanding shares of Series C
Preferred are to be redeemed pursuant to Section 3A(a), the number of shares to
be redeemed shall be determined by the Board of Directors of the Corporation. To
the extent that there is one Holder of all shares of Series C Preferred, such
Holder shall determine which of its shares of Series C Preferred are to be
redeemed in the case of a partial redemption. To the extent there is more than
one Holder for all shares of Series C Preferred, then in the case of a partial
redemption, the shares to be redeemed shall be determined by the Board of
Directors among the then current Holders by lot or such other method deemed by
the Board of Directors to be fair and equitable.
C. Notice of Redemption; Other Redemption Procedures.
(a) Whenever shares of Series C Preferred are to be redeemed pursuant to
this Section 3, a notice of such redemption shall be mailed, by first-class
mail, postage prepaid, or delivered to each Holder of the shares to be redeemed
at such Holder's address as the same appears on the stock transfer books of the
Corporation. Such notice shall be mailed or delivered not less than 20 days and
not more than 45 days prior to the date fixed for redemption. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of Series C
Preferred to be redeemed; (iii)
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the redemption price; (iv) the place or places where such shares of Series C
Preferred are to be surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date; and (vi) the provision of this Section 3 under which the redemption is
made. If fewer than all shares of Series C Preferred held by a Holder are to be
redeemed, the notice mailed or delivered to such Holder shall specify the number
of shares to be redeemed from such Holder. Except as required by the applicable
law, no defect in the notice of redemption or in the mailing thereof shall
affect the validity of the redemption proceedings.
(b) On and after the date specified in a notice of redemption, the Holder
of shares of Series C Preferred specified for redemption, upon presentation and
surrender at the office of the Auction Company (or any successor redemption
agent) designated in such notice of redemption of the certificate or
certificates evidencing the shares of Series C Preferred held by such holder and
called for redemption, properly endorsed in blank for transfer or accompanied by
proper instruments of assignment or transfer in blank, bearing all necessary
transfer tax stamps thereto affixed and cancelled, shall be entitled to receive
therefor the applicable redemption price hereinbefore specified. If less than
all of the shares represented by one share certificate are to be redeemed, the
Corporation shall issue a new share certificate for the shares not redeemed.
(c) If the Corporation shall give a notice of redemption, then, by 12:00
noon (New York City time) on the Business Day next preceding the date fixed for
redemption, the Corporation shall deposit with the Auction Company (or any
successor redemption agent) an aggregate amount of funds available on the next
Business Day equal to the aggregate redemption price of the shares of the Series
C Preferred called for redemption in such notice of redemption and shall give
the Auction Company (or any successor redemption agent) irrevocable instructions
and authority to pay the redemption price to the Holders of the shares of the
Series C Preferred called for redemption upon surrender of the certificate or
certificates therefor. All such moneys so deposited will be held in trust by the
Auction Company for the benefit of the Holders of the shares to be redeemed.
Upon the earlier of the date of such deposit or the payment of the redemption
price, all rights of the Holders of the shares so called for redemption shall
cease and terminate, except the right of the Holders of such shares, upon
surrender of such shares, to receive the redemption price thereof, but without
any
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interest, and such shares shall no longer be deemed to be outstanding for any
purposes. The Corporation shall be entitled to receive, promptly after the date
fixed for redemption, any funds so deposited and interest thereon in excess of
the aggregate redemption price of the shares of the Series C Preferred called
for redemption on such date. Any funds so deposited which are unclaimed at the
end of two years from such redemption date shall, to the extent permitted by
law, be repaid to the Corporation, after which the holders of shares of the
Series C Preferred so called for redemption shall look only to the Corporation
for payment thereof, without any interest payable thereon. The Corporation shall
be entitled to receive, from time to time after the date fixed for redemption,
any interest on the funds so deposited and held by the Auction Company (or any
successor redemption agent).
(d) Notwithstanding any other provisions of this Section 3, if any
dividends on any share of Preferred are in arrears, no shares of Preferred may
be redeemed unless all outstanding shares of Preferred are simultaneously
redeemed, nor may any shares of Preferred be purchased or otherwise acquired by
the Corporation except in accordance with a purchase offer on the same terms
made by the Corporation for all outstanding shares of Preferred.
(e) Except as set forth in this Section 3 with respect to redemptions and
subject to subsection (d) of this Section 3 and to the limitations contained in
Part II, nothing contained herein shall limit any legal right of the Corporation
or any Affiliate to purchase or otherwise acquire any shares of Series C
Preferred at any price, whether higher or lower than the redemption price.
Shares of Series C Preferred which have been redeemed, purchased or otherwise
acquired by the Corporation are not subject to reissuance and shall be retired.
4. Liquidation.
(a) Upon a liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series C
Preferred then outstanding shall be entitled, whether from capital or surplus
before any assets of the Corporation shall be distributed among or paid over to
the holders of stock junior to the Series C Preferred as to liquidation payments
but after distribution of such assets among, or payment thereof over to,
creditors of the Corporation and to holders of any stock of the Corporation with
liquidation rights
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senior to the Series C Preferred, to be paid $500,000 per share, plus, in each
such case, an amount equal to all accrued and unpaid dividends thereon (whether
or not earned or declared) to the date of final distribution. After any such
payment in full, the holders of shares of the Series C Preferred shall not be
entitled to any further participation in any distribution of assets of the
Corporation.
(b) Neither the merger or consolidation of the Corporation into or with any
other corporation or the merger or consolidation of any other corporation into
or with the Corporation, shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, for the purposes of this Section 4.
(c) If, upon any such liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets of the Corporation
shall be insufficient to make the full payments required by subsection (a) of
this Section 4, no such distribution shall be made on account of any shares of
any other class or series of preferred stock ranking on a parity with the shares
of Series C Preferred upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
Series C Preferred, ratably, in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
(d) Subject to the rights of the holders of shares of any series or class
or classes of stock ranking on a parity with or prior to the shares of Series C
Preferred upon liquidation, dissolution or winding up, upon any liquidation,
dissolution or winding up of the Corporation, after payment shall have been made
in full to the Holders of the shares of Series C Preferred as provided in this
Section 4, but not prior thereto, any other series or class or classes of stock
ranking junior to the shares of Series C Preferred upon liquidation shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the Holders of the shares of Series C Preferred shall not be entitled to share
therein.
5. Ranking. For purposes of this resolution, any stock of any class or
classes of the Corporation shall be deemed to rank:
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(a) prior to the shares of Series C Preferred either as to dividends
or upon liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may
be, in preference or priority to the Holders of shares of Series C
Preferred.
(b) on a parity with shares of Series C Preferred either as to
dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of Series C Preferred, if the
holders of such stock shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority, one over the
other, as between the holders of such stock and the Holders of shares of
Series C Preferred; and
(c) junior to shares of Series C Preferred either as to dividends or
upon liquidation, if such class shall be common stock or if the Holders of
shares of Series C Preferred shall be entitled to receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders
of shares of such class or classes.
6. Definitions. As used herein, the following terms shall have the
following meanings (with terms defined in the singular having the same meanings
when used in the plural and vice versa):
(a) "Aa Composite Commercial Paper Rate," on any date, shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "Aa" by Moody's, "AA" by S&P, or the
equivalent of such rating by another rating agency, as made available on a
discount basis or otherwise by the Federal Reserve Bank of New York for the
Business Day immediately preceding such date, or (ii) if the Federal Reserve
Bank of New York does not make available such a rate, then the arithmetic
average of the interest equivalent of the 60-day rate on commercial paper placed
on behalf of such issuers, as quoted on a discount basis or otherwise by two
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nationally recognized commercial paper placement agents or dealers selected by
the Corporation to the Auction Company prior to the close of business on the
Business Day immediately preceding such date. If the Board of Directors of the
Corporation shall increase the number of Dividend Period Days in accordance with
Section 2(b)(i) of this Part I, with the result that (A) the number of Dividend
Period Days shall be less than 70, such rate shall be the interest equivalent of
the 60-day rate on such commercial paper, or (B) the number of Dividend Period
Days shall be 70 or more but less than 85, such rate shall be the arithmetic
average of the interest equivalent of the 60-day and 90-day rates on such
commercial paper, or (C) the number of Dividend Period Days shall be 85 or more
but less than or equal to 98, such rate shall be the interest equivalent of the
90-day rate on such commercial paper. For the purposes of such definition,
"interest equivalent" means a rate for commercial paper which is (A) if the
provided rate is made available on an interest bearing basis, such provided rate
and (B) if the provided rate is made available on a discount basis (a "discount
rate") a rate equal to the quotient (rounded upwards to the next higher
one-thousandth of one percent (.001 of 1%) of (A) the discount rate (expressed
as a decimal) divided by (B) the difference between (x) 1.00 and (y) a fraction
the numerator of which shall be the product of the discount rate (expressed as a
decimal) times the number of days in which such commercial paper matures and the
denominator of which shall be 360.
(b) "Alternate Rate" shall mean for any Dividend Period 150% of LIBOR
determined for such Dividend Period.
(c) "Applicable Rate" shall mean the dividend rate applicable to the Series
C Preferred in effect during a Dividend Period as determined pursuant to
Sections 2(c)(i) and (ii) of this Part I.
(d) "Auction" shall mean the periodic implementation of the Auction
Procedures.
(e) "Auction Company" shall mean the bank or trust company or other entity
appointed as such by a resolution of the Board of Directors of the Corporation.
(f) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(g) "Auction Procedures" shall mean the procedures for conducting Auctions
set forth in Part II hereof.
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(h) "Board of Directors" shall mean the Board of Directors of the
Corporation or any duly authorized committee thereof.
(i) "Business Day" shall mean a day on which the New York Stock Exchange,
Inc. is open for trading and is not a day on which banks in The City of New York
are authorized or required by law or order to close.
(j) "Corporation" shall mean AMR Corporation, a Delaware corporation.
(k) "Date of Original Issue" shall mean the date on which the Corporation
originally issues shares of Series C Preferred.
(l) "Dividend Payment Date" shall have the meaning specified in Section
2(b)(i) of this Part I.
(m) "Dividend Period" shall have the meaning specified in Section 2(c)(i)
of this Part I.
(n) "Dividend Period Days" shall have the meaning specified in Section
2(b)(i) of this Part I.
(o) "Holder" shall mean a holder of shares of Series C Preferred as the
same appears on the stock transfer books of the Corporation.
(p) "Initial Dividend Payment Date" shall have the meaning specified in
Section 2(b)(i) of this Part I.
(q) "Initial Dividend Period" shall have the meaning specified in Section
2(c)(i) of this Part I.
(r) "Initial Dividend Rate" shall have the meaning specified in Section
2(c)(i) of this Part I.
(s) "LIBOR" shall mean for any Dividend Period the arithmetic average
(rounded to the next higher 1/16 of 1%), computed by the Corporation, of the
respective rates per annum quoted by each of the principal London offices of
Bankers Trust Company, Citibank, N.A., Barclays Bank plc and National
Westminster Bank plc, or their respective successors (the "Reference Banks"), at
which United States dollar deposits for a two-month period in the amount of U.S.
$10,000,000 are offered by such Reference Banks to leading banks in the London
interbank market, at approximately 11:00 A.M. (London time) on the first day of
such Dividend Period,
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or if such day is not a day on which dealings in United States dollars are
transacted in the London interbank market, then on the next preceding day on
which such dealings are transacted in such market. If any Reference Bank does
not quote a rate required to determine LIBOR, LIBOR shall be determined on the
basis of the quotation or quotations furnished by the remaining Reference Bank
or Reference Banks and any Substitute Reference Bank or Substitute Reference
Banks (as defined below) selected by the Corporation to provide such quotation
or quotations not being supplied by any Reference Bank or Reference Banks, as
the case may be, or, if the Corporation does not select any Substitute Reference
Bank or Substitute Reference Banks, by the remaining Reference Bank or Reference
Banks. However, if the Board of Directors of the Corporation shall, pursuant to
Section 2(b)(i) of this Part I, increase the number of Dividend Period Days, in
the event of a change in the dividend received deduction holding period, with
the result that (i) the Dividend Period Days after such adjustment shall be 70
or more days but fewer than 85 days, LIBOR shall be based on the arithmetic
average (rounded to the next higher 1/16 of 1%) of the rates per annum quoted
for such United States dollar deposits for two- and three-month periods or (ii)
the Dividend Period Days after such adjustment shall be 85 or more days but 98
or fewer days, such rate shall be based on the rates per annum quoted for such
United States dollar deposits for a three-month period. For the purposes of the
foregoing, "Substitute Reference Bank" shall mean the principal London offices
of The Chase Manhattan Bank, N.A. or Morgan Guaranty Trust Company of New York,
or their respective successors or, if none of such Substitute Reference Banks
are engaged in dealings in United States dollars in the London interbank market,
than a bank or banks, selected by the Corporation, engaged in dealings in United
States dollars in the London interbank market. For each Dividend Period for
which the rate is to be the Alternate Rate, the Corporation will obtain the
rates from Reference Banks, determine LIBOR and the Alternate Rate and notify
the Auction Company of such determination.
(t) "Minimum Holding Period" shall have the meaning specified in Section
2(b)(i) of this Part I.
(u) "Normal Day" shall have the meaning specified in Section 2(b)(i) of
this Part I.
(v) "Permanent Auction Termination Date" shall mean the second Business Day
preceding the fifth Dividend Payment Date following any failure by the
Corporation to pay
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in a timely manner to the Auction Company the full amount of any dividend
for Series C Preferred when due or the redemption price, when due, of any
shares of Series C Preferred after the Corporation has given notice of
redemption, if and only if, such failure has not theretofore been remedied
and the Corporation is not then in arrears on any dividends payable on
Series C Preferred.
(w) "Preferred" shall mean the Series C Preferred, together with the
series of preferred stock of the Corporation designated as "Preferred
Auction Rate Stock, Series A" and "Preferred Auction Rate Stock, Series B".
(x) "Series C Preferred" shall mean the series of preferred stock,
without par value, of the Corporation designated as "Preferred Auction Rate
Stock, Series C".
(y) "Subsequent Dividend Period" shall have the meaning specified in
Section 2(c)(i) of this Part I.
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PART II
AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms used in this Part II and not defined in this Section 1
shall have the respective meanings specified in Part I hereof. As used in this
Part II, the following terms shall have the following meanings, unless the
context otherwise requires, with all references to the singular to include the
plural and all references to the plural to include the singular:
(a) "Affiliate" shall mean any Person known to the Auction Company to
be controlled by, in control of, or under common control with the
Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository
that will act on behalf of a Bidder (as identified in such Bidder's
Purchaser's Letter).
(c) "Applicable Rate" shall mean the dividend rate applicable to the
Shares for a Dividend Period to the extent determined pursuant to the
procedures set forth herein.
(d) "Auction" shall mean the periodic auction in respect of the Shares
conducted in accordance with the procedures set forth in this Part II.
(e) "Auction Company" shall mean Manufacturers Hanover Trust Company
or any successor thereto as Auction Company to the extent such successor
has entered into an agreement with the Corporation similar to the Auction
Company Agreement.
(f) "Auction Company Agreement" shall mean the Auction Company
Agreement between the Corporation and Manufacturers Hanover Trust Company
as Auction Company pursuant to which Manufacturers Hanover Trust Company
agrees, inter alia, to perform the duties of the Auction Company in
connection with the Auctions.
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(g) "Auction Date" shall mean the Business Day next preceding a
Dividend Payment Date.
(h) "Auction Placement Agent" shall mean any entity permitted by law
to perform the functions of an Auction Placement Agent in Auctions which
has been selected by the Corporation and has entered into an Auction
Placement Agent Agreement with the Auction Company that remains in effect.
(i) "Auction Placement Agent Agreement" shall mean an agreement
between the Auction Company and an Auction Placement Agent pursuant to
which such Auction Placement Agent agrees to follow the procedures set
forth herein in respect of Auctions.
(j) "Available Shares" shall have the meaning specified in Section
4(b)(i).
(k) "Bid" shall mean the offer of an Existing Holder or Potential
Holder to continue to hold or purchase, as the case may be, a Share or
Shares if the Applicable Rate equals or exceeds the Specified Rate
contained in such Bid. Such offers from the same Person specifying
different Specified Rates shall each constitute a separate Bid.
(l) "Bidder" shall mean each Existing Holder and Potential Holder
placing an Order.
(m) "Clearing Bid" shall have the meaning specified in Section 4(b).
(n) "Eligible Person" shall mean those Persons (i) who qualify as
"accredited investors" under Regulation D promulgated under the Securities
Act of 1933, as amended, (ii) who otherwise satisfy the requirements set
forth in the Auction Placement Agent Agreements as persons from whom
Auction Placement Agents may solicit Orders or who constitute Affiliates of
the Corporation, and (iii) who have executed and delivered a Purchaser's
Letter, which remains in full force and effect.
(o) "Existing Holder" shall mean on any Auction Date an Eligible
Person if and to the extent then listed as the beneficial owner of Shares
in the records of the Auction Company.
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(p) "Hold Order" shall have the meaning specified in Section
2(a)(iii).
(q) "Maximum Rate" at any Auction shall mean the applicable Rate
Multiple times the Aa Composite Commercial Paper Rate determined at the
close of business on the Business Day immediately preceding the related
Auction Date.
(r) "Order" shall mean the placing with the Placement Agent of (x) a
Hold Order, a Bid or Bids and/or a Sell Order by an Existing Holder and (y)
a Bid by a Potential Holder.
(s) "Outstanding" shall mean, as of any date, Shares theretofore
issued by the Corporation except, without duplication, (i) any Shares
theretofore cancelled or delivered to the Auction Company for cancellation,
or redeemed by, or as to which a notice of redemption has been given by,
the Corporation, (ii) any Shares as to which the Corporation is an Existing
Holder and (iii) any Shares represented by any certificate in lieu of which
a new certificate has been executed and delivered by the Corporation.
(t) "Owned Shares" of any Existing Holder shall mean the Shares as to
which it is listed as beneficial owner in the records of the Auction
Company.
(u) "Person" shall mean a corporation, a trust, a pension fund, an
institutional investor or other similar entity.
(v) "Potential Holder" shall mean any Eligible Person who has
submitted a Bid ( or, in the case of an Existing Holder, a Bid for Shares
other than Owned Shares).
(w) "Prevailing Rating" of the Shares shall be (i) AA/aa or Above if
the Shares have a rating of AA- or better by Standard & Poor's Corporation
("Standard & Poor's") or aa3 or better by Moody's Investors Service, Inc.
("Moody's"), or the equivalent of either or both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, (ii) if not AA/aa or Above, then A/a if the
Shares have a rating of A- or better and lower than AA- by Standard &
Poor's or a3 or better and lower than aa3 by Moody's or the equivalent of
either or both of such ratings by such agencies or a substitute rating
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agency or substitute rating agencies selected as provided below, (iii) if
not AA/aa or Above or A/a, then BBB/baa if the Shares have a rating of
BBB- or better and lower than A- by Standard & Poor's or baa3 or better
and lower than a3 by Moody's or the equivalent of either or both of such
ratings by such agencies or a substitute rating agency or substitute
rating agencies selected as provided below and (iv) if not AA/aa or Above,
A/a or BBB/baa, then Below BBB/baa. The Corporation will take all
reasonable action necessary to enable Standard & Poor's or Moody's to
provide a rating for the Shares. If neither Standard & Poor's nor Moody's
shall make such a rating available, Bankers Trust Company or its successor
shall select a nationally recognized statistical rating organization (as
that term is used in the rules and regulations of the Securities and
Exchange Commission under the Security Exchange Act of 1934, as amended)
to act as substitute rating agency, and the Corporation shall take all
reasonable action to enable such rating agency to provide a rating for
the Shares.
(x) "Purchaser's Letter" shall mean a letter addressed to the
Corporation, the Auction Company, an Auction Placement Agent and an Agent
Member in which a Person agrees, among other things, to offer to purchase,
purchase, offer to sell and/or sell Shares as set forth therein.
(y) "Rate Multiple" on any Auction Date for the Shares shall mean the
percentage determined below based on the Prevailing Rating of the Shares in
effect at the close of business of the Business Day immediately preceding
such Auction Date:
<TABLE>
<CAPTION>
Prevailing Rating Percentage
----------------- ----------
<S> <C>
AA/aa or Above 110%
A/a 120%
BBB/baa 130%
Below BBB/baa 150%
</TABLE>
(z) "Securities Depository" shall mean The Depository Trust Company
and its successors and assigns or any other securities depository selected
by the Corporation which agrees to follow the procedures required to be
followed by such securities depository in connection with Shares.
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(aa) "Sell Order" shall have the meaning specified in Section 2(a)(iii).
(bb) "Shares" shall mean shares of Preferred Auction Rate Stock, Series C
issued by the Corporation.
(cc) "Specified Rate" shall mean with respect to each Bid the rate
specified by the Existing Holder or Potential Holder making such Bid as the
dividend rate below which it is not offering to continue to hold or purchase the
Shares subject to such Bid.
(dd) "Submission Deadline" shall mean 2:00 p.m., New York City time, on any
Auction Date or such other time on any Auction Date (as specified by the Auction
Company from time to time) by which each Auction Placement Agent is required to
submit Orders to the Auction Company.
(ee) "Submitted Bid" shall have the meaning specified in Section 4(b).
(ff) "Submitted Hold Order" shall have the meaning specified in Section
4(b).
(gg) "Submitted Order" shall have the meaning specified in Section 4(b).
(hh) "Submitted Sell Order" shall have the meaning specified in Section
4(b).
(ii) "Winning Bid Rate" shall have the meaning specified in Section
4(b)(iii).
Section 2. Orders by Existing Holders and Potential Holders.
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) Each Existing Holder may submit to an Auction Placement Agent by
telephone information as to the number of Owned Shares of such Existing
Holder, if any, that such Existing Holder:
(A) desires to continue to hold without regard to the Applicable
Rate for the next succeeding Dividend Period;
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(B) elects to continue to hold if the Applicable Rate for the next
succeeding Dividend Period is not less than the rate per annum specified
by such Existing Holder to the Auction Placement Agent; and/or
(C) offers to sell without regard to the Applicable Rate for the
next succeeding Dividend Period.
(ii) Each Auction Placement Agent shall diligently attempt to contact
by telephone such number of Eligible Persons, including Persons who are not
Existing Holders, as such Auction Placement Agent shall in good faith deem
appropriate in order to obtain a commercially reasonable and competitive
Applicable Rate for the next succeeding Dividend Period. Each Auction
Placement Agent shall transmit to the Auction Company pursuant to Section 3
hereof the number of Shares, if any, any such Person offers to purchase if
the Applicable Rate for the next Dividend Period is not less than the rate
per annum specified by such Person to such Auction Placement Agent.
(iii) Any Order containing the information referred to in Section
2(a)(i)(A) is hereafter referred to as a "Hold Order" and an Order
containing the information referred to in Section 2(a)(i)(C) is hereinafter
referred to as a "Sell Order".
(b)(i) A Bid by an Existing Holder submitted to the Auction Company by an
Auction Placement Agent on its behalf shall constitute an irrevocable offer to
sell:
(A) the number of Shares specified in such Bid if the Winning Bid Rate
determined on such Auction Date is less than the Specified Rate;
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(b)(iv) if the Winning Bid Rate determined on such
Auction Date is equal to the Specified Rate;
(C) the specified number of Shares or a lesser number, as determined
pursuant to Section
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5(c)(ii) if the Specified Rate is higher than the Maximum Rate and a
Clearing Bid does not exist.
(ii) A Sell Order by an Existing Holder submitted to the Auction Company by
an Auction Placement Agent on its behalf shall constitute an irrevocable offer
to sell:
(A) the number of Shares specified in such Sell Order; or
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(c)(ii), if a Clearing Bid does not exist.
(iii) A Bid by a Potential Holder submitted to the Auction Company by an
Auction Placement Agent on its behalf shall constitute an irrevocable offer to
purchase:
(A) the number of Shares specified in such Bid if the Winning Bid Rate
determined on such Auction Date is higher than the Specified Rate; or
(B) the specified number of Shares or a lesser number, as determined
pursuant to Section 5(b)(v), if the Winning Bid Rate determined on such
Auction Date is equal to the Specified Rate.
Section 3. Submission of Orders by Auction Placement Agents to Auction Company.
(a) Each Auction Placement Agent shall submit in writing or by telecopier
to the Auction Company prior to the Submission Deadline on each Auction Date all
Orders obtained by such Auction Placement Agent, and specifying with respect to
each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of Shares that are the subject of the Order;
(iii) to the extent that the Bidder is an Existing Holder the number
of Owned Shares of such Existing Holder, if any, subject to any:
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(A) Hold Order placed by such Existing Holder;
(B) Bid placed by such Existing Holder and the Specified Rate for
each such Bid; and
(C) Sell Order placed by such Existing Holder; and
(iv) to the extent such Bidder is a Potential Holder, the Specified
Rate for each such Bid.
(b) If any rate contained in any Bid contains more than three figures to
the right of the decimal point, the Auction Company shall round such rate up to
the next highest one-thousandth (.001) of 1%.
(c) If an Order or Orders covering all Owned Shares of an Existing Holder
are not submitted to the Auction Company prior to the Submission Deadline, the
Auction Company shall deem a Hold Order to have been submitted on behalf of such
Existing Holder covering the number of Owned Shares of such Existing Holder not
subject to Orders submitted to the Auction Company.
(d) If one or more Orders submitted on behalf of an Existing Holder to the
Auction Company purport to cover more Owned Shares than actually held by such
Existing Holder, such Orders shall be considered valid as follows and in the
following order of priority:
(i) any Hold Order shall be considered valid up to and including the
number of Owned Shares of such Existing Holder; provided that if more than
one Hold Order is submitted on behalf of such Existing Holder and the
number of Owned Shares subject to such Hold Orders exceeds the number of
Owned Shares of such Existing Holder, the number of Owned Shares subject to
each such Hold Order shall be reduced pro rata so that such Hold Orders
shall cover the number of Owned Shares of such Existing Holder;
(ii) (A) any Bid shall be considered valid up to and including the
excess of the number of Owned Shares of such Existing Holder over the
number of Owned Shares subject to any and all Hold Orders referred to in
clause (i) above, (B) subject to subclause (A), if more than one Bid with
the same Specified Rate is submitted on behalf of such Existing Holder and
the number of
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Owned Shares subject to such Bids is greater than such excess, such Bids
shall be considered valid up to the amount of such excess and, the number
of Owned Shares subject to each Bid with the same Specified Rate shall be
reduced pro rata to cover the number of Owned Shares equal to such excess,
(C) subject to subclause (A), if more than one Bid with different Specified
Rates is submitted on behalf of such Existing Holder, such Bids shall be
considered valid in the ascending order of their respective rates up to the
amount of such excess, and in any such event the number, if any, of such
Owned Shares subject to Bids not valid under this clause (ii) shall be
treated as the subject of a Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Owned Shares of such Existing Holder over the sum
of Owned Shares of such Existing Holder subject to Hold Orders referred to
in clause (i) above and valid Bids referred to in clause (ii) above;
provided that if more than one Sell Order is submitted on behalf of any
Existing Holder and the number of Owned Shares subject to such Sell Orders
is greater than such excess, such Sell Orders shall be reduced pro rata so
that such Orders shall cover a number of shares equal to such excess.
Section 4. Determination of Clearing Bid, Winning Bid Rate and Applicable Rate.
(a) As early as possible on the Auction Date and in any event not later
than the Submission Deadline, the Auction Company shall determine the Aa
Composite Commercial Paper Rate and the Maximum Rate for such Auction Date and
shall advise the Corporation and the Auction Placement Agents thereof.
(b) Promptly after the Submission Deadline on each Auction Date, the
Auction Company shall assemble all Orders submitted or deemed submitted to it by
the Auction Placement Agents on such date (each a "Submitted Order" and each
Hold Order, Bid and Sell Order contained in a Submitted Order, a "Submitted Hold
Order", a "Submitted Bid" or a "Submitted Sell Order", as the case may be) and
shall determine:
(i) the number, if any, of Shares available to be purchased pursuant
to Bids on such Auction Date, which
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number shall equal the excess of (A) the total number of Outstanding Shares
over (B) the total number of Outstanding Shares subject to Submitted Hold
Orders (such excess number is hereinafter referred to as the "Available
Shares");
(ii) from the Submitted Orders, whether, subject to compliance with
the requirements of Section 5(g) hereof, (A) the number of Shares subject
to Submitted Bids with a Specified Rate equal to or less than the Maximum
Rate equals or exceeds (B) the Available Shares (if such equality or excess
exists, other than because the Available Shares are zero, a "Clearing Bid"
exists);
(iii) if a Clearing Bid exists, the lowest Specified Rate (such lowest
rate, the "Winning Bid Rate") contained in the Submitted Bids which if the
Auction Company accepted same would result in: (A) each Existing Holder
with Submitted Bids with Specified Rates equal to or lower than such lowest
rate continuing to hold Owned Shares in a number which, when added to (B)
the number of Shares subject to Submitted Bids with Specified Rates equal
to or lower than such lowest rate from Potential Holders would equal (C) a
number of Shares not less than the Available Shares.
(c) Promptly upon the Auction Company making the determinations described
in clauses (a) and (b) of this Section 4, the Auction Company shall determine
the Applicable Rate for the next succeeding Dividend Period as follows:
(i) if a Clearing Bid exists, the Applicable Rate shall be equal to
the Winning Bid Rate;
(ii) if a Clearing Bid does not exist (other than because all the
Outstanding Shares are subject to Submitted Hold Orders), the Applicable
Rate shall be equal to the Maximum Rate; or
(iii) if all the Outstanding Shares are subject to Submitted Hold
Orders, the Applicable Rate shall be equal to 59% of the Aa Composite
Commercial Paper Rate determined on the Business Day immediately preceding
the related Auction Date.
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Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders;
Allocation of Shares.
After giving effect to the determinations required to be made pursuant to
Section 4, Submitted Bids and Submitted Sell Orders shall be accepted or
rejected and the Auction Company shall take such other actions as set forth
below in this Section 5.
(a) If all Owned Shares are subject to submitted Hold Orders, all Submitted
Bids shall be rejected.
(b) If a Clearing Bid exists, subject to Sections 5(d) and 5(e) and subject
to compliance with the requirements of Section 5(g), Submitted Bids and
Submitted Sell Orders shall be accepted and/or rejected in the following order
of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Order of each Existing Holder shall be
accepted;
(ii) the Submitted Bid of each Existing Holder with a Specified Rate
lower than the Winning Bid Rate shall be accepted;
(iii) the Submitted Bid of each Potential Holder, with a Specified
Rate lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bid of each Existing Holder with a Specified Rate
equal to the Winning Bid Rate shall be accepted only for a number of Shares
equal, for each such Existing Holder, to the lesser of (A) the number of
Shares of such Existing Holder subject to such Submitted Bid and (B) the
number obtained by multiplying (x) the number of shares equal to the excess
of the Available Shares over the number of Shares subject to Submitted Bids
accepted pursuant to clauses (ii) and (iii) of this Section 5(b) by (y) a
fraction the numerator of which is the number of Shares subject to such
Submitted Bid and the denominator of which is the number of Shares subject
to all Submitted Bids by Existing Holders with a Specified Rate equal to
the Winning Bid Rate; and
(v) the Submitted Bid of each Potential Holder with a Specified Rate
equal to the Winning Bid Rate shall be accepted only in an amount equal to
the number
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of Shares obtained by multiplying (A) the number equal to the excess of the
Available Shares over the total number of Shares subject to Submitted Bids
accepted pursuant to clauses (ii), (iii) and (iv) of this Section 5(b) by
(B) a fraction the numerator of which is the number of Shares subject to
such Submitted Bid and the denominator of which is the number of Shares
subject to all Submitted Bids by Potential Holders with a Specified Rate
equal to the Winning Bid Rate.
(c) If a Clearing Bid does not exist and Section 5(a) is inapplicable,
subject to Sections 5(d) and 5(e) and subject to compliance with the provisions
of Section 5(g), Submitted Orders shall be accepted and/or rejected in the
following order of priority and all other Submitted Bids and Submitted Sell
Orders shall be rejected:
(i) the Submitted Bid of each Existing Holder and Potential Holder
with a Specified Rate equal to or lower than the Maximum Rate shall be
accepted; and
(ii) the Submitted Bid of each Existing Holder with a Specified Rate
higher than the Maximum Rate shall be accepted and the Submitted Sell Order
of each Existing Holder shall be rejected, in each case only for the number
of Shares equal to the number of Shares obtained by multiplying (A) the
excess of the Available Shares over the number of Shares the subject of
Submitted Bids accepted pursuant to clause (i) of this Section 5(c) by (B)
a fraction the numerator of which shall be the number of Owned Shares of
such Existing Holder subject to such Submitted Bid or Submitted Sell Order,
and the denominator of which shall be the number of Shares the subject of
all such Submitted Bids and Submitted Sell Orders.
(d) If on any Auction Date as a result of the procedures described in
Sections 5(b) and 5(c) any Existing Holder would be entitled or required to sell
a fraction of an Owned Share, the Auction Company shall in such manner as it
shall determine in its sole discretion, round up or down the number of Owned
Shares to be sold or continued to be held by an Existing Holder on such Auction
Date so that the number of Shares held or sold by each Existing Holder shall be
whole Shares.
(e) If on any Auction Date, as a result of the procedures described in
Section 5(b), any Potential Holder would be entitled or required to purchase a
fraction of a
-31-
<PAGE> 151
Share, the Auction Company shall, in such manner as it shall determine in its
sole discretion, allocate Shares for purchase among Potential Holders so that
only whole Shares are purchased, even if such allocation results in one or more
Potential Holders not purchasing Shares on such Auction Date.
(f) Each Existing Holder shall continue to hold for the next succeeding
Dividend Period Owned Shares subject on the Auction Date preceding such Dividend
Period to (A) a Submitted Hold Order, (B) a Submitted Bid to the extent accepted
pursuant to Section 5(b) or 5(c), as modified pursuant to Section 5(d), and (C)
a Submitted Sell Order to the extent rejected pursuant to Section 5(c)(ii), as
modified pursuant to Section 5(d). Each Existing Holder shall be required to
sell Owned Stock subject on an Auction Date to (A) a Submitted Sell Order to the
extent not rejected pursuant to Section 5(c)(ii) and (B) a Submitted Bid to the
extent not accepted pursuant to Section 5(b) or 5(c). Each Potential Holder
shall be required to purchase the Shares subject to a Submitted Bid made by such
Potential Holder to the extent such Submitted Bid is accepted pursuant to
Section 5(b) or 5(c).
(g) The Corporation shall not submit an Order, and no Affiliate shall
submit a Bid, at any Auction.
(h) Based on the result of an Auction, the Auction Company shall give the
notices specified in paragraph (a) of the Settlement Procedures, as defined in
the Auction Company Agreement.
Section 6. Miscellaneous.
The Board of Directors of the Corporation may interpret the provisions of
these procedures to resolve any inconsistency or ambiguity, remedy any formal
defect or make any other changes or modification that does not adversely affect
the rights of an Existing Holder and if such inconsistency or ambiguity reflects
an incorrect provison hereof, the Board of Directors may authorize the filing of
a Certificate of Correction."
5. The Preferred Stock Committee of the Board of Directors on June 1, 1987,
pursuant to the authority conferred upon the Preferred Stock Committee of the
Board of
-32-
<PAGE> 152
Directors by Section 141(c) of the General Corporation Law of the State of
Delaware, by Article VI, Section 7 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, established the Initial
Dividend Rate (as defined in the preceding resolution) for Series C Preferred as
5.25% per annum.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by John C. Pope, its Senior Vice President, and attested by Anne H.
McNamara, its Secretary, this 2nd day of June, 1987.
AMR CORPORATION
By /s/ JOHN C. POPE
----------------------------
ATTEST:
By /s/ ANNE H. McNAMARA
--------------------------------
Secretary
-33-
<PAGE> 153
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AMR CORPORATION
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
We, the undersigned, Richard A. Lempert and Anne H. McNamara, Senior Vice
President and Secretary, respectively, of AMR Corporation, a corporation
organized under the General Corporation Law of the State of Delaware (the
"Corporation"), hereby certify as follows:
1. A new Article NINTH shall be added to the Certificate of Incorporation
of the Corporation, which shall read as follows:
"NINTH: No director of the corporation shall be 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 shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit."
2. The succeeding articles of the Certificate of Incorporation of the
Corporation shall be renumbered accordingly.
3. The amendment herein set forth was duly adopted in accordance with the
provisions of section 242 of the General Corporation Law of the State of
Delaware.
<PAGE> 154
4. This amendment shall be effective on June 9, 1987.
IN WITNESS WHEREOF, this Certificate has been executed and attested by the
undersigned this 8th day of June, 1987.
/s/ RICHARD A. LEMPERT
---------------------------------
Richard A. Lempert
Senior Vice President
& General Counsel
Attest:
/s/ ANNE H. McNAMARA
- ---------------------------------
Anne H. McNamara
Corporate Secretary
<PAGE> 155
CERTIFICATE OF INCREASE
OF
AMR CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the said Corporation, the said
Board of Directors on April 19, 1989 adopted the following resolution
authorizing and directing that the number of shares of the series of Preferred
Stock designated, pursuant to a Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock filed with the Office of
the Secretary of State of the State of Delaware on February 27, 1986, as Series
A Junior Participating Preferred Stock be increased from 610,000 shares to
650,000 shares:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, the number of shares of the
Corporation's Preferred Stock designated as Series A Junior Participating
Preferred Stock be, and it hereby is, increased from 610,000 shares to
650,000 shares."
<PAGE> 156
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this 21st day of
April, 1989.
/s/ ANNE H. McNAMARA
-------------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- -----------------------------
Charles D. MarLett
Corporate Secretary
<PAGE> 157
CERTIFICATE OF INCREASE
OF
AMR CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the said Corporation, the said
Board of Directors on July 18, 1990 adopted the following resolution authorizing
and directing that the number of shares of the series of Preferred Stock
designated, pursuant to a Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock filed with the office of the
Secretary of State of the State of Delaware on February 27, 1986, as Series A
Junior Participating Preferred Stock be increased from 650,000 shares to 750,000
shares:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, the number of shares of the
Corporation's Preferred Stock designated as Series A Junior Participating
Preferred Stock be, and it hereby is, increased from 650,000 shares to
750,000 shares."
<PAGE> 158
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this 24th day of
July, 1990.
/s/ ANNE H. McNAMARA
----------------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- -----------------------------------
Charles D. MarLett
Corporate Secretary
<PAGE> 159
CERTIFICATE OF INCREASE
OF
AMR CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the said Corporation, the said
Board of Directors on December 14, 1990 adopted the following resolution
authorizing and directing that the number of shares of the series of Preferred
Stock designated, pursuant to a Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock filed with the office of
the Secretary of State of the State of Delaware on February 27, 1986, as Series
A Junior Participating Preferred Stock be increased from 750,000 shares to
850,000 shares:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, the number of shares of the
Corporation's Preferred Stock designated as Series A Junior Participating
Preferred Stock be, and it hereby is, increased from 750,000 shares to
850,000 shares."
<PAGE> 160
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this 1st day of
February, 1991.
[Seal]
/s/ ANNE H. McNAMARA
-------------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- -------------------------------
Charles D. MarLett
Corporate Secretary
<PAGE> 161
CERTIFICATE OF INCREASE
OF
AMR CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the said Corporation, the said
Board of Directors on January 6, 1992 adopted the following resolution
authorizing and directing that the number of shares of the series of Preferred
Stock designated, pursuant to a Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock filed with the office of
the Secretary of State of the State of Delaware on February 27, 1986, as Series
A Junior Participating Preferred Stock be increased from 850,000 shares to
900,000 shares:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, the number of shares of the
Corporation's Preferred Stock designated as Series A Junior Participating
Preferred Stock be, and it hereby is, increased from 850,000 shares to
900,000 shares."
<PAGE> 162
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this day of
January, 1992.
[Seal]
/s/ ANNE H. McNAMARA
--------------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- -------------------------------
Charles D. MarLett
Corporate Secretary
<PAGE> 163
CERTIFICATE OF ELIMINATION OF SERIES OF PREFERRED STOCK
OF
AMR CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
FIRST: That no issued shares of any of the following series of preferred
stock of the Corporation remain outstanding: (i) the $2.1875 Cumulative
Preferred Stock; (ii) $2.125 Cumulative Convertible Preferred Stock; (iii) the
Preferred Auction Rate Stock, Series A; (iv) the Preferred Auction Rate Stock,
Series B; and (v) the Preferred Auction Rate Stock, Series C.
SECOND: That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, as amended, of the said
Corporation, the said Board of Directors on January 20, 1993 adopted the
following resolution stating that none of the authorized shares of such series
of preferred stock of the Corporation are outstanding, and that none will be
issued subject to the certificates of designations previously filed with respect
to such series:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, with respect to the following
series of preferred stock of the Corporation: (i) the $2.1875 Cumulative
Preferred Stock; (ii) the $2.125 Cumulative Convertible Preferred Stock;
(iii) the Preferred Auction Rate Stock, Series A; (vi) the Preferred
Auction Rate Stock, Series B; and (v) the Preferred Auction Rate Stock,
Series C (collectively, the "Retired Series"), we hereby certify that none
of the authorized shares of any of the Retired Series are outstanding, and
hereby resolve that none of the authorized shares of any of the Retired
Series shall
<PAGE> 164
be issued subject to the certificates of designations previously filed with
respect to such Retired Series."
THIRD: This Certificate shall be effective upon its filing with the
Secretary of State of the State of Delaware in accordance with Section 103 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this 20th day of
January, 1993.
[Seal]
/s/ ANNE H. McNAMARA
-------------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- -------------------------------
Charles D. Marlett
Corporate Secretary
<PAGE> 165
CERTIFICATE OF INCREASE
OF
AMR CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the said Corporation, the said
Board of Directors on January 20, 1993 adopted the following resolution
authorizing and directing that the number of shares of the series of Preferred
Stock designated, pursuant to a Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock filed with the office of
the Secretary of State of the State of Delaware on February 27, 1986, as Series
A Junior Participating Preferred Stock be increased from 900,000 shares to
1,000,000 shares:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, the number of shares of the
Corporation's Preferred Stock designated as
<PAGE> 166
Series A Junior Participating Preferred Stock be, and it hereby is,
increased from 900,000 shares to 1,000,000 shares."
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this 20th day of
January, 1993.
[Seal]
/s/ ANNE H. McNAMARA
-------------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- -------------------------------
Charles D. MarLett
Corporate Secretary
2
<PAGE> 167
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
of
AMR CORPORATION
------------------------
Pursuant to Section 151(g) of the
General Corporation Law
of the State of Delaware
------------------------
We, Michael J. Durham, Senior Vice President and Treasurer, and Charles D.
MarLett, Corporate Secretary, of AMR Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), do hereby certify:
FIRST: The certificate of incorporation, as amended (the "Certificate of
Incorporation"), of the Corporation authorizes the issuance of 20,000,000 shares
of preferred stock, without par value, in one or more series, and further
authorizes the Board of Directors of the Corporation (the "Board of Directors")
from time to time to provide by resolution for the issuance of shares of
preferred stock in one or more series not exceeding the aggregate number of
shares of preferred stock authorized by the Certificate of Incorporation and to
determine with respect to each such series, the voting powers, if any (which
voting powers if granted may be full or limited), designations, preferences, the
relative, participating, optional or other rights, and the qualifications,
limitations and restrictions appertaining thereto.
SECOND: The Board of Directors, at a meeting duly called and held on
January 20, 1992 approved the creation and issuance of a series of said
preferred stock to be known as "Series A Cumulative Convertible Preferred
Stock," convertible into the common stock, par value $1.00 per share (the
"Common Stock"), of the Corporation, and authorized the Executive Committee of
the Board of Directors to determine the voting powers, designations,
preferences, the relative, participating, optional and other rights, and the
qualifications, limitations or restrictions appertaining thereto in addition to
those set forth in the Certificate of Incorporation.
<PAGE> 168
THIRD: The Board of Directors, at a meeting held on January 27, 1993,
adopted the following resolution creating a series of 2,200,000 shares of
preferred stock designated as set forth below.
RESOLVED: the Board of Directors hereby authorizes the issuance of a series
of preferred stock of the corporation and hereby fixes the voting powers,
designations, preferences, the relative, participating, optional and other
rights, and the qualifications, limitations and restrictions appertaining
thereto in addition to those set forth in the certificate of incorporation of
the Corporation (the "Certificate of Incorporation"), as follows:
1. Designation and Number. The designation of the preferred stock created
by this resolution shall be Series A Cumulative Convertible Preferred Stock,
without par value, of AMR Corporation (the "Corporation") (hereinafter referred
to as the "Convertible Preferred Stock"), and the number of shares constituting
such series shall be 2,200,000. The number of authorized shares of Convertible
Preferred Stock may be decreased (but not below the number of shares of
Convertible Preferred Stock then outstanding) from time to time by the Board of
Directors. The Convertible Preferred Stock shall rank prior to the Common Stock
and the Corporation's Series A Junior Participating Preferred Stock (the "Junior
Preferred Stock"), with respect to the payment of dividends and upon
liquidation, dissolution and winding up as provided in this Certificate of
Designation.
All shares of Convertible Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation (excluding, until the Corporation
elects to retire them, shares which are held as treasury shares but including
shares redeemed, shares purchased and retired, shares converted pursuant to
Section 5 hereof and shares exchanged for any other security of the Corporation)
shall have the status of authorized but unissued shares of the Corporation's
preferred stock, without designation as to series, and thereafter may be issued,
but not as shares of Convertible Preferred Stock.
2. Dividend Rights. (a) General. The holders of shares of Convertible
Preferred Stock shall be entitled to receive, in preference to the holders of
shares of Common Stock, Junior Preferred Stock and any other stock ranking as to
dividends junior to the Convertible Pre-
2
<PAGE> 169
ferred Stock, when, as and if declared by the Board of Directors, out of funds
legally available therefor, cumulative cash dividends, accruing from and after
the date of original issuance thereof at an annual rate of $30.00 per share, and
no more, as long as shares of Convertible Preferred Stock remain outstanding.
Dividends shall accrue and be payable quarterly in arrears, on February 1, May
1, August 1 and November 1 in each year, commencing May 1, 1993 (each, a
"Dividend Payment Date"), except that, if any such date is a Saturday, Sunday or
legal holiday, then such dividend shall be payable on the next day that is not a
Saturday, Sunday or legal holiday. Each dividend will be payable to holders of
record as they appear on the stock transfer books of the Corporation on the
record date therefor, not exceeding 60 days nor less than 10 days preceding the
payment date thereof, as shall be fixed by the Board of Directors. Dividends in
arrears may be declared and paid at any time, without reference to any Dividend
Payment Date, to holders of record on such date, not exceeding 60 days preceding
the payment date thereof, as may be fixed by the Board of Directors of the
Corporation. Dividends payable on the Convertible Preferred Stock (i) for any
period less than a full dividend period, shall be computed on the basis of a
360-day year consisting of twelve 30-day months and (ii) for each full dividend
period, shall be computed by dividing the annual dividend rate by four.
Dividends on shares of Convertible Preferred Stock shall be cumulative from the
date of original issuance thereof whether or not in any dividend period or
periods, there shall be funds legally available for the payment thereof. Holders
of shares of the Convertible Preferred Stock shall not be entitled to any
dividend, whether payable in cash, property or stock, in excess of full
cumulative dividends on such shares. No interest or sum of money in lieu of
interest shall be payable in respect of any dividend payment or payments which
may by in arrears.
(b) Requirements for Dividends on Parity Preferred Stock. If there shall be
outstanding shares of any other series of preferred stock ranking on a parity
with the Convertible Preferred Stock as to dividends, no dividends, except as
described in the next sentence, shall be declared or paid or set apart for
payment on any such other series for any period unless full cumulative dividends
on the Convertible Preferred Stock through the most recent Dividend Payment Date
have been or contemporaneously are declared and paid or declared and a sum
sufficient
3
<PAGE> 170
for the payment thereof is set apart for such payment. If dividends on the
Convertible Preferred Stock and on any other series of preferred stock ranking
on a parity as to dividends with the Convertible Preferred Stock are in arrears,
all dividends declared upon shares of the Convertible Preferred Stock and all
dividends declared upon such other series shall be declared pro rata so that the
amounts of dividends per share declared on the Convertible Preferred Stock and
such other series shall in all cases bear to each other the same ratio that full
cumulative dividends per share at the time on the shares of Convertible
Preferred Stock and on such other series bear to each other.
(c) Requirements for Dividends on Junior Stock. The Corporation shall not
(i) declare or pay or set apart for payment any dividends or distributions on
any stock ranking as to dividends junior to the Convertible Preferred Stock
(other than dividends or distributions paid in shares of any such junior stock)
or (ii) make any purchase, redemption or other acquisition of, or any sinking
fund payment for the purchase or redemption of, any stock ranking as to
dividends or upon liquidation, dissolution or winding up, junior to the
Convertible Preferred Stock (except by conversion into or exchange for such
junior stock and except for a redemption, purchase or other acquisition of
shares of such junior stock made for the purpose of an employee incentive plan
or employee benefits plan of the Corporation or any of its subsidiaries) unless
full cumulative dividends on all outstanding shares of Convertible Preferred
Stock through the most recent Dividend Payment Date prior to the date of payment
of such dividend or distribution, or effective date of such purchase, redemption
or sinking fund payment, shall have been paid in full or declared and a
sufficient sum set apart for payment thereof; provided, however, that unless
prohibited by the terms of any other outstanding series of preferred stock, any
moneys theretofore deposited in any sinking fund with respect to any preferred
stock of the Corporation in compliance with this Section 2(c) and the provisions
of such sinking fund may thereafter be applied to the purchase or redemption of
such preferred stock in accordance with the terms of such sinking fund
regardless of whether at the time of such application full cumulative dividends
on all outstanding shares of Convertible Preferred Stock through the most recent
Dividend Payment Date shall have been paid in full or declared and a sufficient
sum set apart for payment thereof.
4
<PAGE> 171
3. Liquidation. (a) Priority. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation (whether from capital
or surplus) shall be made to or set apart for the holders of any class or series
of stock of the Corporation ranking junior to the Convertible Preferred Stock
upon liquidation, dissolution or winding up, the holders of the shares of
Convertible Preferred Stock and the holders of preferred stock ranking on a
parity with Convertible Preferred Stock upon liquidation, dissolution or winding
up shall be entitled to receive liquidation payments according to the following
priorities:
First.
The holders of the shares of Convertible Preferred Stock shall receive
the liquidation preference of $500 per share and the holders of shares of
such parity preferred stock shall receive the full respective liquidation
preferences (including any premiums) to which they are entitled; and
Second.
The holders of shares of Convertible Preferred Stock and the holders
of shares of such parity preferred stock shall each receive an amount equal
to full cumulative dividends with respect to their respective shares
accrued and unpaid through and including the date of final distribution to
such holders, but such holders shall not be entitled to any further
payment.
No payment (in either of the first step or second step provided above) on
account of any liquidation, dissolution or winding up of the Corporation shall
be made to holders of such parity preferred stock or to the holders of
Convertible Preferred Stock unless there shall likewise be paid at the same time
to the holders of the Convertible Preferred Stock and the holders of all classes
or series of such parity preferred stock like proportionate amounts of the same
payments (as to each of the first step or the second step above), such
proportionate amounts to be determined ratably in proportion to the full amounts
to which the holders of all outstanding shares of such parity preferred stock
are respectively entitled (in
5
<PAGE> 172
either the first step or the second step, as the case may be) with respect to
such distribution.
For purposes of this Section 3, neither a consolidation or merger of the
Corporation with or into another corporation nor a merger of any other
corporation with or into the Corporation or a sale or transfer of all or any
part of the Corporation's assets for cash, securities or other property will be
deemed a liquidation, dissolution or winding up of the Corporation.
(b) Junior Stock. After payment shall have been made in full to the holders
of Convertible Preferred Stock and to the holders of such parity preferred stock
as provided in this Section 3 upon liquidation, dissolution or winding up of the
Corporation, any other series or class or classes of stock ranking junior to the
Convertible Preferred Stock upon liquidation, dissolution or winding up shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed upon
such liquidation, dissolution or winding up, and the holders of Convertible
Preferred Stock shall not be entitled to share therein.
4. Redemption. (a) General. The Convertible Preferred Stock shall not be
redeemed by the Corporation prior to February 1, 1996. Thereafter, the
Corporation, at its option, in accordance with the terms and provisions of this
Section 4, may redeem any or all shares of Convertible Preferred Stock at the
applicable redemption price per share, expressed as a percentage of the $500
liquidation preference thereof set forth below (each a "Redemption Price"), plus
an amount equal to full cumulative dividends thereon accrued and unpaid up to
but excluding the date of redemption:
<TABLE>
<CAPTION>
Twelve-month period beginning Redemption Price
----------------------------- ----------------
<S> <C>
February 1, 1996 104.2%
February 1, 1997 103.6%
February 1, 1998 103.0%
February 1, 1999 102.4%
February 1, 2000 101.8%
February 1, 2001 101.2%
February 1, 2002 100.6%
February 1, 2003 and thereafter 100.0%
</TABLE>
6
<PAGE> 173
If fewer than all the outstanding shares of Convertible Preferred Stock are to
be redeemed, the shares to be redeemed shall be selected pro rata as nearly as
practicable or by lot, or by such other method as the Board of Directors may
determine to be fair and appropriate.
(b) Notice of Redemption. The Corporation will provide notice of any
redemption of shares of Convertible Preferred Stock to holders of record of the
Convertible Preferred Stock to be redeemed not less than 30 nor more than 60
days prior to the date fixed for such redemption. Such notice shall be provided
by first-class mail postage prepaid, to each holder of record of the Convertible
Preferred Stock to be redeemed, at such holder's address as it appears on the
stock transfer books of the Corporation. Each such mailed notice shall state, as
appropriate, the following:
(i) the redemption date;
(ii) the number of shares of Convertible Preferred Stock to be
redeemed and, if fewer than all the shares held by any holder are to be
redeemed, the number of such shares to be redeemed from such holder;
(iii) the Redemption Price;
(iv) the place or places where certificates for such shares are to be
surrendered for redemption;
(v) the amount of full cumulative dividends per share of Convertible
Preferred Stock to be redeemed accrued and unpaid up to but excluding such
redemption date, and that dividends on shares of Convertible Preferred
Stock to be redeemed will cease to accrue on such redemption date unless
the Corporation shall default in payment of the Redemption Price plus such
full cumulative dividends accrued and unpaid thereof;
(vi) the name and location of any bank of trust company with which the
Corporation will deposit redemption funds pursuant to subsection (d) below;
(vii) the then effective Conversion Price (as determined under Section
5); and
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(viii) that the right of holders to convert shares of Convertible
Preferred Stock to be redeemed will terminate at the close of business on
the business day next preceding the date fixed for redemption (unless the
Corporation shall default in the payment of the Redemption Price and such
full cumulative dividends accrued and unpaid thereon).
Any notice that is mailed as set forth above shall be conclusively presumed to
have been duly given, whether or not the holder of shares of Convertible
Preferred Stock receives such notice, and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Convertible Preferred Stock.
(c) Mechanics of Redemption. Upon surrender in accordance with the
aforesaid notice of the certificate for any shares so redeemed (duly endorsed or
accompanied by appropriate instruments of transfer), the holders of record of
such shares shall be entitled to receive the Redemption Price, without interest,
plus full cumulative dividends thereon accrued and unpaid up to but excluding
such redemption date out of funds legally available therefor. In case fewer than
all the shares represented by any such certificate are redeemed, a new
certificate representing the unredeemed shares shall be issued without cost to
the holder thereof.
(d) Redemption Funds. On the date of any redemption being made pursuant to
this Section 4, the Corporation shall, and at any time after notice of such
redemption shall have been mailed and before the date of redemption the
Corporation may deposit for the benefit of the holders of shares of Convertible
Preferred Stock to be redeemed the funds necessary for such redemption with a
bank or trust company in the City of New York having a capital and surplus of at
least $100,000,000, with instructions to such bank or trust company to pay the
full redemption amounts as provided herein to the holders of shares of
Convertible Preferred Stock upon surrender of certificates for such shares;
provided, however, that the making of such deposit shall not release the
Corporation from any of its obligations hereunder. Any moneys so deposited by
the Corporation and unclaimed at the end of two years from the date designated
for such redemption shall revert to the general funds of the Corporation and,
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upon demand, such bank or trust company shall pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust company shall be relieved of
all responsibility in respect thereof and any holder of shares of Convertible
Preferred Stock so redeemed shall look only to the Corporation for the payment
of the full redemption amounts, as provided herein. Notwithstanding the
foregoing, to the extent that the Corporation is required under the abandoned
property laws of any jurisdiction to escheat any such redemption amounts, the
Corporation shall be absolved of any further obligation or liability to the full
extent provided by any such laws. In the event that moneys are deposited
pursuant to this subsection (d) in respect of shares of Convertible Preferred
Stock that are converted in accordance with the provisions of Section 5, such
moneys shall, upon such conversion, revert to the general funds of the
Corporation and, upon demand, such bank or trust company shall pay over to the
Corporation such moneys. Any interest accrued on funds deposited pursuant to
this subsection (d) shall be paid from time to time to the Corporation for its
own account.
(e) Rights After Redemption. Notice of redemption having been given as
aforesaid, upon the deposit pursuant to Section 4(d) of the full redemption
amounts as provided herein in respect of all shares of Convertible Preferred
Stock then to be redeemed, notwithstanding that any certificates for such shares
shall not have been surrendered in accordance with Section 4(c), from and after
the date of redemption designated in the notice of redemption (i) the shares
represented thereby shall no longer be deemed outstanding, (ii) the rights to
receive dividends thereon shall cease to accrue, and (iii) all rights of the
holders of such shares of Convertible Preferred Stock shall cease and terminate,
excepting only the right to receive the full redemption amounts as provided
herein without interest. If the funds deposited are not sufficient for
redemption of the shares of the Convertible Preferred Stock that were to be
redeemed, then the certificates evidencing such shares shall be deemed not to be
surrendered, such shares shall remain outstanding and the right of holders of
shares of Convertible Preferred Stock shall continue to be only those of a
holder of shares of the Convertible Preferred Stock.
(f) Restrictions on Redemption and Purchase. Any provision of this Section
4 to the contrary notwithstanding, in the event that any quarterly dividend
payable
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on the Convertible Preferred Stock shall be in arrears and until all such
dividends in arrears shall have been paid or declared and set apart for payment,
the Corporation shall not redeem any shares of Convertible Preferred Stock or
any stock ranking on a parity as to dividends or upon liquidation, dissolution
or winding up with the Convertible Preferred Stock unless all outstanding shares
of Convertible Preferred Stock are simultaneously redeemed and shall not
purchase or otherwise acquire any shares of Convertible Preferred Stock or any
such parity preferred stock except (i) by conversion into or exchange for stock
ranking junior as to dividends or (ii) in accordance with a purchase or exchange
offer made by the Corporation to all holders of record of Convertible Preferred
Stock and such parity preferred stock upon the same terms as to holders of any
series and, in the case of offers relating to more than one series, upon such
terms as between such series as the Board of Directors or, to the extent
permitted by applicable law, any authorized committee thereof, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series of stock, will result in fair and
equitable treatment as between such series, which determination shall be
conclusive.
5. Conversion. (a) General. The holders of shares of Convertible Preferred
Stock shall have the right, at each holder's option, at any time after the
fortieth day after the date of initial issuance of shares of Convertible
Preferred Stock (the "Issue Date"), in whole or in part, to convert all or a
portion of such holder's shares into a number of fully paid and nonassessable
whole shares of the Corporation's Common Stock as is equal to the aggregate
liquidation preference of the shares of Convertible Preferred Stock surrendered
for conversion divided by an initial conversion price of $78.75 per share of
Common Stock (as adjusted from time to time, the "Conversion Price"). The
Conversion Price shall be subject to adjustment from time to time as hereinafter
provided.
No payment or adjustment shall be made on account of any accrued and unpaid
dividends on shares of Convertible Preferred Stock surrendered for conversion
prior to the close of business on the record date for the determination of
stockholders entitled to such dividends.
Holders of shares of Convertible Preferred Stock at the close of business
on a dividend payment record date
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will be entitled to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the conversion of such
shares following such dividend payment record date and prior to such Dividend
Payment Date. However, shares of Convertible Preferred Stock surrendered for
conversion during the period between the close of business on any dividend
payment record date and the opening of business on the corresponding Dividend
Payment Date (except shares converted after the issuance of a notice of
redemption with respect to a redemption date during such period, which will be
entitled to such dividend), must be accompanied by payment to the Corporation of
an amount equal to the dividend payable on such shares on such Dividend Payment
Date. A holder of shares of Convertible Preferred Stock on a dividend payment
record date who (or whose transferee) tenders any such shares for conversion
into shares of Common Stock on such Dividend Payment Date will receive the
dividend payable by the Corporation on such shares of Convertible Preferred
Stock on such date, and the converting holder need not include payment of the
amount of such dividend upon surrender of shares of Convertible Preferred Stock
for conversion. Except as provided in this subsection (a), the Corporation will
make no payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the shares of Common Stock issued upon such
conversion.
If any shares of Convertible Preferred Stock shall be called for
redemption, the right to convert the shares designated for redemption shall
terminate at the close of business on the business day next preceding the date
fixed for redemption unless the Corporation defaults in the payment of the
Redemption Price plus all accrued and unpaid dividends. In the event of default
in the payment of the Redemption Price, the right to convert the shares
designated for redemption shall terminate at the close of business on the
business day next preceding the date that such default is cured.
The shares of Common Stock issuable upon conversion of the shares of
Convertible Preferred Stock, when the same shall be issued in accordance with
the terms hereof, are hereby declared to be and shall be fully paid and
nonassessable shares of Common Stock in the hands of the holders thereof.
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(b) Mechanics of Conversion. Conversion of the Convertible Preferred Stock
may be effected by the surrender to the Transfer Agent (as defined below), as
may be designated by the Board of Directors of the Corporation, together with
any payment to the Corporation required by Section 5(a), of the certificate or
certificates for such Convertible Preferred Stock to be converted accompanied by
a written notice stating that such holder elects to convert all or a specified
whole number of such shares in accordance with the provisions hereof and
specifying the name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If more than one stock
certificate for Convertible Preferred Stock shall be surrendered for conversion
at one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares represented by all the certificates so surrendered. In case
such notice shall specify a name or names other than that of such holder, such
notice shall be accompanied by payment of all transfer taxes payable upon the
issuance of shares of Common Stock in such name or names. Other than such taxes,
the Corporation will pay any and all issue and other taxes (other than taxes
based on income) that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of Convertible Preferred Stock. As promptly
as practicable and in any event within ten business days, after the surrender of
such certificate or certificates and the receipt of such notice relating thereto
and, if applicable, payment of all transfer taxes (or the demonstration to the
satisfaction of the Corporation that any such taxes have been paid) and any
payment to the Corporation required by Section 5(a), the Corporation shall
deliver or cause to be delivered at the office of the Transfer Agent (i)
certificates representing the number of validly issued, fully paid and
nonassessable full shares of Common Stock to which the holder of shares of
Convertible Preferred Stock being converted shall be entitled, (ii) any cash
owing in lieu of a fractional share of Common Stock, determined in accordance
with subsection (d) below and (iii) if fewer than the full number of shares of
Convertible Preferred Stock evidenced by the surrendered certificate or
certificates are being converted, a new certificate or certificates, of like
tenor, for the number of shares evidenced by such surrendered certificate or
certificates less the number of shares being converted. Such conversion shall be
deemed to have been made immediately prior to the close of busi-
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ness on the date of such surrender of the certificate or certificates
representing the shares of Convertible Preferred Stock to be converted and the
making of any such required payment. Upon such conversion, except as provided in
Section 5(a), the rights of the holder thereof as to the shares being converted
shall cease except for the right to receive shares of Common Stock (or such
other consideration as provided herein) in accordance herewith, and the person
entitled to receive the shares of Common Stock shall be treated for all purposes
as having become the record holder of such shares of Common Stock at such time.
The Corporation shall not be required to convert shares of Convertible Preferred
Stock, and no surrender of shares of Convertible Preferred Stock shall be
effective for that purpose, while the stock transfer books of the Corporation
for the Common Stock are closed for any purposes (but not for any period in
excess of 15 days), but the surrender of shares of Convertible Preferred Stock
for conversion during any period while such books are so closed shall become
effective for conversion immediately upon the the reopening of such books, as if
the conversion had been made on the date such shares of Convertible Preferred
Stock were surrendered, and at the Conversion Price in effect at the date of
such surrender.
(c) Adjustment to Conversion Price. The Conversion Price shall be adjusted
from time to time as follows:
(i) In case the Corporation shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following
the date fixed for such determination. The Corporation will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Corporation.
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(ii) In case the Corporation shall hereafter issue rights or warrants
to all holders of its outstanding shares of Common Stock entitling them
(for a period expiring within 45 days after the date fixed for
determination of stockholders entitled to receive such rights or warrants)
to subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price (as defined below) on the date fixed for
determination of stockholders entitled to receive such rights or warrants,
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the date fixed for determination of stockholders entitled to
receive such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would
purchase at such Current Market Price, and of which the denominator shall
be the number of shares of Common Stock outstanding on the date fixed for
determination of stockholders entitled to receive such rights or warrants
plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the date
fixed for determination of stockholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the conversion price shall be
readjusted to the conversion price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
conversion price shall again be adjusted to be the conversion price which
would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed.
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares
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<PAGE> 181
of Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such subdivision becomes effective
shall be proportionately reduced, and conversely, in case outstanding
shares of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business on
the day following the day upon which such combination becomes effective
shall be proportionately increased, such reduction or increase, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination
becomes effective.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
capital stock (other than a dividend or distribution to which Section
5(c)(i) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in
subparagraph (ii) of this Section 5(c), and excluding any dividend or
distribution (x) in connection with the liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, (y) paid
exclusively in cash or (z) referred to in subparagraph (i) of this Section
5(c)) (any of the foregoing being hereinafter in this subparagraph (iv)
called the "Securities"), then, in each such case, unless the Corporation
elects to reserve such Securities for distribution to the holders of the
Convertible Preferred Stock upon the conversion of the shares of
Convertible Preferred Stock so that any such holder converting shares of
Convertible Preferred Stock will receive upon such conversion, in addition
to the shares of the Common Stock to which such holder is entitled, the
amount and kind of such Securities which such holder would have received if
such holder had, immediately prior to the Record Date (as defined in
Section 8) for such distribution of the Securities, converted its shares of
Convertible Preferred Stock into Common Stock, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect on the Record Date by a fraction of which
the numerator shall be the Current Market Price of the Common Stock on the
Record Date less the fair market
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value (as determined by the Board of Directors or, to the extent permitted
by applicable law, a duly authorized committee thereof, whose determination
shall be conclusive, and described in a resolution of the Board of
Directors or such duly authorized committee thereof, as the case may be),
on the Record Date, of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator shall be such
Current Market Price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business on the day
following the Record Date; provided, however, that in the event the then
fair market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that
each holder of shares of Convertible Preferred Stock shall have the right
to receive upon conversion the amount and kind of Securities such holder
would have received had such holder converted each such share of
Convertible Preferred Stock on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. If the Board of
Directors (or, to the extent permitted by applicable law, a duly authorized
committee thereof) determines the fair market value of any distribution for
purposes of this subparagraph (iv) by reference to the actual or when
issued trading market for any securities comprising such distribution, it
must in doing so consider the prices in such market over the same period
used in computing the Current Market Price of the Common Stock.
For purposes of this subparagraph (iv) and subparagraphs (i) and (ii)
of this Section 5(c), any dividend or distribution that includes shares of
Common Stock, or rights or warrants to subscribe for or purchase shares of
Common Stock, shall be deemed instead to be (1) a dividend or distribution
of the evidences of indebtedness, assets or shares of capital stock other
than such shares of Common Stock or rights or warrants (and any Conversion
Price reduction required by this subparagraph (iv) with respect
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to such dividend or distribution shall then be made) immediately followed
by (2) a dividend or distribution of such shares of Common Stock or such
rights or warrants (and any further Conversion Price reduction required by
subparagraph (i) or (ii) of this Section 5(c) with respect to such dividend
or distribution shall then be made, except (A) the Record Date of such
dividend or distribution as defined in this subparagraph (iv) shall be
substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution" and "the date
fixed for such determination" within the meaning of subparagraphs (i) and
(ii) of this Section 5(c) and (B) any shares of Common Stock included in
such dividend or distribution shall not be deemed "outstanding at the close
of business on the date fixed for such determination" within the meaning of
subparagraph (i) of this Section 5(c)).
In lieu of making any adjustment to the Conversion Price under this
Section 5(c) in the event that the rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of February 13, 1986, as amended, between
the Company and First Chicago Trust Company of New York (as successor
Rights Agent to J. Henry Schroder Bank and Trust Company) as may be amended
from time to time (the "Rights Agreement"), are separately distributed to
the holders of Common Stock upon the occurrence of certain events specified
in the Rights Agreement, the Corporation has the option of amending such
Rights Agreement to provide that Rights shall be issuable upon conversion
of the Convertible Preferred Stock without regard to whether the shares of
Common Stock issuable upon conversion of the Convertible Preferred Stock
were issued before or after the Distribution Date (as defined in the Rights
Agreement).
(v) In case the Corporation shall, by dividend or otherwise, at any
time distribute to all holders of its Common Stock cash (excluding (x) any
quarterly cash dividend on the Common Stock to the extent the aggregate
cash dividend per share of Common Stock in any fiscal quarter does not
exceed the greater of (A) the amount per share of Common Stock of the next
preceding quarterly cash dividend on the Common Stock to the extent not
requiring any adjustment of the Conversion Price pursuant to this
subparagraph (v)
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(as adjusted to reflect subdivisions or combinations of the Common Stock),
and (B) 3.75% of the Current Market price of the Common Stock on the
Trading Day (as defined in Section 8) next preceding the date of
declaration of such dividend and (y) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary), then, in such case, unless
the Corporation elects to reserve such cash for distribution to the holders
of the Convertible Preferred Stock upon the conversion of the shares of
Convertible Preferred Stock so that any such holder converting shares of
Convertible Preferred Stock will receive upon such conversion, in addition
to the shares of the Common Stock to which such holder is entitled, the
amount of cash which such holder would have received if such holder had,
immediately prior to the Record Date for such distribution of cash,
converted its shares of Convertible Preferred Stock into Common Stock, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the Record Date by a fraction of which the numerator shall be the
Current Market Price of the Common Stock on the Record Date less the amount
of cash so distributed (and not excluded as provided above) applicable to
one share of Common Stock and the denominator shall be such Current Market
Price of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following the Record Date;
provided, however, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder
of shares of Convertible Preferred Stock shall thereafter have the right to
receive upon conversion the amount of cash such holder would have received
had he converted each share of Convertible Preferred Stock on the Record
Date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution had
not been declared.
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(vi) In case a tender or exchange offer made by the Corporation or any
subsidiary of the Corporation for all or any portion of the Common Stock
shall expire and such tender or exchange offer shall involve the payment by
the Corporation or such subsidiary of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors
or, to the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described in a
resolution of the Board of Directors or such duly authorized committee
thereof, as the case may be) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time,
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the Expiration Time by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately prior
to the opening of business on the day following the Expiration Time. In the
event that the Corporation is obligated to purchase shares pursuant to any
such tender or exchange offer, but the Corporation is permanently prevented
by applicable law from effecting any such purchases or all such purchases
are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender or exchange
offer had not been made.
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(vii) The Corporation may make such reductions in the Conversion
Price, in addition to those required by subparagraphs (i), (ii), (iii),
(iv), (v) and (vi) of this Section 5(c), as the Board of Directors
considers to be advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. To the extent permitted by
applicable law, the Corporation from time to time may reduce the Conversion
Price by any amount for any period of time if the period is at least 20
days, the reduction is irrevocable during the period and the Board of
Directors (or, to the extent permitted by applicable law, a duly authorized
committee thereof) shall have made a determination that such reduction
would be in the best interests of the Corporation, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to
the preceding sentence, the Corporation shall mail to holders of record of
the Convertible Preferred Stock a notice of the reduction at least 15 days
prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period it will be
in effect.
(viii) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason
of this subparagraph (viii) are not required to be made shall be carried
forward and taken into account in determining whether any subsequent
adjustment shall be required.
(ix) Notwithstanding any other provision of this Section 5, no
adjustment to the Conversion Price shall reduce the Conversion Price below
the then par value per share of the Common Stock, and any such purported
adjustment shall instead reduce the Conversion Price to such par value. The
Corporation hereby covenants not to take any action (1) to increase the par
value per share of the Common Stock or (2) that would or does result in any
adjustment in the Conversion Price that, if made without giving effect to
the previous sentence, would cause the Conversion Price to be less than the
then par value per share of the
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Common Stock, provided, however, that the covenant in this sentence shall
be suspended if within 10 days of determining in good faith that such
action would result in such adjustment (but not later than the business day
next following the effectiveness of such adjustment), the Corporation gives
notice of redemption of all outstanding shares of the Convertible Preferred
Stock, and effects the redemption referred to in such notice on the
redemption date referred to therein in compliance with Section 4, but the
covenant in this sentence shall be retroactively reinstated if such notice
is not given or such redemption does not occur.
(x) Whenever the Conversion Price is adjusted as herein provided:
(1) the Corporation shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Treasurer of the Corporation
setting forth the adjusted Conversion Price and showing in reasonable
detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Transfer Agent; and
(2) a notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Corporation to all record holders of shares
of Convertible Preferred Stock at their last addresses as they shall
appear upon the stock transfer books of the Corporation.
(xi) In any case in which this Section 5(c) provides that an
adjustment shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such event (y)
issuing to the holder of any share of Convertible Preferred Stock converted
after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason
of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and
(z) paying to such holder any
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amount in cash in lieu of any fractional share of Common Stock pursuant to
Section 5(d).
(d) No Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon conversion of Convertible
Preferred Stock. If more than one certificate evidencing shares of Convertible
Preferred Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Convertible Preferred
Stock so surrendered. Instead of any fractional share of Common Stock that would
otherwise be issuable upon conversion of any shares of Convertible Preferred
Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to the same fraction of the market price per share
of Common Stock (as determined or prescribed by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive, but which, so long as the Common Stock
is listed on the New York Stock Exchange, shall be the Closing Price on the New
York Stock Exchange) at the close of business on the Trading Day immediately
preceding the date of conversion.
(e) Reclassification, Consolidation, Merger or Sale of Assets. In the event
that the Corporation shall be a party to any transaction (including without
limitation any (i) recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination of the
Common Stock), (ii) any consolidation or merger of the Corporation with or into
any other person or any merger of another person into the Corporation (other
than a merger which does not result in a reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock of the Corporation), (iii)
any sale or transfer of all or substantially all of the assets of the
Corporation, or (iv) any compulsory share exchange) pursuant to which either
shares of Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of any other transfer of all
or substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
appropriate provision shall be made as part of the terms of such
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transaction whereby (1) in the case of any such transaction not constituting a
Common Stock Fundamental Change (as defined in Section 5(i)) and subject to
funds being legally available for such purpose under applicable law at the time
of such conversion, the holder of each share of Convertible Preferred Stock then
outstanding shall have the right thereafter to convert such share only into the
kind and amount of securities, cash and other property receivable upon such
transaction by a holder of the number of shares of Common Stock into which such
share of Convertible Preferred Stock might have been converted immediately prior
to such transaction, after giving effect, in the case of any Non-Stock
Fundamental Change (as defined in Section 5(i)), to any adjustment in the
Conversion Price required by the provisions of Section 5(h), and (2) in the case
of a Common Stock Fundamental Change, the holder of each share of Convertible
Preferred Stock then outstanding shall have the right thereafter to convert such
share only into common stock of the kind received by holders of Common Stock as
a result of such Common Stock Fundamental Change in an amount determined
pursuant to the provisions of Section 5(h). The Corporation or the person formed
by such consolidation or resulting from such merger or which acquired such
assets or which acquired the Corporation's shares or which participated in such
transaction, as the case may be, shall make provisions in its certificate or
articles of incorporation or other constituent document to establish such right.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be nearly equivalent as may be practicable to the adjustments provided for
in this Section 5. The above provisions shall similarly apply to successive
transactions of the type described in this Section 5(e).
(f) Reservation of Shares. The Corporation shall at all times reserve and
keep available, out of its authorized and unissued stock, solely for the purpose
of effecting the conversion of the Convertible Preferred Stock, such number of
shares of its Common Stock free of preemptive rights as shall from time to time
be sufficient to effect the conversion of all shares of Convertible Preferred
Stock from time to time outstanding. The Corporation shall from time to time, in
accordance with the laws of the State of Delaware, use all reasonable efforts to
increase the authorized number of shares of Common
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Stock if at any time the number of shares of authorized and unissued Common
Stock shall not be sufficient to permit the conversion of all the then
outstanding shares of Convertible Preferred Stock.
If any shares of Common Stock required to be reserved for purposes of
conversion of the Convertible Preferred Stock hereunder require registration
with or approval of any governmental authority under any Federal or State law
before such shares may be issued upon conversion, the Corporation will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved, as the case may be. If the Common Stock is listed on the
New York Stock Exchange or any other national securities exchange, the
Corporation will, in good faith and as expeditiously as possible, endeavor, if
permitted by the rules of such exchange, to list and keep listed on such
exchange, upon official notice of issuance, all shares of Common Stock issuable
upon conversion of the Convertible Preferred Stock.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash (other than any
special or nonrecurring or other extraordinary dividend) or (2) declare or
authorize a redemption or repurchase of in excess of 10% of the then
outstanding shares of Common Stock; or
(ii) the Corporation shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights or warrants (other than Rights
or rights granted pursuant to a rights agreement described in the second
sentence of Section 5(j)); or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the Corporation shall
be required, or of the sale or transfer of all
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or substantially all of the assets of the Corporation or of any compulsory
share exchange whereby the Common Stock is converted into other securities,
cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed with the Transfer Agent, and shall
cause to be mailed to the holders of record of the Convertible Preferred Stock,
at their last addresses as they shall appear upon the stock transfer books of
the Corporation, at least 15 days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend, distribution, redemption,
repurchase or granting of rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up. No failure to mail such notice or any
defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice.
(h) Adjustments in Case of Fundamental Changes. Notwithstanding any other
provision in this Section 5 to the contrary, if any Fundamental Change (as
defined in Section 5(i)) occurs, then the Conversion Price in effect will be
adjusted immediately after such Fundamental Change as described below. In
addition, in the event of a Common Stock Fundamental Change, shares of
Convertible Preferred Stock shall thereafter be convertible solely into common
stock of the kind received by holders of Common Stock as the result of such
Common Stock Fundamental Change.
For purposes of calculating any adjustment to be made pursuant to this
Section 5(h) in the event of a Fundamental Change, immediately after such
Fundamental Change:
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(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price immediately following such Non-Stock Fundamental Change shall be the
lower of (A) the Conversion Price in effect immediately prior to such
Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments pursuant to this Section 5, and (B) the product of (1) the
greater of the Applicable Price (as defined in Section 5(i) or the then
applicable Reference Market Price (as defined in Section 5(i)) and (2) a
fraction, the numerator of which is $500 and the denominator of which is
the sum of (x) the amount at which one share of Convertible Preferred Stock
would be redeemed by the Company if the redemption date were the date of
such Non-Stock Fundamental Change (or, for the period commencing on the
Issue Date and ending on January 31, 1994 and the 12-month periods
commencing February 1, 1994 and 1995, the product of 106.0%, 105.4% and
104.8%, respectively, and $500) and (y) an amount equal to full cumulative
dividends thereon accrued and unpaid through but excluding the date of such
Non-Stock Fundamental Change; and
(ii) in the case of a Common Stock Fundamental Change, the Conversion
Price immediately following such Common Stock Fundamental Change shall be
the Conversion Price in effect immediately prior to such Common Stock
Fundamental Change, but after giving effect to any other prior adjustments
effected pursuant to this Section 5, multiplied by a fraction, the
numerator of which is the Purchaser Stock Price (as defined in Section
5(i)) and the denominator of which is the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in which
(A) 100% of the value of the consideration received by a holder of Common
Stock is common stock of the successor, acquiror or other third party (and
cash, if any, paid with respect to fractional interests in such common
stock resulting from such Common Stock Fundamental Change) and (B) all of
the Common Stock of the Corporation shall have been exchanged for,
converted into, or acquired for common stock (and any cash paid with
respect to fractional interests) of the successor, acquiror or other third
party, the Conversion Price immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior
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to such Common Stock Fundamental Change multiplied by a fraction, the
numerator of which is one and the denominator of which is the number of
shares of common stock of the successor, acquiror, or other third party
received by a holder of one share of Common Stock as a result of such
Common Stock Fundamental Change.
(i) Definitions. The following definitions shall apply to terms used in
this Section 5:
(1) "Applicable Price" shall mean (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only
cash, the amount of cash received by the holder of one share of Common
Stock and (ii) in the event of any other Non-Stock Fundamental Change or
any Common Stock Fundamental Change, the Current Market Price immediately
prior to the record date fixed for the determination of the holders of
Common Stock entitled to receive cash, securities, property or other assets
in connection with such Non-Stock Fundamental Change or Common Stock
Fundamental Change, or, if there is no such record date, prior to the date
upon which the holders of the Common Stock shall have the right to receive
such cash, securities, property or other assets.
(2) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% by value (as determined in good faith by the
Board of Directors of the Corporation or, to the extent permitted by
applicable law, a duly authorized committee thereof, which determination
shall be conclusive) of the consideration received by the holders of Common
Stock pursuant to such transaction consists of common stock that, for the
consecutive 10 Trading Days immediately prior to such Fundamental Change,
has been admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the National
Association of Securities Dealers, Inc. ("NASDAQ") National Market System;
provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (i) the Corporation continues to exist
after the occurrence of such Fundamental Change and the outstanding shares
of Convertible Preferred Stock continue to exist as outstanding shares of
Convertible Preferred Stock, or (ii) not later than the
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occurrence of such Fundamental Change, the outstanding shares of
Convertible Preferred Stock are converted into or exchanged for shares of
convertible preferred stock of a corporation succeeding directly or
indirectly to the business of the Corporation, which convertible preferred
stock has powers, preferences and relative, participating, optional or
other rights, and qualifications, limitations and restrictions
substantially similar to those of the Convertible Preferred Stock.
(3) "Fundamental Change" shall mean the occurrence of any transaction
or event or series of transactions or events pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted
into, acquired for or shall constitute solely the right to receive cash,
securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in
the case of any series of transactions or events, for purposes of
adjustment of the Conversion Price, such Fundamental Change shall be deemed
to have occurred when substantially all of the Common Stock of the
Corporation shall be exchanged for, converted into, or acquired for or
shall constitute solely the right to receive such cash, securities,
property or other assets, but the adjustment shall be based upon the
consideration which the holders of Common Stock received in such
transactions or event as a result of which more than 50% of the Common
Stock of the Corporation shall have been exchanged for, converted into, or
acquired for or constitute solely the right to receive cash, securities,
property or other assets; provided, further, that such term does not
include (i) any such transactions or event in which the Corporation and/or
any of its subsidiaries are the issuers of all the cash, securities,
property or other assets exchanged, acquired or otherwise issued in such
transaction or event, or (ii) any such transaction or event in which the
holders of Common Stock receive securities of an issuer other than the
Corporation or any of its subsidiaries if, immediately following such
transaction or event, such holders hold a majority of the securities having
the power to vote normally in the election of directors of such other
issuer outstand-
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ing immediately following such transaction or other event.
(4) "Non-Stock Fundamental Change" shall mean any Fundamental Change
other than a Common Stock Fundamental Change.
(5) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change during the 10 Trading Days immediately prior to
the date fixed for the determination of the holders of Common Stock
entitled to receive such common stock, or if there is no such date, prior
to the date upon which the holders of the Common Stock shall have the right
to receive such common stock.
(6) "Reference Market Price" shall initially mean $42.3333 (which is
an amount equal to 66 2/3% of the Closing Price for the Common Stock on
January 27, 1993), and in the event of any adjustment to the Conversion
Price other than as a result of a Fundamental Change, the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment
shall always be the same as the ratio of the initial Reference Market
Prices to the initial Conversion Price set forth in Section 5(a) above.
(j) Dividend or Interest Reinvestment Plans; Other. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under any such plan, and the issuance of any shares of
Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Corporation, or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date the Convertible Preferred Stock was first designated (except as
expressly provided in Section 5(c)(iv) with respect to certain events under the
Rights Agreement), shall not be deemed to constitute an issuance of Common Stock
or exercisable,
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exchangeable or convertible securities by the Corporation to which any of the
adjustment provisions described above applies. In addition, there shall be no
adjustment of the Conversion Price in the event that, upon termination of the
Rights Agreement, the Company enters into a new agreement which is comparable in
purpose and in effect to the Rights Agreement (as determined by the Board of
Directors or, to the extent permitted by applicable law, a duly authorized
committee thereof, whose determination shall be conclusive). There shall be no
adjustment of the Conversion Price in case of the issuance of any stock (or
securities convertible into or exchangeable for stock) of the Corporation except
as described in this Section 5. Except as expressly set forth above, if any
action would require adjustment of the Conversion Price pursuant to more than
one of the provisions described above, only one adjustment shall be made and
such adjustment shall be the amount of adjustment which has the highest absolute
value.
(k) For purposes of this Section 5, the number of shares of Common Stock at
any time outstanding shall not include any shares of Common Stock then owned or
held by or for the account of the Corporation.
6. Voting Rights. Other than as required by applicable law, the Convertible
Preferred Stock shall not have any voting powers either general or special,
except that:
(a) Unless the vote or consent of the holders of a greater number of shares
shall then be required by law, the affirmative vote or consent of two-thirds of
the votes to which the holders of the outstanding shares of the Convertible
Preferred Stock, and each other series of preferred stock of the Corporation
similarly affected, if any, as to which like voting rights have been conferred,
voting together as a single class, are entitled shall be necessary for
authorizing, effecting or validating the amendment, alteration or repeal of any
or the provisions of the Certificate of Incorporation or of any amendment or
supplement thereto (including any certificate of designation or any similar
document relating to any series of preferred stock) of the Corporation, which
would materially and adversely affect the voting powers, preferences, rights,
powers or privileges, qualifications, limitations and restrictions of the
Convertible Preferred Stock and any such other series of preferred stock;
provided, however, that the creation, issuance or increase in the
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amount of authorized shares of any series of preferred stock ranking on a parity
with or junior to the Convertible Preferred Stock as to the payment of dividends
or upon liquidation, dissolution or winding up will not be deemed to materially
and adversely affect such voting powers, preferences, rights, powers or
privileges, qualifications, limitations and restrictions of the Convertible
Preferred Stock.
(b) Unless the vote or consent of the holders of a greater number of shares
shall then be required by law, the affirmative vote or consent of two-thirds of
the votes to which the holders of the outstanding shares of the Convertible
Preferred Stock, and all other series of preferred stock of the Corporation
ranking on parity with shares of the Convertible Preferred Stock (either as to
dividends or upon liquidation, dissolution or winding up) as to which like
voting rights have been conferred, voting together as a single class, are
entitled shall be necessary to create, authorize or issue, or reclassify any
authorized stock of the Corporation into, or create, authorize or issue any
obligation or security convertible into or evidencing a right to purchase, any
shares of any class or series of stock of the Corporation ranking prior to the
Convertible Preferred Stock or ranking prior to any other series of preferred
stock of the corporation which ranks on a parity with the Convertible Preferred
Stock as to dividends or upon liquidation, dissolution or winding up.
(c) Whenever, at any time or times, dividends payable on the shares of
Convertible Preferred Stock shall be in arrears in an amount equal to at least
six full quarterly dividends (whether or not consecutive) on shares of the
Convertible Preferred Stock at the time outstanding, the holders of the
outstanding shares of the Convertible Preferred Stock shall have the exclusive
right, voting together as a class with holders of shares of any one or more
other series of preferred stock (other than the Convertible Preferred Stock)
ranking on a parity with the Convertible Preferred Stock as to dividends upon
which like voting rights have been conferred and are then exercisable, to elect
two (2) directors of the Corporation for one-year terms at the Corporation's
next annual meeting of stockholders and at each subsequent annual meeting of
stockholders. If the right to elect directors shall have accrued to the holders
of the Convertible Preferred Stock more than 90 days prior to the date
established for
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the next annual meeting of stockholders, the President of the Corporation shall,
within 20 days after delivery to the Corporation at its principal office of a
written request for a special meeting signed by the holders of at least 10% of
all outstanding shares of the Convertible Preferred Stock, call a special
meeting of the holders of Convertible Preferred Stock to be held within 60 days
after the delivery of such request for the purpose of electing such additional
directors. Upon the vesting of such right of the holders of Convertible
Preferred Stock, the maximum authorized number of members of the Board of
Directors shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of the outstanding shares of
Convertible Preferred Stock (either alone or together with the holders of shares
of any one or more other such series of preferred stock entitled to vote in such
election) as set forth above. The right of the holders of Convertible Preferred
Stock to elect members of the Board of Directors of the Corporation as aforesaid
shall continue until such time as all dividends in arrears on the Convertible
Preferred Stock shall have been paid in full or declared and set apart for
payment, at which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above described.
(d) Upon termination of such special voting rights attributable to all
holders of the Convertible Preferred Stock and any other such series of
preferred stock ranking on a parity with the Convertible Preferred Stock as to
dividends or upon liquidation, dissolution or winding up and upon which like
voting rights have been conferred and are exercisable, the term of office of
each director elected by the holders of shares of Convertible Preferred Stock
and such parity preferred stock (a "Preferred Stock Director") pursuant to such
special voting rights shall immediately terminate and the number of directors
constituting the entire Board of Directors shall be reduced by the number of
Preferred Stock Directors. Any Preferred Stock Director may be removed by, and
shall not be removed otherwise than by, a majority of the votes to which the
holders of the outstanding shares of Convertible Preferred Stock and all other
series of preferred stock ranking on a parity with the Convertible Preferred
Stock as to dividends that are entitled to participate in such Preferred Stock
Director's election, voting as a single class, are entitled. If the office of
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any Preferred Stock Director becomes vacant by reason of death, resignation,
retirement, disqualification, removal from office, or otherwise, the remaining
Preferred Stock Director may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred.
(e) In connection with any right to vote, each holder of Convertible
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other series of preferred stock being entitled to such number
of votes, if any, for each share of stock held as may be granted to them).
7. Ranking. The Common Stock and the Junior Preferred Stock shall rank
junior to the Convertible Preferred Stock as to dividends and upon liquidation,
distribution or winding up, in each case as described in Section 2 or 3,
respectively. Any other class or series of stock of the Corporation shall be
deemed to rank:
(a) prior to the Convertible Preferred Stock, as to dividends or upon
liquidation, dissolution or winding up as described in Section 3, if the holders
of such class shall be entitled to the receipt of dividends or of amounts
distributable upon such a liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of the Convertible Preferred
Stock;
(b) on a parity with the Convertible Preferred Stock, as to dividends or
upon liquidation, dissolution or winding up as described in Section 3, whether
or not the dividend rates, dividend payment dates or redemption or liquidation
prices per share thereof be different from those of the Convertible Preferred
Stock, if the holders of such class of stock and the Convertible Preferred Stock
shall be entitled to the receipt of dividends or of amounts distributable upon
such a liquidation, dissolution or winding up, as the case may be, in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation price, without preference or priority one over the other; and
(c) junior to the Convertible Preferred Stock, as to dividends or upon
liquidation, dissolution or winding up as described in Section 3, if the holders
of Convertible Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon such a liquida-
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tion, dissolution or winding up, as the case may be, in preference or priority
to the holders of shares of such stock.
8. Definitions. For purposes of this Certificate of Designation of
Convertible Preferred Stock, the following terms shall have the meaning
indicated:
(a) "business day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close or a day which is or is declared a
national or New York state holiday;
(b) "Closing Price" with respect to any securities on any day shall mean
the closing sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case on the New York Stock Exchange, or, if such security
is not listed or admitted to trading on such Exchange, on the principal national
security exchange or quotation system on which such security is quoted or listed
or admitted to trading, or, if not quoted or listed or admitted to trading on
any national securities exchange or quotation system, the average of the closing
bid and asked prices of such security on the over-the-counter market on the day
in question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or a price determined
in good faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose determination shall
be conclusive.
(c) "Current Market Price" shall mean the average of the daily Closing
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question; provided, however, that (1) if the
"ex" date (as hereinafter defined) for any event (other than the issuance,
distribution or Fundamental Change requiring such computation) that requires an
adjustment to the Conversion Price pursuant to subparagraph (i), (ii), (iii),
(iv), (v) or (vi) of Section 5(c) occurs during such ten consecutive Trading
Days, the
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<PAGE> 201
Closing Price for each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of such
other event, (2) if the "ex" date for any event (other than the issuance,
distribution or Fundamental Change requiring such computation) that requires an
adjustment to the Conversion Price pursuant to subparagraph (i), (ii), (iii),
(iv), (v) or (vi) of Section 5(c) occurs on or after the "ex" date for the
issuance or distribution requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (3) if the "ex" date for the
issuance, distribution or Fundamental Change requiring such computation is prior
to the day in question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by the Board of
Directors or, to the extent permitted by applicable law, a duly authorized
committee thereof in a manner consistent with any determination of such value
for purposes of subparagraph (iv) or (vi) of Section 5(c), whose determination
shall be conclusive and described in a resolution of the Board of Directors or
such duly authorized committee thereof, as the case may be) of the evidences of
indebtedness, shares of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such
"ex" date. For purposes of any computation under subparagraph (vi) of Section
5(c), the Current Market Price of the Common Stock on any date shall be deemed
to be the average of the daily Closing Prices per share of Common Stock for such
day and the next two succeeding Trading Days; provided, however, that if the
"ex" date for any event (other than the tender or exchange offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
subparagraph (i), (ii), (iii), (iv), (v) and (vi) of Section 5(c) occurs on or
after the Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Price for each Trading
Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the
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fraction by which the Conversion Price is so required to be adjusted as a result
of such other event. For purposes of this paragraph, the term "ex" date, (1)
when used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the right to
receive such issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective, and
(3) when used with respect to any tender or exchange offer means the first date
on which the Common Stock trades regular way on such exchange or in such market
after the Expiration Time of such offer.
(d) "fair market value" shall mean the amount which a willing buyer would
pay a willing seller in an arm's length transaction.
(e) "Record Date" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the right
to receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(f) "Trading Day" shall mean (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national security
exchange, a day on which the New York Stock Exchange or another national
security exchange is open for business or (y) if the applicable security is
quoted on the National Market System of the NASDAQ, a day on which trades may be
made on such National Market System or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
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(g) "Transfer Agent" shall mean First Chicago Trust Company of New York, or
any other national or state bank or trust company having combined capital and
surplus of at least $100,000,000 and designated by the Corporation as the
transfer agent and/or registrar of the Convertible Preferred Stock, or if no
such designation is made, the Corporation.
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IN WITNESS WHEREOF, AMR Corporation has caused this Certificate of
Designation to be signed by its Senior Vice President and Treasurer and its
Corporate Secretary this 3rd day of February, 1993.
AMR CORPORATION
By /s/ MICHAEL J. DURHAM
-----------------------------------
Michael J. Durham
Senior Vice President
and Treasurer
Attest:
/s/ CHARLES D. MARLETT
- -------------------------------
Charles D. MarLett
Corporate Secretary
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CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AMR CORPORATION
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
We, the undersigned Anne H. McNamara, Senior Vice President and General
Counsel of AMR Corporation, and Charles D. MarLett, Corporate Secretary of AMR
Corporation, a corporation organized under the General Corporation Law of the
State of Delaware (the "Corporation"), hereby certify as follows:
1. The first paragraph of Article FOURTH of the Certificate of
Incorporation of the Corporation is hereby amended to read in its entirety
as follows:
"FOURTH: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 170,000,000 shares, of
which 20,000,000 shares shall be shares of Preferred Stock without par
value (hereinafter called "Preferred Stock") and 150,000,000 shares
shall be shares of Common Stock of the par value of $1.00 per share
(hereinafter called "Common Stock")."
2. The amendment herein set forth was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
3. This amendment shall be effective on May 27, 1993.
IN WITNESS WHEREOF, this certificate has been executed and attested by the
undersigned this 24th day of May, 1993.
/s/ ANNE H. McNAMARA
-----------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ CHARLES D. MARLETT
- ------------------------------
Charles D. MarLett
Corporate Secretary
<PAGE> 1
Exhibit 4(b)
AMR CORPORATION
BYLAWS
(As amended November 28, 1990)
ARTICLE I
Offices
The registered office of the corporation in the State of Delaware is to be
located in the City of Wilmington, County of New Castle. The corporation may
have other offices within and without the State of Delaware.
ARTICLE II
Meetings of Stockholders
Section 1. Annual Meetings. An annual meeting of stockholders to elect
directors and to take action upon such other matters as may properly come before
the meeting shall be held on the third Wednesday in May of each year, or on such
other day, and at such time and at such place, within or without the State of
Delaware, as the board of directors or the chairman of the board may from time
to time fix.
Any stockholder wishing to bring a matter before an annual meeting must
notify the secretary of the corporation of such fact not less than sixty nor
more than ninety days before the date of the meeting. Such notice shall be in
writing and shall set forth the business proposed to be brought before the
meeting, shall identify the stockholder and shall disclose the stockholder's
interest in the proposed business.
<PAGE> 2
Section 2. Special Meetings. A special meeting of stockholders shall be
called by the secretary upon receipt of a request in writing of the board of
directors, the chairman of the board or the president. Any such meeting shall be
held at the principal business office of the corporation unless the board shall
name another place therefor, at the time specified by the body or persons
calling such meeting.
Section 3. Nominees For Election As Director. Nominations for election as
director, other than those made by or at the direction of the board of
directors, must be made by timely notice to the secretary, setting forth as to
each nominee the information required to be included in a proxy statement under
the proxy rules of the Securities and Exchange Commission. If such election is
to occur at an annual meeting of stockholders, notice shall be timely if it
meets the requirements of such proxy rules for proposals of security holders to
be presented at an annual meeting. If such election is to occur at a special
meeting of stockholders, notice shall be timely if received not less than ninety
days prior to such meeting.
Section 4. Notice of Meetings. Written notice of each meeting of
stockholders shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, such notice shall
be mailed, postage prepaid, to each stockholder entitled to vote at such
meeting, at
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his address as it appears on the records of the corporation, not less than ten
nor more than sixty days before the date of the meeting. When a meeting is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken, unless the adjournment is for more than thirty days or a
new record date is fixed for the adjourned meeting, in which case a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 5. Chairman and Secretary at Meetings. At any meeting of
stockholders the chairman of the board, or in his absence, the president, or if
neither such person is available, then a person designated by the board of
directors, shall preside at and act as chairman of the meeting. The secretary,
or in his absence a person designated by the chairman of the meeting, shall act
as secretary of the meeting.
Section 6. Proxies. Each stockholder entitled to vote at a meeting of
stockholders may authorize another person or persons to act for him by proxy,
but no such proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period.
Section 7. Quorum. At all meetings of the stockholders the holders of
one-third of the number of shares of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum
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requisite for the election of directors and the transaction of other business,
except as otherwise provided by law or by the certificate of incorporation or by
any resolution of the board of directors creating any series of Preferred Stock.
If holders of the requisite number of shares to constitute a quorum shall
not be present in person or represented by proxy at any meeting of stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have the power to adjourn the meeting from time to time until a
quorum shall be present or represented. At any such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 8. Voting. At any meeting of stockholders, except as otherwise
provided by law or by the certificate of incorporation or by any resolution of
the board of directors creating any series of Preferred Stock:
(a) Each holder of record of a share or shares of stock on the record
date for determining stockholders entitled to vote at such meeting shall be
entitled to one vote in person or by proxy for each share of stock so held.
(b) Directors shall be elected by a plurality of the votes cast by the
holders of Common Stock, present in person or by proxy.
(c) Each other question properly presented to any meeting
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of stockholders shall be decided by a majority of the votes cast on the
question entitled to vote thereon.
(d) Elections of directors shall be by ballot but the vote upon any
other question shall be by ballot only if so ordered by the chairman of the
meeting or if so requested by stockholders, present in person or
represented by proxy, entitled to vote on the question and holding at least
10% of the shares so entitled to vote.
Section 9. Action By Written Consent. Any stockholder seeking to act by
written consent of stockholders shall notify the secretary in writing of such
intent and shall request the board of directors to fix a record date for
determining the stockholders entitled to vote by consent. The notice shall
specify the actions sought to be taken and, if the election of one or more
individuals as director is sought, shall include as to each nominee the
information required to be included in a proxy statement under the proxy rules
of the Securities and Exchange Commission. Such record date shall not be more
than ten (10) days after the date upon which the resolution fixing the record
date is adopted by the board of directors.
The board of directors shall promptly, but in all events within ten (10)
days after the date on which the written request for fixing a record date was
received by the secretary, adopt a resolution fixing the record date. If no
record date has been fixed by the board of directors within ten (10) days of the
date on which such a request is received, the record date for determining
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stockholders entitled to vote by consent, when no prior action by the board of
directors is required by applicable law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken
was delivered to the corporation by delivery to its registered office in the
State of Delaware, its principal place of business, or any officer or agent of
the corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by applicable law, the record date for
determining stockholders entitled to vote by consent shall be at the close of
business on the date on which the board of directors adopts the resolution
taking such prior action.
Section 10. List of Stockholders. At least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder
shall be prepared. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the
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meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 11. Judges of Election. Whenever a vote at a meeting of
stockholders shall be by ballot, or whenever written consent to action is
sought, the proxies and ballots or consents shall be received and taken charge
of, and all questions touching on the qualification of voters and the validity
of proxies and consents and the acceptance and rejection of votes shall be
decided by two judges of election. In the case of a meeting of stockholders,
such judges of election shall be appointed by the board of directors before or
at the meeting, and if no such appointment shall have been made, then by the
stockholders at the meeting. In the case of a solicitation of consents, such
judges of election shall be appointed by the board of directors on or before the
record date for determining the stockholders entitled to vote by consent, and if
no such appointment shall have been made, then by the chairman of the board or
the president. If for any reason either of the judges of election previously
appointed shall fail to attend or refuse or be unable to serve, a judge of
election in place of any so failing to attend or refusing or unable to serve,
shall be appointed by the board of directors, the stockholders at the meeting,
the chairman of the board or the president.
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ARTICLE III
Directors: Number, Election, Etc.
Section 1. Number. The board of directors shall consist of such number of
members, not less than three, as the board of directors may from time to time
determine by resolution, plus such additional persons as the holders of the
Preferred Stock may be entitled from time to time, pursuant to the provisions of
any resolution of the board of directors creating any series of Preferred Stock,
to elect to the board of directors.
Section 2. Election, Term, Vacancies. Directors shall be elected each year
at the annual meeting of stockholders, except as hereinafter provided, and shall
hold office until the next annual election and until their successors are duly
elected and qualified. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, although less than a quorum.
Section 3. Resignation. Any director may resign at any time by giving
written notice of such resignation to the board of directors, the chairman of
the board, the president or the secretary. Any such resignation shall take
effect at the time specified therein or, if no time be specified, upon the
receipt thereof by the board of directors or one of the above-named officers
and, unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
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Section 4. Removal. Any director may be removed from office at any time,
with or without cause, by a vote of a majority of a quorum of the stockholders
entitled to vote at any regular meeting or at any special meeting called for the
purpose.
Section 5. Fees and Expenses. Directors shall receive such fees and
expenses as the board of directors shall from time to time prescribe.
ARTICLE IV
Meetings of Directors
Section 1. Regular Meetings. Regular meetings of the board of directors
shall be held at the principal office of the corporation, or at such other place
(within or without the State of Delaware), and at such time, as may from time to
time be prescribed by the board of directors or stockholders. A regular annual
meeting of the board of directors for the election of officers and the
transaction of other business shall be held on the same day as the annual
meeting of the stockholders or on such other day and at such time and place as
the board of directors shall determine. No notice need be given of any regular
meeting.
Section 2. Special Meetings. Special meetings of the board of directors may
be held at such place (within or without the State of Delaware) and at such time
as may from time to time be determined by the board of directors or as may be
specified in the call and notice of any meeting. Any such meeting shall be held
at the call of the chairman of the board, the president, a vice
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president, the secretary, or two or more directors. Notice of a special meeting
of directors shall be mailed to each director at least three days prior to the
meeting date, provided that in lieu thereof, notice may be given to each
director personally or by telephone, or dispatched by telegraph, at least one
day prior to the meeting date.
Section 3. Waiver of Notice. In lieu of notice of meeting, a waiver thereof
in writing, signed by the person or persons entitled to said notice whether
before or after the time stated therein, shall be deemed equivalent thereto. Any
director present in person at a meeting of the board of directors shall be
deemed to have waived notice of the time and place of meeting.
Section 4. Action Without Meeting. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting if all members of the board of directors or of such committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of the proceedings of the board of directors or of such
committee.
Section 5. Quorum. At all meetings of the board, one-third of the total
number of directors shall constitute a quorum for the transaction of business.
The act of a majority of the directors present at any meeting at which there is
a quorum shall be the act
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of the board of directors, except as may be otherwise specifically provided by
law.
If at any meeting there is less than a quorum present, a majority of those
present (or if only one be present, then that one), may adjourn the meeting from
time to time without further notice other than announced at the meeting until a
quorum is present. At such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally scheduled.
Section 6. Business Transacted. Unless otherwise indicated in the notice of
meeting or required by law, the certificate of incorporation or bylaws of the
corporation, any and all business may be transacted at any directors' meeting.
ARTICLE V
Powers of the Board of Directors
The management of all the property and business of the corporation and the
regulation and government of its affairs shall be vested in the board of
directors. In addition to the powers and authorities by these bylaws and the
certificate of incorporation expressly conferred on them, the board of directors
may exercise all such powers of the corporation and do all such lawful acts and
things as are not by law, or by the certificate of incorporation or by these
bylaws directed or required to be exercised or done by the stockholders.
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ARTICLE VI
Committees
Section 1. Executive Committee. The board of directors may, by resolution
passed by a majority of the whole board, designate an executive committee, to
consist of five or more members. The chief executive officer plus three other
members of the executive committee shall constitute a quorum.
The executive committee shall have and may exercise all the powers and
authority of the board of directors in the management of the business and
affairs of the corporation, with the exception of such powers and authority as
may be specifically reserved to the board of directors by law or by resolution
adopted by the board of directors.
Section 2. Audit Committee. The board of directors may, by resolution
passed by a majority of the whole board, designate an audit committee, to
consist of two or more members, none of the members of which shall be employees
or officers of the corporation. A majority of the members of the audit committee
shall constitute a quorum.
The audit committee shall from time to time review and make recommendations
to the board of directors with respect to the selection of independent auditors,
the fees to be paid such auditors, the adequacy of the audit and accounting
procedures of the corporation, and such other matters as may be specifically
delegated to the committee by the board of directors. In this connection the
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audit committee shall, at its request, meet with representatives of the
independent auditors and with the financial officers of the corporation
separately or jointly.
Section 3. Compensation/Nominating Committee. The board of directors may,
by resolution passed by a majority of the whole board, designate a
compensation/nominating committee, to consist of each member of the board of
directors, except that no member of the compensation/nominating committee may be
an employee or officer of the corporation. A majority of the members of the
compensation/nominating committee shall constitute a quorum.
The compensation/nominating committee shall from time to time review and
make recommendations to the board of directors with respect to the management
remuneration policies of the corporation including but not limited to salary
rates and fringe benefits of elected officers, other remuneration plans such as
incentive compensation, deferred compensation and stock option plans, directors'
compensation and benefits and such other matters as may be specifically
delegated to the committee by the board of directors.
In addition, the compensation/nominating committee shall make
recommendations to the board of directors (i) concerning suitable candidates for
election to the board, (ii) with respect to assignments to board committees, and
(iii) with respect to promotions, changes and succession among the senior
management of
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the corporation, and shall perform such other duties as may be specifically
delegated to the committee by the board of directors.
Section 4. Committee Procedure, Seal.
(a) The executive, compensation/nominating, and audit committees shall keep
regular minutes of their meetings, which shall be reported to the board of
directors, and shall fix their own rules of procedures.
(b) The executive, compensation/nominating, and audit committees may each
authorize the seal of the corporation to be affixed to all papers which may
require it.
(c) In the absence or disqualification of a member of any committee, the
members of that committee present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another
member of the board of directors to act at the meeting in the place of such
absent or disqualified member.
Section 5. Special Committees. The board of directors may, from time to
time, by resolution passed by a majority of the whole board, designate one or
more special committees. Each such committee shall have such duties and may
exercise such powers as are granted to it in the resolution designating the
members thereof. Each such committee shall fix its own rules of procedures.
ARTICLE VII
Indemnification
Section 1. Nature of Indemnity. The corporation shall
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indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative by reason of the fact that he
is or was or has agreed to become a director or officer of the corporation, or
is or was serving or has agreed to serve at the request of the corporation as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action by reason of the fact that he
is or was or has agreed to become an employee or agent of the corporation, or is
or was serving or has agreed to serve at the request of the corporation as an
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding had no reasonable cause to believe his
conduct was unlawful; except that in the case of an action or suit by or in the
right of the corporation to procure a judgment in its favor (1) such
indemnification shall be limited to expenses (including attorneys' fees)
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actually and reasonably incurred by such person in the defense or settlement of
such action or suit, and (2) no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. Successful Defense. To the extent that a director, officer,
employee or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section 1
hereof or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
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Section 3. Determination That Indemnification Is Proper. Any
indemnification of a director or officer of the corporation under Section 1
hereof (unless ordered by a court) shall be made by the corporation unless a
determination is made that indemnification of the director or officer is not
proper in the circumstances because he has not met the applicable standard of
conduct set forth in Section 1 hereof. Any indemnification of an employee or
agent of the corporation under Section 1 hereof (unless ordered by a court) may
be made by the corporation upon a determination that indemnification of the
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 1 hereof. Any such
determination shall be made (1) by the board of directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.
Section 4. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined
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that he is not entitled to be indemnified by the corporation as authorized in
this Article. Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the board of directors deems appropriate. The board of directors may authorize
the corporation's counsel to represent a director, officer, employee or agent in
any action, suit or proceeding, whether or not the corporation is a party to
such action, suit or proceeding.
Section 5. Procedure for Indemnification of Directors or Officers. Any
indemnification of a director or officer of the corporation under Sections 1 and
2, or advance of costs, charges and expenses of a director or officer under
Section 4 of this Article, shall be made promptly, and in any event within 60
days, upon the written request of the director or officer. If the corporation
fails to respond within 60 days, then the request for indemnification shall be
deemed to be approved. The right to indemnification or advances as granted by
this Article shall be enforceable by the director or officer in any court of
competent jurisdiction if the corporation denies such request, in whole or in
part. Such person's costs and expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the corporation. It shall be a defense to
any such action (other than an action brought to enforce a claim for the advance
of costs, charges and expenses under Section 4 of this Article where the
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required undertaking, if any, has been received by the corporation) that the
claimant has not met the standard of conduct set forth in Section 1 of this
Article, but the burden of proving such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors, its
independent legal counsel, and its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 1 of this Article, nor the fact that there has been
an actual determination by the corporation (including its board of directors,
its independent legal counsel, and its stockholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
Section 6. Survival; Preservation of Other Rights.
The foregoing indemnification provisions shall be deemed to be a contract
between the corporation and each director, officer, employee and agent who
serves in such capacity at any time while these provisions as well as the
relevant provisions of the Delaware Corporation Law are in effect and any repeal
or modification thereof shall not affect any right or obligation then existing
with respect to any state of facts then or previously existing or any action,
suit, or proceeding previously or thereafter brought or threatened based in
whole or in part upon any such state of facts. Such a
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"contract right" may not be modified retroactively without the consent of such
director, officer, employee or agent.
The indemnification provided by this Article VII shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 7. Insurance. The corporation shall purchase and maintain insurance
on behalf of any person who is or was or has agreed to become a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him or on his behalf in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of this Article, provided that
--------
such insurance is available on acceptable terms, which determination shall be
made by a vote of a majority of the entire board of directors.
Section 8. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless
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indemnify each director or officer and may indemnify each employee or agent of
the corporation as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the corporation, to the full extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.
ARTICLE VIII
Officers
Section 1. General. The officers of the corporation shall be the chairman
of the board, president, one or more vice presidents (including executive vice
presidents and senior vice presidents), a secretary, a controller, a treasurer,
and such other subordinate officers as may from time to time be designated and
elected by the board of directors.
Section 2. Other Offices. The chairman of the board and president shall be
chosen by the board of directors from among their own number. The other officers
of the corporation may or may not be directors.
Section 3. Term. Officers of the corporation shall be elected by the board
of directors and shall hold their respective offices during the pleasure of the
board and any officer may be removed at any time, with or without cause, by a
vote of the
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majority of the directors. Each officer shall hold office from the time of his
appointment and qualification until the next annual election of officers or
until his earlier resignation or removal except that upon election thereof a
shorter term may be designated by the board of directors. Any officer may resign
at any time upon written notice to the corporation.
Section 4. Compensation. The compensation of officers of the corporation
shall be fixed, from time to time, by the board of directors.
Section 5. Vacancy. In case any office becomes vacant by death,
resignation, retirement, disqualification, removal from office, or any other
cause, the board of directors may abolish the office (except that of president,
secretary and treasurer) or elect an officer to fill such vacancy.
ARTICLE IX
Duties of Officers
Section 1. Chairman of the Board, President. The chairman of the board
shall be the chief executive officer of the corporation. He shall have general
supervisory powers over all other officers, employees and agents of the
corporation for the proper performance of their duties and shall otherwise have
the general powers and duties of supervision and management usually vested in
the chief executive officer of a corporation. The president shall be chief
operating officer of the corporation and, subject to the general direction of
the chairman of the board, shall
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have the general powers and duties of supervision and management usually vested
in a chief operating officer of a corporation. The chairman of the board shall
preside at and act as chairman of all meetings of the board of directors. The
president shall preside at any meeting of the board of directors in the event of
the absence of the chairman of the board. The offices of chairman of the board
and president may be filled by the same individual.
Section 2. Vice Presidents. Each vice president shall perform such duties
as shall be assigned to him by the board of directors, the chairman of the board
or the president.
Section 3. Secretary. The secretary shall record all proceedings of the
meetings of the corporation, its stockholders and the board of directors and
shall perform such other duties as shall be assigned to him by the board of
directors, the chairman of the board, or the president. Any part or all of the
duties of the secretary may be delegated to one or more assistant secretaries.
Section 4. Controller. The controller shall perform such duties as shall be
assigned to him by the chairman of the board, the president or such vice
president as may be responsible for financial matters. Any or all of the duties
of the controller may be delegated to one or more assistant controllers.
Section 5. Treasurer. The treasurer shall, under the direction of the
chairman of the board, the president or such vice president as may be
responsible for financial matters, have the custody of the funds and securities
of the corporation, subject to
23
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such regulations as may be imposed by the board of directors. He shall deposit,
or have deposited, all monies and other valuable effects in the name and to the
credit of the corporation in such depositories as may be designated by the board
of directors or as may be designated by the appropriate officers pursuant to a
resolution of the board of directors. He shall disburse, or have disbursed, the
funds of the corporation as may be ordered by the board of directors or properly
authorized officers, taking proper vouchers therefor. If required by the board
of directors he shall give the corporation bond in such sum and in such form and
with such security as may be satisfactory to the board of directors, for the
faithful performance of the duties of his office. He shall perform such other
duties as shall be assigned to him by the board of directors, the chairman of
the board, the president or such vice president as may be responsible for
financial matters. Any or all of the duties of the treasurer may be delegated to
one or more assistant treasurers.
Section 6. Other Officers' Duties. Each other officer shall perform such
duties and have such responsibilities as may be delegated to him by the superior
officer to whom he is made responsible by designation of the chairman of the
board or the president.
Section 7. Absence or Disability. The board of directors or the chairman of
the board may delegate the powers and duties of any absent or disabled officer
to any other officer or to
24
<PAGE> 25
any director for the time being. In the event of the absence or temporary
disability of the chairman of the board, the president shall assume his powers
and duties while he is absent or so disabled.
ARTICLE X
Stock
Section 1. Certificates. Certificates of stock of the corporation shall be
signed by, or in the name of the corporation by, the chairman of the board, the
president or a vice president, and by the treasurer or an assistant treasurer,
or the secretary or an assistant secretary of the corporation. If such
certificate is countersigned, (1) by a transfer agent other than the corporation
or its employee, or (2) by a registrar other than the corporation or its
employee, then any other signature on the certificate may be a facsimile. In
case any officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.
Section 2. Transfers. Shares of stock shall be transferable on the books of
the corporation by the holder of record thereof in person or by his attorney
upon surrender of such certificate with an assignment endorsed thereon or
attached thereto
25
<PAGE> 26
duly executed and with such proof of authenticity of signatures as the
corporation may reasonably require. The board of directors may from time to time
appoint such transfer agents or registrars as it may deem advisable and may
define their powers and duties. Any such transfer agent or registrar need not be
an employee of the corporation.
Section 3. Record Holder. The corporation may treat the holder of record of
any shares of stock as the complete owner thereof entitled to receive dividends
and vote such shares, and accordingly shall not be bound to recognize any
interest in such shares on the part of any other person, whether or not it shall
have notice thereof.
Section 4. Lost and Damaged Certificates. The corporation may issue a new
certificate of stock to replace a certificate alleged to have been lost, stolen,
destroyed or mutilated upon such terms and conditions as the board of directors
may from time to time prescribe.
Section 5. Fixing Record Date. In order that the corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of
other lawful action, the board of directors
26
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may fix, in advance, a record date, which shall not be more than sixty nor less
than ten days before the date of such meeting, nor more than sixty days prior to
any other action.
ARTICLE XI
Miscellaneous
Section 1. Fiscal Year. The fiscal year of the corporation shall begin upon
the first day of January and terminate upon the 31st day of December, in each
year.
Section 2. Stockholder Inspection of Books and Records. The board of
directors from time to time shall determine whether and to what extent and at
what times and places and under what conditions and regulations the accounts and
books of the corporation, or any of them, shall be open to the inspection of a
stockholder and no stockholder shall have any right to inspect any account, book
or document of the corporation except as conferred by statute or authorized by
resolution of the board of directors.
Section 3. Seal. The corporate seal shall be circular in form and have
inscribed thereon the name of the corporation and the words "Corporate Seal,
Delaware."
ARTICLE XII
Amendments to Bylaws
Subject to the provisions of any resolution of the board of directors
creating any series of Preferred Stock, the board of directors shall have power
from time to time to make, alter or
27
<PAGE> 28
repeal bylaws, but any bylaws made by the board of directors may be altered,
amended or repealed by the stockholders at any annual meeting of stockholders,
or at any special meeting provided that notice of such proposed alteration,
amendment or repeal is included in the notice of such special meeting.
28
<PAGE> 1
Exhibit 4(m)
================================================================================
AMR CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO
__________
INDENTURE
Dated as of _______, 1994
__________
$____________
___% Convertible Subordinated
Quarterly Income Capital Securities due 2024
================================================================================
<PAGE> 2
Reconciliation and tie between Indenture, dated as of March 1, 1991, and the
Trust Indenture Act of 1939, as amended.
<TABLE>
<CAPTION>
Trust Indenture Act Indenture
of 1939 Section Section
- ------------------- ---------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9; TIA
311(a) TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
312(a) 6.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
313(a) 6.6; TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6; TIA
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
314(a) 9.5; 9.6; TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
315(a) TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . 5.2; 5.8
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9; 5.10
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3
318(a) 1.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11; TIA
</TABLE>
____________________
This reconciliation and tie section does not constitute part of the
Indenture.
2
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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----
<S> <C> <C>
ARTICLE I
Definitions And Other Provisions
Of General Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.3. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.4. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.5. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.6. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.7. Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.8. Successor and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.9. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.13. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
Debenture Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.2. Debentures in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.3. Form of Legend for Debentures in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III
The Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.1. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.2. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.3. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.4. Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.5. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.6. Replacement Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.7. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.8. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.9. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.10. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IV
</TABLE>
i
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<TABLE>
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<S> <C> <C>
Satisfaction And Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.1. Termination of Company's Obligations Under the Indenture . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.2. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V
Defaults And Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.2. Acceleration; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . 37
Section 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.5. Trustee May Enforce Claims Without Possession of Debentures . . . . . . . . . . . . . . . . . . . . . 37
Section 5.6. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.7. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.8. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.9. Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.10. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.11. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.12. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.13. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.1. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.2. Trustee May Hold Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.3. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.6. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.7. Debentureholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.8. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.9. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.10. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.11. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.12. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . . 46
Section 6.13. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VII
Consolidation, Merger Or Sale By The Company . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.1. Consolidation, Merger or Sale of Assets Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
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<S> <C> <C>
ARTICLE VIII
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.1. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.2. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.3. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.4. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.5. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.6. Reference in Debentures to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.1. Payment of Principal, Premium, if any, and Interest . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.3. Money for Debentures to Be Held in Trust; Unclaimed Money . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.4. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.5. Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.6. Annual Review Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.7. Limitation on Dividends and Capital Stock Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE X
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.1. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.2. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.3. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.4. Selection of Debentures to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.5. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.6. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.7. Debentures Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.8. Debentures Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE XI
Subordination Of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.2. No Payment on Debentures if Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.3. Priority of Senior Indebtedness Upon Distribution of Assets . . . . . . . . . . . . . . . . . . . . . 61
Section 11.4. Trustee May Rely on Certificate of Liquidating Agent . . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
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Section 11.5. Subrogation of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 11.6. Company Obligation to Pay Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 11.7. Authorization of Debentureholders to Trustee to Effect Subordination . . . . . . . . . . . . . . . . . 63
Section 11.8. Notice to Trustee of Effectuation of Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 11.9. Relationship of Other Indenture Provisions to Article XI . . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.10. Trustee's Relationship to Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE XII
Conversion Of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 12.1. Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 12.2. Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 12.3. No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 12.4. Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.5. Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.6. Reclassification, Consolidation, Merger or Sale of Assets . . . . . . . . . . . . . . . . . . . . . . 74
Section 12.7. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 12.8. Reservation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 12.9. Prior Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 12.10. Adjustments in Case of Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 12.11. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 12.12. Dividend or Interest Reinvestment Plans; Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 12.13. Treasury Stock Not Included . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 12.14. Return of Money Deposited for Converted Debentures . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 12.15. Responsibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SIGNATURES
EXHIBIT A -- Form of Debenture
</TABLE>
iv
<PAGE> 8
INDENTURE, dated as of _______, 1994, between AMR CORPORATION,
a Delaware corporation (the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO,
Trustee, a national banking association (the "Trustee").
Recitals
For its lawful corporate purposes, the Company has duly
authorized the issue of __% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures"), in the aggregate principal amount of
$____________, and, in order to provide the terms and conditions on which the
Debentures are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Debentures, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
For and in consideration of the premises and the purchase of
the Debentures by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Debentures:
ARTICLE I
Definitions and Other Provisions
of General Application
Section 1.1. Definitions. (a) For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
<PAGE> 9
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Affiliate" of any specified Person means any Person directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Paying Agent or Registrar.
"Authenticating Agent" means any authenticating agent
appointed by the Trustee pursuant to Section 6.13.
"Board" or "Board of Directors" means the Board of Directors
of the Company, the Executive Committee or any other duly authorized committee
thereof.
"Board Resolution" means a copy of a resolution of the Board
of Directors, certified by the Corporate Secretary or an Assistant Secretary of
the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of the certificate, and delivered to the
Trustee.
"Business Day" means each day which is not a Saturday, Sunday
or other day on which banking institutions in The City of New York or Fort
Worth, Texas are authorized or obligated by law or required by executive order
to remain closed.
"Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the New York Stock Exchange, or, if such
security is not listed or admitted to trading on
2
<PAGE> 10
such Exchange, on the principal national security exchange or quotation system
on which such security is quoted or listed or admitted to trading or, if not
quoted or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner as furnished by any
New York Stock Exchange member firm selected from time to time by the Board for
that purpose, or a price determined in good faith by the Board, whose
determination shall be conclusive.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this Indenture such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" means the shares of common stock, par value
$1.00 per share, of the Company as in existence on the date of this Indenture.
"Company" means the party named as the Company in the first
paragraph of this Indenture until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
means such successors.
"Company Order" and "Company Request" mean, respectively, a
written order or request signed in the name of the Company by the Chairman of
the Board, the President, any Executive Vice President or any Senior Vice
President, signing alone, or by any Vice President signing together with the
Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant
Secretary of the Company.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date hereof is located at
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention:
Corporate Trust Services Division, except that, for purposes of Section 9.2,
such term means the office or agency of the Trustee in the Borough of
Manhattan, The City
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<PAGE> 11
of New York, which office at the date hereof is located at 14 Wall Street,
Eighth Floor, New York, New York 10005.
"Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question; provided, however, that (1) if the
"ex" date (as hereinafter defined) for any event (other than the issuance,
distribution or Fundamental Change requiring such computation) that requires an
adjustment to the Conversion Price pursuant to subparagraph (i), (ii), (iii),
(iv), (v) or (vi) of Section 12.5 occurs during such ten consecutive Trading
Days, the Closing Price for each Trading Day prior to the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, (2) if the "ex" date for any event (other than the
issuance, distribution or Fundamental Change requiring such computation) that
requires an adjustment to the Conversion Price pursuant to subparagraph (i),
(ii), (iii), (iv), (v) or (vi) of Section 12.5 occurs on or after the "ex" date
for such other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (3) if the "ex" date for the
issuance, distribution or Fundamental Change requiring such computation is
prior to the day in question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by the Board in a
manner consistent with any determination of such value for purposes of
subparagraph (iv) or (vi) of Section 12.5, whose determination shall be
conclusive and described in a Board Resolution) of the evidences of
indebtedness, share of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such
"ex" date. For purposes of any computation under subparagraph (vi) of Section
12.5, the Current Market Price of the Common Stock on any date shall be deemed
to be the average of the daily Closing Prices per share of Common Stock for
such day and the next two succeeding Trading Days; provided, however, that if
the "ex" date for any event (other than the tender or exchange offer requiring
such computation) that requires an adjustment to the Conversion Price pursuant
to subparagraph (i), (ii), (iii), (iv), (v) and (vi) of Section 12.5 occurs on
or after the Expiration Time
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<PAGE> 12
for the tender or exchange offer requiring such computation and prior to the
day in question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such Closing Price
by the reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the Closing Price
was obtained without the right to receive such issuance or distribution, (2)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on
such exchange or in such market after the time at which such subdivision or
combination becomes effective, and (3) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades regular
way on such exchange or in such market after the Expiration Time of such offer.
"Debenture" or "Debentures" has the meaning stated in the
first recital of this Indenture and more particularly means any Debenture or
Debentures of the Company issued, authenticated and delivered under this
Indenture.
"Default" means any event which is, or after notice or passage
of time, or both, would be, an Event of Default.
"Depositary", when used with respect to any Debentures
issuable or issued in global form, means the Person designated as Depositary by
the Company pursuant to Section 3.1 until a successor Depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter shall mean or include each Person which is then a Depositary
hereunder, and if at any time there is more than one such Person, shall be a
collective reference to such Persons.
"Extension Period" means the period from and including the
Interest Payment Date next following the date of any notice of extension of the
interest payment period on the Debentures given pursuant to the last sentence
of Section 3.1(d) (or, in the case of any further extension of the interest
payment period pursuant to the third sentence of Section 3.1(d) before the
payment in full of all accrued interest on the Debentures, the Interest Payment
Date next
5
<PAGE> 13
following the date of the first such notice given after the last Interest
Payment Date to which interest was paid in full) to but excluding the Interest
Payment Date to which payment of interest on the Debentures is so extended,
after giving effect to any further extensions of the interest payment period on
the Debentures pursuant to the third sentence of Section 3.1(d); provided that
no Extension Period shall exceed 20 consecutive quarters from the last date to
which interest on the Debentures was paid in full; and provided, further, that
any Extension Period shall end on an Interest Payment Date. Notwithstanding
the foregoing, in no event shall any Extension Period exceed the final Stated
Maturity of the Debentures.
"fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
"Government Obligations" means securities which are (i) direct
obligations of the United States or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States,
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States, which are not callable or redeemable at
the option of the issuer thereof, and shall also include a depositary receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the holder
of a depositary receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depositary receipt from any amount received by the custodian
in respect of the Government Obligation evidenced by such depositary receipt.
"Holder" means, with respect to a Debenture, the Person,
including a Depositary, in whose name such Debenture is registered on the
Register.
"Indenture" means this Indenture as originally executed or as
amended or supplemented from time to time and shall include the forms and terms
of the Debentures established as contemplated hereunder.
"Interest Payment Date", when used with respect to any
Debenture, means the Stated Maturity of an installment of interest on such
Debenture.
6
<PAGE> 14
"Maturity" when used with respect to any Debenture, means the
date on which the principal of such Debenture or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board of Directors, the
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Treasurer or the Corporate Secretary of the Company.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President, any Executive Vice President or any
Senior Vice President, signing alone, or by any Vice President signing together
with the Corporate Secretary, any Assistant Secretary, the Treasurer, or any
Assistant Treasurer of the Company.
"Opinion of Counsel" means a written opinion of legal counsel,
who may be (a) the senior attorney employed by the Company, (b) Debevoise &
Plimpton or (c) other counsel designated by the Company and who shall be
reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Debentures, means, as
of the date of determination, all Debentures theretofore authenticated and
delivered under this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debentures, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of
such Debentures, provided that, if such Debentures are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provisions therefor satisfactory to the Trustee have been
made; and
(iii) Debentures which have been paid pursuant to Section 3.6 or
in exchange for or in lieu of which other Debentures have been
authenticated and delivered
7
<PAGE> 15
pursuant to this Indenture, other than any such Debentures in respect
of which there shall have been presented to the Trustee proof
satisfactory to it that such Debentures are held by a bona fide
purchaser in whose hands such Debentures are valid obligations of the
Company;
provided, however, that Holders of Debentures which cease to be Outstanding by
reason of a call for redemption prior to their Stated Maturity shall
nevertheless be entitled to convert the same or any portion thereof in
accordance with Article XII; and provided, further, that in determining whether
the Holders of the requisite principal amount of the Outstanding Debentures
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, or whether sufficient funds are available for redemption or
for any other purpose, and for the purpose of making the calculations required
by section 313 of the Trust Indenture Act, Debentures owned by the Company or
any other obligor upon the Debentures or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debentures which the Trustee knows
to be so owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect
to such Debentures and that the pledgee is not the Company or any other obligor
upon the Debentures or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of, premium, if any, or interest on any Debentures on behalf
of the Company.
"Payment Obligation", when used with respect to Senior
Indebtedness, means an obligation stated in an agreement, instrument or lease
to pay money (whether for principal, premium, interest, sinking fund, periodic
rent, stipulated value, termination value, liquidated damages or otherwise),
but excluding an obligation to pay money in respect of fees (including, without
limitation, availability, commitment and similar fees) of, or as payment or
reimbursement for expenses (including, without limitation, legal accounting and
ordinary out-of-pocket expenses) incurred by or on behalf of, or as indemnity
for losses, damages, taxes
8
<PAGE> 16
or other indemnity claims of any kind owed to, any holder of Senior
Indebtedness or other party to such agreement, instrument or lease.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Predecessor Debenture" of any particular Debenture means
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Debenture.
"Redemption Date", when used with respect to any Debenture to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Debenture to
be redeemed, in whole or in part, means the price at which it is to be redeemed
pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date other than an Interest Payment Date occurring during an Extension
Period means the close of business on January 15, April 15, July 15 or October
15, as the case may be (whether or not a Business Day), next preceding such
Interest Payment Date; provided that the "Regular Record Date" for the interest
payable on any Interest Payment Date occurring during an Extension Period on
which the Company has elected to make a full or partial payment of accrued
interest on the Debentures means the close of business on January 15, April 15,
July 15 or October 15, as the case may be, next preceding such Interest Payment
Date, it being understood that there shall be no Regular Record Date for any
Interest Payment Date occurring during an Extension Period on which the Company
has not elected to make a full or partial payment of interest accrued on the
Debentures.
"Responsible Officer", when used with respect to the Trustee,
shall mean the chairman or any vice chairman of the board of directors, the
chairman or any vice-chairman of the executive committee of the board of
directors, the
9
<PAGE> 17
chairman of the trust committee, the president, any senior vice president, any
vice president, any assistant vice president, the secretary, any assistant
secretary, any associate, the treasurer, any assistant treasurer, the cashier,
any assistant cashier, any senior trust officer, any trust officer, the
controller, any assistant controller, or any officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with a particular subject.
"Senior Indebtedness" means each of the following, whether
outstanding on the date hereof or hereafter created, incurred or assumed:
(a) any Payment Obligation of the Company in respect of any
indebtedness, directly or indirectly, created, incurred or assumed (i)
for borrowed money or (ii) in connection with the acquisition of any
business, property or asset (including securities), other than any
account payable or other indebtedness created, incurred or assumed in
the ordinary course of business in connection with the obtaining of
materials or services;
(b) any Payment Obligation of the Company in respect of any
lease that would, in accordance with generally accepted accounting
principles, be required to be classified and accounted for as a
capital lease;
(c) any Payment Obligation of the Company in respect of any
interest rate exchange agreement, currency exchange agreement or
similar agreement that provides for payment (whether or not
contingent) over a period or term (including any renewals or
extensions) longer than one year from the execution thereof;
(d) any Payment Obligation of the Company in respect of any
agreement relating to the acquisition (including a sale and buyback)
or lease (including a sale and leaseback) of real or personal property
that provides for payment (whether or not contingent) over a period or
term (including any renewals or extensions) longer than one year from
the execution thereof;
(e) any Payment Obligation of any Subsidiary or of others of
the kind described in the preceding
10
<PAGE> 18
clauses (a) through (d) assumed or guaranteed by the Company or for
which the Company is otherwise responsible or liable; and
(f) any amendment, renewal, extension or refunding of any
Payment Obligation described in the preceding subparagraphs (a)
through (e);
unless in the agreement, instrument or lease in which any such Payment
Obligation is stated it is expressly provided that such Payment Obligation is
not senior in right of payment to the Debentures; provided, however, that
Senior Indebtedness shall not include the 5 1/4% Subordinated Debentures due
1998 issued by American Airlines, Inc. and for which the Company is jointly and
severally liable.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Debenture or
any installment of principal thereof or interest thereon, means the date
specified in such Debenture as the fixed date on which the principal of such
Debenture or such installment of principal or interest is due and payable;
provided that, with respect to any payment of interest on a Debenture, no date
during an Extension Period on which the Company has not elected to make a
partial payment of interest shall be a date of Stated Maturity.
"Subsidiary" means any corporation of which the Company at the
time owns or controls, directly or indirectly, more than 50% of the shares of
outstanding stock having general voting power under ordinary circumstances to
elect a majority of the Board of Directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency).
"Trading Day" means (x) if the applicable security is listed
or admitted for trading on the New York Stock Exchange or another national
security exchange, a day on which the New York Stock Exchange or another
national security exchange is open for business or (y) if the applicable
security is quoted on the National Market System of NASDAQ, a day on which
trades may be made on such National Market System or (z) if the applicable
security is not so listed,
11
<PAGE> 19
admitted for trading or quoted, any day other than a Saturday or Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in effect on the date of this Indenture, except as provided in Section 8.3.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor Trustee replaces it pursuant to the
applicable provisions of this Indenture, and thereafter means such successor
Trustee.
(b) The following terms shall have the meanings specified
in the Sections referred to opposite such term below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
"Act" 1.4(a)
"Applicable Price" 12.11
"Bankruptcy Law" 5.1
"Common Stock Fundamental
Change" 12.11
"Conversion Price" 12.5
"Custodian" 5.1
"Date of Conversion" 12.2
"Defaulted Interest" 3.7(b)
"Event of Default" 5.1
"Expiration Time" 12.5(v)
"Fundamental Change" 12.11
"Non-Stock Fundamental Change" 12.11
"Purchased Shares" 12.5(vi)
"Purchaser Stock Price" 12.11
"Reference Market Price" 12.11
"Register" 3.5
"Registrar" 3.5
"Rights" 12.5(iv)
"Rights Agreement" 12.5(iv)
"Securities" 12.5(iv)
</TABLE>
Section 1.2. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the pro-
12
<PAGE> 20
posed action have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 9.7) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representa-
13
<PAGE> 21
tions with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations as to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 1.4. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgements of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the
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execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Debentures shall be conclusively
proved by the Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Debenture shall bind
every future Holder of the same Debenture and the Holder of every Debenture
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(e) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Debentures shall be computed as
of such record date; provided that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.
Section 1.5. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at AMR Corporation, P.O. Box
619616, Dallas/Fort Worth Airport, Texas 75261-9616 or at any other
address previously furnished in writing to the Trustee by the Company.
Section 1.6. Notice to Holders; Waiver. Where this
Indenture provides for notice to Holders of any event, such notice to the
Holders thereof shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each such
Holder affected by such event, at its address as it appears in the Register,
within the time prescribed for the giving of such notice; provided that public
notice shall also be given in accordance with the rules of the New York Stock
Exchange if required by such rules.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders, and any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.
If by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder.
Any request, demand, authorization, direction, notice, consent
or waiver required or permitted under this Indenture shall be in the English
language.
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Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
Section 1.7. Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.8. Successor and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successor and
assigns, whether so expressed or not.
Any act or proceeding that is required or permitted by any
provision of this Indenture and that is authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the successor or assign of
the Company.
Section 1.9. Separability. In case any provision of this
Indenture or the Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1.10. Benefits of Indenture. Nothing in this
Indenture or in the Debentures, expressed or implied, shall give to any Person,
other than the parties hereto and their successors hereunder and the Holders,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.11. Governing Law. THIS INDENTURE AND THE
DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. This Indenture is subject to the Trust Indenture Act
and if any provision hereof limits, qualifies or conflicts with the Trust
Indenture Act, the Trust Indenture Act shall control.
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Section 1.12. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, Stated Maturity or Maturity of any Debenture, or
the last date on which a Holder has the right to convert his Debentures (or the
right to convert his Debentures at a particular conversion price or rate) shall
not be a Business Day, then, notwithstanding any other provision of this
Indenture or any Debenture, payment of principal, premium, if any or interest
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on such date; provided that no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Stated Maturity or Maturity or on
such last date for conversion, as the case may be.
Section 1.13. No Recourse Against Others. No recourse for
the payment of the principal of or interest on the Debentures, or for any claim
based on the Debentures or this Indenture, and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture or any
indenture supplemental thereto or in any Debenture, or because of the creation
of any indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty otherwise, all
such liability being, by the acceptance of a Debenture by each Holder and as
part of the consideration for the issue of such Debenture, expressly waived and
released.
ARTICLE II
Debenture Form
Section 2.1. Forms Generally. The Debentures and the
certificates of authentication thereon shall be in substantially the form set
forth in Exhibit A attached hereto, which is hereby incorporated in and
expressly made part of this Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may be
required to comply with any law or with any rules promulgated pursuant thereto
or with the rules of any securities exchange or governmental
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agency, or as may, consistently herewith, be determined by the officers
executing such Debentures, as evidenced by their execution of the Debentures.
Any portion of the text of any Debenture may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Debenture.
Section 2.2. Debentures in Global Form. Any Debenture may
provide that it shall represent the aggregate or specified amount of
Outstanding Debentures from time to time endorsed thereon and may also provide
that the aggregate amount of Outstanding Debentures represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a
Debenture in global form to reflect the amount, or any increase or decrease in
the amount, or changes in the rights of Holders, of Outstanding Debentures
represented thereby, shall be made in such manner and by such Person or Persons
as shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 3.3 or 3.4. Subject to the provisions of Section
3.3 and, if applicable, Section 3.4, the Trustee shall deliver and redeliver
any security in permanent global form in the manner and upon instructions given
by the Person or Persons specified therein or in the applicable Company Order.
Any instructions by the Company with respect to endorsement or delivery or
redelivery of a Debenture in global form shall be in writing but need not
comply with Section 1.2 hereof and need not be accompanied by an Opinion of
Counsel.
The provisions of the last paragraph of Section 3.3 shall
apply to any Debenture in global form if such Debenture was never issued and
sold by the Company and the Company delivers to the Trustee the Debenture in
global form together with written instructions (which need not comply with
Section 1.2 and need not be accompanied by an Opinion of Counsel) with regard
to the reduction in the principal amount of Debentures represented thereby,
together with the written statement contemplated by the last paragraph of
Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7,
payment of principal of, premium, if any, and interest on any Debenture in
permanent global form shall be made to the Person or Persons specified therein.
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Section 2.3. Form of Legend for Debentures in Global Form.
Any Debenture in global form authenticated and delivered hereunder shall bear a
legend in substantially the following form, or such other form as deemed
necessary or desirable by the Company and specified in a Company order
delivered to the Trustee:
This Debenture is in global form within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. Unless and until it is
exchanged in whole or in part for Debentures in certificated form,
this Debenture may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or
by the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
ARTICLE III
The Debentures
Section 3.1. Title and Terms. (a) The aggregate principal
amount of Debentures which may be authenticated and delivered under this
Indenture is limited to $____________ except for Debentures authenticated and
delivered upon registration and transfer of, or in exchange for, or in lieu of,
other Debentures pursuant to Section 3.4, 3.5, 3.6, 8.6, 10.8 or 12.2.
(b) The Debentures shall be known and designated as the "___%
Convertible Subordinated Quarterly Income Capital Securities due 2024" of the
Company. Their Stated Maturity shall be August 1, 2024, and they shall bear
interest as set forth below, at the rate per annum of 6.0% from and including
August 1, 1994 to but excluding __________* and at the rate per annum of ___%,
from ______________* or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, until the principal thereof
becomes due and payable, and at such rate on any overdue principal and premium
and (to the extent that the payment of
____________________
* Insert first day after Expiration Date of Exchange Offer.
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such interest shall be legally enforceable) on any overdue installment of
interest.
(c) Every Debenture shall be dated the date of its
authentication and, except as otherwise provided in this Section, shall bear
interest, payable (subject to paragraph (d) below) quarterly in arrears on
February 1, May 1, August 1 and November 1 of each year, commencing November 1,
1994, from the February 1, May 1, August 1 or November 1, as the case may be,
next preceding the date of such Debenture to which interest on the Debentures
has been paid or duly provided for, unless the date of such Debenture is a
February 1, May 1, August 1 or November 1 to which interest has been paid or
duly provided for, in which case from such date, or unless no interest has been
paid or duly provided for on the Debentures, in which case from August 1, 1994.
However, when there is no existing default in the payment of interest on the
Debentures, each Debenture authenticated after the Regular Record Date for any
Interest Payment Date, but prior to such Interest Payment Date shall be dated
the date of its authentication but shall bear interest from such Interest
Payment Date; provided, however, that if and to the extent that the Company
shall default in the payment of the interest due on such Interest Payment Date,
then all such Debentures shall bear interest from the February 1, May 1, August
1 or November 1, as the case may be, to which interest has been paid or duly
provided for next preceding such Interest Payment Date, unless no interest has
been paid or duly provided for on the Debentures, in which case from August 1,
1994.
(d) Notwithstanding anything contained in this Indenture to
the contrary, the Company shall have the right at any time during the term of
the Debentures, so long as the Company is not in default in the payment of
interest on the Debentures, to extend the interest payment period for an
Extension Period. Except as provided in the next succeeding sentence, no
interest shall be due and payable during an Extension Period, but at the end of
each Extension Period the Company shall pay all interest then accrued and
unpaid on the Debentures, together with interest thereon, compounded quarterly
(commencing with the first Interest Payment Date in such Extension Period), at
the rate specified for the Debentures to the extent permitted by applicable
law. Prior to the termination of any Extension Period, the Company may (i) on
any Interest Payment Date pay all or any portion of the interest accrued on the
Debentures as provided in Section 3.1(c) to holders of record on the Record
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Date for such Interest Payment Date or (ii) from time to time further extend
the interest payment period as provided in the last sentence of this paragraph,
provided that any such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive calendar quarters
from the last date to which interest on the Debentures was paid in full. If
the Company shall elect to pay all of the interest accrued on the Debentures on
an Interest Payment Date during any Extension Period, such Extension Period
shall automatically terminate on such Interest Payment Date. Upon the
termination of any Extension Period and the payment of all amounts of interest
then due, the Company may select a new Extension Period, subject to the above
requirements. The Company shall cause the Trustee to give notice to the
Holders, in the manner provided in Section 1.6, not less than five Business
Days prior to the earlier of (x) the January 15, April 15, July 15 or October
15 next preceding the applicable Interest Payment Date and (y) the date on
which the Company or the Trustee is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization of the Regular
Record Date and payment date for such related interest payment period, of
(1) the Company's election to initiate an Extension Period,
and the duration thereof,
(2) the Company's election to extend any Extension Period
beyond the Interest Payment Date on which such Extension Period is
then scheduled to terminate, and the duration of such extension, and
(3) the Company's election to make a full or partial payment
of interest accrued on the Debentures on any Interest Payment Date
during any Extension Period and the amount of such payment.
(e) The principal and the Redemption Price of, and interest
on, the Debentures shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York; provided, however, that at the
option of the Company, interest on any Debentures may be paid (i) by check
mailed to the address of the Person entitled thereto as it shall appear on the
Register or (ii) by wire transfer to an account maintained by the Person
entitled thereto as specified on the Register.
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(f) The Debentures shall be redeemable as provided in Article
X.
(g) The Debentures shall be subordinated in right of payment
to certain other indebtedness of the Company as provided in Article XI.
(h) The Debentures shall be convertible into Common Stock as
provided in Article XII.
(i) One or more Debentures representing all or any portion of
the authorized principal amount of the Debentures may be issued in global form.
The Company hereby designates The Depository Trust Company as the initial
Depositary for any such Debentures issued in global form.
(j) Each Debenture issued hereunder shall provide that the
Company and, by its acceptance of a Debenture or a beneficial interest therein,
the Holder of, and any Person that acquires a beneficial interest in, such
Debenture agree that for United States federal, state and local tax purposes it
is intended that such Debenture constitute indebtedness.
Section 3.2. Denominations. The Debentures shall be issuable
in denominations of $1,000 and any integral multiple thereof.
Section 3.3. Execution, Authentication and Delivery.
Debentures shall be executed on behalf of the Company by the Chairman of the
Board, the President, any Executive Vice President, any Senior Vice President
or any Vice President. The Company's seal shall be reproduced on the
Debentures and shall be attested by the Corporate Secretary or any Assistant
Secretary. The signatures of any of these officers on the Debentures may be
manual or facsimile.
Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
The definitive Debentures shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities ex-
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change, all as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.
At any time and from time to time, the Company may deliver
Debentures executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Debentures and
the Trustee in accordance with the Company Order shall authenticate and deliver
such Debentures.
The Company may execute and the Trustee shall, in accordance
with this Section and the Company Order with respect to the Debentures,
authenticate and deliver one or more Debentures in global form that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of the Outstanding Debentures to be represented by such
Debenture or Debentures in global form, (ii) shall be registered in the name of
the Depositary for such Debenture or Debentures in global form or the nominee
of such Depositary, (iii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instruction and (iv) shall bear the legend set
forth in Section 2.3.
Each Depositary for a Debenture in global form must, at the
time of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934 and any
other applicable statute or regulation. The Trustee shall have no
responsibility to determine if the Depositary is so registered. Each
Depositary shall enter into an agreement with the Trustee governing the
respective duties and rights of such Depositary and the Trustee with regard to
Debentures issued in global form.
No Debenture shall be entitled to any benefits under this
Indenture or be valid or obligatory for any purpose until authenticated by the
manual signature of one of the authorized officers of the Trustee or an
Authenticating Agent. Such signature upon any Debenture shall be conclusive
evidence, and the only evidence, that such Debenture has been duly
authenticated and delivered under this Indenture and is entitled to the
benefits of this Indenture.
Notwithstanding the foregoing, if any Debenture shall have
been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall
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deliver such Debenture to the Trustee for cancellation as provided in Section
3.9 together with a written statement (which need not comply with Section 1.2
and need not be accompanied by an Opinion of Counsel) stating that such
Debenture has never been issued and sold by the Company, for all purposes of
this Indenture such Debenture shall be deemed never to have been authenticated
and delivered hereunder and shall not be entitled to the benefits of this
Indenture.
Section 3.4. Temporary Debentures. Pending the preparation
of definitive Debentures, the Company may execute and, upon Company Order, the
Trustee shall authenticate and deliver temporary Debentures which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor and form of the definitive
Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Debentures may determine, as conclusively evidenced by their
execution of such Debentures.
If temporary Debentures are issued, the Company will cause
definitive Debentures to be prepared without unreasonable delay. After
preparation of definitive Debentures, the temporary Debentures shall be
exchangeable for definitive Debentures upon surrender of the temporary
Debentures at the office or agency of the Company in the borough of Manhattan,
The City of New York, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Debentures of authorized denominations. Until
so exchanged, the temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures.
Section 3.5. Registration, Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the "Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Debentures
and the registration of transfers of Debentures and which shall be made
available to the Company by the Trustee upon written request of the Company
delivered to the Trustee. The Register shall be in written form or any other
form capable of being converted into written form within a reasonable time.
The Trustee is hereby appointed "Registrar"
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for the purpose of registering Debentures and transfers of Debentures as herein
provided.
Upon surrender for registration of transfer of any Debenture
at the office or agency maintained pursuant to Section 9.2, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Debentures, of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for
other Debentures, of any authorized denominations and of a like aggregate
principal amount containing identical terms and provisions, upon surrender of
the Debentures to be exchanged at such office or agency. Whenever any
Debentures are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Debentures which the Holder making
the exchange is entitled to receive.
Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for Debentures in certificated
form, a Debenture in global form representing all or a portion of the
Debentures may not be transferred except as a whole by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the Debentures or if at any
time the Depositary shall no longer be eligible under Section 3.3, the Company
shall appoint a successor Depositary. If a successor Depositary is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, Section 3.1(i) shall no longer be
effective and the Company shall execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of certificated Debentures,
shall authenticate and deliver, Debentures in certificated form, in authorized
denominations and in an aggregate principal amount equal to the principal
amount of the Debenture or Debentures in global form in exchange for such
Debenture or Debentures in global form.
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The Company may at any time in its sole discretion determine
that Debentures issued in global form shall no longer be represented by such a
Debenture or Debentures in global form. In such event the Company shall
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of certificated Debentures, shall authenticate and
deliver, Debentures in certificated form, in authorized denominations and in an
aggregate principal amount equal to the principal amount of the Debenture or
Debentures in global form in exchange for such Debenture or Debentures in
global form.
The Depositary may surrender a Debenture in global form in
exchange in whole or in part for Debentures in certificated form on such terms
as are acceptable to the Company and such Depositary. Thereupon, the Company
shall execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to each Person specified by such Depositary a new
certificated Debenture or Debentures, of any authorized denomination
as requested by such Person in aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Debenture in
global form; and
(ii) to such Depositary a new Debenture in global form in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Debenture in global form and the aggregate
principal amount of certificated Debentures delivered to Holders
thereof.
Upon the exchange of a Debenture in global form for Debentures
in certificated form, such Debenture in global form shall be cancelled by the
Trustee. Debentures in certificated form issued in exchange for a Debenture in
global form pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Debentures to the Persons in whose names such
Debentures are so registered.
Whenever any Debentures are surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Debentures which the Holder making the exchange is entitled to receive.
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All Debentures issued upon any registration of transfer or
upon any exchange of Debentures shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debentures surrendered upon such registration of transfer or
exchange.
Every Debenture presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Registrar and the Trustee
duly executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or for any exchange of Debentures, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration or transfer or exchange of
Debentures, other than exchanges pursuant to Section 3.4 or 10.7 not involving
any transfer.
The Company shall not be required (i) to issue, register the
transfer of, or exchange any Debentures for a period beginning at the opening
of business 15 days before any selection for redemption of Debentures and
ending at the close of business on the date of mailing of a notice of
redemption of Debentures; or (ii) to register the transfer of or exchange any
Debenture so selected for redemption, in whole or in part, except the
unredeemed portion of any Debenture being redeemed in part; provided, that
nothing herein contained shall be deemed to restrict the right to convert any
Debentures or portion thereof at any time in accordance with Article XII.
Section 3.6. Replacement Debentures. If there shall be
delivered to the Company and the Trustee (i) evidence to their satisfaction of
the destruction, loss or theft of any Debenture and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Trustee that such Debenture has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver in lieu of
any such destroyed, lost or stolen Debenture, a replacement Debenture of like
terms and principal amount, bearing a number not contemporaneously outstanding;
pro-
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vided, however, that if any such mutilated, destroyed, lost or stolen Debenture
shall have matured or shall be about to mature, or shall have been selected or
called for redemption, or if the applicant shall desire to convert such
Debenture pursuant to the provisions of Article XII hereof, instead of issuing
a substitute Debenture, the Company may, with the consent of the Holder, pay or
convert the same, as the case may be, without surrender thereof, except that
such mutilated Debenture shall be surrendered.
Upon the issuance of any new Debenture under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of
any destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Debentures.
Section 3.7. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Debenture which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Debenture (or one or more Predecessor Debentures) is registered at
the close of business on the Regular Record Date for such interest; provided,
however, that at the option of the Company, interest on any Debentures may be
paid (i) by check mailed to the address of the Person entitled thereto as it
shall appear on the Register or (ii) by wire transfer to an account maintained
by the Person entitled thereto as specified in the Register.
(b) Any interest on any Debenture which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date other
than an Interest Payment Date during an Extension Period on which the Company
has not
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elected to make a full or partial payment of interest accrued on the Debentures
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names such Debentures (or
their respective Predecessor Debentures) are registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the trustee for
such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause (1) provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as
it appears in the Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names
the Debentures (or their respective Predecessor Debentures) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest to the Persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a specified date in any other lawful manner not
inconsistent with the re-
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quirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause (2), such manner of payment shall be
deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section
and Section 3.1, each Debenture delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Debenture shall carry the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Debenture.
(d) In the case of any Debenture which is converted after
any Regular Record Date and on or prior to the next succeeding Interest Payment
Date, interest whose Stated Maturity is such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Debenture (or one or more Predecessor Debentures)
is registered at the close of business on such Regular Record Date.
Section 3.8. Persons Deemed Owners. Prior to due presentment
of any Debenture for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Debenture is registered as the owner of such Debenture for the purpose of
receiving payment of principal of, premium, if any, and (subject to Section
3.7) interest on such Debenture and for all other purposes whatsoever, whether
or not such Debenture be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee or any agent of the Company
or the Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Debenture in global form, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Debenture in global form,
nothing herein shall prevent the Company or the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any Deposi-
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tary (or its nominee), as a Holder, with respect to such Debenture in global
form or impair, as between such Depositary and owners of beneficial interests
in such Debenture in global form, the operation of customary practices
governing the exercise of the rights of such Depositary (or its nominee) as
Holder of such Debenture in global form.
Section 3.9. Cancellation. The Company at any time may
deliver Debentures to the Trustee for cancellation. The Registrar and any
Paying Agent shall forward to the Trustee any Debentures surrendered to them
for replacement, for registration of transfer, or for exchange, conversion or
payment. The Trustee shall cancel all Debentures surrendered for replacement,
for registration of transfer, or for exchange, payment, redemption, conversion
or cancellation and may destroy cancelled Debentures and, if so destroyed,
shall issue a certificate of destruction to the Company. The Company may not
issue new Debentures to replace Debentures that it has paid or delivered to the
Trustee for cancellation.
Section 3.10. Computation of Interest. Interest on the
Debentures shall be computed on the basis of a 360-day year of twelve 30-day
months and in the case of any installment of interest based on a period of less
than one full calendar month, on the basis of the actual number of days elapsed
in such period.
ARTICLE IV
Satisfaction and Discharge
Section 4.1. Termination of Company's Obligations Under the
Indenture. This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange or conversion of Debentures and replacement of Debentures which may
have been lost, stolen or mutilated as herein expressly provided for) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(1) either
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(A) all Debentures previously authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen
and which have been replaced, paid or converted as provided in Section
3.6 and (ii) Debentures for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 9.3) have been delivered to the Trustee for
cancellation; or
(B) all Debentures not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on Debentures not theretofore
delivered to the Trustee for cancellation, for principal, premium, if
any, and interest, with respect thereto, to the date of such deposit
(in the case of Debentures which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligation of the Company to the Trustee and any predecessor Trustee under
Section 6.8, the obligations of the Company to any Authenticating Agent under
Sec-
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tion 6.13, the obligations of the Company to the Holders under Article XII and,
if money shall have been deposited with the Trustee pursuant to subclause (B)
of clause (1) of this Section, the obligations of the Trustee under Section 4.2
and the last paragraph of Section 9.3 shall survive.
Section 4.2. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 9.3, all money deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal, premium, if any and any interest for whose
payment such money has been deposited with or received by the Trustee, but such
money need not be segregated from other funds except to the extent required by
law.
ARTICLE V
Defaults and Remedies
Section 5.1. Events of Default. An "Event of Default" occurs
if (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) the Company defaults in the payment of interest on
any Debenture when the same becomes due and payable and such default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal
of or any premium on any Debenture when the same becomes due and
payable at its Maturity or on redemption or otherwise and in each case
such default continues for a period of ten days;
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(3) the Company defaults in the performance of, or
breaches, any covenant or warranty of the Company in this Indenture
(other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with),
and such default or breach continues for a period of 60 days after
there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Debentures, a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder;
(4) the Company defaults under the terms of any agreement
or instrument evidencing or under which the Company has at the date of
this Indenture or hereafter outstanding any indebtedness for borrowed
money and such indebtedness shall be accelerated so that the same
shall be or become due and payable prior to the date on which the same
would otherwise become due and payable and the aggregate principal
amount thereof so accelerated exceeds $150,000,000 and such
acceleration is not rescinded or annulled within ten days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Outstanding Debentures a
written notice specifying such default and stating that such notice is
a "Notice of Default" hereunder (it being understood however, that,
subject to the provisions of Section 6.1, the Trustee shall not be
deemed to have knowledge of such default under such agreement or
instrument unless either (A) a Responsible Officer of the Trustee
shall have actual knowledge of such default or (B) a Responsible
Officer of the Trustee shall have received written notice thereof from
the Company, from any Holder, from the holder of any such indebtedness
or from the trustee under any such agreement or other instrument);
provided, however, that if such default under such agreement or
instrument is remedied or cured by the Company or waived by the
holders of such indebtedness, then the Event of Default hereunder by
reason thereof shall be deemed likewise to have been thereupon
remedied, cured or waived without further action upon the part of
either the Trustee or any of such Holders;
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(5) the Company pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case, (B) consents to the
entry of an order for relief against it in an involuntary case, (C)
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (D) makes a general assignment
for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (A) is for relief against the
Company in an involuntary case, (B) appoints a Custodian of the Company
or for all or substantially all of its property, or (C) orders the
liquidation of the Company; and the order or decree remains unstayed
and in effect for 90 days.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 5.2. Acceleration; Rescission and Annulment. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of all of the Outstanding Debentures,
by written notice to the Company (and, if given by the Holders, to the
Trustee), may declare the principal of all the Debentures to be due and payable
and upon any such declaration such principal shall be immediately due and
payable.
At any time after such a declaration of acceleration has been
made and before a judgement or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in aggregate principal amount of the Outstanding Debentures, by
written notice to the Trustee, may rescind and annul such declaration and its
consequences if all existing Defaults and Events of Default, other than the
non-payment of the principal of Debentures which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.7. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
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Section 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if
(1) default is made in the payment of any interest on any
Debenture when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of
(or premium, if any, on) any Debenture at the Maturity thereof and
such default continues for a period of 10 days,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable on such
Debentures for principal, premium, if any, and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal, premium, if any, and on any overdue interest, at the rate or rates
prescribed therefor in such Debentures and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
Section 5.4. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Holders of
Debentures allowed in any judicial proceedings relating to the Company, its
creditors or its property.
Section 5.5. Trustee May Enforce Claims Without Possession of
Debentures. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the possession
of any of the Debentures or the production thereof in any proceeding relating
thereto.
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Section 5.6. Delay or Omission Not Waiver. No delay or
omission by the Trustee or any Holder of any Debentures to exercise any right
or remedy accruing upon an Event of Default shall impair any such right or
remedy or constitute a waiver of or acquiescence in any such Event of Default.
Section 5.7. Waiver of Past Defaults. The Holders of a
majority in aggregate principal amount of Outstanding Debentures by notice to
the Trustee may waive on behalf of the Holders of all Debentures a past Default
or Event of Default and its consequences except (i) a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on any
Debenture or (ii) in respect of a covenant or provision hereof which pursuant
to Section 8.2 cannot be amended or modified without the consent of the Holder
of each Outstanding Debenture adversely affected. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture.
Section 5.8. Control by Majority. The Holders of a majority
in aggregate principal amount of the Outstanding Debentures shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it; provided, however, that (i) the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, (ii) the Trustee may refuse to
follow any direction that is unduly prejudicial to the rights of the Holders of
Debentures not consenting, or that would in the good faith judgment of the
Trustee have a substantial likelihood of involving the Trustee in personal
liability and (iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.9. Limitation on Suits by Holders. No Holder of
any Debenture shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(1) the Holder has previously given written notice to the
Trustee of a continuing Event of Default;
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(2) the Holders of at least 25% in aggregate principal
amount of the Outstanding Debentures have made a written request to
the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense to be, or which may be, incurred by the Trustee in pursuing
the remedy;
(4) the Trustee for 60 days after its receipt of such
notice, request and the offer of indemnity has failed to institute any
such proceedings; and
(5) during such 60 day period, the Holders of a majority
in aggregate principal amount of the Outstanding Debentures have not
given to the Trustee a direction inconsistent with such written
request.
No one or more Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holders of Debentures, or
to obtain or to seek to obtain priority or preference over any other Holders of
Debentures or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all Holders of
Debentures.
Section 5.10. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, but subject to Section
9.2, the right of any Holder of a Debenture to receive payment of principal of,
premium, if any, and, subject to Sections 3.5 and 3.7, interest on the
Debenture, on or after the respective due dates expressed in the Debenture (or,
in case of redemption, on the redemption dates) or, subject to Section 5.9, to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 5.11. Application of Money Collected. If the Trustee
collects any money pursuant to this Article, it shall pay out the money in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal, premium, if any, or
interest, upon presentation of the Debentures and the
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notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
First: to the Trustee for amounts due under Section 6.8;
Second: to Holders of Debentures in respect of which or for
the benefit of which such money has been collected for amounts due and
unpaid on such Debentures for principal of, premium, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Debentures for
principal, premium, if any, and interest, respectively; and
Third: to the Company.
Section 5.12. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 5.13. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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ARTICLE VI
The Trustee
Section 6.1. Rights of Trustee. Subject to the provisions of
the Trust Indenture Act:
(a) The Trustee may rely and shall be protected in acting
or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper party or
parties. The Trustee need not investigate any fact or matter stated
in the document.
(b) Any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order (other than delivery of any Debenture to the Trustee for
authentication and delivery pursuant to Section 3.3, which shall be
sufficiently evidenced as provided therein) and any resolution of the
Board of Directors may be sufficiently evidenced by a Board
Resolution.
(c) Before the Trustee acts or refrains from acting, it
may consult with counsel or require an Officers' Certificate. The
Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on a Board Resolution, the written advice of
counsel acceptable to the Company and the Trustee, a certificate of an
Officer or Officers delivered pursuant to Section 1.2, an Officers'
Certificate or an Opinion of Counsel.
(d) The Trustee may act through agents or attorneys and
shall not be responsible for the misconduct or negligence of any agent
or attorney appointed with due care.
(e) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(f) The Trustee shall not be required to expend or risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of its
rights or powers, if it shall have reasonable grounds for believing
that
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repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
Section 6.2. Trustee May Hold Debentures. The Trustee, any
Paying Agent, any Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may
otherwise deal with the Company, an Affiliate or Subsidiary with the same
rights it would have if it were not Trustee, Paying Agent, Registrar or such
other agent.
Section 6.3. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
Section 6.4. Trustee's Disclaimer. The recitals contained
herein and in the Debentures, except the Trustee's certificate of
authentication, shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Debentures. The Trustee shall not be accountable for the Company's use of the
proceeds from the Debentures or for monies paid over to the Company pursuant to
the Indenture.
Section 6.5. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall, within 90 days
after it occurs, transmit, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, notice of all uncured Defaults known to it;
provided, however, that, except in the case of a Default in payment on the
Debentures, the Trustee may withhold the notice if and so long as a Responsible
Officer in good faith determines that withholding such notice is in the
interests of Holders of Debentures; provided, further, that in the case of any
default or breach of the character specified in Section 5.1(3), no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.
Section 6.6. Reports by Trustee to Holders. Within 60 days
after each May 15 of each year commencing with the first May 15 after the first
issuance of Debentures pursuant to this Indenture, the Trustee shall transmit
by
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mail to all Holders of Debentures as provided in Section 313(c) of the Trust
Indenture Act a brief report dated as of such May 15 if required by and in
compliance with Section 313(a) of the Trust Indenture Act.
Section 6.7. Debentureholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders of Debentures. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee
semiannually on or before the last day of June and December in each year, and
at such other times as the Trustee may request in writing, a list, in such form
and as of such date as the Trustee may reasonably require, containing all the
information in the possession or control of the Registrar, the Company or any
of its Paying Agents other than the Trustee as to the names and addresses of
Holders of Debentures.
Section 6.8. Compensation and Indemnity. (a) The Company
shall pay to the Trustee from time to time reasonable compensation for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it
in connection with the performance of its duties under this Indenture, except
any such expense as may be attributable to its negligence or bad faith. Such
expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee for, and hold
it harmless against, any loss or liability incurred by it arising out of or in
connection with its acceptance or administration (including the exercise or
performance of any of its powers or duties) of the trust or trusts hereunder.
The Trustee shall notify the Company promptly of any claim for which it may
seek indemnity. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent.
(c) The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence, bad faith or breach or non-compliance with any of its duties
hereunder.
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(d) To secure the payment obligations of the Company
pursuant to this Section, the Trustee shall have a lien prior to the Debentures
on all money or property held or collected by the Trustee, except that held in
trust to pay principal, premium, if any, and interest on particular Debentures.
Section 6.9. Replacement of Trustee. (a) The resignation or
removal of the Trustee and the appointment of a successor Trustee shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in Section 6.10.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Holders of a majority in aggregate principal
amount of the Outstanding Debentures may remove the Trustee by so notifying the
Trustee and the Company and may appoint a successor Trustee with the Company's
consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Debenture for at
least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any Holder of a
Debenture who has been a bona fide Holder of a Debenture for at least
six months; or
(3) the Trustee becomes incapable of acting, is adjudged
a bankrupt or an insolvent or a receiver or public officer takes
charge of the Trustee or its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 315(e) of the Trust Indenture Act, any Holder who has been a bona
fide Holder of a Debenture for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee and shall comply with the applicable requirements
of Section 6.10. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Debentures delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 6.10,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 6.10, any Holder who has been a bona fide Holder of a Debenture for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
Section 6.10. Acceptance of Appointment by Successor. (a)
In case of the appointment hereunder of a successor Trustee, every such
successor Trustee shall execute, acknowledge and deliver to the Company and to
the retiring Trustee an instrument accepting such appointment. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee, without further act, deed or conveyance, shall become vested
with all the rights, powers and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
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(b) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be qualified
and eligible under the Trust Indenture Act.
(d) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee in the
manner provided for notices to the Holders of Debentures in Section 1.6. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust office.
Section 6.11. Eligibility; Disqualification. There shall at
all times be a Trustee hereunder which shall be eligible to act as Trustee
under Section 310(a)(1) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000, which Trustee may be organized
under the law of any government or government subdivision. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial, District of Columbia, foreign or
other governmental supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In
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case any Debentures shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Debentures so authenticated with the same effect as if such successor Trustee
had itself authenticated such Debentures.
Section 6.13. Appointment of Authenticating Agent. The
Trustee may appoint an Authenticating Agent or Agents which shall be authorized
to act on behalf of the Trustee to authenticate Debentures issued upon original
issue exchange, registration of transfer or partial redemption thereof, and
Debentures so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposed as if authenticated by the
Trustee hereunder. Any such appointment shall be evidenced by an instrument in
writing signed by a Responsible Officer of the Trustee, a copy of which
instrument shall be promptly furnished to the Company. Wherever reference is
made in this Indenture to the authentication and delivery of Debentures by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing under the laws of
the United States of America or of any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $1,500,000 and subject to supervision or
examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conver-
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sion or consolidation to which such Authenticating Agent shall be a party, or
any corporation succeeding to the corporate agency or corporate trust business
of an Authenticating Agent, shall continue to be an Authenticating Agent,
provided such corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice of termination to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Debentures in the
manner set forth in Section 1.6. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its reasonable
expenses for its services under this Section.
If an appointment is made pursuant to this Section, the
Debentures may have endorsed thereon, in addition to or in lieu of the
Trustee's certificate of authentication, an alternate certificate of
authentication substantially in the following form:
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This is one of the Debentures issued under the within-
mentioned Indenture.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By______________________________________
as Authenticating Agent
By______________________________________
Authorized Officer
ARTICLE VII
Consolidation, Merger or Sale by the Company
Section 7.1. Consolidation, Merger or Sale of Assets
Permitted. The Company may merge or consolidate with or into any other
corporation or sell, convey, transfer or otherwise dispose of all or
substantially all of its assets to any person, firm or corporation, if (i) (A)
in the case of a merger or consolidation, the Company is the surviving
corporation or (B) in the case of a merger or consolidation where the Company
is not the surviving corporation and in the case of any sale, conveyance or
other disposition, the successor corporation is a corporation organized and
existing under the laws of the United States or a State thereof and such
corporation expressly assumes by supplemental indenture all the obligations of
the Company under the Debentures and under this Indenture, (ii) immediately
thereafter, giving effect to such merger or consolidation, or such sale,
conveyance, transfer or other disposition, no Default or Event of Default shall
have occurred and be continuing and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such merger, consolidation, sale, conveyance, transfer or other disposition
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with. In the event of the
assumption by a successor corporation of the obligations of the Company as
provided in clause (i)(B) of the immediately preceding sentence, such successor
corporation shall succeed to and be substituted for the Company here-
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under and under the Debentures and all such obligations of the Company shall
terminate.
ARTICLE VIII
Supplemental Indentures
Section 8.1. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company and the Trustee, at
any time and from time to time, may enter into indentures supplemental hereto,
in form reasonably satisfactory to the Trustee, for any of the following
purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants
and obligations of the Company herein and in the Debentures; or
(2) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Debenture Outstanding; or
(5) to secure the Debentures; or
(6) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee pursuant to the
requirements of Section 6.10; or
(7) to provide for uncertificated Debentures in addition
to or in place of certificated Debentures so long as such
uncertificated Debentures are in registered form for United States
federal income tax purposes; or
(8) to correct or supplement any provision herein which may
be inconsistent with any other provision herein; or
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(9) to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Debentures; or
(10) to cure any ambiguity or correct any mistake; or
(11) to comply with any requirement of the Commission in
connection with the qualification of this Indenture under the Trust
Indenture Act.
Section 8.2. With Consent of Holders. With the written
consent of the Holders of a majority of the aggregate principal amount of the
Outstanding Debentures, the Company and the Trustee may enter into an indenture
or indentures supplemental hereto to add any provisions to or to change or
eliminate any provisions of this Indenture or of any other indenture
supplemental hereto or to modify the rights of the Holders of Debentures;
provided, however, that without the consent of the Holder of each Outstanding
Debenture affected thereby, an amendment under this Section may not:
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Debenture, or
reduce the principal amount thereof or the rate of interest thereon or
any premium payable upon the redemption thereof, or change the coin or
currency in which any Debentures or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date);
(2) reduce the percentage in principal amount of the
Outstanding Debentures, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture;
(3) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 9.2; or
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(4) make any change in Section 5.7 or this 8.2 except to
increase any percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived except with the consent of
the Holders of each Outstanding Debenture affected thereby; or
(5) adversely affect the right to convert Debentures as
provided in Article XII hereof.
It is not necessary under this Section 8.2 for the Holders to
consent to the particular form of any proposed supplemental indenture, but it
is sufficient if they consent to the substance thereof.
Section 8.3. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Debentures shall be set forth in a
supplemental indenture that complies with the Trust Indenture Act as then in
effect.
Section 8.4. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 8.5. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 8.6. Reference in Debentures to Supplemental
Indentures. Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Debentures so modified as to
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conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures.
ARTICLE IX
Covenants
Section 9.1. Payment of Principal, Premium, if any, and
Interest. The Company will duly and punctually pay the principal of, premium,
if any, and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture. An installment of principal, premium, if any,
or interest shall be considered paid on the date it is due if the Trustee or
Paying Agent holds on that date money designated for and sufficient to pay the
installment.
Section 9.2. Maintenance of Office or Agency. The Company
will maintain one or more offices or agencies in the Borough of Manhattan, The
City of New York, New York, where Debentures may be presented or surrendered
for payment, and one or more offices or agencies in the Borough of Manhattan,
The City of New York, New York, where Debentures may be surrendered for
registration of transfer or exchange or for conversion and where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of any such office or agency. If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Trustee shall initially serve as Paying Agent.
Section 9.3. Money for Debentures to Be Held in Trust;
Unclaimed Money. If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of, premium, if any, or
interest on any of the Debentures, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming
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due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee in writing of its action
or failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on Debentures in trust for
the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Debentures) in the making of any
payment of principal, premium, if any, or interest on the Debentures;
and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of any principal, premium or
interest on any Debenture and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Debenture shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of
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the Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York or cause to be
mailed to such Holder, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 9.4. Corporate Existence. Subject to Article VII,
the Company will at all times do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and its
rights and franchises; provided that nothing in this Section 9.4 shall prevent
the abandonment or termination of any right or franchise of the Company if, in
the opinion of the Company, such abandonment or termination is in the best
interests of the Company.
Section 9.5. Reports by the Company. The Company covenants:
(a) to file with the Trustee, within 30 days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934, as
amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file
with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports
which may be required pursuant to section 13 of the Securities
Exchange Act of 1934, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
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(b) to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to time
by the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture, as may be required from time
to time by such rules and regulations; and
(c) to transmit to all Holders of Debentures, within 30
days after the filing thereof with the Trustee, in the manner and to
the extent provided in section 313(c) of the Trust Indenture Act, such
summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this
Section 9.6, as may be required by rules and regulations prescribed
from time to time by the Commission.
Section 9.6. Annual Review Certificate. The Company
covenants and agrees to deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, a brief certificate from the principal
executive officer, principal financial officer, or principal accounting officer
as to his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this Section 9.7, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
Section 9.7. Limitation on Dividends and Capital Stock
Acquisitions. The Company covenants and agrees that, if at any time it has
failed to make any payment of interest, principal or premium on the Debentures
when due (after giving effect to any grace period for payment thereof as
provided in Section 5.1), or the Company has exercised its right to extend the
interest payment period for an Extension Period as provided in Section 3.1(d),
the Company will not, until all defaulted interest on the Debentures and all
principal and premium, if any, then due and payable on the Debentures shall
have been paid in full or such Extension Period has terminated, (i) declare,
set aside or pay any dividend or distribution on any capital stock of the
Company (except for dividends or distributions in shares of its capital stock
or rights to acquire shares of its capital stock), or (ii) repurchase, redeem
or otherwise acquire, or make any sinking fund payment for the purchase or
redemption
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of, any shares of its capital stock (except by conversion into or exchange for
shares of its capital stock and except for a redemption, purchase or other
acquisition of shares of its capital stock made for the purpose of an employee
incentive plan or benefit plan of the Company or any of its subsidiaries);
provided, however, that any moneys theretofore deposited in any sinking fund
with respect to any preferred stock of the Company in compliance with this
Section 9.7 and the provisions of such sinking fund may thereafter be applied
to the purchase or redemption of such preferred stock in accordance with the
terms of such sinking fund without regard to the restrictions in this Section
9.7.
ARTICLE X
Redemption
Section 10.1. Right of Redemption. The Company may, at its
option, redeem all, or from time to time any part of the Debentures on any date
on or after February 1, 1996 and prior to Maturity by payment of the Redemption
Price specified in the form of Debenture attached hereto as Exhibit A, together
with accrued interest to the Redemption Date.
Section 10.2. Applicability of Article. Redemption of
Debentures at the election of the Company, or permitted by any provision of
this Indenture, shall be made in accordance with this Article.
Section 10.3. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Debentures shall be evidenced by or
pursuant to a Board Resolution. In the case of any redemption at the election
of the Company of less than all the Debentures, the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Debentures to be redeemed.
Section 10.4. Selection of Debentures to Be Redeemed. If
less than all the Debentures are to be redeemed, the Company, not more than 45
days prior to the redemption date, shall select the Debentures to be redeemed
by lot or pro rata or in such other manner permitted by the rules of the New
York Stock Exchange as the Board of Directors may determine. The Company shall
make the selection
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from Debentures that are Outstanding and that have not previously been called
for redemption and may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Debentures or any integral
multiple thereof) of the principal amount of Debentures of a denomination
larger than the minimum authorized denomination for Debentures.
For purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debentures redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debentures which has been or is to be
redeemed.
Section 10.5. Notice of Redemption. Notice of redemption
shall be given in the manner provided in Section 1.6 not less than 30 days nor
more than 60 days prior to the Redemption Date to the Holders of the Debentures
to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Debentures are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Debenture or Debentures to be
redeemed;
(4) in case any Debenture is to be redeemed in part only,
the notice which relates to such Debenture shall state that on and
after the Redemption Date, upon surrender of such Debenture, the
holder will receive, without a charge, a new Debenture or Debentures
of authorized denominations for the principal amount thereof remaining
unredeemed;
(5) the place where such Debentures are to be surrendered
for payment for the Redemption Price, which shall be the office or
agency of the Company to be maintained as provided in Section 9.2;
(6) that Debentures must be surrendered to the Paying
Agent to collect the Redemption Price;
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(7) that, on the Redemption Date, the Redemption Price
will become due and payable upon each such Debenture, or the portion
thereof, to be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date; and
(8) the current conversion price of the Debentures, the
place or places where such Debentures may be surrendered for
conversion, and the time at which the right to convert the Debentures
or portions thereof to be redeemed will terminate in accordance with
this Indenture.
Notice of redemption of Debentures to be redeemed shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
Section 10.6. Deposit of Redemption Price. On or prior to
any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 9.3) an amount of money sufficient to
pay on the Redemption Date the Redemption Price of, and (unless the Redemption
Date shall be an Interest Payment Date) interest accrued to the Redemption Date
on, all Debentures or portions thereof which are to be redeemed on that date.
Section 10.7. Debentures Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Debentures so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Debentures shall cease to bear interest. Except as provided in the next
succeeding paragraph, upon surrender of any such Debenture for redemption in
accordance with said notice, such Debenture shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that installments of interest on Debentures whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Debentures, or one or more Predecessor Debentures, registered as such
at the close of business on the relevant Record Dates according to their terms
and the provisions of Section 3.7.
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If any Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Debenture.
Section 10.8. Debentures Redeemed in Part. Upon surrender of
a Debenture that is redeemed in part (with, if the Company or the Trustee so
require, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), the Company shall execute
and the Trustee shall authenticate and deliver to the Holder of that Debenture,
without service charge a new Debenture or Debentures in any authorized
denomination equal in aggregate principal amount to the unredeemed portion of
the principal amount of the Debenture surrendered.
ARTICLE XI
Subordination of Debentures
Section 11.1. Agreement to Subordinate. The Company
covenants and agrees and each holder of Debentures issued hereunder by
acceptance thereof likewise covenants and agrees, that all Debentures shall be
issued subject to the provisions of this Article; and each Person holding any
Debenture, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
All Debentures shall, for all purposes and in all respects
without limitation, including those hereinafter in this Article set forth, be
subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness; provided, however, that principal and interest may be
paid from time to time upon the Debentures subject to the specific limitations
in this Article set forth. The indebtedness evidenced by the Debentures is
equal in rank to the Company's obligations in respect of the 5 1/4%
Subordinated Debentures Due 1998 issued by American Airlines, Inc.
Section 11.2. No Payment on Debentures if Senior Indebtedness
in Default. No payments or distributions, whether in cash, securities or other
property (other than securities of the Company or any other corporation
provided
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for by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Article XI with respect
to the Debentures, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), on account of principal of, premium, if
any, or interest on, the Debentures shall be made by the Company unless full
payment of all amounts then due on all Senior Indebtedness has been made or
duly provided for in money or money's worth.
Section 11.3. Priority of Senior Indebtedness Upon
Distribution of Assets. Upon any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities
(other than securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinated,
at least to the extent provided in this Article XI with respect to the
Debentures, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under such plan of
reorganization or readjustment), to creditors upon any dissolution or
winding-up or total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness shall first be
paid in full, or payment thereof provided for in money or money's worth, before
the Holders of the indebtedness evidenced by the Debentures or the Trustee
shall be entitled to retain any assets so paid or distributed (other than
securities described in the immediately preceding parenthetical in this
sentence) in respect of the Debentures (for principal or interest) or of this
Indenture; and upon any such dissolution or winding-up or liquidation or
reorganization any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than securities
described in the first parenthetical in this sentence), to which the Holders of
the Debentures or the Trustee would be entitled, except for the provisions of
this Article XI, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Debentures or by the Trustee if received
by them or it, directly to the holders of Senior Indebtedness (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders) or their representatives, to the extent necessary to pay all
Senior Indebtedness in full, in money or money's
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worth, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness, before any such payment or distribution is
made to the Holders of the indebtedness evidenced by the Debentures or to the
Trustee.
Nothing in this Section 11.3 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.8.
Section 11.4. Trustee May Rely on Certificate of Liquidating
Agent. The Company shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Company within
the meaning of this Article XI. The Trustee shall be entitled to assume that
no such event has occurred unless the Company or any one or more holders of
Senior Indebtedness or any trustee therefor has given such notice. Upon any
payment or distribution of assets of the Company referred to in this Article
XI, the Trustee shall be entitled to rely upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the holders of
Debentures, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XI.
Section 11.5. Subrogation of Debentures. Upon the payment in
full of all Senior Indebtedness, the Holders of the Debentures shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company made on the Senior
Indebtedness until the principal of and interest on the Debentures shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of Senior Indebtedness of any cash, property or
securities to which the Holders of the Debentures or the Trustee would be
entitled except for the provisions of this Article XI shall, as between the
Company, its creditors other than the holders of Senior Indebtedness, on the
one hand, and the Holders of Debentures, on the other, be deemed to be a
payment by the Company to or on account of Senior Indebtedness, it being
understood that the provisions of this Article XI are and are intended solely
for the purpose of defining the relative rights of the Holders of the Deben-
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tures, on the one hand, and the holders of Senior Indebtedness, on the other.
Section 11.6. Company Obligation to Pay Unconditional.
Nothing contained in this Article XI or elsewhere in this Indenture, or in the
Debentures, is intended to or shall impair as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of and interest on the
Debentures, as and when the same shall become due and payable in accordance
with their terms, or to affect the relative rights of the Holders of the
Debentures and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article XI of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon exercise of any such
remedy.
Section 11.7. Authorization of Debentureholders to Trustee to
Effect Subordination. Each Holder of Debentures by his acceptance thereof
authorizes the Trustee in his behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in this Article XI
and appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 11.8. Notice to Trustee of Effectuation of
Subordination. Notwithstanding any of the provisions of this Article XI or any
other provision of this Indenture, neither the Trustee nor any Paying Agent
shall at any time be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of money to or by the Trustee or such
Paying Agent, unless and until the Trustee at its Corporate Trust Office or
such Paying Agent, as the case may be, shall have received written notice
thereof from the Company or from one or more holders of Senior Indebtedness or
from any trustee therefor; and, prior to the receipt of any such written
notice, the Trustee and such Paying Agent shall be entitled in all respects to
assume that no such facts exist; provided that, if three Business Days prior to
the date upon which under the provisions hereof such moneys become payable for
any purpose (including, without limitation, payment of the principal or
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interest on any Debenture called for redemption) the Trustee shall not have
received with respect to such moneys the notice provided for in this Section
11.8, then, anything herein contained to the contrary notwithstanding, the
Trustee and such Paying Agent shall have full power and authority to receive
such moneys and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received
by them or either of them during or after such three-Business- Day period.
Section 11.9. Relationship of Other Indenture Provisions to
Article XI. Notwithstanding anything herein contained to the contrary, all the
provisions of this Indenture shall be subject to the provisions of this Article
XI, so far as the same may be applicable thereto; provided that a deposit of
funds with the Trustee pursuant to Article IV shall be deemed for the purposes
of this Article XI to be a payment or distribution on the Debentures at the
time such deposit is made, irrespective of when such funds are applied by the
Trustee to the payment of principal of or interest on the Debentures.
Section 11.10. Trustee's Relationship to Holders of Senior
Indebtedness. The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee
subject to Sections 310(b) and 311 of the Trustee Indenture Act. Any Agent may
do the same with like rights.
ARTICLE XII
Conversion of Debentures
Section 12.1. Conversion Privilege. Subject to and upon
compliance with the provisions of this Article XII, at the option of the
Holder, any Debenture may, at any time up to and including August 1, 2024, or
in case such Debenture or some portion thereof shall be called for redemption
prior to such date, then, with respect to such Debenture or portion thereof as
is so called, until and including, but (if no default is made in making due
provision for the payment or payments of the Redemption Price thereof, together
with accrued interest) not after, the close of business on the Redemption Date,
be converted in whole, or in part in integral multiples of $1,000 principal
amount, at 100% of the principal amount of such Debenture into shares of Common
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Stock at the actual conversion price in effect at the Date of Conversion (as
hereinafter defined).
Section 12.2. Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the Holder of any Debenture to be converted
shall surrender such Debenture to the Company at any time during usual business
hours at its office or agency in the Borough of Manhattan, The City of New
York, and shall give written notice to the Company (which notice shall be
irrevocable) at such office or agency that the Holder elects to convert such
Debenture or a stated portion thereof constituting an integral multiple of
$1,000 principal amount. Such notice shall also state the name or names (with
addresses and taxpayer identification number) in which the certificate or
certificates for Common Stock shall be issued. All Debentures shall be
accompanied, if required by the Company or the Trustee, by proper assignments
thereof in blank. Holders that convert their Debentures will not be entitled
to payment of any accrued interest on such Debentures, including interest that
accrues during an Extension Period. Any Debentures so surrendered during any
period beginning on a Regular Record Date and ending at the opening of business
on the Interest Payment Date next following such Regular Record Date shall also
be accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Debentures then being
converted. As promptly as practicable after the receipt of such notice and the
surrender of such Debenture as aforesaid, the Company shall, subject to the
provisions of Section 12.7, issue and deliver at such office or agency to such
Holder, or on his written order, a certificate or certificates for the number
of full shares of Common Stock issuable on such conversion in accordance with
the provisions of this Article XII and cash, as provided in Section 12.3, in
respect of any fraction of a share otherwise issuable upon such conversion.
Such conversion shall be deemed to have been effected immediately prior to the
close of business on the date (herein called the "Date of Conversion") on which
such notice shall have been received by the Company and such Debentures shall
have been surrendered as aforesaid, and the Person or Persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become on the Date of
Conversion the holder or holders of record of the shares of Common Stock
represented thereby; provided, however, that any such surrender on any date
when the stock transfer books of the Company
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shall be closed shall constitute the Person or Persons, in whose name or names
the certificate or certificates for such shares of Common Stock are to be
issued, as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open and the Debentures surrendered shall not be deemed to have been converted,
in whole or in part, as the case may be, until such date for the purpose of
determining whether any interest is payable thereon, and such conversion shall
be at the actual conversion price in effect at such date. In the case of
conversion of a portion, but less than all, of a Debenture, the Company shall
execute, and the Trustee shall authenticate and deliver to such Holder, a
Debenture or Debentures in the aggregate principal amount of the unconverted
portion of the Debentures surrendered. Except as provided above, no adjustment
shall be made for interest accrued on any Debenture that shall be converted or
for dividends on any shares of Common Stock that shall be issued upon the
conversion of any Debenture.
Section 12.3. No Fractional Shares. No fractional shares or
scrip representing fractional shares of Common Stock shall be issued upon
conversions of Debentures. If more than one Debenture shall be surrendered for
conversion at one time by the same Holder, including any Depositary, the number
of full shares of Common Stock which shall be issuable upon conversion thereof
shall be computed on the basis of the aggregate principal amount of the
Debentures so surrendered. Instead of any fractional share of Common Stock
that would otherwise be issuable upon the conversion of any Debenture or
Debentures, the Company shall pay a cash adjustment in respect of such
fractional interest in an amount equal to the same fraction of the market price
per share of Common Stock (as determined or prescribed by the Board, whose
determination shall be conclusive, but which, so long as the Common Stock is
listed on the New York Stock Exchange, shall be the Closing Price on the New
York Stock Exchange) at the close of business on the Trading Day immediately
preceding the Date of Conversion. Any such cash adjustment may be in the form
of a check drawn on an account of the Trustee.
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Section 12.4. Conversion Price. The initial conversion price
at which shares of Common Stock shall be issuable upon conversion of Debentures
shall be $79.00 principal amount of Debentures for each share of Common Stock.
Section 12.5. Adjustment of Conversion Price. The conversion
price (hereinafter called the "Conversion Price") shall be subject to
adjustment from time to time as follows:
(i) In case the Company shall hereafter pay a dividend or
make a distribution to all holders of the outstanding Common Stock in
shares of Common Stock, the Conversion Price in effect at the opening
of business on the date following the date fixed for the determination
of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Conversion Price by
a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such
number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the
date fixed for such determination. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(ii) In case the Company shall hereafter issue rights or
warrants to all holders of its outstanding shares of Common Stock
entitling them (for a period expiring within 45 days after the date
fixed for determination of stockholders entitled to receive such
rights or warrants) to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price on the
date fixed for determination of stockholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the date fixed for determination
of stockholders entitled to receive such rights or warrants by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for determination of stockholders entitled to receive such rights or
warrants plus the number of shares which the aggregate offering
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price of the total number of shares so offered would purchase at such
Current Market Price, and of which the denominator shall be the number
of shares of Common Stock outstanding on the date fixed for
determination of stockholders entitled to receive such rights or
warrants plus the total number of additional shares of Common Stock
offered for subscription or purchase. Such adjustment shall become
effective immediately after the opening of business on the day
following the date fixed for determination of stockholders entitled to
receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or
warrants, the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered. In
the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such date fixed for the determination
of stockholders entitled to receive such rights or warrants had not
been fixed.
(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and conversely, in case outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction
or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iv) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
capital stock (other than a dividend or distribution to which
subparagraph (i) of this Section 12.5 applies) or evidences of its
indebtedness or assets (including debentures, but excluding any rights
or warrants referred to in subparagraph (ii) of this Section 12.5, and
excluding any
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dividend or distribution (x) in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary, (y) paid exclusively in cash or (z) referred to in
subparagraph (i) of this Section 12.5 (any of the foregoing being
hereinafter in this subparagraph (iv) called the "Securities"), then,
in each such case, unless the Company elects to reserve such
Securities for distribution to the Holders of the Debentures upon the
conversion of the Debentures so that any such Holder converting will
receive upon such conversion, in addition to the shares of the Common
Stock to which such Holder is entitled, the amount and kind of such
Securities which such Holder would have received if such Holder had,
immediately prior to the record date for such distribution of the
Securities, converted his Debentures into Common Stock, the Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect on such
record date by a fraction of which the numerator shall be the Current
Market Price of the Common Stock on such record date less the fair
market value (as determined by the Board, whose determination shall be
conclusive, and described in a Board Resolution), on such record date,
of the portion of the Securities so distributed applicable to one
share of Common Stock and the denominator shall be such Current Market
Price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day
following such record date; provided, however, that in the event the
then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price of the Common Stock
on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of a Debenture shall have
the right to receive upon conversion the amount and kind of Securities
such Holder would have received had such Holder converted each such
Debenture on such record date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. If the Board
determines the fair market value of any distribution for purposes of
this subparagraph (iv) by reference to the actual or when issued
trading market for any securities comprising such distribution, it
must in
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doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Stock.
For purposes of this subparagraph (iv) and subparagraphs (i)
and (i) of this Section 12.5, any dividend or distribution that
includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of common Stock, shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, assets
or shares of capital stock other than such shares of Common Stock or
rights or warrants (and any Conversion Price reduction required by
this subparagraph (iv) with respect to such dividend or distribution
shall then be made) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants
(and any further Conversion Price reduction required by subparagraph
(i) or (ii) of this Section 12.5 with respect to such dividend or
distribution shall then be made, except (A) the record date of such
dividend or distribution as defined in this subparagraph (iv) shall be
substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution" and "the date
fixed for such determination" within the meaning of subparagraphs (i)
and (ii) of this Section 12.5 and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
12.5.
In lieu of making any adjustment to the Conversion Price under
this Section 12.5 in the event that the rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of February 13, 1986, as
amended, between the Company and First Chicago Trust Company of New
York (as successor Rights Agent to J. Henry Schroder Bank and Trust
Company) as may be amended from time to time (the "Rights Agreement"),
are separately distributed to the holders of Common Stock upon the
occurrence of certain events specified in the Rights Agreement, the
Company has the option of amending such Rights Agreement to provide
that Rights shall be issuable upon conversion of the Debentures
without regard to whether the shares of Common Stock issuable upon
conversion of the Debentures were issued before or
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after the Distribution Date (as defined in the Rights Agreement).
(v) In case the Company shall, by dividend or otherwise,
at any time distribute to all holders of its Common Stock cash
(excluding (x) any quarterly cash dividend on the Common Stock to the
extent the aggregate cash dividend per share of Common Stock in any
fiscal quarter does not exceed the greater of (A) the amount per share
of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent not requiring any adjustment of the
Conversion Price pursuant to this subparagraph (v) (as adjusted to
reflect subdivisions or combinations of the Common Stock), and (B)
3.75% of the Current Market Price of the Common Stock on the Trading
Day next preceding the date of declaration of such dividend and (y) any
dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, unless the Company elects to reserve
such cash for distribution to the Holders of the Debentures upon the
conversion of the Debentures so that any such Holder converting
Debentures will receive upon such conversion, in addition to the
shares of the Common Stock to which such Holder is entitled, the
amount of cash which such Holder would have received if such Holder
had, immediately prior to the record date for such distribution of
cash, converted its Debentures into Common Stock, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
Record Date by a fraction of which the numerator shall be the Current
Market Price of the Common Stock on such record date less the amount
of cash so distributed (and not excluded as provided above) applicable
to one share of Common Stock and the denominator shall be such Current
Market Price of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following such
record date; provided, however, that in the event the portion of the
cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price of the Common Stock on
such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of Debentures shall
thereafter have the right to receive upon conversion the amount of
cash such Holder would have received had he
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converted each Debenture on such record date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such dividend or distribution had not been declared.
(vi) In case a tender or exchange offer made by the
Company or any Subsidiary for all or any portion of the Common Stock
shall expire and such tender or exchange offer shall involve the
payment by the Company or such Subsidiary of consideration per share
of Common Stock having a fair market value (as determined by the
Board, whose determination shall be conclusive, and described in a
Board Resolution) at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it
shall have been amended) that exceeds the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time,
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time
multiplied by the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid)
of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares") and
(y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) on the Expiration Time and the Current
Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration
Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Corporation is
permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the
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Conversion Price which would then be in effect if such tender or
exchange offer had not been made.
(vii) The Company may make such reductions in the
Conversion Price, in addition to those required by subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of this Section 12.5, as the Board
considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting
from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. To
the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time
if the period is at least 20 days, the reduction is irrevocable during
the period and the Board shall have made a determination that such
reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, the Company shall mail to
Holders of the Debentures a notice of the reduction at least 15 days
prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period it will
be in effect.
(viii) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in the Conversion Price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not
required to be made shall be carried forward and taken into account in
determining whether any subsequent adjustment shall be required.
(ix) Notwithstanding any other provision of this Article
XII, no adjustment to the Conversion Price shall reduce the Conversion
Price below the then par value per share of the Common Stock, and any
such purported adjustment shall instead reduce the Conversion Price to
such par value. The Company hereby covenants not to take any action
(1) to increase the par value per share of the Common Stock or (2) that
would or does result in any adjustment in the Conversion Price that,
if made without giving effect to the previous sentence, would cause
the Conversion Price to be less than the then par value per share of
the Common Stock, provided, however, that the covenant in this
sentence shall be
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suspended if within 10 days of determining in good faith that such
action would result in such adjustment (but not later than the
business day next following the effectiveness of such adjustment), the
Company gives notice of redemption of all Outstanding Debentures, and
effects the redemption referred to in such notice on the Redemption
Date referred to therein in compliance with Article X hereof, but the
covenant in this sentence shall be retroactively reinstated if such
notice is not given or such redemption does not occur.
(x) Whenever the Conversion Price is adjusted as herein
provided:
(1) the Company shall compute the adjusted
Conversion Price and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall forthwith
be filed with the Trustee; and
(2) a notice stating that the Conversion Price
has been adjusted and setting forth the adjusted Conversion
Price shall as soon as practicable be mailed by the Company to
all Holders of Debentures at their last addresses as they
shall appear on the Register.
(xi) In any case in which this Section 12.5 provides that
an adjustment shall become effective immediately after a record date
for an event, the Company may defer until the occurrence of such event
(y) issuing to the Holder of any Debenture converted after such record
date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (z) paying
to such Holder any amount in cash in lieu of any fractional share of
Common Stock pursuant to Section 12.4.
Section 12.6. Reclassification, Consolidation, Merger or Sale
of Assets. In the event that the Company shall be a party to any transaction
(including without limitation any (i) recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par
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<PAGE> 82
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination of the Common Stock), (ii) any consolidation or
merger of the Company with or into any other person or any merger of another
Person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (iii) any sale or transfer of all or
substantially all of the assets of the Company, or (iv) any compulsory share
exchange) pursuant to which either shares of Common Stock shall be converted
into the right to receive other securities, cash or other property, or, in the
case of any such transfer of all or substantially all of the assets of the
Company, the holders of Common Stock shall be entitled to receive other
securities, cash or other property, then appropriate provision shall be made as
part of the terms of such transaction whereby (1) in the case of any such
transaction not constituting a Common Stock Fundamental Change (as defined in
Section 12.11) and subject to funds being legally available for such purpose
under applicable law at the time of such conversion, the Holder of each
Debenture then Outstanding shall have the right thereafter to convert such
Debenture only into the kind and amount of securities, cash and other property
receivable upon such transaction by a holder of the number of shares of Common
Stock into which such Debenture might have been converted immediately prior to
such transaction, after giving effect, in the case of any Non-Stock Fundamental
Change (as defined in Section 12.11), to any adjustment in the Conversion Price
required by the provisions of Section 12.10, and (2) in the case of a Common
Stock Fundamental Change, the Holder of each Debenture then Outstanding shall
have the right thereafter to convert such Debenture only into common stock of
the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions of
Section 12.10. The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquired the
Company's shares or which participated in such transaction, as the case may be,
shall make provisions in its certificate or articles of incorporation or other
constituent document to establish such right. Such certificate or articles of
incorporation or other constituent document shall provide for adjustments
which, for events subsequent to the effective date of such certificate or
articles of incorporation or other constituent document, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 12.6. The above provisions shall similarly apply to
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<PAGE> 83
successive transactions of the type described in this Section 12.6.
Section 12.7. Taxes on Conversions. The issue of
certificates for shares of Common Stock on conversions of Debentures shall be
made without charge to the converting Debentureholder for any tax in respect of
the issue thereof. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in any name other than that of the Holder of
any Debenture converted, and the Company shall not be required to issue or
deliver any certificate unless and until the Person or Persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.
Section 12.8. Reservation of Shares. The Company shall at
all times reserve and keep available, out of its authorized and unissued stock,
solely for the purpose of effecting the conversion of the Debentures, such
number of shares of its Common Stock free of preemptive rights as shall from
time to time be sufficient to effect the conversion of all Debentures from time
to time outstanding. The Company shall from time to time, in accordance with
the laws of the State of Delaware, use all reasonable efforts to increase the
authorized number of shares of Common Stock if at any time the number of shares
of authorized and unissued Common Stock shall not be sufficient to permit the
conversion of all the then Outstanding Debentures.
If any shares of Common Stock required to be reserved for
purposes of conversion of the Debentures hereunder require registration with or
approval of any governmental authority under any Federal or State laws before
such shares may be issued upon conversion, the Corporation will in good faith
and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved, as the case may be. If the Common Stock is listed on
the New York Stock Exchange or any other national securities exchange, the
Company will, in good faith and as expeditiously as possible, endeavor, if
permitted by the rules of such exchange, to list and keep listed on such
exchange, upon official notice of issuance, all shares of common Stock issuable
upon conversion of the Debentures.
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<PAGE> 84
Section 12.9. Prior Notice of Certain Events. In case:
(i) the Company shall (1) declare any dividend (or any
other distributions) on its Common Stock, other than (A) a dividend
payable in shares of Common Stock or (B) a dividend payable in cash
(other than any special or nonrecurring or other extraordinary
dividend) or (2) declare or authorize a redemption or repurchase of in
excess of 10% of the then outstanding shares of Common Stock; or
(ii) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or of any other rights or warrants (other
than Rights or rights granted pursuant to a rights agreement described
in the second sentence of Section 12.12); or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which the Company is a party and for which
approval of any stockholders of the Company shall be required, or of
the sale or transfer of all or substantially all of the assets of the
Company or of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause to
be mailed to the Holders of the Debentures, at their last addresses as they
shall appear on the Register, at least 15 days prior to the applicable record
date hereinafter specified, a notice stating (x) the date on which a record (if
any) is to be taken for the purpose of such dividend, distribution, redemption,
repurchase or granting of rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liqui-
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<PAGE> 85
dation or winding up is expected to become effective, and the date as of which
it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up. No failure to mail
such notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice.
Section 12.10. Adjustments in Case of Fundamental Changes.
Notwithstanding any other provision in this Article XII to the contrary, if any
Fundamental Change (as defined in Section 12.11) occurs, then the Conversion
Price in effect will be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock Fundamental
Change, Debentures shall thereafter be convertible solely into common stock of
the kind received by holders of Common Stock as the result of such Common Stock
Fundamental Change.
For purposes of calculating any adjustment to be made pursuant
to this Section 12.10 in the event of a Fundamental Change, immediately after
such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price immediately following such Non-Stock Fundamental
Change shall be the lower of (A) the Conversion Price in effect
immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other prior adjustments pursuant to this Article
XII, and (B) the product of (1) the greater of the Applicable Price (as
defined in Section 12.11) or the then applicable Reference Market
Price (as defined in Section 12.11) and (2) a fraction, the numerator
of which is $1,000 and the denominator of which is the sum of (x) the
amount of the Redemption Price for $1,000 principal amount of
Debentures if the Redemption Date were the date of such Non- Stock
Fundamental Change (or, for the period commencing on ______,* and
ending on January 31, 1995 and the twelve-month period commencing on
February 1, 1995, the product of 105.4% and 104.8%, respectively,
times $1,000) plus (y) an amount equal to
____________________
* Insert first day after Expiration Date of Exchange Offer.
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<PAGE> 86
interest thereon accrued and unpaid through but excluding the date of
such Non-Stock Fundamental Change; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price immediately following such Common Stock Fundamental
Change shall be the Conversion Price in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to this Article XII,
multiplied by a fraction, the numerator of which is the Purchaser
Stock Price (as defined in Section 12.11) and the denominator of which
is the Applicable Price; provided, however, that in the event of a
Common Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of
the successor, acquiror or other third party (and cash, if any, paid
with respect to fractional interests in such common stock resulting
from such Common Stock Fundamental Change) and (B) all of the Common
Stock of the Company shall have been exchanged for, converted into, or
acquired for common stock (and any cash paid with respect to
fractional interests) of the successor, acquiror or other third party,
the Conversion Price immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change multiplied by a
fraction, the numerator of which is one and the denominator of which
is the number of shares of common stock of the successor, acquiror, or
other third party received by a holder of one share of Common Stock as
a result of such Common Stock Fundamental Change.
Section 12.11. Definitions. The following definitions shall
apply to terms used in this Article XII:
(1) "Applicable Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by the holder of one
share of Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the Current
Market Price immediately prior to the record date fixed for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change, or, if there is
no such record date,
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<PAGE> 87
prior to the date upon which the holders of the Common Stock shall
have the right to receive such cash, securities, property or other
assets.
(2) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% by value (as determined in
good faith by the Board, which determination shall be conclusive) of
the consideration received by the holders of Common Stock pursuant to
such transaction consists of common stock that, for the consecutive 10
Trading Days immediately prior to such Fundamental Change, has been
admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the National
Market System of NASDAQ;provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental
Change and the Outstanding Debentures continue to exist as Outstanding
Debentures, or (ii) not later than the occurrence of such Fundamental
Change, a corporation succeeding directly or indirectly to the
business of the Company, complies with the provisions of Article VII
hereof.
(3) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to
which all or substantially all of the Common Stock shall be exchanged
for, converted into, acquired for or shall constitute solely the right
to receive cash, securities, property or other assets (whether by
means of an exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or otherwise);
provided, however, in the case of any series of transactions or
events, for purposes of adjustment of the Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially
all of the Common Stock of the Company shall be exchanged for,
converted into, or acquired for or shall constitute solely the right
to receive such cash, securities, property or other assets, but the
adjustment shall be based upon the consideration which the holders of
Common Stock received in such transactions or event as a result of
which more than 50% of the Common Stock of the Company shall have been
exchanged for, converted into, or acquired for or constitute solely
the right to receive cash, securities, property or other
assets;provided, further, that such term does not include
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<PAGE> 88
(i) any such transactions or event in which the Company and/or any of
its Subsidiaries are the issuers of all the cash, securities, property
or other assets exchanged, acquired or otherwise issued in such
transaction or event, or (ii) any such transaction or event in which
the holders of Common Stock receive securities of an issuer other than
the Company or any of its Subsidiaries if, immediately following such
transaction or event, such holders hold a majority of the securities
having the power to vote normally in the election of directors of such
other issuer outstanding immediately following such transaction or
other event.
(4) "Non-Stock Fundamental Change" shall mean any
Fundamental Change other than a Common Stock Fundamental Change.
(5) "Purchaser Stock Price" shall mean, with respect to
any Common Stock Fundamental Change, the average of the Closing Prices
for one share of the common stock received by holders of Common Stock
in such Common Stock Fundamental Change during the 10 Trading Days
immediately prior to the date fixed for the determination of the
holders of Common Stock entitled to receive such common stock, or if
there is no such date, prior to the date upon which the holders of the
Common Stock shall have the right to receive such common stock.
(6) "Reference Market Price" shall initially mean
$42.3333, and in the event of any adjustment to the Conversion Price
other than as a result of a Fundamental Change, the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such
adjustment shall always be the same as the ratio of the initial
Reference Market Prices to the initial Conversion Price set forth in
Section 12.4 above.
Section 12.12. Dividend or Interest Reinvestment Plans;
Other. Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock pursuant to any plan providing for the reinvestment of dividends
or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any such plan, and
the issuance of any shares of Common Stock or options or rights to purchase
such shares pursuant
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<PAGE> 89
to any employee benefit plan or program of the Company, or pursuant to any
option, warrant, right or exercisable, exchangeable or convertible debenture
outstanding as of the date hereof (except as expressly provided in Section
12.5(iv) with respect to certain events under the Rights Agreement), shall not
be deemed to constitute an issuance of Common Stock or exercisable,
exchangeable or convertible securities by the Company to which any of the
adjustment provisions described above applied. In addition, there shall be no
adjustment of the Conversion Price in the event that, upon termination of the
Rights Agreement, the Company enters into a new agreement which is comparable
in purpose and in effect to the Rights Agreement (as determined by the Board,
whose determination shall be conclusive). There shall be no adjustment of the
Conversion Price in case of the issuance of any stock (or securities
convertible into or exchangeable for stock) of the Company except as described
in this Section 12.12. Except as expressly set forth above, if any action
would require adjustment of the Conversion Price pursuant to more than one of
the provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment which has the highest absolute
value.
Section 12.13. Treasury Stock Not Included. For purposes of
this Article XII, the number of shares of Common Stock at any time outstanding
shall not include any shares of Common Stock then owned or held by or for the
account of the Company.
Section 12.14. Return of Money Deposited for Converted
Debentures. Notwithstanding anything elsewhere contained in this Indenture,
any funds which at any time shall have been deposited by the Company or on its
behalf with the Trustee or any other depositary for the purpose of paying
(other than in any transaction pursuant to Section 12.3), redeeming or
defeasing any Debentures which shall have been converted into shares of Common
Stock, pursuant to the provisions of this Article XII, shall, as soon as
practicable after such conversion, be repaid to the Company by the Trustee or
such other depositary.
Section 12.15. Responsibility of Trustee. Neither the
Trustee nor any conversion agent shall at any time be under any duty or
responsibility to any Debentureholder to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to
the nature or extent of any such adjustment when
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<PAGE> 90
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any conversion agent shall be accountable with respect to the registration,
listing, validity or value (or the kind or amount) of any shares of Common
Stock or of any securities or property which may at any time be issued or
delivered upon the conversion of any Debenture; and neither the Trustee nor any
conversion agent makes any representation with respect thereto. Neither the
Trustee nor any conversion agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or certificates or other securities or property upon the surrender
of any Debenture for the purpose of conversion or, subject to Section 6.1, to
comply with any of the covenants of the Company contained in this Article XII.
___________________________
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<PAGE> 91
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
AMR CORPORATION
By______________________________________
Title:
(Seal)
Attest:
_______________________
Secretary
THE FIRST NATIONAL BANK OF
CHICAGO
By______________________________________
Title:
(Seal)
Attest:
_______________________
Title:
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<PAGE> 92
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
$______________ No. ______________
AMR CORPORATION
__% CONVERTIBLE SUBORDINATED
QUARTERLY INCOME CAPITAL SECURITY DUE 2024
AMR Corporation, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company"), which
term includes any successor under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to , or
registered assigns, the principal sum of Dollars, on August
1, 2024 upon presentation and surrender of this Debenture, and, subject to the
right of the Company to extend the interest payment period on the Debentures as
provided on the reverse hereof, to pay interest on said principal sum,
quarterly on February 1, May 1, August 1 and November 1 of each year,
commencing November 1, 1994, at the rate of 6.0% per annum from and including
August 1, 1994 to but excluding ____________* and from and after ___________*
at the rate of % per annum, from the February 1, May 1, August 1 or November
1, as the case may be, next preceding the date of this Debenture to which
interest on the Debentures has been paid or duly provided for, unless the date
hereof is an Interest Payment Date to which interest has been paid or duly
provided for, in which case from the date of this Debenture, or unless no
interest has been paid or duly provided for on the Debentures, in which case
from August 1, 1994, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, when there is no existing default
in the payment of interest on the Debentures, each Debenture authenticated
after the Regular Record Date for any Interest Payment Date, but prior to such
Interest Payment Date shall be dated the date of its authentication but shall
bear interest from such Interest Payment Date; provided, however, that if and
to the extent that the Company shall default in the payment of the interest due
on such Interest Payment Date, then all such Debentures shall bear interest
from the February 1, May 1, August 1 or November 1, as the case may be, to
which interest
____________________
* Insert first day after Expiration Date of Exchange Offer.
<PAGE> 93
has been paid or duly provided for next preceding such Interest Payment Date,
unless no interest has been paid or duly provided for on the Debentures, in
which case from August 1, 1994. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in said
Indenture, be paid to the Person in whose name this Debenture (or one or more
Predecessor Debentures) is registered on the Regular Record Date for such
Interest Payment Date.
The principal of (and premium, if any) and interest on this
Debenture are payable in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts at the office or agency of the Company in the Borough of Manhattan, The
City of New York; provided, that, at the option of the Company, interest may be
paid (i) by check mailed to the address of the Person entitled thereto as it
shall appear on the Register or (ii) by wire transfer to an account maintained
by the Person entitled thereto as specified in the Register. Any interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture.
Reference is made to the further provisions of this Debenture
set forth on the reverse hereof, which shall have the same effect as though
fully set forth at this place.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee by manual
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<PAGE> 94
signature, this Debenture shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Debenture to
be duly executed in its corporate name by the facsimile signature of its
Chairman of the Board, its President, one of its Executive Vice Presidents, one
of its Senior Vice Presidents or one of its Vice Presidents and impressed or
imprinted with its corporate seal or facsimile thereof, attested by the manual
or facsimile signature of its Secretary or an Assistant Secretary.
Dated:
AMR CORPORATION
(Seal)
By_______________________
Attest: (Title)
_______________________
Secretary
3
<PAGE> 95
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Debentures referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By____________________________
Authorized Signature
(FORM OF REVERSE OF DEBENTURE)
__% CONVERTIBLE SUBORDINATED
QUARTERLY INCOME CAPITAL SECURITY DUE 2024
This Debenture is one of a duly authorized issue of Debentures
of the Company designated as its __% Convertible Subordinated Quarterly Income
Capital Securities due 2024 (herein called the "Debentures"), limited in
aggregate principal amount to $____________, issued and to be issued under an
Indenture dated as of _________, 1994 (herein called the "Indenture"), between
the Company and The First National Bank of Chicago, Trustee (herein called the
"Trustee", which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Trustee and the Holders of the Debentures, and the terms upon which the
Debentures are, and are to be, authenticated and delivered.
Notwithstanding anything contained in the Indenture to the
contrary, the Company shall have the right at any time during the term of the
Debentures, so long as the Company is not in default in the payment of interest
on the Debentures, to extend the interest payment period for an Extension
Period (as defined below). Except as provided in the next succeeding sentence,
no interest shall be due and payable during an Extension Period, but at the end
of each Extension Period the Company shall pay all interest then
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<PAGE> 96
accrued and unpaid on the Debentures, together with interest thereon,
compounded quarterly (commencing with the first Interest Payment Date in such
Extension Period), at the rate of __% per annum, to the extent permitted by
applicable law. Prior to the termination of any Extension Period, the Company
may (a) on any Interest Payment Date pay all or any portion of the interest
accrued on the Debentures as provided on the face hereof to holders of record
on the Record Date for such Interest Payment Date or (b) from time to time
further extend the interest payment period as provided in the last sentence of
this paragraph, provided that any such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 calendar quarters
from the last date to which interest on the Debentures was paid in full. If
the Company shall elect to pay all of the interest accrued on the Debentures on
an Interest Payment Date during any Extension Period, such Extension Period
shall automatically terminate on such Interest Payment Date. Upon the
termination of any Extension Period and the payment of all amounts of interest
then due, the Company may select a new Extension Period, subject to the above
requirements. The Company shall cause the Trustee to give notice to the holder
of this Debenture in the manner provided in the Indenture, not less than five
Business Days prior to the earlier of (i) the January 15, April 15, July 15 or
October 15 next preceding the applicable Interest Payment Date and (ii) the
date on which the Company or the Trustee is required to give notice to the New
York Stock Exchange or other applicable self-regulatory organization of the
Regular Record Date and payment date for such related interest payment period,
of
(x) the Company's election to initiate an Extension Period,
and the duration thereof,
(y) the Company's election to extend any Extension Period
beyond the Interest Payment Date on which such Extension Period is
then scheduled to terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial payment
of interest accrued on the Debentures on any Interest Payment Date
during any Extension Period and the amount of such payment.
The term "Extension Period" means the period from and
including the Interest Payment Date next following the date of any notice of
extension of the interest payment
5
<PAGE> 97
period on the Debentures given pursuant to the last sentence of the preceding
paragraph (or, in the case of any further extension of the interest payment
period pursuant to the third sentence of the preceding paragraph before the
payment in full of all accrued interest on the Debentures, the Interest Payment
Date next following date of the first such notice given after the last Interest
Payment Date to which interest was paid in full) to but excluding the Interest
Payment Date to which payment of interest on the Debentures is so extended,
after giving effect to any further extensions of the interest payment period on
the Debentures pursuant to the third sentence of the preceding paragraph;
provided that no Extension Period shall exceed 20 consecutive quarters from the
last date to which interest on the Debentures was paid in full; and provided,
further, that any Extension Period shall end on an Interest Payment Date.
Notwithstanding the foregoing, in no event shall any Extension Period exceed
the final Stated Maturity of the Debentures.
The Debentures may be redeemed, at the option of the Company,
as a whole or from time to time in part, on any date on or after February 1,
1996 and prior to Maturity, upon not less than 30 nor more than 60 days' prior
notice given as provided in the Indenture, at the following Redemption Prices
(expressed as percentages of the principal amount thereof redeemed), plus
accrued and unpaid interest, if any, up to but excluding the Redemption Date,
if redeemed during the twelve-month period commencing February 1 of the years
indicated:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ------------ ---------- ------------ ----------
<S> <C> <C> <C>
1996 . . . . . . 104.2% 2000 . . . . . . 101.8%
1997 . . . . . . 103.6% 2001 . . . . . . 101.2%
1998 . . . . . . 103.0% 2002 . . . . . . 100.6%
1999 . . . . . . 102.4% 2003 and 100.0%
thereafter
</TABLE>
(except that interest installments whose Stated Maturity is the Redemption Date
will be payable to the Holders of such Debentures, or one or more Predecessor
Debentures, of record on the relevant Regular Record Date referred to on the
face hereof).
6
<PAGE> 98
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Debenture may be registered
on the Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City of New York, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Debentures are issuable only as registered Debentures
without coupons in the denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture, and subject to certain limitations
therein set forth, Debentures are exchangeable for a like aggregate principal
amount of Debentures of different authorized denominations as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee and any agency of the Company or the
Trustee may treat the Person in whose name this Debenture is registered as the
owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Debenture be overdue, and neither the
Company, the Indenture Trustee nor any such agent shall be affected by notice
to the contrary.
If an Event of Default as defined in the Indenture shall
occur, the principal of all Debentures may be declared due and payable in the
manner and with the effect provided in the Indenture.
The indebtedness evidenced by the Debentures is, to the extent
and in the manner provided in the Indenture, subordinate and subject in right
of payment to the prior payment in full of Senior Indebtedness as defined in
the Indenture and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Debenture, by accepting
the same, agrees to and shall
7
<PAGE> 99
be bound by such provisions and authorizes the Trustee in his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and appoints the Trustee his attorney-in-fact for such purpose.
Subject to the provisions of the Indenture, the Holder of this
Debenture is entitled, at his option, at any time on or before August 1, 2024
(or, if this Debenture or some portion hereof shall be called for redemption on
a Redemption Date which is prior to such date and the Company shall not
thereafter default in making payment of the Redemption Price hereof, together
with accrued interest hereon, then, with respect to this Debenture or such
portion hereof, on or before the close of business on the Redemption Date), to
convert this Debenture, or a portion hereof in integral multiples of $1,000
principal amount, at 100% of the principal amount hereof being converted into
fully paid and nonassessable shares of Common Stock of the Company, as said
shares shall be constituted at the date of conversion, at a conversion price
equal to $79.00 aggregate principal amount of Debentures for each share (or at
the current adjusted conversion price if an adjustment has been made as
provided in the Indenture), by surrender of this Debenture to the Company at
its office or agency in said Borough of Manhattan, accompanied, if required by
the Company or Indenture, by a proper assignment hereof in blank together with
written notice of his election to convert (which election shall be
irrevocable). This Debenture shall, if so surrendered during any period
beginning on a Regular Record Date and ending at the opening of business on the
Interest Payment Date next following such Regular Record Date, also be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Debenture then being
converted. As provided in the Indenture, the conversion price is subject to
adjustment in certain events. Except as aforesaid, no adjustment is to be made
on conversion for interest accrued hereon or for dividends on securities issued
on conversion. No fractional shares of Common Stock or scrip representing
fractional shares will be issued on conversion, but an adjustment in cash will
be made for any fractional interest as provided in the Indenture.
The Company and, by its acceptance of this Debenture or a
beneficial interest herein, the Holder of, and any Person that acquires a
beneficial interest in, this Debenture agree that for United States federal,
state and local
8
<PAGE> 100
tax purposes it is intended that this Debenture constitute indebtedness.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modifications of the rights and
obligations of the Company and the rights of the Holders of the Debentures
under the Indenture at any time by the Trust with the consent of the Holders of
a majority of the aggregate principal amount of the Debentures at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Debentures at the
time Outstanding, on behalf of the Holders of all the Debentures, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon
such Holder and upon all future Holders of this Debenture and of any Debenture
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Debenture at the times, place and rate,
and in the coin or currency, herein prescribed.
No recourse for the payment of the principal of or interest on
this Debenture, or for any claim based hereon or otherwise in respect hereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in the Indenture or any indenture supplemental thereto or in any
Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
9
<PAGE> 101
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
10
<PAGE> 1
Exhibit 12
AMR CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(in millions)
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended June 30,
--------------------------------------------------------- -------------------
1989 1990 1991 1992 1993 1993 1994
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings (loss) before
income taxes, extraordinary
loss, and the cumulative
effect of accounting changes $719 $(34) $(340) $(697) $(113) $51 $250
Add: Total fixed charges
(per below) 552 734 1,028 1,285 1,339 678 632
Less: Interest capitalized 65 116 159 101 51 30 11
--------- --------- --------- --------- --------- --------- ---------
Total Earnings $1,206 $584 $529 $487 $1,175 $699 $871
========= ========= ========= ========= ========= ========= =========
Combined Fixed Charges and
Preferred Stock Dividends:
Interest expense $239 $338 $508 $651 $668 $343 $306
Portion of rental expense
deemed representative of the
interest factor 311 394 513 627 663 331 322
Amortization of debt issue
costs 2 2 7 7 8 4 4
--------- --------- --------- --------- --------- --------- ---------
Total Fixed Charges 552 734 1,028 1,285 1,339 678 632
Preferred dividend
requirements 19 0 0 0 60 55 57
--------- --------- --------- --------- --------- --------- ---------
Combined Fixed Charges and
Preferred Stock Dividends $571 $734 $1,028 $1,285 $1,399 $733 $689
========= ========= ========= ========= ========= ========= =========
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends 2.11 - - - - - 1.26
========= ========= ========= ========= ========= ========= =========
Coverage Deficiency - $150 $499 $798 $224 $34 -
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of AMR Corporation for
the registration of $1,100,000,000 of its convertible subordinated debentures
and to the incorporation by reference of our report dated February 15, 1994,
with respect to the consolidated financial statements and schedules of AMR
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1993, filed with the Securities & Exchange Commission.
/s/ERNST & YOUNG LLP
ERNST & YOUNG LLP
Dallas, Texas
August 18, 1994
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
The undersigned, Chairman of the Board, President and Chief
Executive Officer of AMR Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Michael J. Durham and Charles D. MarLett, and each of them, as his
true and lawful attorneys-in-fact and agents, with full power of substitution,
to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in
<PAGE> 2
respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United States of America and (c) the
securities or similar applicable laws of Canada, Mexico and any other foreign
jurisdiction; and the undersigned does hereby ratify and confirm as his own
acts and deeds all that such attorneys-in-fact and agents, and each of them,
shall do or cause to be done by virtue hereof. Each one of such
attorneys-in-fact and agents shall have, and may exercise, all of the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 18th day of August, 1994.
/s/ Robert L. Crandall
Robert L. Crandall
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 3
POWER OF ATTORNEY
The undersigned, Executive Vice President and Chief Financial
Officer of AMR Corporation, a Delaware corporation (the "Corporation"), does
hereby constitute and appoint Anne H. McNamara, Michael J. Durham and Charles
D. MarLett, and each of them, as his true and lawful attorneys-in-fact and
agents, with full power of substitution, to execute and deliver in his name and
on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 4
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 18th day of August, 1994.
/s/ Donald J. Carty
Donald J. Carty
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
-2-
<PAGE> 5
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 6
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 17th day of August, 1994.
/s/ Howard P. Allen
Howard P. Allen
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 7
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 8
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 18th day of August, 1994.
/s/ Edward A. Brennan
Edward A. Brennan
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 9
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 10
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 17th day of August, 1994.
/s/ Christopher F. Edley
Christopher F. Edley
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 11
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 12
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 18th day of August, 1994.
/s/ Charles T. Fisher, III
Charles T. Fisher, III
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 13
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 14
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 17th day of August, 1994.
/s/ Dee J. Kelly
Dee J. Kelly
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 15
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as her true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in her name and on her behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 16
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as her own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 17th day of August, 1994.
/s/ Ann D. McLaughlin
Ann D. McLaughlin
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 17
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 18
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 17th day of August, 1994.
/s/ Joe M. Rodgers
Joe M. Rodgers
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 19
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 20
States of America and (c) the securities or similar applicable laws of Canada,
Mexico and any other foreign jurisdiction; and the undersigned does hereby
ratify and confirm as his own acts and deeds all that such attorneys-in-fact
and agents, and each of them, shall do or cause to be done by virtue hereof.
Each one of such attorneys-in-fact and agents shall have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 18th day of August, 1994.
/s/ Maurice Segall
Maurice Segall
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 21
POWER OF ATTORNEY
The undersigned, a director of AMR Corporation, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Donald J.
Carty, Anne H. McNamara, Michael J. Durham and Charles D. MarLett, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on
an appropriate form proposed to be filed with the Securities and
Exchange Commission ("SEC") for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), up to U.S.
$1,100,000,000 aggregate principal amount of the Corporation's
convertible subordinated debentures (the "Debentures"), together with
a presently indeterminate number of shares of the Corporation's common
stock, par value $1 per share (and associated rights to purchase
Series A Junior Participating Preferred Stock of the Corporation),
into which such Debentures may be converted, such Debentures to be
issued in connection with a proposed exchange offer (the "Exchange
Offer") for the Corporation's Series A Cumulative Convertible
Preferred Stock (the "Preferred Stock"), including Preferred Stock
represented by depositary shares, such Debentures to be issued from
time to time with, and such Exchange Offer to be conducted on, terms
to be established in each case by or pursuant to resolutions of the
Board of Directors of the Corporation or any duly authorized committee
thereof; and
(b) any and all supplements and amendments (including,
without limitation, post-effective amendments) to such Registration
Statements;
and any and all other documents and instruments in connection with the issuance
of the Debentures and the conduct of the Exchange Offer which such
attorneys-in-fact and agents, or any one of them, deem necessary or advisable
to enable the Corporation to comply with (a) the Securities Act, the Securities
Exchange Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the SEC
in respect of any thereof, (b) the securities or Blue Sky laws of any state or
other governmental subdivision of the United
<PAGE> 22
States of America and (c) the securities or similar applicable laws of
Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such
attorneys-in-fact and agents, and each of them, shall do or cause to be done by
virtue hereof. Each one of such attorneys-in-fact and agents shall have, and
may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed
this power of attorney this 19th day of August, 1994.
/s/ Eugene F. Williams, Jr.
Eugene F. Williams, Jr.
Witness:
/s/ Charles D. MarLett
Charles D. MarLett
2
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(B)(2) ________
____________________________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312)732-6919
(Name, address and telephone number of agent for service)
________________________________________
AMR CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 75-1825172
(State or other jurisdiction of (I.R.S. employer
incorporation of organization) identification number)
P.O. Box 619616 75261-9616
Dallas/Fort Worth Airport, Texas (Zip Code)
(Address of Principal
Executive Offices) CONVERTIBLE SUBORDINATED QUARTERLY INCOME
CAPITAL SECURITIES DUE 2024
(Title of Indenture Securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.; Federal
Deposit Insurance Corporation, Washington, D.C., The
Board of Governors of the Federal Reserve System,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable
9. Not Applicable
* EXHIBITS 1,2,3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 17th day of August, 1994.
THE FIRST NATIONAL BANK OF CHICAGO
BY:/S/ STEVEN M. WAGNER
STEVEN M. WAGNER
VICE PRESIDENT AND SENIOR COUNSEL
CORPORATE TRUST SERVICES DIVISION
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
August 17, 1994
Securities and Exchange Commission,
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between AMR Corporation
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
Authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request
therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/Steven M. Wagner
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 5
EXHIBIT 7
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 3/31/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 <-
DOLLAR AMOUNTS IN ------------ -----------
THOUSANDS RCFD BIL MIL THOU
------------------ ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RCA-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . 0081 3,199,527 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . 0071 7,574,509 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 125,951 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D). . 1773 318,814 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . 0276 2,711,748 3.a.
b. Securities purchased under agreements to resell . . . . . . . . 0277 695,723 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 13,613,912 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . RCFD 3123 352,027 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 2125 13,261,885 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . 3545 8,561,533 5.
6. Premises and fixed assets (including capitalized leases) . . . . . 2145 478,470 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . 2150 95,399 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . 2130 6,434 8.
9. Customers' liability to this bank on acceptances outstanding . . . 2155 452,815 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . 2143 140,023 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . 2160 1,048,744 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . 2170 38,671,575 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 3/31/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
---------------- ------------
<S> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . . . . . RCON 2200 14,309,869 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . . RCON 6631 5,980,761 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . RCON 6636 8,329,108 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) . . . . . . . . . . . . RCFN 2200 9,813,189 13.b.
(1) Noninterest-bearing . . . . . . . . . . . . . . . . . RCFN 6631 374,630 13.b.(1)
(2) Interest-bearing RCFN 6636 9,438,559 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . RCFD 0278 580,252 14.a.
b. Securities sold under agreements to repurchase . . . . . . RCFD 0279 1,543,995 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . RCON 2840 102,941 15.a.
b. Trading Liabilities. . . . . . . . . . . . . . . . . . . . RCFD 3548 5,353,511 15.b.
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . . RCFD 2332 1,590,728 16.a.
b. With original maturity of more than one year . . . . . . RCFD 2333 254,470 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2910 267,000 17.
18. Bank's liability on acceptance executed and outstanding . . . RCFD 2920 452,815 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . RCFD 3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . RCFD 2930 549,976 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . RCFD 2948 35,993,746 21.
22. Limited-Life preferred stock and related surplus . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock). . . RCFD 3839 2,254,940 25.
26. a. Undivided profits and capital reserves . . . . . . . . . . RCFD 3632 222,981 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities. . . . . . . . . . . . . . . RCFD 8434 (8) 26.b.
27. Cumulative foreign currency translation adjustments . . . . . RCFD 3284 (942) 27.
28. Total equity capital (sum of items 23 through 27) . . . . . . RCFD 3210 2,677,829 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) . . . . . . . . . . . . RCFD 3300 38,671,575 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement
below that best describes the most comprehensive level of
auditing work performed for the bank by independent external Number
auditors as of any date during 1993 . . . . . . . . . . . . . RCFD 6724 2 M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
___________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 99(a)
LETTER OF TRANSMITTAL
FOR
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
(INCLUDING SERIES A CUMULATIVE
CONVERTIBLE PREFERRED STOCK REPRESENTED BY
$3.00 DEPOSITARY SHARES)
OF
AMR CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON ______ __, 1994 (THE "EXPIRATION DATE") UNLESS EXTENDED
BY AMR CORPORATION
EXCHANGE AGENT:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:
First Chicago Trust Company of New York (registered or certified mail recommended)
Tenders & Exchanges First Chicago Trust Company of New York
Suite 4680 - AMR Tenders & Exchanges
14 Wall Street, 8th Floor P.O. Box 2565, Mail Suite 4660
New York, NY 10005 Jersey City, NJ 07303-2565
</TABLE>
By Facsimile:
(For Eligible Institutions Only)
(201) 222-4720 or (201) 222-4721
Confirm Receipt of Notice
of Guaranteed Delivery
by Telephone:
(201) 222-4707
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges receipt of the Prospectus dated
_____________, 1994 (the "Prospectus") of AMR Corporation (the "Company")
which, together with this Letter of Transmittal (the "Letter of Transmittal"),
describes the Company's offer (the "Exchange Offer") to exchange up to
$1,100,000,000 of its __% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") for shares of its Series A Cumulative
Convertible Preferred Stock (the "Preferred Stock") with a like aggregate
liquidation preference. Exchanges will be made on a basis of $1,000 principal
amount of Debentures (the minimum permitted denomination) for every two (2)
shares of Preferred Stock (liquidation preference $500 per share) validly
tendered and accepted for exchange in the Exchange Offer. The Company will pay
amounts of less than $1,000 due to any exchanging shareholder in cash, in lieu
of issuing Debentures with a principal amount of less than $1,000. Tenders may
also be made of Preferred Stock represented by $3.00 Depositary Shares (the
"Depositary Shares") issued pursuant to a Deposit Agreement, dated February 4,
1993 (the "Deposit Agreement"), between the Company, First Chicago Trust
Company of New York (in such capacity, the "Depositary") and holders from time
to time of depositary receipts (the "Depositary Receipts") representing
Depositary Shares issued thereunder. Each Depositary Share represents 1/10 of
a share of Preferred Stock and entitles the owner, proportionately, to all the
rights and preferences of the Preferred Stock represented thereby.
The undersigned has checked the appropriate boxes below and signed
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
<PAGE> 2
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND
THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE
FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF
THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE
AGENT OR THE INFORMATION AGENT.
List below the Preferred Stock or Depositary Shares to which this
Letter of Transmittal relates. If the space provided below is inadequate, the
Certificate or Depositary Receipt Numbers and Numbers of Shares or Depositary
Shares should be listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
DESCRIPTION OF PREFERRED STOCK TENDERED HEREWITH
------------------------------------------------
Number of Shares Number of
Name(s) and Address(es) of Registered Holder(s) Certificate Represented by Shares
(Please fill in) Number(s)* Certificate(s)* Tendered**
----------------------------------------------- ---------- ---------------- ----------
<S> <C> <C> <C>
Total
</TABLE>
* Need not be completed by book-entry holders.
** Unless otherwise indicated, the holder will be deemed to have tendered the
full number of shares of Preferred Stock represented by the tendered
certificates. See Instruction 2.
<TABLE>
<CAPTION>
DESCRIPTION OF DEPOSITARY SHARES TENDERED HEREWITH
--------------------------------------------------
Number of
Depositary Shares Number of
Depositary Represented by Depositary
Name(s) and Address(es) of Registered Holder(s) Receipt Depositary Shares
(Please fill in) Number(s)* Receipt(s)* Tendered**
----------------------------------------------- ---------- ----------------- ----------
<S> <C> <C> <C>
Total
</TABLE>
* Need not be completed by book-entry holders.
** Unless otherwise indicated, the holder will be deemed to have tendered the
full number of Depositary Shares represented by the tendered Depositary
Receipts. See Instruction 2.
This Letter of Transmittal is to be used either if certificates for
Preferred Stock or Depositary Receipts representing Depositary Shares are to be
forwarded herewith or if delivery of Preferred Stock or Depositary Shares is to
be made by book-entry transfer to an account maintained by the Exchange Agent
at The Depository Trust Company ("DTC"), pursuant to the procedures set forth
in "The Exchange Offer--Procedures for Tendering" in the Prospectus. Although
delivery of Preferred Stock or Depositary Shares may be effected through
book-entry transfer into the Exchange Agent's account at DTC in accordance with
DTC's Automated Tender Offer Program ("ATOP") procedures, the tendering
shareholder's properly completed and duly executed Letter of Transmittal, with
any required signature guarantees, must, in any case, be received by the
Exchange Agent at its address set forth above prior to the Expiration Date or
the guaranteed delivery procedures described below must be complied with.
Unless the context requires otherwise, the term "Holder" for purposes
of this Letter of Transmittal means any person in whose name Preferred Stock or
Depositary Shares are registered on the books of the Company or any other person
who has obtained a properly completed stock power from the registered holder or
any person whose Preferred Stock or Depositary Shares
2
<PAGE> 3
are held of record by DTC who desires to deliver such Preferred Stock or
Depositary Shares by book-entry transfer at DTC.
Holders whose Preferred Stock or Depositary Shares are not immediately
available or who cannot deliver their Preferred Stock or Depositary Shares and
all other documents required hereby to the Exchange Agent prior to the
Expiration Date may tender their Preferred Stock or Depositary Shares according
to the guaranteed delivery procedure set forth in the Prospectus under the
caption "The Exchange Offer -- Procedures for Tendering -- Guaranteed Delivery."
( ) CHECK HERE IF TENDERED PREFERRED STOCK OR DEPOSITARY SHARES ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE DEPOSITORY TRUST COMPANY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution__________________________________________
The Depository Trust Company
Account Number ___________________ Transaction Code Number____________
( ) CHECK HERE IF TENDERED PREFERRED STOCK OR DEPOSITARY SHARES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE
FOLLOWING:
Name of Registered Holder(s)___________________________________________
Name of Eligible Institution that Guaranteed Delivery__________________
IF DELIVERED BY BOOK-ENTRY TRANSFER:
Account Number ___________________________
( ) CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:__________________________________________________________________
Address:_______________________________________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer,
the undersigned hereby tenders to the Company the above-described Preferred
Stock or Depositary Shares. Subject to, and effective upon, the acceptance for
exchange of the Preferred Stock or Depositary Shares tendered herewith, the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
the Company all right, title and interest in and to such Preferred Stock or
Depositary Shares. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as the true and lawful agent and attorney-in-fact of the
undersigned (with full knowledge that said Exchange Agent acts as the agent of
the undersigned in connection with the Exchange Offer) to cause the Preferred
Stock or Depositary Shares to be assigned, transferred and exchanged. In
particular, the undersigned specifically authorizes the Exchange Agent to
withdraw under the Deposit Agreement the Preferred Stock underlying any
Depositary Shares tendered herewith, and to tender such underlying Preferred
Stock in the Exchange Offer. The undersigned represents and warrants that it
has full power and authority to tender, exchange, assign and transfer the
Preferred Stock or Depositary Shares and to acquire Debentures issuable upon
the exchange of such tendered Preferred Stock or Depositary Shares, and that,
when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the tendered Preferred Stock or Depositary Shares, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claim. The undersigned also warrants that it will, upon
request, execute and deliver any additional documents deemed by the Exchange
Agent or the Company to be necessary or desirable to complete the exchange,
assignment and transfer of tendered Preferred Stock or Depositary Shares or
transfer ownership of such Preferred Stock or Depositary Shares on the account
books maintained by DTC. All authority herein conferred or agreed to be
conferred shall survive the death, bankruptcy or incapacity of the undersigned
and every obligation of the undersigned hereunder shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
3
<PAGE> 4
The Company has expressly reserved the right to amend or modify the
terms of the Exchange Offer in any manner, or to withdraw or terminate the
Exchange Offer, at any time for any reason. The undersigned recognizes that
as a result of the foregoing, the Company may not be required to exchange any
of the Preferred Stock or Depositary Shares tendered hereby and, in such
event, the Preferred Stock or Depositary Shares not exchanged will be
returned to the undersigned at the address shown below the signature of the
undersigned. Tendered Preferred Stock or Depositary Shares may be withdrawn at
any time prior to the Expiration Date and, unless accepted for exchange by the
Company, may be withdrawn at any time after 40 business days after the date of
the Prospectus.
Certificates for all Debentures delivered in exchange for tendered
Preferred Stock or Depositary Shares and any Preferred Stock or Depositary
Shares delivered herewith but not exchanged, in each case registered in the
name of the undersigned, shall be delivered to the undersigned at the address
shown below the signature of the undersigned.
TENDERING HOLDER(S) SIGN HERE
(Complete Accompanying Substitute Form W-9)
________________________________________________________________________________
________________________________________________________________________________
Signature of Holder(s)
Dated:___________________, 1994
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for Preferred Stock or Depositary Receipts representing
Depositary Shares or by any person(s) authorized to become registered holder(s)
by endorsements and documents transmitted herewith or, if the Preferred Stock
or Depositary Shares are held of record by DTC, the person in whose name such
Preferred Stock or Depositary Shares are registered on the books of DTC. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, please set forth the full title of such person.) See
Instruction 3.
Name(s):________________________________________________________________________
________________________________________________________________________
(Please Print)
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________
(Including Zip Code)
Area Code and Telephone No. ____________________________________________________
Tax Identification No. _________________________________________________________
GUARANTEE OF SIGNATURE(S)
(If Required--See Instruction 3)
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
Title:__________________________________________________________________________
Address:________________________________________________________________________
Name of Firm:___________________________________________________________________
Area Code and Telephone No._____________________________________________________
Dated: , 1994
4
<PAGE> 5
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
Certificates or Depositary Receipts for all physically delivered Preferred
Stock or Depositary Shares, respectively, as well as a properly completed and
duly executed copy of this Letter of Transmittal or facsimile thereof, and any
other documents required by this Letter of Transmittal, or confirmation of any
book- entry transfer to the Exchange Agent's account at DTC of Preferred Stock
or Depositary Shares tendered by book-entry transfer, must be received by the
Exchange Agent at either of its addresses set forth herein prior to the
Expiration Date (as defined in the Prospectus).
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE PREFERRED
STOCK OR DEPOSITARY SHARES AND ANY OTHER REQUIRED DOCUMENTS IS AT THE ELECTION
AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF SUCH
DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, BE USED.
Holders whose Preferred Stock or Depositary Shares are not immediately
available or who cannot deliver their Preferred Stock or Depositary Shares and
all other required documents to the Exchange Agent prior to the Expiration Date
or comply with book-entry transfer procedures on a timely basis may tender
their Preferred Stock or Depositary Shares pursuant to the guaranteed delivery
procedure set forth in the Prospectus under "The Exchange Offer-Procedures for
Tendering-Guaranteed Delivery." Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution (as defined in the
Prospectus); (ii) on or prior to the Expiration Date the Exchange Agent must
have received from such Eligible Institution a letter, telex, telegram or
facsimile transmission setting forth the name and address of the tendering
holder, the names in which such Preferred Stock or Depositary Shares are
registered, and, if possible, the certificate or Depositary Receipt numbers of
the Preferred Stock or Depositary Shares, respectively, to be tendered; and
(iii) all tendered Preferred Stock or Depositary Shares as well as this Letter
of Transmittal and all other documents required by this Letter of Transmittal,
or a confirmation of any book-entry transfer of such Preferred Stock or
Depositary Shares into the Exchange Agent's account at DTC, must be received by
the Exchange Agent within five New York Stock Exchange trading days after the
date of execution of such letter, telex, telegram or facsimile transmission,
all as provided in the Prospectus under the caption "The Exchange
Offer-Procedures for Tendering-Guaranteed Delivery."
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance
of the Preferred Stock or Depositary Shares for exchange.
2. PARTIAL TENDERS; WITHDRAWALS. If less than the entire number of
shares of Preferred Stock or Depositary Shares evidenced by a submitted
certificate or Depositary Receipt, respectively, is tendered, the tendering
holder must fill in the number of shares of Preferred Stock or Depositary
Shares tendered in the box entitled "Number of Shares (Depositary Shares)
Tendered." A newly issued certificate for Preferred Stock or Depositary Receipt
for Depositary Shares submitted but not tendered will be sent to such holder as
soon as practicable after the Expiration Date. All Preferred Stock or
Depositary Shares delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
Tenders of Preferred Stock or Depositary Shares pursuant to the
Exchange Offer may be withdrawn at any time prior to the Expiration Date and,
unless accepted for exchange by the Company, may be withdrawn at any time after
40 business days after the date of the Prospectus. To be effective, a written
notice of withdrawal delivered by hand, mail delivery or facsimile transmission
must be timely received by the Exchange Agent. Any such notice of withdrawal
must specify the person named in the Letter of Transmittal as having tendered
Preferred Stock or Depositary Shares to be withdrawn, the certificate or
Depositary Receipt numbers of the Preferred Stock or Depositary Shares,
respectively, to be withdrawn, the number of shares of Preferred Stock or
Depositary Shares delivered for exchange, a statement that such a holder is
withdrawing its election to have such Preferred Stock or Depositary Shares
exchanged, and the name of the registered holder of such Preferred Stock or
Depositary Shares, and must be signed by the holder in the same manner as the
original signature on this Letter of Transmittal (including any required
signature guarantees) or be accompanied by evidence satisfactory to the Company
that the person withdrawing the tender has succeeded to the beneficial ownership
of the Preferred Stock or Depositary Shares being withdrawn. The Exchange Agent
will return properly withdrawn Preferred Stock or Depositary Shares promptly
following receipt of notice of withdrawal. If Preferred Stock or Depositary
Shares have been tendered pursuant to the procedure for book-entry transfer, any
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawn Preferred Stock or Depositary Shares or otherwise
comply with DTC's procedures. All questions as to the validity of notice of
withdrawal, including time of receipt, will be determined by the Company, and
such determination will be final and binding on all parties. Withdrawals of
tenders of Preferred Stock or Depositary Shares may not be rescinded and any
Preferred Stock or Depositary Shares withdrawn will thereafter be deemed not
validly tendered for purposes of the Exchange Offer. Properly withdrawn
Preferred Stock or Depositary Shares, however, may be retendered by following
the procedures therefor at any time prior to the Expiration Date.
5
<PAGE> 6
3. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed
by the registered holder(s) of the Preferred Stock or Depositary Shares
tendered hereby, the signature must correspond with the name(s) as written on
the face of the certificates for Preferred Stock or Depositary Receipts
representing Depositary Shares, respectively, without alteration, enlargement
or any change whatsoever.
If any of the Preferred Stock or Depositary Shares tendered hereby are
owned of record by two or more joint owners, all such owners must sign this
Letter of Transmittal.
If a number of shares of Preferred Stock or Depositary Shares
registered in different names are tendered, it will be necessary to complete,
sign and submit as many separate copies of this Letter of Transmittal as there
are different registrations of Preferred Stock or Depositary Shares.
When this Letter of Transmittal is signed by the registered holder or
holders of Preferred Stock or Depositary Shares listed and tendered hereby, no
endorsements of certificates or Depositary Receipts or separate written
instruments of transfer or exchange are required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of the Preferred Stock or Depositary Shares
listed, such Preferred Stock or Depositary Shares must be endorsed or
accompanied by separate written instruments of transfer or exchange in form
satisfactory to the Company and duly executed by the registered holder, in
either case signed exactly as the name or names of the registered holder or
holders appear(s) on the Preferred Stock or Depositary Shares.
If this Letter of Transmittal, any certificates or Depositary Receipts
or separate written instruments of transfer or exchange are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority so to act must
be submitted.
Endorsements on certificates or Depositary Receipts or signatures on
separate written instruments of transfer or exchange required by this
Instruction 3 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Preferred Stock or Depositary Shares are
tendered: (i) by a registered holder of such Preferred Stock or Depositary
Shares; or (ii) for the account of an Eligible Institution.
4. TRANSFER TAXES. The Company shall pay all transfer taxes, if any,
applicable to the transfer and exchange of Preferred Stock or Depositary Shares
to it or its order pursuant to the Exchange Offer. If, however, Debentures are
to be delivered to, or are to be registered or issued in the name of, any
person other than the registered holder of the Preferred Stock or Depositary
Shares tendered hereby, or if a transfer tax is imposed for any reason other
than the transfer of Preferred Stock or Depositary Shares to the Company or its
order pursuant to the Exchange Offer, the amount of any such transfer taxes
(whether imposed on the registered holder or any other person) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exception therefrom is not submitted herewith, the amount of such transfer
taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 4, it will not be necessary for
transfer tax stamps to be affixed to the certificates for Preferred Stock or
Depositary Receipts representing Depositary Shares, respectively, listed in
this Letter of Transmittal.
5. EXTENSIONS, AMENDMENTS AND TERMINATION. The Company expressly
reserves the right to extend, amend or modify the terms of the Exchange Offer
in any manner and withdraw or terminate the Exchange Offer and not accept for
exchange any Preferred Stock, at any time for any reason, including (without
limitation) if Preferred Stock having an aggregate liquidation preference of at
least $200 million is not tendered (which condition may be waived by the
Company).
6. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any holder whose
Preferred Stock or Depositary Shares have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated below for
further instructions.
7. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating
to the procedure for tendering, as well as requests for additional copies of
the Prospectus and this Letter of Transmittal, may be directed to the Exchange
Agent at the addresses and telephone number set forth above. In addition, all
questions relating to the Exchange Offer, as well as requests for assistance or
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to D.F. King & Co., Inc., the Information Agent for the Exchange
Offer, at 77 Water Street, New York, New York 10005, telephone (800) 347-7869.
8. IRREGULARITIES. All questions as to the validity, form,
eligibility (including time of receipt), and acceptance of Letters of
Transmittal or Preferred Stock or Depositary Shares will be resolved by the
Company, and such determination will be final and binding on all parties. The
Company reserves the absolute right to reject any or all Letters of Transmittal
or tenders that are not in proper form or the acceptance of which would, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
right to waive any irregularities or conditions of tender as to the particular
Preferred Stock or Depositary Shares covered by any Letter of Transmittal or
tendered pursuant to such letter. None of the Company, the Exchange Agent or
any other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. The Company's interpretation of the terms and conditions of the
Exchange Offer shall be final and binding on all parties.
9. SUBSTITUTE FORM W-9. Federal income tax laws require each
tendering holder to provide the Company with a correct taxpayer identification
number ("TIN") on the Substitute Form W-9 which is provided under "Important
Tax
6
<PAGE> 7
Information" below, and to indicate whether or not the holder is not subject to
backup withholding by checking the box in Part 2 of the Form. Failure to
provide the information on the Form or to check the box in Part 2 of the Form
may subject the tendering holder to 31% federal income tax withholding on the
payments made to the holder. The box in Part 3 of the Form may be checked if
the tendering holder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked
and the holder is not provided with a TIN within sixty (60) days, the Company
will withhold 31% on all such payments thereafter until a TIN is provided to
the Company.
10. DEFINITIONS. Capitalized terms used in this Letter of Transmittal
and not otherwise defined have the meanings given in the Prospectus.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF
(TOGETHER WITH CERTIFICATES FOR PREFERRED STOCK OR DEPOSITARY RECEIPTS
REPRESENTING DEPOSITARY SHARES AND ALL OTHER REQUIRED DOCUMENTS) OR
CONFIRMATION OF BOOK-ENTRY TRANSFER OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a holder whose tendered Preferred Stock
or Depositary Shares are accepted for exchange is required to provide the
Company with such holder's correct taxpayer identification number ("TIN") on
Substitute Form W-9. If a holder is an individual, the TIN is the holder's
social security number. If the Company is not provided with the correct TIN,
the holder may be subject to a penalty imposed by the Internal Revenue Service.
In addition, payments that are made to such holder with respect to Debentures
acquired pursuant to the Exchange Offer may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding requirements.
A corporation must, however, complete the Substitute Form W-9, including
providing its TIN and indicating that it is exempt from backup withholding, in
order to establish its exemption from backup withholding. In order for a
foreign individual to qualify as an exempt recipient, that holder must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Company. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Company is required to withhold 31%
of all payments made to the holder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained.
To prevent backup withholding on payments that are made to a holder
with respect to Debentures, the holder is required to notify the Company of his
or its correct TIN by completing the Form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such holder is awaiting a
TIN) and whether or not (i) the holder has not been notified by the Internal
Revenue Service that the holder is subject to backup withholding as a result of
a failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified the holder that the holder is no longer subject to backup
withholding.
7
<PAGE> 8
<TABLE>
<S> <C>
PAYOR'S NAME: AMR CORPORATION
-----------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE TIN:
BOX AT RIGHT AND CERTIFY BY SIGNING AND -------------------------------------------------
DATING BELOW Social Security Number or
Employer Identification Number
---------------------------------------- ------------------------------------------------------
FORM W-9 Part 2--I am not subject to backup withholding because (i) I am FOR PAYEES EXEMPT FROM
exempt from backup withholding, or (ii) I have not been notified by BACKUP WITHHOLDING
the IRS that I am subject to backup withholding as a result of a
DEPARTMENT OF THE TREASURY failure to report all interest or dividends, or (iii) the IRS has
INTERNAL REVENUE SERVICE notified me that I am no longer subject to backup withholding. Write "EXEMPT" if you
(YOU MUST CROSS OUT THIS PART 2 IF YOU ARE CURRENTLY SUBJECT TO are exempt from backup
BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING OF INTEREST OR withholding.
DIVIDENDS ON YOUR TAX RETURN.)
------------------------------------------------------------------- ---------------------------
PAYER'S REQUEST FOR TAXPAYER CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION PROVIDED ON THIS
IDENTIFICATION NUMBER (TIN) FORM IS TRUE, CORRECT AND COMPLETE.
-----------------------------------------------------------------------------------------------
SIGNATURE DATE PART 3--AWAITING
----------------------------------------- ----- TIN ( )
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER OR SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
CERTIFICATE OF TAXPAYER AWAITING TIN
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to appropriate Internal Revenue
Service Center or Social Security Administration Office, or (b) I intend to
mail or deliver an application in the near future. I understand that if I do
not provide a taxpayer identification number within 60 days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.
Signature _____________________________________________ Date_________________
8
<PAGE> 1
Exhibit 99(b)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
(INCLUDING SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
REPRESENTED BY $3.00 DEPOSITARY SHARES)
IN EXCHANGE FOR
___% CONVERTIBLE SUBORDINATED QUARTERLY INCOME CAPITAL SECURITIES DUE 2024
OF
AMR CORPORATION
Registered holders of outstanding Series A Cumulative Convertible
Preferred Stock, of AMR Corporation (the "Preferred Stock"), including
registered holders of $3.00 Depositary Shares (the "Depositary Shares") (each
of which represents 1/10 of a share of Preferred Stock), who wish to tender
Preferred Stock or Depositary Shares in exchange for AMR Corporation's __%
Convertible Subordinated Quarterly Income Capital Securities due 2024 (the
"Debentures") on a basis of $1,000 principal amount of Debentures for every two
(2) shares of Preferred Stock (liquidation preference $500 per share) accepted
for exchange, on the terms and subject to the conditions set forth in AMR
Corporation's Prospectus, dated _______ __, 1994 and the related Letter of
Transmittal and, in each case, whose Preferred Stock or Depositary Shares are
not immediately available or who cannot deliver their Preferred Stock or
Depositary Shares and Letter of Transmittal (and any other documents required
by the Letter of Transmittal) to First Chicago Trust Company of New York (the
"Exchange Agent") prior to the Expiration Date, may use this Notice of
Guaranteed Delivery or one substantially equivalent hereto. This Notice of
Guaranteed Delivery may be delivered by hand or sent by facsimile transmission
(receipt confirmed by telephone and an original delivered by guaranteed
overnight delivery) or mail to the Exchange Agent. See "The Exchange
Offer--Procedures for Tendering" in the Prospectus.
The Exchange Agent for the Exchange Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Courier:
(registered or certified mail recommended)
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
P. O. Box 2565, Mail Suite 4660 Suite 4680 - AMR
Jersey City, NJ 07303-2565 14 Wall Street, 8th Floor
New York, NY 10005
</TABLE>
By Facsimile:
(For Eligible Institutions Only)
(201) 222-4720 or (201) 222-4721
Confirm Receipt of Notice of
Guaranteed Delivery by Telephone:
(201) 222-4707
Delivery of this Notice of Guaranteed Delivery to an address other
than as set forth above or transmission of instructions via a facsimile
transmission to a number other than as set forth above will not constitute a
valid delivery.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN ELIGIBLE INSTITUTION, SUCH SIGNATURE GUARANTEE MUST APPEAR IN
THE APPLICABLE SPACE PROVIDED ON THE LETTER OF TRANSMITTAL FOR GUARANTEE OF
SIGNATURES.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders the number of shares of Preferred Stock
or Depositary Shares indicated below, upon the terms and subject to the
conditions contained in the Prospectus dated ________ __, 1994, of AMR
Corporation (the "Prospectus"), receipt of which is hereby acknowledged.
DESCRIPTION OF SECURITIES TENDERED
<TABLE>
<CAPTION>
Preferred Stock
---------------
Name and address of registered holder as it
appears on the
Certificate(s) for
Preferred
Stock Certificate Number(s) of Preferred Number of Shares of Preferred Stock
(Please Print) Stock Tendered Tendered
------------------------------------------- ---------------------------------- -----------------------------------
<S> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Depositary Shares
-----------------
Name and address of registered holder as it
appears on the
Depositary Receipt(s) for
Depositary
Shares Depositary Receipt Number(s) of
(Please Print) Depositary Shares Tendered Number of Depositary Shares Tendered
-------------------------------------------- ------------------------------- ------------------------------------
<S> <C> <C>
</TABLE>
2
<PAGE> 3
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(Not to be used for signature guarantee)
The undersigned, a firm that is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office, branch,
agency or correspondent in the United States, hereby guarantees to deliver to
the Exchange Agent at one of its addresses set forth above, the certificates
representing the Preferred Stock or depositary receipts representing the
Depositary Shares, together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), with any required signature guarantees,
and any other documents required by the Letter of Transmittal within five New
York Stock Exchange, Inc. trading days after the date of execution of this
Notice of Guaranteed Delivery.
Name of Firm:_____________________________ ___________________________________
(Authorized Signature)
Address:__________________________________
Title:_____________________________
__________________________________________
(Zip Code) Name:______________________________
(Please type or print)
Area Code and Telephone Number:
Date:______________________________
__________________________________________
NOTE: DO NOT SEND CERTIFICATES FOR PREFERRED STOCK OR
DEPOSITARY RECEIPTS REPRESENTING DEPOSITARY SHARES WITH THIS
NOTICE OF GUARANTEED DELIVERY. CERTIFICATES FOR PREFERRED
STOCK OR DEPOSITARY RECEIPTS REPRESENTING DEPOSITARY SHARES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
Exhibit 99(c)
TENDER FOR ALL OUTSTANDING
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
(INCLUDING SERIES A CUMULATIVE CONVERTIBLE PREFERRED
STOCK REPRESENTED BY $3.00 DEPOSITARY SHARES)
IN EXCHANGE FOR
______% CONVERTIBLE SUBORDINATED QUARTERLY INCOME CAPITAL SECURITIES DUE 2024
OF
AMR CORPORATION
To Registered Holders and Depository
Trust Company Participants:
We are enclosing herewith the material listed below relating to the
offer by AMR Corporation (the "Company") to exchange $1,000 principal amount of
its __% Convertible Subordinated Quarterly Income Capital Securities due 2024
for every two (2) shares of its Series A Cumulative Convertible Preferred Stock
(liquidation preference $500 per share) (the "Preferred Stock") (including
Preferred Stock represented by certain $3.00 Depositary Shares, each of which
represents 1/10 of a share of Preferred Stock), upon the terms and subject to
the conditions set forth in the Company's Prospectus, dated _____ __, 1994, and
the related Letter of Transmittal (which together constitute the "Exchange
Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated ______ __, 1994;
2. Letter of Transmittal (together with accompanying Substitute
Form W-9 Guidelines);
3. Notice of Guaranteed Delivery; and
4. Letter which may be sent to your clients for whose account you
hold Preferred Stock or Depositary Shares in your name or in
the name of your nominee, with space provided for obtaining
such client's instruction with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the
Exchange Offer will expire at 5:00 p.m., New York City time, on _____ __, 1994,
unless extended.
The Offer is conditioned upon Preferred Stock with an aggregate
liquidation preference of not less than $200 million being validly tendered and
not withdrawn.
First Chicago Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Questions relating to the procedure for
tendering, as well as requests for additional copies of the Prospectus and the
Letter of Transmittal may be addressed to the following addresses and telephone
number:
<PAGE> 2
<TABLE>
<S> <C>
By Mail (registered or certified mail By Hand or Overnight Courier:
recommended): First Chicago Trust Company of New York
First Chicago Trust Company of New York Tenders & Exchanges
Tenders & Exchange Suite 4680-AMR
P.O. Box 2565, Mail Suite 4660 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2565 New York, NY 10005
</TABLE>
By Facsimile
(Eligible Institutions Only)
(201) 222-4720 or (201) 222-4721
Confirm Receipt
of Notice
of Guaranteed Delivery
by Telephone
(201) 222-4707
In addition, all questions relating to the Exchange Offer, as well as
requests for assistance or additional copies of the Prospectus or the Letter of
Transmittal, may be directed to D.F. King & Co., Inc., the Information Agent for
the Exchange Offer, 77 Water Street, New York, New York 10005, telephone (800)
347-7869.
The Company will not pay any fee or commission to any broker or dealer
or to any other persons (other than the Dealer Managers, the Information Agent
and the Exchange Agent) in connection with the solicitation of tenders of
Preferred Stock or Depositary Shares pursuant to the Exchange Offer. The
Company will pay or cause to be paid any transfer taxes payable on the transfer
of Preferred Stock or Depositary Shares to it, except as otherwise provided in
Instruction 4 of the enclosed Letter of Transmittal.
Very truly yours,
AMR CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU AS
THE AGENT OF AMR CORPORATION OR FIRST CHICAGO TRUST COMPANY OF NEW YORK OR
AUTHORIZE YOU TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
TENDER FOR ALL OUTSTANDING
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
(INCLUDING SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
REPRESENTED BY $3.00 DEPOSITARY SHARES)
IN EXCHANGE FOR
__% CONVERTIBLE SUBORDINATED QUARTERLY INCOME CAPITAL SECURITIES DUE 2024
OF
AMR CORPORATION
The undersigned acknowledges receipt of your letter enclosing the
Prospectus, dated _____ __, 1994, of the Company and a related Letter of
Transmittal relating to the Exchange Offer. This will instruct you to tender
the number of shares of Preferred Stock or Depositary Shares indicated below
held by you for the account of the undersigned, pursuant to the terms and
subject to the conditions of the Exchange Offer and confirm that you may make
the representations contained in the Letter of Transmittal on behalf of the
undersigned.
Preferred Stock to be Tendered
Aggregate
Number of Shares
of Preferred Stock Held by Number of Shares of
You for the Account Preferred Stock
of the Undersigned Tendered*
-------------------------- -------------------
Depositary Shares to be Tendered
Aggregate
Number of
Depositary Shares
Held by
You for the Account Number of Depositary Shares
of the Undersigned Tendered*
------------------ ---------------------------
________________________________________
Signature(s)
________________________________________
Please print name
________________________________________
Date
________________________
* Unless otherwise indicated, it will be assumed that all the undersigned's
Preferred Stock or Depositary Shares are to be tendered.
<PAGE> 1
Exhibit 99(d)
TENDER FOR ALL OUTSTANDING
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
(INCLUDING SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
REPRESENTED BY $3.00 DEPOSITARY SHARES)
IN EXCHANGE FOR
___% CONVERTIBLE SUBORDINATED QUARTERLY INCOME
CAPITAL SECURITIES DUE 2024
OF
AMR CORPORATION
To Our Clients:
We are enclosing herewith a Prospectus, dated ________ __, 1994, of
AMR Corporation (the "Company"), and a related Letter of Transmittal (which
together constitute the "Exchange Offer") relating to the offer by the Company
to exchange $1,000 principal amount of its __% Convertible Subordinated
Quarterly Income Capital Securities due 2024 for every two (2) shares of its
Series A Cumulative Convertible Preferred Stock (liquidation preference $500
per share) (the "Preferred Stock") (including Preferred Stock represented by
certain $3.00 Depositary Shares, each of which represents 1/10 of a share of
Preferred Stock), upon the terms and subject to the conditions set forth in the
Exchange Offer.
Please note that the Offer will expire at 5:00 pm., New York City
time, on ____ __, 1994, unless extended.
The Offer is conditioned upon Preferred Stock with an aggregate
liquidation preference of not less than $200 million being validly tendered and
not withdrawn.
We are the holder of record of Preferred Stock or Depositary Shares
held by us for your account. A tender of such Preferred Stock or Depositary
Shares can be made only by us as the record holder and pursuant to your
instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Preferred Stock or
Depositary Shares held by us for your account.
We request instructions as to whether you wish to tender any or all of
the Preferred Stock or Depositary Shares held by us for your account pursuant
to the terms and conditions of the Exchange Offer.
Very truly yours,
