SCHEDULE 14A INFORMATION
AMENDMENT NO. 1
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only (as
permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or
(S)240.14a-12
Texas Utilities Electric Company
(Name of Registrant as specified In Its Charter)
-----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a- 6(i)(3).
[_] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
-------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
-------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
---------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------
(5) Total fee paid:
---------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------
(2) Form, Schedule or Registration Statement No.:
---------
(3) Filing Party:
-----------------------------------------
(4) Date Filed:
-------------------------------------------
<PAGE>
TEXAS UTILITIES ELECTRIC COMPANY
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
-------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
-------------------
April , 1997
To the Shareholders of
Texas Utilities Electric Company:
A special meeting of shareholders of Texas Utilities
Electric Company will be held in the Gold Room of the Fairmont
Hotel, Dallas, Texas on Friday, May 16,1997, beginning at 9:30
a.m. local time, for the purpose of approving the proposed
Restated Articles of Incorporation of the Company.
The Board of Directors has fixed the close of business
on May 2, 1997 as the time as of which shareholders entitled to
notice of, and to vote at, the meeting and any adjournments
thereof shall be determined.
WHETHER OR NOT YOU WILL BE ABLE TO ATTEND THE MEETING,
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY PROMPTLY. NO
POSTAGE NEED BE AFFIXED TO THE REPLY ENVELOPE WHICH IS ENCLOSED
HEREWITH FOR YOUR CONVENIENCE IF IT IS MAILED IN THE UNITED
STATES.
Glen H. Hibbs
Assistant Secretary
<PAGE>
TEXAS UTILITIES ELECTRIC COMPANY
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
-------------------
PROXY STATEMENT
-------------------
April , 1997
A special meeting of the shareholders of TEXAS
UTILITIES ELECTRIC COMPANY (Company) has been called by the Board
of Directors of the Company to be held in the Gold Room of the
Fairmont Hotel, Dallas, Texas, on Friday, May 16, 1997, beginning
at 9:30 a.m. local time, for the purpose of approving the
proposed Restated Articles of Incorporation of the Company
(Restated Articles). Attached hereto as Annex I is the Restated
Articles marked to show the proposed changes (Amendments) to the
Company's Articles of Incorporation currently in effect (Current
Articles). The Amendments are described herein.
Pursuant to the requirements of the New York Stock
Exchange, a proxy in the accompanying form is solicited by the
Board of Directors of the Company for use at the meeting and any
adjournments thereof.
The close of business on May 2, 1997 has been fixed as
the time as of which shareholders entitled to notice of such
meeting and to vote on the matters before such meeting shall be
determined. As of May 2, 1997, there will be outstanding and
entitled to vote 156,800,000 shares of common stock of the
Company (Common Stock) and 5,613,880.25 shares of preferred stock
of the Company (Preferred Stock), of which 1,032,238.25 shares
are represented by 4,128,953 outstanding depositary shares
(Depositary Shares).
Except as indicated below, each share of Common Stock
is entitled to one vote on all matters submitted to shareholders
and each share of Preferred Stock is entitled to one vote on
matters concerning the rights of holders of Preferred Stock.
Each Depositary Share represents the right to instruct the
Depositary to vote with respect to 1/4 share of a series of
Preferred Stock.
<PAGE>
This Notice, Proxy Statement and form of proxy are
being mailed or given to shareholders on or about April , 1997.
The cost of soliciting proxies will be borne by the
Company. In addition to use of the mails, proxies may be
solicited by directors, officers and regular employees of the
Company in person or by telephone. The Company has not hired any
solicitation firm to assist in the solicitation of proxies, but
it has hired D.F. King & Co., Inc. to assist in determining the
appropriate recipients of this Proxy Statement at an estimated
cost of $8,500.
Any proxy delivered pursuant to this solicitation is
revocable at the option of the person executing the same at any
time prior to the exercise thereof. The shares represented by
any proxy duly given as a result of this request will be voted in
the discretion of the persons named in the proxy unless the
shareholder specifies a choice by means of the ballot space on
the proxy, in which case the shares will be voted accordingly.
Depositary Shares of any series for which the
Depositary does not timely receive voting instructions will be
voted in conformity with the instructions received from the
record holders of a majority of the Depositary Shares of such
series who have given voting instructions.
Employees of an affiliate of the Company will tabulate
proxies and votes cast at the meeting.
There are two classes of capital stock of the Company
outstanding: the Common Stock and the Preferred Stock. The
presence in person or by proxy of the holders of a majority of
the total number of shares of the Common Stock and the Preferred
Stock entitled to vote shall constitute a quorum entitled to
transact business at the meeting. The approval of the Amendments
requires the affirmative vote of two-thirds of the outstanding
shares of Common Stock entitled to vote on the proposal. The
approval of those Amendments affecting Article VI. Division A---
Preferred Stock, Section 6. Restrictions on Certain Corporate
Action (Amendments Affecting Preferred) also requires the
affirmative vote of two-thirds of the outstanding shares of
Preferred Stock, voting together as a class. No abstentions or
broker non-votes will be treated as affirmative votes.
Texas Utilities Company (Texas Utilities) is the holder
of all of the outstanding Common Stock of the Company. On
February 24, 1997, Texas Utilities commenced a tender offer for
any and all shares of seventeen series of the Company's Preferred
Stock and three series of its Depositary Shares. Texas Utilities
also advised holders of shares subject to such tender offer that
-2-
<PAGE>
it intended to vote all the shares of the Company's Common Stock
and Preferred Stock it held, including any shares acquired in
such offer, for amendments to the Current Articles substantially
the same as the Amendments Affecting Preferred. This tender
offer was concluded on March 21, 1997, resulting in the
acquisition by Texas Utilities of an aggregate of 3,985,652
shares of the Company's Preferred Stock, either directly or
through the ownership of Depositary Shares. Because Texas
Utilities is an affiliate of the Company, Texas Utilities filed
an Issuer Tender Offer Statement and amendments thereto on Form
13E-4 under the Securities Exchange Act of 1934, as amended.
Anticipated redemptions by the Company on May 1, 1997
of the remaining four series of Preferred Stock that were not
subject to Texas Utilities' tender offer and open market purchases
of Preferred Stock by the Company will result in Texas Utilities'
ownership, either directly or indirectly though the ownership of
Depositary Shares, to aggregate approximately 71% of the Company's
outstanding Preferred Stock as of May 2, 1997. Texas Utilities
has publicly stated its intention to vote in favor of the
Restated Articles. Since Texas Utilities will be the holder of
more than two-thirds of the outstanding Common Stock and more
than two thirds of the outstanding Preferred Stock, it is
expected that the Restated Articles will be approved and adopted.
Because the Amendments other than the Amendments
Affecting Preferred are generally conforming and updating
revisions to the Current Articles, the Amendments are
incorporated into the proposed Restated Articles which will be
presented to the shareholders for approval as a single ballot
item. The Amendments will not be voted on separately.
-3-
<PAGE>
BENEFICIAL OWNERSHIP OF CAPITAL STOCK OF THE COMPANY
The following table indicates the number of shares of
each class beneficially owned by any person or group known by the
Company to be the holder of more than 5% of the shares of each
class of stock entitled to vote at the meeting.
=================================================================
Amount and Percent of
Name and address nature of class as
Title of of beneficial beneficial of May 2,
Class owner ownership 1997
-----------------------------------------------------------------
Common Stock Texas Utilities 156,800,000 100%
Company shares
1601 Bryan Street
Dallas, Texas 75201
-----------------------------------------------------------------
Preferred Texas Utilities 3,985,652 71%*
Stock Company shares
(directly or 1601 Bryan Street
through Dallas, Texas 75201
ownership of
Depositary
Shares)
=================================================================
*After the completion of the optional redemptions on May 1, 1997.
As of March 15, 1997, none of the directors or
executive officers of the Company owned any shares of the
Preferred Stock or Depositary Shares of the Company.
APPROVAL OF RESTATED ARTICLES OF INCORPORATION
The Board of Directors believes that the proposed
Restated Articles will provide greater flexibility for the
Company to modify its capital structure in the future and that
approval of the Restated Articles is in the best interests of the
Company and its shareholders. Therefore the Board of Directors
recommends a vote FOR approval of the Restated Articles.
---
If the Restated Articles are approved by the
shareholders, the Company will then have (i) the flexibility to
repurchase shares of its Common Stock and (ii) increased
flexibility to issue unsecured debt. Any such repurchases of
Common Stock would have the effect of reducing the common equity
component of the Company's capital structure. Increasing the
Company's flexibility to issue unsecured debt enables the Company
to access important sources of debt financing in a timely and
cost efficient manner. The ability of the Company to adjust its
capital structure in the ways contemplated by the Restated
Articles enables the Company to better respond to the competitive
-4-
<PAGE>
pressures in the electric utility industry, to regulatory
requirements, to capital market forces and to strategic
opportunities. At the present time the Company's Board of
Directors does not have plans for the Company to repurchase any
of its Common Stock or to issue additional unsecured debt.
If the Restated Articles are approved, holders of
shares of Preferred Stock and Depositary Shares that remain
outstanding will not possess the same protections, rights and
privileges as the holders of Preferred Stock and Depositary
Shares now possess. The elimination of such protections, rights
and privileges may adversely affect the ratings, market value or
liquidity of shares of Preferred Stock and Depositary Shares that
remain outstanding after the approval of the Restated Articles.
Reference is made to Annex I hereto, where the complete
Restated Articles are set forth showing additions to and
deletions from the Current Articles made by the Amendments. The
following list summarizes the proposed modifications to the
Articles:
1. Replace the word "fixed" with the word "authorized" in the
terms "fixed dividend rate", "fixed redemption price",
"fixed liquidation price" and "fixed liquidation premium" to
more clearly describe the terms of various series of
preferred stock, including adjustable rate preferred stock.
(Pages 3, 4 and 5 of Restated Articles) THIS CHANGE IS NOT
EXPECTED TO HAVE A SUBSTANTIAL IMPACT ON THE OUTSTANDING
SHARES OF PREFERRED STOCK.
2. Permit variations in the voting rights of different series
of Preferred Stock. This will permit the Company to use
different financing techniques such as the issuance of
series of Preferred Stock having differing per share
liquidation values and votes per share that reflect such
differences. For example, the Company would be able to issue
shares with a liquidation value of $25.00 and one-quarter
vote per share. (Pages 4 and 40 of Restated Articles) THE
VOTING RIGHTS OF OUTSTANDING SHARES OF PREFERRED STOCK AND
DEPOSITARY SHARES WILL BE UNAFFECTED BY THIS CHANGE.
3. Incorporation of a provision making the redemption of
Preferred Stock conditional so that the Company has the
option of revoking its decision to redeem series of
Preferred Stock subsequent to giving notice to the holders
thereof but prior to the redemption date therefor. This
change would make redemptions of Preferred Stock similar in
this respect to redemptions of mortgage bonds under the
Company's Mortgage and Deed of Trust. (Page 5 and 6 of
Restated Articles) THE EFFECT OF THIS CHANGE WOULD BE TO
-5-
<PAGE>
MAKE THE REDEMPTION OF SHARES OF PREFERRED STOCK CALLED FOR
REDEMPTION LESS CERTAIN UNTIL THE ACTUAL REDEMPTION DATE.
4. Addition of the title "an officer of the Corporation" in
place of "its President or a Vice President..." as a person
authorized to make certain determinations and take certain
actions on behalf of the Company, consistent with changes
made to the Texas Business Corporation Act (TBCA) that
increased the group of officers a corporation could
authorize to perform such duties. (Pages 6 and 8 of Restated
Articles) THIS CHANGE IS NOT EXPECTED TO HAVE A SUBSTANTIAL
IMPACT ON THE OUTSTANDING SHARES OF PREFERRED STOCK.
5. Increase from four to six the number of quarterly dividend
payments that must be in arrears before holders of Preferred
Stock, voting as a class, are entitled to certain special
rights to vote for the smallest number of directors
necessary to constitute a majority of the full Board of
Directors. The change would conform to the New York Stock
Exchange requirements for the voting rights of preferred
stock of its listed companies. (Page 6 of Restated
Articles) THIS CHANGE IMPACTS THE OUTSTANDING SHARES OF
PREFERRED STOCK BY EXTENDING THE TIME BY TWO QUARTERS DURING
WHICH DIVIDENDS ON PREFERRED STOCK CAN BE IN ARREARS AND THE
HOLDERS OF PREFERRED STOCK ARE NOT ABLE TO ELECT A MAJORITY
OF THE BOARD OF DIRECTORS.
6. Change from "two-thirds" to "a majority" the number of
shares of Preferred Stock required for consent to certain
corporate actions (Page 9 of Restated Articles) and the
number of shares of capital stock required to approve an
increase in the Company's capital stock. (Page 40 of
Restated Articles) THESE CHANGES WOULD MAKE IT EASIER FOR
THE TERMS OF ONE OR MORE INDIVIDUAL SERIES OF PREFERRED
STOCK TO BE MODIFIED AND FOR THE NUMBER OF SHARES OF CAPITAL
STOCK TO BE INCREASED.
7. Elimination of the prohibition of the issuance of unsecured
debt if such issuance would cause all unsecured debt of the
Company to exceed 25% of the sum of the Company's unsecured
debt, stated capital and retained earnings. The restriction
on the issuance of unsecured indebtedness based on net
earnings available for the payment of interest would remain
unchanged, although the calculation of such earnings would
be changed as described in paragraph 8, below. This change,
together with the changes described in paragraph 8, below,
could result in an increase in the aggregate unsecured
indebtedness allowable under the Restated Articles. (Page 9
of Restated Articles) IN THE EVENT OF LIQUIDATION OR
-6-
<PAGE>
DISSOLUTION, INDEBTEDNESS WOULD HAVE PRIORITY OVER
OUTSTANDING PREFERRED STOCK AND COMMON STOCK.
8. Change to the definition of earnings available for the
payment of interest, for purposes of the coverage test
calculations for the issuance of unsecured debt, to exclude
extraordinary charges, regulatory disallowances, cumulative
effects of changes in accounting principles, and any other
non-cash non-recurring book losses. (Pages 11 and 12 of
Restated Articles) REFERENCE IS MADE TO PARAGRAPH 7, ABOVE.
9. Elimination of two of the three earnings coverage tests
related to restrictions on the issuance by the Company of
Preferred Stock. The existence of three similar tests
resulted from the merger of three predecessor companies in
the formation of the Company in 1983. The coverage test
that would remain would be the one which states that net
income, after income taxes, must be at least two times
annual preferred stock dividend requirements. (Page 10 and
11 of Restated Articles) THIS CHANGE IS NOT EXPECTED TO
HAVE A SUBSTANTIAL IMPACT ON THE OUTSTANDING SHARES OF
PREFERRED STOCK.
10. Exclusion from indebtedness, for purposes of the coverage
test calculations for the issuance of unsecured debt, of any
obligation or liability which is non-recourse to the
Company, whether or not the obligation or liability is
reflected in the financial statements of the Company. A
corresponding exclusion would be introduced in the
definition of "total capitalization" for purposes of the net
income test with respect to the payment of Common Stock
dividends. (Pages 12 and 39 of Restated Articles). These
changes eliminate potential ambiguities which may develop in
the future if accounting rules or legislative or regulatory
actions require the Company to include in its
financial statements indebtedness which the Company has no
legal obligation to repay. An example of this type of
indebtedness might be bonds issued by an affiliate of the
Company in connection with the securitization of a revenue
stream related to stranded assets. THESE CHANGES ARE NOT
EXPECTED TO HAVE A SUBSTANTIAL IMPACT ON THE OUTSTANDING
SHARES OF PREFERRED STOCK.
11. Increase the limit on a payment of Common Stock dividends
from 50% to 75% of net income at any time when common stock
equity is less than 20% of total capitalization and
eliminate other restrictions on the payment of Common Stock
dividends. (Page 38 of Restated Articles) ANY INCREASE IN
THE PAYMENT OF COMMON STOCK DIVIDENDS RESULTING FROM THIS
CHANGE WOULD RESULT IN INCREASED UTILIZATION OF RETAINED
-7-
<PAGE>
EARNINGS FOR THE PURPOSE OF PAYING COMMON STOCK DIVIDENDS
AND COULD ADVERSELY IMPACT THE COMPANY'S ABILITY TO PAY
DIVIDENDS ON OUTSTANDING SHARES OF PREFERRED STOCK.
12. Eliminate limitations on repurchases by the Company of its
Common Stock. The primary effect of this change would be to
permit the Company to repurchase shares of its Common Stock
from Texas Utilities Company to the full extent permitted by
the TBCA WITHOUT THE CONSENT OF THE OUTSTANDING SHARES OF
PREFERRED STOCK. (Page 40 of Restated Articles)
13. Miscellaneous administrative updates, including the
recording of current numbers of outstanding shares of
different series of Preferred Stock.
For the reasons set forth above, the Board of Directors
proposes the adoption of the Restated Articles in the form
attached hereto as Annex I by adoption of the following
resolution by the shareholders of the Company:
RESOLVED that the Restated Articles of Incorporation of
the Company presented for approval to this meeting be
adopted.
-----------
OTHER BUSINESS
Other than as stated herein, the Board of Directors
does not intend to bring any business before the meeting and it
has not been informed of any matters that may be presented to the
meeting by others. However, if any other matters properly come
before the meeting, it is the intent of the Board of Directors
that the proxies named in the Proxy will vote pursuant to the
proxy in accordance with their judgment with respect to such
matters.
Dated: April , 1997.
WHETHER OR NOT YOU WILL BE ABLE TO ATTEND THE MEETING,
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY PROMPTLY.
-8-
<PAGE>
ANNEX I
CHANGES FROM THE CURRENT ARTICLES ARE SHADED.
DELETIONS ARE BRACKETED AND CROSSED-OUT.
ADDITIONS ARE DOUBLE UNDERLINED.
RESTATED ARTICLES OF INCORPORATION
OF
TEXAS UTILITIES ELECTRIC COMPANY
ARTICLE I
---------
The name of the Corporation is Texas Utilities
Electric Company.
ARTICLE II
----------
The purposes for which the Corporation is
organized are the production, generation, manufacture,
purchase, transportation, transmission, distribution, supply
and sale to the public of electric current and power, gas,
steam, and any other form or source of light, heat, energy
or power; and the transaction otherwise of any and all
lawful business for which corporations may be incorporated
in the State of Texas.
ARTICLE III
-----------
The post office address of the [initial]
registered office of the Corporation is [2001 Bryan Tower,
Suite 1900] Energy Plaza, 1601 Bryan Street, Dallas, Texas,
================================
75201-3411, and the name of its registered agent at such
=====
address is Peter B. Tinkham.
ARTICLE IV
----------
The period of duration of the Corporation is
perpetual.
1
<PAGE>
ARTICLE V
---------
The number of directors of the Corporation shall
be fixed from time to time as provided for in the Bylaws and
shall be one or more.
The number of directors constituting the current
Board of Directors of the Corporation is seven (7), and the
names and addresses of the persons serving as directors are
as follows:
Name Address
---- -------
T. L. Baker [2001 Bryan Tower, Suite 1900]
Energy Plaza, 1601 Bryan Street
===============================
Dallas, Texas 75201-3411
=====
J. S. Farrington [2001 Bryan Tower, Suite 1900]
Energy Plaza, 1601 Bryan Street
===============================
Dallas, Texas 75201-3411
=====
H. Jarrell Gibbs [2001 Bryan Tower, Suite 1900]
Energy Plaza, 1601 Bryan Street
===============================
Dallas, Texas 75201-3411
=====
Michael J. McNally [Erle A. Nye] Energy Plaza,
================== =============
1601 Bryan Street [2001 Bryan
=================
Tower, Suite 1900]
Dallas, Texas 75201-3411
=====
Erle A. Nye [M. D. Spence] Energy Plaza,
=========== =============
1601 Bryan Street [2001 Bryan
=================
Tower, Suite 1900]
Dallas, Texas 75201-3411
=====
W. M. Taylor [2001 Bryan Tower, Suite 1900]
Energy Plaza, 1601 Bryan Street
===============================
Dallas, Texas 75201-3411
=====
E. L. Watson [2001 Bryan Tower, Suite 1900]
Energy Plaza, 1601 Bryan Street
===============================
Dallas, Texas 75201-3411
=====
ARTICLE VI
----------
The aggregate number of shares of capital stock
which the Corporation shall have authority to issue is
197,000,000 shares, of which 17,000,000 shares are
2
<PAGE>
classified as Preferred Stock, without par value, and
180,000,000 shares are classified as Common Stock, without
par value.
The descriptions of the different classes of
capital stock of the Corporation, and the preferences,
designations, relative rights, privileges, powers,
restrictions, limitations and qualifications of said classes
of capital stock, are as follows:
Division A --- Preferred Stock
1. Series and Limits of Variations between Series.
----------------------------------------------
Subject to the provisions of Division B of this Article VI
which describe certain terms, characteristics and relative
rights and preferences of various series of Preferred Stock
which will be issuable at such time as the Board of
Directors of the Corporation shall provide (which
provisions, however, shall not continue effective as to any
shares which are redeemed or purchased and thereby restored
to the status of authorized but unissued shares of Preferred
Stock without designation), the Preferred Stock may be
divided into and issued in one or more series from time to
time as herein provided, each series to be so designated as
to distinguish the shares thereof from the shares of all
other series and classes. The authorized number of shares
of any such series, the designation of such series, and the
terms, characteristics and relative rights and preferences
thereof (in those respects in which the shares of one series
may vary from the shares of other series as herein provided)
shall be [fixed] established at any time prior to the
===========
issuance thereof by resolution or resolutions of the Board
of Directors of the Corporation. The Preferred Stock of all
series shall be of the same class and of equal rank and
shall be identical in all respects, except that there may
be variations in the following particulars:
(a) The rate or rates at which dividends are to
========
accrue on the shares of such series, hereinafter referred to
as the ["fixed] "authorized dividend rate";
===========
(b) The terms and conditions upon which the
shares of such series may be redeemed, and the amount
payable in respect to the shares of such series in case of
the redemption thereof at the option of the Corporation (the
amount [so fixed] or amounts so established being
=============================
hereinafter referred to as the ["fixed] "authorized
===========
redemption price"), and the amount pyable in respect of
the shares of such series in case of the redemption thereof
for any sinking fund of such series, which amounts in respect
of any series may, but need not, vary according to the time
or circumstances of such action or otherwise;
============
(c) The amount payable in respect of the shares
of such series in case of liquidation, dissolution or
winding up of the Corporation (the amount [so fixed] or
==
amounts so established being hereinafter referred to as the
======================
["fixed] "authorized liquidation price"), and the amount
===========
payable, if any, in addition to the [fixed] authorized
==========
liquidation price for each series, in case such liquidation,
dissolution or winding up be voluntary (the amount [so
fixed] or amounts so established being
=========================
hereinafter referred to as the ["fixed] "authorized
===========
liquidation premium"), which amounts in respect of any series
may, but need not, vary according to the time or circumstances
of such action or otherwise;
============
3
<PAGE>
(d) Any requirement as to any sinking fund or
purchase fund for, or the redemption, purchase or other
retirement by the Corporation of, the shares of such series;
[and]
(e) The right, if any, to exchange or convert the
shares of such series into shares of any other series of the
Preferred Stock or, to the extent permitted by law, into
[shares of any other class of capital stock] securities of the
==========
Corporation or any other corporation or other entity, and the
========================================
rate or basis, time, manner and conditions of exchange or
conversion or the method by which the same shall be
determined; and
=====
(f) The voting rights, if any, of shares of such
==================================================
series.
======
2. Dividends. Out of the assets of the Corporation
---------
legally available for dividends, the holders of the
Preferred Stock of each series shall be entitled, in
preference to the holders of the Common Stock, to receive,
but only when and as declared payable by the Board of
Directors, dividends at the [fixed] authorized dividend rate
==========
for such series, and no more, payable quarterly on February
1, May 1, August 1, and November 1 in each year, or
otherwise as the Board of Directors may determine or as
set forth herein with respect to any particular series of
Preferred Stock, to shareholders of record as of a date
not exceeding fifty (50) days nor less than ten (10) days
preceding such dividend payment dates, and such dividends
on the Preferred Stock shall be cumulative, so that, if in
any past dividend period or periods full dividends upon each
series of the outstanding Preferred Stock at the [fixed]
authorized dividend rate or rates therefor shall not
==========
have been paid, the deficiency (without interest) shall be
paid or declared and set apart for payment before any
dividends shall be paid upon or set apart for the Common
Stock (other than a dividend payable in Common Stock of the
Corporation). Dividends on all shares of the Preferred Stock
of each series shall commence to accrue and be cumulative from
a date [fixed by] established by or upon authority of the
===================================
Board of Directors. Any dividends paid on the Preferred
Stock in an amount less than full cumulative dividends
accrued or in arrears upon all Preferred Stock outstanding
shall, if more than one series be outstanding, be divided
between the different series in proportion to the aggregate
amounts which would be distributable to the Preferred Stock
of each series if full cumulative dividends were declared
and paid thereon.
3. Preference on Liquidation. In the event of any
-------------------------
liquidation, dissolution, or winding up of the Corporation,
the holders of the Preferred Stock of each series shall have
a preference over the holders of the Common Stock until the
[fixed] authorized liquidation price per share for such
==========
series, plus, in case such liquidation, dissolution or
winding up shall have been voluntary, the [fixed] authorized
==========
liquidation premium per share for such series, if any,
together in all cases with unpaid accumulated dividends, if
any, shall have been paid or distributed or declared and set
apart for payment or distribution, but the holders of the
Preferred Stock shall be entitled to no further
participation in any such distribution. If upon any such
liquidation, dissolution or winding up, the assets
distributable among the holders of the Preferred Stock shall
4
<PAGE>
be insufficient to permit the payment of the full
preferential amounts aforesaid, then said assets shall be
distributed among the holders of each series of the
Preferred Stock then outstanding, ratably in proportion to
the full preferential amounts to which they are respectively
entitled. Nothing in this Section 3 shall be deemed to
prevent the purchase or redemption of Preferred Stock in any
manner permitted by Section 4 of this Division A, nor shall
anything in this Section 3 be deemed to prevent the purchase
or redemption by the Corporation of shares of its Common
Stock. No such purchase or redemption shall be deemed to be
a liquidation, dissolution, or winding up of the Corporation
or a distribution of assets to its Common Shareholders
within the meaning of this Section 3 whether or not shares
of Common Stock so redeemed or purchased shall be retired,
nor shall a consolidation or merger of the Corporation or a
sale or transfer of all or substantially all of its assets
as an entirety be regarded as a liquidation, dissolution or
winding up of the Corporation within the meaning of this
Section 3.
4. Redemption and Repurchase. The Corporation may
-------------------------
at any time or from time to time, by resolution of the Board
of Directors, redeem all or any part of the Preferred Stock,
or of any series thereof, by paying in cash the [fixed]
authorized redemption price applicable thereto plus the amount
==========
of unpaid accumulated dividends, if any, to the date of such
redemption. If less than all the shares of one series of
Preferred Stock is to be redeemed, the shares to be redeemed
shall be selected ratably or by lot, in such manner as may
be prescribed by resolution of the Board of Directors [, by
an independent bank or trust company selected for that purpose
by the Board of Directors]. Notice of such redemption shall be
mailed to each holder of redeemable shares being called, not
less than twenty (20) nor more than [fifty (50)] sixty (60)
==========
days before the date fixed for redemption, at his address as
it appears on the stock transfer books of the Corporation,
with postage thereon prepaid. Such notice of redemption of
such shares shall set forth the series or part thereof to be
redeemed, the date fixed for redemption, the redemption price,
and the place at which the shareholders may obtain payment of
the redemption price upon surrender of their respective share
certificates. The Corporation may at any time revoke or
=========================================
rescind its decision to redeem preferred stock subsequent to
============================================================
giving notice to the preferred shareholders but prior to the
============================================================
redemption date so long as the Company shall not have
=====================================================
deposited with the bank or trust company and/or irrevocably
===========================================================
directed the bank or trust company to apply, from moneys held
=============================================================
by it available to be used for the redemption of shares, an
===========================================================
amount in cash sufficient to redeem all of the shares. From
======================================================
and after the date fixed in any such notice as the date of
redemption, unless default shall be made by the Corporation
in providing funds sufficient for such redemption at the time
and place specified for the payment thereof pursuant to said
notice or the Corporation revokes its decision to redeem the
=====================================================
preferred stock prior to the redemption date, all dividends on
============================================
the shares so redeemed shall cease to accrue, and all rights of
the holders of such shares as shareholders of the
Corporation except only the right to receive the redemption
funds to which they are entitled, shall cease and determine.
The Corporation may, on or prior to the date fixed
5
<PAGE>
for any redemption, deposit with any bank or trust company
[in the State of Texas], or any [bank or trust company in the
United States] entity duly appointed and acting as a transfer
======
agent of the Corporation, as a trust fund, a sum sufficient
to redeem shares called for redemption, with irrevocable
instructions and authority to such bank or trust company to
give or complete the notice of redemption thereof and to
pay, on or after the date fixed for such redemption, to the
respective holders of shares, as evidenced by a list of
holders of such shares certified by an officer of the
=============
Corporation [by its President or a Vice President and by its
Secretary or an Assistant Secretary], the redemption price
upon the surrender of their respective share certificates, in
====
the case of certificated shares. Thereafter, from and after
===============================
the date fixed for redemption such shares shall be deemed to
be redeemed and dividends thereon shall cease to accrue after
such date fixed for redemption. Such deposit shall be deemed
to constitute full payment of such shares to their holders.
[Thereafter] From and after the date such deposit is made and
================================================
such instruction given, such shares shall no longer be deemed
======================
to be outstanding, and the holders thereof shall cease to be
shareholders with respect to such shares, and shall have no
rights with respect thereto except the right to receive from
the bank or trust company payment of the redemption price of
such shares, without interest, upon the surrender of their
respective certificates therefor, and any right to convert
such shares which may exist. In case the holders of such
shares shall not, within six (6) years after such deposit,
claim the amount deposited for redemption thereof, such bank
or trust company shall upon demand pay over to the
Corporation the balance of such amount so deposited to be
held in trust and such bank or trust company shall thereupon
be relieved of all responsibility to the holders thereof,
and any interest accrued thereon shall be paid over to the
Corporation and become its property.
Nothing in this Section 4 contained shall limit
the right of the Corporation to purchase or otherwise
acquire shares of the Preferred Stock to the extent
permitted by law.
Shares of Preferred Stock of the Corporation
redeemed or purchased by the Corporation shall be restored
to the status of authorized but unissued shares of Preferred
Stock without designation, and may from time to time be
reissued as provided in Section 1 of this Division A. All
such redemptions and purchases of Preferred Stock of the
Corporation shall be effected in accordance with the laws of
the State of Texas governing redemption or purchase of
redeemable shares.
5. Voting Rights. Except for those purposes only
-------------
for which the right to vote is expressly conferred in this
Article VI upon holders of the Preferred Stock, no holders
of the Preferred Stock shall be entitled to notice of or to
vote at any meeting of shareholders of the Corporation or at
any election of the Corporation or the shareholders thereof.
If and when dividends payable on any of the
Preferred Stock shall be in default in an amount equal to
[four] six full quarterly payments or more per share, and
===
thereafter until all dividends on any of the Preferred Stock
in default shall have been paid, the holders of all of the
Preferred Stock, voting as a class in contradistinction to
6
<PAGE>
the Common Stock as a class, shall be entitled to elect the
smallest number of directors necessary to constitute a
majority of the full Board of Directors, and the holders of
the Common Stock, voting separately as a class, shall be
entitled to elect the remaining directors of the
Corporation. The terms of office as directors of all
persons who may be directors of the Corporation at the time
shall terminate upon the election of a majority of the Board
of Directors by the holders of the Preferred Stock, except
that if the holders of the Common Stock shall not have
elected the remaining directors of the Corporation then, and
only in that event, the directors of the Corporation in
office just prior to the election of a majority of the Board
of Directors by the holders of the Preferred Stock shall
elect the remaining directors to the Corporation.
Thereafter, while such default continues and the majority of
the Board is being elected by the holders of the Preferred
Stock, the remaining directors, whether elected by
directors, as aforesaid, or whether originally or later
elected by holders of the Common Stock, shall continue in
office until their successors are elected by holders of the
Common Stock and shall qualify. The term of office of the
directors so elected by the holders of the Preferred Stock,
voting separately as a class, and of the directors elected
by the holders of the Common Stock, voting separately as a
class, or elected by directors, as aforesaid, shall be until
the next annual meeting of shareholders or until the
privilege of the holders of the Preferred Stock to elect
directors shall terminate as hereinafter provided, whichever
shall be the earlier date and until their successors shall
have been elected and shall have qualified.
If and when all dividends then in default on all
of the Preferred Stock shall be paid (such dividends to be
declared and paid out of any funds legally available
therefor as soon as reasonably practicable), the holders of
the Preferred Stock shall be divested of any privilege with
respect to the election of directors which is conferred upon
the holders of such Preferred Stock under this Section 5,
and the voting power of the holders of the Preferred Stock
and the holders of the Common Stock shall revert to the
status existing before the first dividend payment date on
which dividends on any of the Preferred Stock were not paid
in full, but always subject to the same provisions for
vesting such privilege in the holders of the Preferred Stock
in case of further like default or defaults in the payment
of dividends thereon. Upon termination of any such voting
privilege upon payment of all accumulated and defaulted
dividends on the Preferred Stock, the terms of office of all
persons who have been elected directors of the Corporation
by vote of the holders of the Preferred Stock as a class,
pursuant to such voting privilege, shall forthwith
terminate, and the resulting vacancies shall be filled by
the vote of a majority of the remaining directors.
In case of any vacancy in the office of a director
occurring among the directors elected by the holders of the
Preferred Stock, voting as a class, the remaining directors
elected by the holders of the Preferred Stock, by
affirmative vote of a majority thereof, or the remaining
director so elected if there be but one, may elect a
successor or successors to hold office for the unexpired
term or terms of the director or directors whose place or
places shall be vacant. In case of any vacancy in the
office of a director occurring among the directors elected
by the holders of the Common Stock, voting separately as a
class, or elected by directors, as aforesaid, the remaining
7
<PAGE>
directors so elected, by affirmative vote of a majority
thereof, or the remaining director so elected if there be
but one, may elect a successor or successors to hold office
for the unexpired term or terms of the director or directors
whose place or places shall be vacant.
Whenever dividends on the Preferred Stock shall be
in default, as provided in this Section 5, it shall be the
duty of the [President, a Vice President or the Secretary]
officers of the Corporation, or in the event of their failure
========
to do so within twenty (20) days of such default, the
privilege is granted any holder of Preferred Stock who shall
first demand the right so to do by written notice to the
Corporation, forthwith to cause notice to be given to the
holders of the Preferred Stock and to the holders of the
Common Stock of a meeting to be held at such time as the
Corporation's officers, or such holder of Preferred Stock,
as the case may be, may fix, not less than ten (10) nor more
than sixty (60) days after the accrual of such privilege,
for the purpose of electing directors. Each holder of
record of Preferred Stock, or his legal representative,
shall be entitled at such meeting to one vote for each share
of Preferred Stock standing in his name on the books of the
Corporation. At each meeting of shareholders held for such
purpose, the presence in person or by proxy of the holders
of a majority of the Common Stock shall be required to
constitute a quorum of the Common Stock for the election of
directors, and the presence in person or by proxy of the
holders of a majority of the Preferred Stock shall be
required to constitute a quorum of the Preferred Stock for
the election of directors; provided, however, that the
absence of a quorum of the holders of stock of either the
Preferred Stock or the Common Stock shall not prevent the
election at any such meeting or adjournment thereof of
directors by such other class, if the necessary quorum of
the holders of stock of such other class is present in
person or by proxy at such meeting or any adjournment
thereof, and provided, that in the event a quorum of the
holders of the Common Stock is present but a quorum of the
holders of the Preferred Stock is not present, then the
directors so elected by the holders of the Common Stock
shall not assume their offices and duties but the directors
in office immediately prior thereto shall remain in office
until the holders of the Preferred Stock, with a quorum
present, shall have elected the directors they shall be
entitled to elect; and provided, further, that in the
absence of a quorum of holders of stock of either class, a
majority of the holders of the stock of the class which
lacks a quorum who are present in person or by proxy, shall
have power to adjourn the election of the directors to be
elected by such class from time to time without notice other
than announcement at the meeting, until the requisite quorum
of holders of such class shall be present in person or
by proxy, but such adjournment shall not be made to a date
beyond the date for the mailing of the notice of the next
annual meeting of shareholders of the Corporation or special
meeting in lieu thereof.
6. Restrictions on Certain Corporate Action.
----------------------------------------
(a) So long as any shares of the Preferred
Stock are outstanding, the Corporation shall not, without the
consent (given by vote at a meeting called for that purpose)
of the holders of at least [two-thirds] a majority of the
==========
total number of shares of the Preferred Stock then
outstanding:
8
<PAGE>
(1) Create or authorize any new stock
ranking prior to the Preferred Stock as to dividends or in
liquidation, dissolution, winding up or distribution, or
create or authorize any security convertible into shares of
any such stock; or
(2) Amend, alter, change or repeal any
of the express terms of the Preferred Stock then outstanding
in a manner substantially prejudicial to the holders
thereof, provided however, that if such amendment, alteration,
or change affects less than all series of Preferred Stock, only
the consent of the holders of [two-thirds] a majority of the
==========
aggregate of the series so affected shall be required.
(b) So long as any shares of the Preferred
Stock are outstanding, the Corporation shall not, without
the consent (given by vote at a meeting called for that
purpose) of the holders of a majority of the total number of
shares of the Preferred Stock, considered as one class, then
outstanding [(provided that if one-third of the shares of
the Preferred Stock, considered as one class then
outstanding are voted against the action hereinafter set
forth it shall not be taken)]:
(1) Create or assume any unsecured
indebtedness maturing more than one year after the date of
its creation or assumption [(i)] unless and until the
Corporation's net earnings available for the payment of
interest (gross operating revenues plus other income, minus
operating expenses, including depreciation expense and
taxes, other than income, profits, and other taxes, measured
by, or dependent on, income) as determined by generally
accepted accounting practices and as stated on the books of
account of the Corporation for a period of twelve
consecutive calendar months ending not more than three
months prior to the beginning of the calendar month in which
such indebtedness shall be created or assumed, shall have
been at least twice the interest charges (using, for the
purpose of this computation with respect to indebtedness
with interest rates that are not fixed, the interest rate in
effect at the end of such twelve month period) on all
outstanding indebtedness created or assumed by the
Corporation and payable more than one year from the date of
such creation or assumption, including the interest charges
on the indebtedness so to be created or assumed (using, for
the purpose of this computation, the interest rate in effect
at the time of incurrence or assumption of such
indebtedness); provided that the requirements of this
subparagraph (1) shall not apply to indebtedness created or
assumed to refund by payment, replacement, retirement,
acquisition, purchase, exchange, redemption, surrender or
otherwise all outstanding shares of the Preferred Stock or
any indebtedness outstanding at any time and maturing
more than one year after the date of creation or assumption
of such refunded indebtedness [, or (ii) in the event, after
the creation or assumption of such indebtedness maturing
more than one year after the date of its creation or
assumption, and the application of the proceeds thereof, the
principal amount of all unsecured indebtedness of the
Corporation maturing more than one year after the date of
its creation or assumption shall thereupon in the aggregate
exceed twenty-five per centum (25%) of the sum of: (I) The
principal amount of secured indebtedness of the Corporation;
plus (II) The amount of capital stock of the Corporation as
stated on its books of account; plus (III) The amount of the
retained earnings, including reservations thereof, as stated
9
<PAGE>
on its books of account]; or
(2) Issue, sell or dispose of any
shares of the Preferred Stock in addition to the shares of
Preferred Stock outstanding, or of any other class of stock
ranking prior to, or on a parity with, the Preferred Stock as
to dividends or distributions [: (A)], unless the net income of
=
the Corporation, determined after provisions for depreciation
and all taxes, and in accordance with generally accepted
accounting [practices] principles to be available for the
==========
payment of dividends for a period of twelve (12) consecutive
calendar months within the fifteen (15) calendar months
immediately preceding the issuance, sale or disposition of
such stock is at least equal to twice the annual dividend
requirements on all outstanding shares of the Preferred
Stock and of all other classes of stock ranking prior to, or
on a parity with, the Preferred Stock as to dividends or
distributions,[ including the shares proposed to be issued,
and unless the gross income of the Corporation for said
period, determined in accordance with generally accepted
accounting practices (but in any event after deducting the
amount for said period charged by the Corporation on its
books to depreciation expense and all taxes) to be available
for the payment of interest, shall have been at least one
and one-half times the sum of (i) the annual interest
charges on all interest bearing indebtedness of the
Corporation (using, for the purpose of this computation with
respect to indebtedness with interest rates that are not
fixed, the interest rate in effect at the end of said
period) and (ii) the annual dividend requirements on all
outstanding shares of the Preferred Stock and of all other
classes of stock ranking prior to, or on a parity with, the
Preferred Stock as to dividends or distributions,] including
the shares proposed to be issued; provided that there shall
be excluded from the foregoing computation interest charges
on all indebtedness and dividends on all stock which is to
be retired in connection with the issue of such additional
shares of Preferred Stock, and where such additional shares
of Preferred Stock are to be issued in connection with the
acquisition of new property, the net earnings of the
property to be so acquired may be included on a pro forma
basis in the foregoing computation, computed on the same
basis as the net earnings of the Corporation; [and unless
(B) the aggregate of the capital of the Corporation
applicable to the Common Stock and the surplus of the
Corporation shall be not less than the aggregate of
Preferred Stock and other classes of stock on a parity with
the Preferred Stock to be outstanding immediately after the
proposed issue of such additional Preferred Stock or other
class of stock on a parity with the Preferred Stock,
excluding from the foregoing computation all Preferred
Stock, or other class of stock on a parity with the
Preferred Stock, which is to be retired in connection with
the issue of such additional shares of Preferred Stock or
other class of stock on a parity with the Preferred Stock,
provided that no portion of the retained earnings of the
Corporation which shall be used to meet the requirements of
this sub-paragraph (B) shall, after the issue of such
additional shares and until such additional shares or a like
number thereof shall have been retired, be available for
dividends or other distribution upon the Common Stock; and
unless (C) for a period of twelve consecutive calendar
months ending not more than three months prior to the
beginning of the calendar month in which any such shares
shall be issued, the Corporation's net earnings available
10
<PAGE>
for the payment of interest for said period, shall have been
at least one and one-half (1-1/2) times the sum of (i) the
interest charges (using, for the purpose of this computation
with respect to indebtedness with interest rates that are
not fixed, the interest rate in effect at the end of such
twelve month period) for one year on all indebtedness which
shall then be outstanding (including any indebtedness
proposed to be created, using, for the purpose of this
computation, the interest rate in effect at the time of
creation of such indebtedness, in connection with the issue,
sale or other disposition of such shares, but not including
any indebtedness proposed to be retired in connection with
such issue, sale or other disposition or indebtedness held
by or for the account of the Corporation), and (ii) an
amount equal to all annual dividend requirements on all
outstanding shares of the Preferred Stock and all other
stock, if any, ranking on a parity with or having a priority
over the Preferred Stock in respect of dividends or of
payments in liquidation, including the shares proposed to be
issued, but not including any shares proposed to be retired
in connection with such issue, sale or other disposition; or
if (D) such issue, sale or disposition would bring the
aggregate of the stated value of the Preferred Stock and any
stock ranking on a parity with or having a priority over the
Preferred Stock in respect of dividends or of payments in
liquidation to an amount in excess of the sum of (i) the
aggregate of the stated value of all then outstanding stock
junior to the Preferred Stock and (ii) the amount of the
Corporation's retained earnings as then stated on the
Corporation's books;] or
[(3) Purchase or redeem any outstanding stock of
the Corporation junior to the Preferred Stock; but this
restriction shall not be applicable to the redemption or
purchase of any junior preferred stock for not more than the
current redemption price thereof at any time when there is
no continuing default in the payment of any dividend on any
of the Preferred Stock and shall not be applicable to the
purchase of any stock junior to the Preferred Stock under
any employee's retirement plan or other plan established for
the benefit of employees of the Corporation; or
(4)](3) Pay any dividend on any stock of the
===
Corporation junior to the Preferred Stock if immediately
after such payment the retained earnings of the Corporation
would be less than one and one-half (1-1/2) times the full
annual dividend requirement on the Preferred Stock issued
and outstanding and on any other issued and outstanding stock
of the Corporation ranking on a parity with or having a
priority over the Preferred Stock in respect of dividends
or of payments in liquidation.
The term "net earnings available for the payment
of interest" shall mean the net earnings of the Corporation
as shown by its books of account, as based on generally
accepted principles of accounting, and shall include the
following items and be calculated in the following manner:
(1) Its gross operating revenues and other
income, including revenues from rental of plants
or systems and net income from miscellaneous non-
operating sources, and excluding any extraordinary
================================
charges to income as defined by generally accepted
==================================================
accounting principles, any regulatory disallowances,
====================================================
the effect of any change in accounting principles
=================================================
11
<PAGE>
promulgated by the Financial Accounting Standards
=================================================
Board, and any other non-cash, non-recurring book
=================================================
losses,
=======
(2) Its operating expenses, including
expenses for current repairs and maintenance,
insurance and rental expenses for plants or
systems and other rentals,
(3) Its provisions out of income for
renewals, replacement, depreciation, depletion or
retirement of property,
(4) Its taxes charged to income other than
income, profits, and other taxes measured by, or
dependent on, income, and
(5) The balance remaining after deducting
the sum of the amounts of (2), (3) and (4) from
the amount of item (1) above, shall be the "net
earnings available for the payment of interest"
for the purposes of this Section 6.
For purposes of this Section 6, the term
========================================
"indebtedness" shall not include any obligation or liability
============================================================
which, by its terms or otherwise, is non-recourse to the
========================================================
Corporation whether or not such obligation or liability is
==========================================================
reflected in the financial statements of the Corporation.
=========================================================
Division B --- Series of Preferred Stock
Each series of Preferred Stock will be issuable as
provided for in Division A of this Article. Unless
otherwise specifically provided for, none of such series
will have any fixed liquidation premium or exchange or
conversion rights.
1. The $4.50 Preferred Stock. 74,367 shares of the
-------------------------
authorized stock classified as Preferred Stock as provided
in Division A of this Article VI shall constitute the first
series of Preferred Stock and are designated as $4.50
Preferred Stock; the fixed dividend rate on the shares of
such series is four dollars and fifty cents ($4.50) per
share per annum; the fixed redemption price on the shares of
such series is $110 per share; the fixed liquidation price
on the shares of such series is $100 per share.
2. The $4.24 Preferred Stock. 100,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the second series of Preferred Stock and are designated as
$4.24 Preferred Stock; the fixed dividend rate on the shares
of such series is four dollars and twenty-four cents ($4.24)
per share per annum; the fixed redemption price on the shares
of such series is $103.50 per share; the fixed liquidation
price on the shares of such series is $100 per share.
3. The $4 (Dallas Power Series) Preferred Stock.
--------------------------------------------
70,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the third series of Preferred Stock and are
12
<PAGE>
designated as $4 (Dallas Power Series) Preferred Stock; the
fixed dividend rate on the shares of such series is four
dollars ($4) per share per annum; the fixed redemption price
on the shares of such series is $103.56 per share; the fixed
liquidation price on the shares of such series is $100 per
share.
4. The $4.80 Preferred Stock. 100,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the fourth series of Preferred Stock and are designated as
$4.80 Preferred Stock; the fixed dividend rate on the shares
of such series is four dollars and eighty cents ($4.80) per
share per annum; the fixed redemption price on the shares of
such series is $102.79 per share; the fixed liquidation
price on the shares of such series is $100 per share.
5. The $7.20 Preferred Stock. [200,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the fifth series of Preferred Stock and are designated as
$7.20 Preferred Stock; the fixed dividend rate on the shares
of such series is seven dollars and twenty cents ($7.20) per
share per annum; the fixed redemption price on the shares of
such series is $105.01 per share if redeemed on or prior to
February 1, 1984, and $103.21 per share if redeemed after
February 1, 1984; the fixed liquidation price on the shares
of such series is $100 per share.] All shares redeemed.
====================
6. The $6.84 Preferred Stock. [200,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of Article VI shall constitute the
sixth series of Preferred Stock and are designated as $6.84
Preferred Stock; the fixed dividend rate on the shares of
such series is six dollars and eighty-four cents ($6.84) per
share per annum; the fixed redemption price on the shares of
such series is $104.76 per share if redeemed prior to
February 1, 1986, and $103.05 per share if redeemed after
February 1, 1986; the fixed liquidation price on the shares
of such series is $100 per share.] All shares redeemed.
====================
7. The $7.48 Preferred Stock. [300,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the seventh series of Preferred Stock and are designated as
$7.48 Preferred Stock; the fixed dividend rate on the shares
of such series is seven dollars and forty-eight cents
($7.48) per share per annum; the fixed redemption price on
the shares of such series is $106.69 per share if redeemed
on or prior to December 1, 1983, $104.82 per share if
redeemed after December 1, 1983, but on or prior to December
1, 1988, and $102.95 per share if redeemed after December 1,
1988; the fixed liquidation price on the shares of such
series is $100 per share.] All shares redeemed.
====================
8. The $4 (Texas Electric Series) Preferred Stock.
----------------------------------------------
110,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the eighth series of Preferred Stock and
13
<PAGE>
are designated as $4 (Texas Electric Series) Preferred
Stock; the fixed dividend rate on the shares of such series
is Four Dollars and No Cents ($4.00) per share per annum;
the fixed redemption price on the shares of such series is
$102 per share; the fixed liquidation price on the shares of
such series is $100 per share.
9. The $4.56 (Texas Electric Series) Preferred
-------------------------------------------
Stock. 64,947 shares of the authorized stock classified as
-----
Preferred Stock as provided in Division A of this Article VI
shall constitute the ninth series of Preferred Stock and are
designated as $4.56 (Texas Electric Series) Preferred Stock;
the fixed dividend rate on the shares of such series is Four
Dollars and Fifty-six Cents ($4.56) per share per annum, and
such dividends shall be payable quarterly on January 1,
April 1, July 1 and October 1 of each year; the fixed
redemption price on the shares of such series is $112.00
per share; the fixed liquidation price on the shares of such
series is $100 per share.
10. The $4.64 Preferred Stock. 100,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the tenth series of Preferred Stock and are designated as
$4.64 Preferred Stock; the fixed dividend rate on the shares
of such series is Four Dollars and Sixty-four Cents ($4.64)
per share per annum, and such dividends shall be payable
quarterly on January 1, April 1, July 1 and October 1 of
each year; the fixed redemption price on the shares of such
series is $103.25 per share; the fixed liquidation price on
the shares of such series is $100 per share.
11. The $5.08 Preferred Stock. 80,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the eleventh series of Preferred Stock and are designated as
$5.08 Preferred Stock; the fixed dividend rate on the shares
of such series is Five Dollars and Eight Cents ($5.08) per
share per annum; the fixed redemption price on the shares of
such series is $103.60 per share; the fixed liquidation
price on the shares of such series is $100 per share.
12. The $8.92 Preferred Stock. All shares
-------------------------
redeemed.
13. The $7.44 Preferred Stock. [300,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the thirteenth series of Preferred Stock and are designated
as $7.44 Preferred Stock; the fixed dividend rate on the
shares of such series is Seven Dollars and Forty-four Cents
($7.44) per share per annum; the dividend payment dates
shall be the first days of April, July, October and January;
the fixed redemption price on the shares of such series is
$104.26 per share if redeemed prior to October 1, 1987, and
$102.40 per share if redeemed after October 1, 1987; the
fixed liquidation price on the shares of such series is $100
per share.] All shares redeemed.
====================
14. The $8.44 Preferred Stock. [300,000 shares of
-------------------------
14
<PAGE>
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the fourteenth series of Preferred Stock and are designated
as $8.44 Preferred Stock; the fixed dividend rate on the
shares of such series is Eight Dollars and Forty-four Cents
($8.44) per share per annum; the dividend payment dates
shall be the first days of October, January, April and July;
the fixed redemption price on the shares of such series is
$107.40 per share if redeemed on or prior to April 1, 1984,
$105.29 per share if redeemed after April 1, 1984, but on or
prior to April 1, 1989, and $103.18 per share if redeemed
after April 1, 1989; the fixed liquidation price on the shares
of such series is $100 per share.] All shares redeemed.
====================
15. The $9.36 Preferred Stock. All shares
-------------------------
redeemed.
16. The $8.32 Preferred Stock. All shares
-------------------------
redeemed.
17. The $10.12 Preferred Stock. All shares
--------------------------
redeemed.
18. The $4 (Texas Power Series) Preferred Stock.
-------------------------------------------
70,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the eighteenth series of Preferred Stock
and are designated as $4 (Texas Power Series) Preferred
Stock; the fixed dividend rate on the shares of such series
is Four Dollars and No Cents ($4.00) per share per annum;
the fixed redemption price on the shares of such series is
$102 per share; the fixed liquidation price on the shares of
such series is $100 per share.
19. The $4.56 (Texas Power Series) Preferred
Stock. ----------------------------------------
------
133,628 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the nineteenth series of Preferred Stock
and are designated as $4.56 (Texas Power Series) Preferred
Stock; the fixed dividend rate on the shares of such series
is Four Dollars and Fifty-six Cents ($4.56) per share per
annum; the fixed redemption price on the shares of such
series is $112 per share; the fixed liquidation price on the
shares of such series is $100 per share.
20. The $4.84 Preferred Stock. 70,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the twentieth series of Preferred Stock and are designated
as $4.84 Preferred Stock; the fixed dividend rate on the
shares of such series is Four Dollars and Eighty-four Cents
($4.84) per share per annum; the fixed redemption price on
the shares of such series is $101.79 per share; the fixed
liquidation price on the shares of such series is $100 per
share.
21. The $4.76 Preferred Stock. 100,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
15
<PAGE>
the twenty-first series of Preferred Stock and are
designated as $4.76 Preferred Stock; the fixed dividend rate
on the shares of such series is Four Dollars and Seventy-six
Cents ($4.76) per share per annum; the fixed redemption
price on the shares of such series is $102 per share; the
fixed liquidation price on the shares of such series is $100
per share.
22. The $4.44 Preferred Stock. 150,000 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the twenty-second series of Preferred Stock and are
designated as $4.44 Preferred Stock; the fixed dividend rate
on the shares of such series is Four Dollars and Forty-four
Cents ($4.44) per share per annum; the fixed redemption
price on the shares of such series is $102.61 per share; the
fixed liquidation price on the shares of such series is $100
per share.
23. The $7.80 Preferred Stock. [299,875 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the twenty-third series of Preferred Stock and are
designated as $7.80 Preferred Stock; the fixed dividend rate
on the shares of such series is Seven Dollars and Eighty
Cents ($7.80) per share per annum; the fixed redemption
price on the shares of such series is $105.20 per share if
redeemed on or prior to May 1, 1984, and $103.25 per share if
redeemed after May 1, 1984; the fixed liquidation price on the
shares of such series is $100 per share.] All shares redeemed.
====================
24. The $7.24 Preferred Stock. [249,800 shares
-------------------------
of the authorized stock classified as Preferred Stock
as provided in Division A of this Article VI shall
constitute the twenty-fourth series of Preferred Stock and
are designated as $7.24 Preferred Stock; the fixed dividend
rate on the shares of such series is Seven Dollars and
Twenty-four Cents ($7.24) per share per annum; the fixed
redemption price on the shares of such series is $105.23 per
share if redeemed prior to February 1, 1987, and $103.42 per
share if redeemed after February 1, 1987; the fixed
liquidation price on the shares of such series is $100 per
share.] All shares redeemed.
====================
25. The $8.20 Preferred Stock. [300,000 shares of
--------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the twenty-fifth series of Preferred Stock and are
designated as $8.20 Preferred Stock; the fixed dividend rate
on the shares of such series is Eight Dollars and Twenty
Cents ($8.20) per share per annum; the fixed redemption
price on the shares of such series is $107.39 per share if
redeemed on or prior to February 1, 1984, $105.34 per share
if redeemed after February 1, 1984, but on or prior to
February 1, 1989, and $103.29 per share if redeemed after
February 1, 1989; the fixed liquidation price on the shares
of such series is $100 per share.] All shares redeemed.
====================
26. The $9.32 Preferred Stock. All shares
-------------------------
redeemed.
16
<PAGE>
27. The $8.68 Preferred Stock. All shares
-------------------------
redeemed.
28. The $8.16 Preferred Stock. [299,475 shares of
-------------------------
the authorized stock classified as Preferred Stock as
provided in Division A of this Article VI shall constitute
the twenty-eighth series of Preferred Stock and are
designated as $8.16 Preferred Stock; the fixed dividend rate
of the shares of such series is Eight Dollars and Sixteen
Cents ($8.16) per share per annum; the fixed redemption
price on the shares of such series is $106.12 per share if
redeemed on or prior to February 1, 1987, $104.08 per share
if redeemed after February 1, 1987, but on or prior to
February 1, 1992, and $102.04 per share if redeemed after
February 1, 1992; the fixed liquidation price on the
shares of such series is $100 per share.] All shares redeemed.
====================
29. The $8.84 Preferred Stock. All shares
-------------------------
redeemed.
30. The $10.92 Preferred Stock. All shares
--------------------------
redeemed.
31. The $10.08 Preferred Stock. All shares
--------------------------
redeemed.
32. The $11.32 Preferred Stock. All shares
--------------------------
redeemed.
33. The Adjustable Rate Cumulative Preferred Stock,
-----------------------------------------------
Series A. [1,000,000] 884,700 shares of the authorized stock
-------- =======
classified as Preferred Stock as provided in Division A of
this Article VI shall constitute the thirty-third series of
Preferred Stock and are designated as Adjustable Rate
Cumulative Preferred Stock, Series A, which series shall
have, in addition to the general terms and characteristics
of all the authorized shares of Preferred Stock of the
Corporation, the following distinctive terms and
characteristics: (a) The thirty-third series of
Preferred Stock shall have a dividend rate for the initial
dividend payment period ending July 31, 1984, at the rate of
11.04% per annum, and for each subsequent quarterly dividend
period at the Applicable Rate (as hereinafter defined) from
time to time in effect, provided that the dividend rate on
the thirty-third series of Preferred Stock for any dividend
period shall in no event be less than 6.50% per annum or
greater than 13% per annum. Except as provided below in
this paragraph, the "Applicable Rate" for any dividend
period will be 2.50% less than the highest of (i) the
Treasury Bill Rate, (ii) the Ten Year Constant Maturity Rate
and (iii) the Twenty Year Constant Maturity Rate (each as
hereinafter defined) for such dividend period. In the event
that the Corporation determines in good faith that for any
reason one or more of such rates cannot be determined for
any dividend period, then the Applicable Rate for such
dividend period shall be 2.50% less than the higher of
whichever of such rates can be so determined. In the event
that the Corporation determines in good faith that none of
such rates can be determined for any dividend period, then
the Applicable Rate in effect for the preceding dividend
period shall be continued for such dividend period.
Except as provided below in this paragraph, the
17
<PAGE>
"Treasury Bill Rate" for each dividend period will be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate shall
be published during the relevant Calendar Period (as defined
below)) for three-month U. S. Treasury bills, as published
weekly by the Federal Reserve Board during the Calendar
Period immediately prior to the last ten calendar days of
July, October, January or April, as the case may be, prior
to the dividend period for which the Applicable Rate is
being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum secondary
market discount rate during any such Calendar Period, then
the Treasury Bill Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate
shall be published during such Calendar Period) for the
three-month U. S. Treasury bills, as published weekly
during such Calendar Period by any Federal Reserve Bank
or by any U. S. Government department or agency selected
by the Corporation. In the event that a per annum secondary
market discount rate for three-month U. S. Treasury bills
shall not be published by the Federal Reserve Board or
by any Federal Reserve Bank or by any U. S. Government
department or agency during such Calendar Period, then the
Treasury Bill Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate shall
be published during such Calendar Period) for all of the
U. S. Treasury bills then having maturities of not less than
80 nor more than 100 days, as published during such
Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board shall not publish such rates, by any
Federal Reserve Bank or by any U. S. Government department
or agency selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason
no such U. S. Treasury bill rates are published as provided
above during such Calendar Period, then the Treasury Bill
Rate for such dividend period shall be the arithmetic
average of the per annum secondary market discount rates
based upon the closing bids during such Calendar Period for
each of the issues of marketable non-interest bearing U. S.
Treasury securities with a maturity of not less than 80 nor
more than 100 days from the date of each such quotation, as
quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized
U. S. Government securities dealers selected by the
Corporation. In the event that the Corporation determines
in good faith that for any reason the Corporation cannot
determine the Treasury Bill Rate for any dividend period as
provided above in this paragraph, the Treasury Bill Rate for
such dividend period shall be the arithmetic average of the
per annum secondary market discount rates based upon the
closing bids during such Calendar Period for each of the
issues of marketable interest-bearing U. S. Treasury
securities with a maturity of not less than 80 nor more than
100 days from the date of each such quotation, as quoted
daily for each business day in New York City (or less
frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized
U. S. Government securities dealers selected by the
Corporation.
18
<PAGE>
Except as provided below in this paragraph, the
"Ten Year Constant Maturity Rate" for each such dividend
period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (as defined
below) (or the one weekly per annum Ten Year Average Yield,
if only one such Yield shall be published during the
relevant Calendar Period as provided below), as published
weekly by the Federal Reserve Board during the Calendar
Period immediately prior to the last ten calendar days of
July, October, January or April, as the case may be, prior
to the dividend period for which the Applicable Rate is
being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum Ten Year
Average Yield during such Calendar Period, then the Ten
Year Constant Maturity Rate for such dividend period shall
be the arithmetic average of the two most recent weekly
per annum Ten Year Average Yields, (or the one weekly per
annum Ten Year Average Yield, if only one such yield shall
be published during such Calendar Period), as published
weekly during such Calendar Period by any Federal Reserve
Bank or by any U. S. Government department or agency selected
by the Corporation. In the event that a per annum Ten
Year Average Yield shall not be published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U. S.
Government department or agency during such Calendar Period,
then the Ten Year Constant Maturity Rate for such dividend
period shall be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the
one weekly average yield to maturity, if only one such yield
shall be published during such Calendar Period) for all of
the actively traded marketable U. S. Treasury fixed interest
rate securities (other than Special Securities, as defined
below) then having maturities of not less than eight nor
more than twelve years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal
Reserve Board shall not publish such yields, by any Federal
Reserve Bank or by any U. S. Government department or agency
selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Ten Year Constant Maturity
Rate for any dividend period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such
dividend period shall be the arithmetic average of the per
annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of
actively traded marketable U. S. Treasury fixed interest
rate securities (other than Special Securities) with a final
maturity date not less than eight nor more than twelve years
from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the
Corporation by at least three recognized U. S. Government
securities dealers selected by the Corporation.
Except as provided below in this paragraph, the
"Twenty Year Constant Maturity Rate" for each such dividend
period shall be the arithmetic average of the two most
recent weekly per annum Twenty Year Average Yields (as
defined below) (or the one weekly per annum Twenty Year
Average Yield, if only one such Yield shall be published
during the relevant Calendar Period), as published weekly by
the Federal Reserve Board during the Calendar Period
immediately prior to the last ten calendar days of July,
19
<PAGE>
October, January or April, as the case may be, prior to the
dividend period for which the Applicable Rate is being
determined. In the event that the Federal Reserve Board
does not publish such a weekly per annum Twenty Year Average
Yield during such Calendar Period, then the Twenty Year
Constant Maturity Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum
Twenty Year Average Yields (or the one weekly per annum
Twenty Year Average Yield, if only one such Yield shall be
published during such Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or
by any U. S. Government department or agency selected by the
Corporation. In the event that a per annum Twenty Year
Average Yield shall not be published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U. S.
Government department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such
dividend period shall be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or
the one weekly average yield to maturity, if only one such
yield shall be published during such Calendar Period) for
all of the actively traded marketable U. S. Treasury fixed
interest rate securities (other than Special Securities)
then having maturities of not less than eighteen nor more
than twenty-two years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal
Reserve Board shall not publish such yields, by any Federal
Reserve Bank or by any U. S. Government department or agency
selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Twenty Year Constant
Maturity Rate for any dividend period as provided above in
this paragraph, then the Twenty Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of
the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the
issues of actively traded marketable U. S. Treasury fixed
interest rate securities (other than Special Securities)
with a final maturity date not less than eighteen nor more
than twenty-two years from the date of each such quotation,
as quoted daily for each business day in New York City (or
less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized
U. S. Government securities dealers selected by the
Corporation.
The Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Twenty Year Constant Maturity Rate
shall each be rounded to the nearest five one-hundredths of
a percentage point.
The amount of dividends per share payable for each
dividend period shall be computed by dividing the Applicable
Rate for such period by four and applying the rate derived
from such division against the fixed liquidation price of
$100 per share of the thirty-third series. The amount of
dividends payable for any period shorter than a full
quarterly dividend period and for the initial dividend
period shall be computed on the basis of a 360-day year of
30-day months and the actual number of days which have
elapsed in such period.
The Applicable Rate with respect to each dividend
period will be calculated as promptly as practicable by the
Corporation according to the appropriate method described
20
<PAGE>
herein. The mathematical accuracy of each such calculation
will be confirmed in writing by independent accountants of
recognized standing. The Corporation will cause each
dividend rate to be published in a newspaper of general
circulation in New York City prior to the commencement of
the new dividend period to which it applies and will cause
notice of such Applicable Rate to be mailed to the holders
of the thirty-third series.
As used herein, the term "Calendar Period" means a
period of fourteen calendar days; the term "Special
Securities" means securities which can, at the option of the
holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which
were originally issued at a deep or substantial discount;
the term "Ten Year Average Yield" means the average yield to
maturity for actively traded marketable U. S. Treasury fixed
interest rate securities (adjusted to constant maturities of
ten years); and the term "Twenty Year Average Yield" means
the average yield to maturity for actively traded marketable
U. S. Treasury fixed interest rate securities (adjusted to
constant maturities of twenty years).
(b) Said thirty-third series shall not be
redeemable prior to June 1, 1989; and on and after that date
shall be redeemable at any time, in whole or in part, at
$103 per share, if redeemed prior to June 1, 1994, and, if
redeemed thereafter, at $100 per share, plus in each case
accrued and unpaid dividends to the redemption date.
(c) The amount payable upon the shares of said
thirty-third series in the event of involuntary dissolution,
liquidation or winding up of the Corporation shall be $100
per share plus an amount equivalent to the accrued and
unpaid dividends thereon, if any, to the date of such
involuntary dissolution, liquidation or winding up, and the
amount payable upon shares of said thirty-third series in
the event of voluntary dissolution, liquidation or winding
up of the Corporation shall be an amount equivalent to the
then redemption price (including an amount equivalent to
accumulated and unpaid dividends thereon, if any) of shares
of said thirty-third series.
34. The Adjustable Rate Cumulative Preferred Stock,
-----------------------------------------------
Series B. [850,000 shares of the authorized stock classified
--------
as Preferred Stock as provided in Division A of
this Article VI shall constitute the thirty-fourth series of
Preferred Stock and are designated as Adjustable Rate
Cumulative Preferred Stock, Series B, which series shall
have, in addition to the general terms and characteristics
of all the authorized shares of Preferred Stock of the
Corporation, the following distinctive terms and
characteristics:
(a) The thirty-fourth series of Preferred Stock
shall have a dividend rate for the initial dividend payment
period ending June 30, 1985, at the rate of 9.10% per annum,
and for each subsequent quarterly dividend period at the
Applicable Rate (as hereinafter defined) from time to time
in effect, provided that the dividend rate on the thirty-
fourth series of Preferred Stock for any dividend period
shall in no event be less than 7% per annum or greater than
14.25% per annum. Dividends on shares of the thirty-fourth
series shall be cumulative from the date of issuance and
shall be payable on the first day of July, October, January
and April in each year, commencing July, 1985. Except as
21
<PAGE>
provided below in this paragraph, the "Applicable Rate" for
any dividend period will be 1.75% less than the highest of
(i) the Treasury Bill Rate, (ii) the Ten Year Constant
Maturity Rate and (iii) the Twenty Year Constant Maturity Rate
(each as hereinafter defined) for such dividend period. In
the event that the Corporation determines in good faith that
for any reason one more of such rates cannot be determined
for any dividend period, then the Applicable Rate for such
dividend period shall be 1.75% less than the higher of
whichever of such rates can be so determined. In the event
that the Corporation determines in good faith that none of
such rates can be determined for any dividend period,
then the Applicable Rate in effect for the preceding dividend
period shall be continued for such dividend period.
Except as provided below in this paragraph, the
"Treasury Bill Rate" for each dividend period will be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate shall
be published during the relevant Calendar Period (as defined
below)) for three-month U. S. Treasury bills, as published
weekly by the Federal Reserve Board during the Calendar
Period immediately prior to the last ten calendar days of
June, September, December or March, as the case may be,
prior to the dividend period for which the Applicable Rate
is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum secondary
market discount rate during any such Calendar Period, then
the Treasury Bill Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate shall
be published during such Calendar Period) for the three-
month U. S. Treasury bills, as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U. S.
Government department or agency selected by the Corporation.
In the event that a per annum secondary market discount rate
for three-month U. S. Treasury bills shall not be published
by the Federal Reserve Board or by any Federal Reserve Bank
or by any U. S. Government department or agency during such
Calendar Period, then the Treasury Bill Rate for such
dividend period shall be the arithmetic average of the two
most recent weekly per annum secondary market discount rates
(or the one weekly per annum secondary market discount rate,
if only one such rate shall be published during such
Calendar Period) for all of the U. S. Treasury bills then
having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board shall
not publish such rates, by any Federal Reserve Bank or by
any U. S. Government department or agency selected by the
Corporation. In the event that the Corporation determines
in good faith that for any reason no such U. S. Treasury
bill rates are published as provided above during such
Calendar Period, then the Treasury Bill Rate for such
dividend period shall be the arithmetic average of the per
annum secondary market discount rates based upon the closing
bids during such Calendar Period for each of the issues of
marketable non-interest bearing U. S. Treasury securities
with a maturity of not less than 80 nor more than 100 days
from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if
22
<PAGE>
daily quotations shall not be generally available) to the
Corporation by at least three recognized U. S. Government
securities dealers selected by the Corporation. In the
event that the Corporation determines in good faith that for
any reason the Corporation cannot determine the Treasury Bill
Rate for any dividend period as provided above in this
paragraph, the Treasury Bill Rate for such dividend period
shall be the arithmetic average of the per annum
secondary market discount rates based upon the closing
bids during such Calendar Period for each of the issues
of marketable interest-bearing U. S. Treasury securities with
a maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as quoted daily for each business
day in New York City (or less frequently if daily quotations
shall not be generally available) to the Corporation by at
least three recognized U. S. Government securities dealers
selected by the Corporation.
Except as provided below in this paragraph, the
"Ten Year Constant Maturity Rate" for each dividend period
shall be the arithmetic average of the two most recent
weekly per annum Ten Year Average Yields (as defined below)
(or the one weekly per annum Ten Year Average Yield, if only
one such Yield shall be published during the relevant
Calendar Period as provided below), as published weekly by
the Federal Reserve Board during the Calendar Period
immediately prior to the last ten calendar days of June,
September, December or March, as the case may be, prior to
the dividend period for which the Applicable Rate is being
determined. In the event that the Federal Reserve Board
does not publish such a weekly per annum Ten Year Average
Yield during such Calendar Period, then the Ten Year
Constant Maturity Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such Yield shall be
published during such Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or
by any U. S. Government department or agency selected by the
Corporation. In the event that a per annum Ten Year Average
Yield shall not be published by the Federal Reserve Board or
by any Federal Reserve Bank or by any U. S. Government
department or agency during such Calendar Period, then the
Ten Year Constant Maturity Rate for such dividend period
shall be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one
weekly average yield to maturity, if only one such yield
shall be published during such Calendar Period) for all of
the actively traded marketable U. S. Treasury fixed interest
rate securities (other than Special Securities, as defined
below) then having maturities of not less than eight nor
more than twelve years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal
Reserve Board shall not publish such yields, by any Federal
Reserve Bank or by any U. S. Government department or agency
selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Ten Year Constant Maturity
Rate for any dividend period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such
dividend period shall be the arithmetic average of the per
annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of
actively traded marketable U. S. Treasury fixed interest
rate securities (other than Special Securities) with a final
23
<PAGE>
maturity date not less than eight nor more than twelve years
from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily
quotations shall not be generally available) to the
Corporation by at least three recognized U. S. Government
securities dealers selected by the Corporation.
Except as provided below in this paragraph, the
"Twenty Year Constant Maturity Rate" for each dividend
period shall be the arithmetic average of the two most
recent weekly per annum Twenty Year Average Yields (as
defined below) (or the one weekly per annum Twenty Year
Average Yield, if only one such Yield shall be published
during the relevant Calendar Period), as published weekly by
the Federal Reserve Board during the Calendar Period
immediately prior to the last ten calendar days of June,
September, December or March, as the case may be, prior to
the dividend period for which the Applicable Rate is being
determined. In the event that the Federal Reserve Board
does not publish such a weekly per annum Twenty Year Average
Yield during such Calendar Period, then the Twenty Year
Constant Maturity Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum
Twenty Year Average Yields (or the one weekly per annum
Twenty Year Average Yield, if only one such Yield shall be
published during such Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or
by any U. S. Government department or agency selected by the
Corporation. In the event that a per annum Twenty Year
Average Yield shall not be published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U. S.
Government department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such
dividend period shall be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or
the one weekly average yield to maturity, if only one such
yield shall be published during such Calendar Period) for
all of the actively traded marketable U. S. Treasury fixed
interest rate securities (other than Special Securities)
then having maturities of not less than eighteen nor more
than twenty-two years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal
Reserve Board shall not publish such yields, by any Federal
Reserve Bank or by any U. S. Government department or agency
selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Twenty Year Constant
Maturity Rate for any dividend period as provided above in
this paragraph, then the Twenty Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of
the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the
issues of actively traded marketable U. S. Treasury fixed
interest rate securities (other than Special Securities)
with a final maturity date not less than eighteen nor more
than twenty-two years from the date of each such quotation,
as quoted daily for each business day in New York City (or
less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized
U. S. Government securities dealers selected by the
Corporation.
The Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Twenty Year Constant Maturity Rate
shall each be rounded to the nearest five one-hundredths of
24
<PAGE>
a percentage point.
The amount of dividends per share payable for each
dividend period shall be computed by dividing the Applicable
Rate for such period by four and applying the rate derived
from such division against the fixed liquidation price of
$100 per share of the thirty-fourth series. The amount of
dividends payable for any period shorter than a full
quarterly dividend period and for the initial dividend
period shall be computed on the basis of a 360-day year of
30-day months and the actual number of days which have
elapsed in such period.
The Applicable Rate with respect to each dividend
period will be calculated as promptly as practicable by the
Corporation according to the appropriate method described
herein. The mathematical accuracy of each such calculation
will be confirmed in writing by independent accountants of
recognized standing. The Corporation will cause each
dividend rate to be published in a newspaper of general
circulation in New York City prior to the commencement of
the new dividend period to which it applies and will cause
notice of such Applicable Rate to be mailed to the holders
of the thirty-fourth series.
As used herein, the term "Calendar Period" means a
period of fourteen calendar days; the term "Special
Securities" means securities which can, at the option of the
holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which
were originally issued at a deep or substantial discount;
the term "Ten Year Average Yield" means the average yield to
maturity for actively traded marketable U. S. Treasury fixed
interest rate securities (adjusted to constant maturities of
ten years); and the term "Twenty Year Average Yield" means
the average yield to maturity for actively traded marketable
U. S. Treasury fixed interest rate securities (adjusted to
constant maturities of twenty years).
(b) Said thirty-fourth series shall not be
redeemable prior to June 1, 1990; and on and after that date
shall be redeemable at any time, in whole or in part, at
$103 per share, if redeemed prior to June 1, 1995, and, if
redeemed thereafter, at $100 per share, plus in each case
accrued and unpaid dividends to the redemption date.
(c) The amount payable upon the shares of said
thirty-fourth series in the event of involuntary
dissolution, liquidation or winding up of the Corporation
shall be $100 per share plus an amount equivalent to the
accrued and unpaid dividends thereon, if any, to the date of
such involuntary dissolution, liquidation or winding up, and
the amount payable upon shares of said thirty-fourth series
in the event of voluntary dissolution, liquidation or
winding up of the Corporation shall be an amount equivalent
to the then redemption price (including an amount equivalent
to accumulated and unpaid dividends thereon, if any) of
shares of said thirty-fourth series.] All shares redeemed.
====================
35. The $9.48 Cumulative Preferred Stock. All
------------------------------------
shares redeemed.
36. The $8.92 Cumulative Preferred Stock. All
------------------------------------
shares redeemed.
37. The $10.00 Cumulative Preferred Stock. All
-------------------------------------
shares redeemed.
25
<PAGE>
38. The Stated Rate Auction Preferred Stock, Series
-----------------------------------------------
A. All shares redeemed.
-
39. The $9.64 Cumulative Preferred Stock.
------------------------------------
[1,000,000 shares of the authorized stock classified
as Preferred Stock as provided in Division A of this Article
VI shall constitute the thirty-ninth series of Preferred
Stock and are designated as $9.64 Cumulative Preferred
Stock, which series shall have, in addition to the general
terms and characteristics of all the authorized shares of
Preferred Stock of the Company, the following distinctive
terms and characteristics:
(a) The thirty-ninth series of Preferred Stock
shall have a dividend rate of Nine Dollars and Sixty-four
Cents ($9.64) per share per annum (the "Basic Dividend
Amount"). In the event any legislative enactment,
administrative action, judicial decision or other change in
law after November 1, 1988, shall reduce or eliminate the
70% dividends received deduction available to eligible
corporate stockholders ("Eligible Corporate Holders")
pursuant to the Internal Revenue Code of 1986 ("Code")
Section 243(a)(l) as in effect on such date (the "Dividends
Received Deduction"), then, in the case of each such
reduction or elimination, from and after the effective date
of such reduction or elimination, the dividend rate for
shares of the thirty-ninth series of Preferred Stock shall
be an amount equal to the Basic Dividend Amount plus the
additional amount, if any, which would maintain for an
eligible corporate holder an after Federal income tax
dividend yield on each dividend at the level which such
yield would have been if such dividend had been paid to such
a holder on November 1, 1988 (a corporate holder's after
Federal income tax dividend yield on November 1, 1988 being
calculated on the bases of (i) a cost per share of $100,
(ii) the Dividends Received Deduction, and (iii) an assumed
Federal income tax rate of 34%; and thereafter a corporate
holder's after Federal income tax dividend yield being
calculated on the bases of (i) and (iii) and any reduced
dividends received deduction in effect at the time);
provided that the total dividend rate for shares of the
thirty-ninth series of Preferred Stock payable pursuant to
this subsection (a) shall not exceed ten dollars and
seventy-four cents ($10.74) per share per annum.
(b) Dividends on shares of the $9.64 Cumulative
Preferred Stock shall be cumulative from the date of
issuance and shall be payable on the first days of January,
April, July and October in each year, commencing January 1,
1989.
(c) The shares of the $9.64 Cumulative Preferred
Stock may be redeemed at any time in whole or in part (in
amounts no less than 10,000 shares) at the option of the
Company (any partial redemption pursuant to this subsection
(c) being applied in satisfaction of redemption requirements
pursuant to subsection (e) below in inverse order of their
scheduled redemption dates) at a fixed redemption price of
$100 per share (the "Redemption Amount") plus accumulated and
unpaid dividends to the date of redemption plus a Yield-
Maintenance Premium per share, if any, as defined below.
Yield-Maintenance Terms.
-----------------------
"Business Day" shall mean any day other than
a Saturday, a Sunday or a day on which commercial
26
<PAGE>
banks in New York City are required or authorized
to be closed.
"Called Redemption Amount" shall mean, with
respect to the $9.64 Cumulative Preferred Stock,
the aggregate Redemption Amount of the Shares of
the $9.64 Cumulative Preferred Stock called for
redemption pursuant to this subsection (c).
"Discounted Value" shall mean, with respect
to the Called Redemption Amount, the amount
obtained by discounting all Remaining Scheduled
Payments with respect to such Called Redemption
Amount from their respective scheduled due dates
to the Settlement Date, in accordance with
accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to
the Reinvestment Yield with respect to such Called
Redemption Amount.
"Reinvestment Yield" shall mean, with respect
to the Called Redemption Amount, the yield to
maturity implied by (i) the yields reported, as of
10:00 A.M. (New York City time) on the Business
Day next preceding the Settlement Date, on the
display designated as "Page 678" on the Telerate
Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded
U. S. Treasury securities having a maturity equal
to the Remaining Average Life of such Called
Redemption Amount as of such Settlement Date, or
if such yields shall not be reported as of such
time or if the yields reported as of such time
shall not be ascertainable, (ii) the Treasury
Constant Maturity Series yields reported, for the
latest day for which such yields shall have been
so reported as of the Business Day next preceding
the Settlement Date in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor
publication) for actively traded U. S. Treasury
securities having a constant maturity equal to the
Remaining Average Life of such Called Redemption
Amount as of such Settlement Date. Such implied
yield shall be determined, if necessary, by (a)
converting U. S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly
between reported yields.
"Remaining Average Life" shall mean, with
respect to the Called Redemption Amount, the
number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called
Redemption Amount into (ii) the sum of the
products obtained by multiplying (a) each Remaining
Scheduled Payment of such Called Redemption
Amount (not including any dividends that would
have been payable with respect to the shares of
the $9.64 Cumulative Preferred Stock to be
redeemed between the Settlement Date and the
respective dates of required payment pursuant to
subsection (e) hereof) by (b) the number of
years (calculated to the nearest one-twelfth year)
which will elapse between the Settlement Date and
the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Scheduled Payments" shall mean
with respect to the Called Redemption Amount, all
payments required by subsection (e) hereof with
respect to such Called Redemption Amount, plus
dividends at the rate of $10.74 per annum on the
shares of the $9.64 Cumulative Preferred Stock to
be redeemed that would have been payable between
the Settlement Date and the respective dates of
required payment pursuant to subsection (e)
hereof.
"Settlement Date" shall mean, with respect to
the Called Redemption Amount, the date on which
such Called Redemption Amount is to be prepaid
pursuant to this subsection (c).
27
<PAGE>
"Yield-Maintenance Premium" shall mean, with
respect to each share of the $9.64 Cumulative
Preferred Stock, a premium equal to (A) the
excess, if any, of the Discounted Value of the
Called Redemption Amount over the sum of (i) such
Called Redemption Amount plus (ii) accumulated and
unpaid dividends on the shares of the $9.64
Cumulative Preferred Stock to be redeemed as of
(including dividends payable on) the Settlement
Date, (B) divided by the number of shares of the
$9.64 Cumulative Preferred Stock to be redeemed on
such Settlement Date. The Yield-Maintenance
Premium shall in no event be less than zero.
(d) The amount payable upon the shares of said
thirty-ninth series in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company shall
be $100 per share plus an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the
date of such voluntary or involuntary dissolution,
liquidation or winding up.
(e) The shares of said thirty-ninth series shall
be subject to redemption as and for a sinking fund pursuant
to which the Company will redeem, out of funds legally
available therefor, semiannually, on May 1 and November 1,
in each year commencing with the year 1995 and ending in the
year in which all shares of the $9.64 Cumulative Preferred
Stock have been redeemed (each such date being hereinafter
referred to as a "$9.64 Cumulative Preferred Stock Sinking
Fund Redemption Date"), 125,000 shares of the $9.64
Cumulative Preferred Stock at a price equal to $100 per
share, plus an amount equal to the accumulated and unpaid
dividends on such share, if any, to the date of redemption
(the obligation of the Company so to redeem the shares of
the $9.64 Cumulative Preferred Stock being hereinafter
referred to as the "$9.64 Cumulative Preferred Stock Sinking
Fund Obligation"); if on any $9.64 Cumulative Preferred
Stock Sinking Fund Redemption Date, the Company shall not
have funds legally available therefor sufficient to redeem
the full number of shares required to be redeemed on that
date, the $9.64 Cumulative Preferred Stock Sinking Fund
Obligation with respect to the shares not redeemed shall
carry forward to each successive $9.64 Cumulative Preferred
Stock Sinking Fund Redemption Date until such shares
shall have been redeemed; whenever on any $9.64 Cumulative
Preferred Stock Sinking Fund Redemption Date, the funds of
the Company legally available for the satisfaction of the
$9.64 Cumulative Preferred Stock Sinking Fund Obligation
and all other sinking fund, mandatory redemption and similar
obligations then existing with respect to any other class
or series of its stock ranking on a parity as to dividends
or assets with the $9.64 Cumulative Preferred Stock
(such Obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligation") are
insufficient to permit the Company to satisfy fully its Total
Sinking Fund Obligation on that date, the Company shall
apply to the satisfaction of its $9.64 Cumulative Preferred
Stock Sinking Fund Obligation on that date that proportion
of such legally available funds which is equal to the
ratio of such $9.64 Cumulative Preferred Stock Sinking
Fund Obligation to such Total Sinking Fund Obligation,
the Company may, however, credit against the $9.64
Cumulative Preferred Stock Sinking Fund Obligation for
any year shares of the $9.64 Cumulative
28
<PAGE>
Preferred Stock (including shares of the $9.64 Cumulative
Preferred Stock optionally redeemed as hereinabove set
forth) redeemed in any manner (other than shares of the
$9.64 Cumulative Preferred Stock redeemed pursuant to the
$9.64 Cumulative Preferred Stock Sinking Fund Obligation),
purchased or otherwise acquired, and not previously credited
against its $9.64 Cumulative Preferred Stock Sinking Fund
Obligation; notwithstanding the above, the Company shall in
no event apply any funds to the satisfaction of its $9.64
Cumulative Preferred Stock Sinking Fund Obligation, on any
$9.64 Cumulative Preferred Stock Sinking Fund Redemption
Date, unless and until all dividends accrued and payable on
all then outstanding shares of the $9.64 Cumulative
Preferred Stock and all other series of the Company's
Preferred Stock shall have been paid or funds shall have
been set apart for their payment for all past dividend
periods ending on or before said $9.64 Cumulative Preferred
Stock Sinking Fund Redemption Date.] All shares redeemed.
====================
40. The Flexible Adjustable Rate Preferred Stock,
---------------------------------------------
Series A. All shares redeemed.
--------
41. The Flexible Adjustable Rate Preferred Stock,
---------------------------------------------
Series B. All shares redeemed.
--------
42. The $10.375 Cumulative Preferred Stock.
--------------------------------------
[750,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the forty-second series of Preferred Stock
and are designated as $10.375 Cumulative Preferred Stock,
which series shall have, in addition to the general terms and
characteristics of all the authorized shares of Preferred
Stock of the Company, the following distinctive terms and
characteristics:
(a) The forty-second series of Preferred Stock shall have a
fixed dividend rate of Ten dollars and thirty-seven and one-
half cents ($10.375) per share per annum. Dividends on
shares of the forty-second series of Preferred Stock shall
be cumulative from the date of issuance and shall be payable
on the first days of January, April, July and October in
each year commencing July 1, 1990.
(b) Said forty-second series shall not be redeemable prior
to April 1, 1995; and on and after that date the fixed
redemption price on the shares of such forty-second series
shall be $102.96 per share if redeemed after March 31, 1995,
but on or prior to March 31, 1996, $101.48 per share if
redeemed after March 31, 1996, but on or prior to March 31,
1997, and $100 per share if redeemed after March 31, 1997,
plus in each case unpaid and accumulated dividends, if any,
to the redemption date.
(c) The amount payable upon shares of said forty-second
series in the event of voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be $100 per
share plus an amount equivalent to the unpaid and
accumulated dividends thereon, if any, to the date of such
voluntary or involuntary dissolution, liquidation or winding
up.
(d) The $10.375 Cumulative Preferred Stock shall be subject
to redemption as and for a sinking fund pursuant to which
the Company will redeem, out of funds legally available
therefor, annually, on April 1, in each year commencing with
29
<PAGE>
the year 1996 and ending in the year in which all shares of
the $10.375 Cumulative Preferred Stock have been redeemed
(each such date being hereinafter referred to as a "$10.375
Cumulative Preferred Stock Sinking Fund Redemption Date"),
150,000 shares of the $10.375 Cumulative Preferred Stock at
a price equal to $100 per share, plus an amount equal to the
unpaid and accumulated dividends on such share, if any, to
the date of redemption (the obligation of the Company so to
redeem the shares of the $10.375 Cumulative Preferred Stock,
being hereinafter referred to as the "$10.375 Cumulative
Preferred Stock Sinking Fund Obligation"); the $10.375
Cumulative Preferred Stock Sinking Fund Obligation during
the specified period will be cumulative; if on any $10.375
Cumulative Preferred Stock Sinking Fund Redemption Date, the
Company shall not have funds legally available therefor
sufficient to redeem the full number of shares required to
be redeemed on that date, the $10.375 Cumulative Preferred
Stock Sinking Fund Obligation with respect to the shares not
redeemed shall carry forward to each successive $10.375
Cumulative Preferred Stock Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any
$10.375 Cumulative Preferred Stock Sinking Fund Redemption
Date, the funds of the Company legally available for the
satisfaction of the $10.375 Cumulative Preferred Stock
Sinking Fund Obligation and all other sinking fund,
mandatory redemption and similar obligations then existing
with respect to any other class or series of its stock
ranking on a parity as to dividends or assets with the
$10.375 Cumulative Preferred Stock (such Obligation and
obligations collectively being hereinafter referred to as
the "Total Sinking Fund Obligation") are insufficient to
permit the Company to satisfy fully its Total Sinking Fund
Obligation on that date, the Company shall apply to the
satisfaction of its $10.375 Cumulative Preferred Stock
Sinking Fund Obligation on that date that proportion of
such legally available funds which is equal to the ratio
of such $10.375 Cumulative Preferred Stock Sinking Fund
Obligation to such Total Sinking Fund Obligation; the
Company may, however, credit against the $10.375 Cumulative
Preferred Stock Sinking Fund Obligation for any year shares
of the $10.375 Cumulative Preferred Stock (including shares
of the $10.375 Cumulative Preferred Stock optionally
redeemed as hereinafter set forth) redeemed in any manner
(other than shares of the $10.375 Cumulative Preferred Stock
redeemed pursuant to the $10.375 Cumulative Preferred Stock
Sinking Fund Obligation), purchased or otherwise acquired,
and not previously credited against its $10.375 Cumulative
Preferred Stock Sinking Fund Obligation; notwithstanding the
above, the Company shall in no event apply any funds to the
satisfaction of its $10.375 Cumulative Preferred Stock
Sinking Fund Obligation, on any $10.375 Cumulative Preferred
Stock Sinking Fund Redemption Date, unless and until all
dividends accrued and payable on all then outstanding shares
of the $10.375 Cumulative Preferred Stock and all other
series of the Company's Preferred Stock shall have been paid
or funds shall have been set apart for their payment for all
past quarterly dividend periods ending on or before said
$10.375 Cumulative Preferred Stock Sinking Fund Redemption
Date; the Company will have the option on April 1, in each
year, commencing with the year 1996, to redeem up to an
additional 150,000 shares of the $10.375 Cumulative
Preferred Stock, at a price equal to $100 per share plus an
amount equal to the unpaid and accumulated dividends on such
30
<PAGE>
share, if any, to the date of redemption; the Company's
option to redeem up to an additional 150,000 shares of the
$10.375 Cumulative Preferred Stock during the specified
period shall be noncumulative.] All shares redeemed.
====================
43. The $9.875 Cumulative Preferred Stock.
-------------------------------------
[250,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the forty-third series of Preferred Stock
and are designated as $9.875 Cumulative Preferred Stock,
which series shall have, in addition to the general terms
and characteristics of all the authorized shares of
Preferred Stock of the Company, the following distinctive
terms and characteristics:
(a) The forty-third series of Preferred Stock shall have a
fixed dividend rate of Nine dollars and eighty-seven and
one-half cents ($9.875) per share per annum. Dividends on
shares of the forty-third series of Preferred Stock shall be
cumulative from the date of issuance and shall be payable on
the first day of January, April, July and October in each
year commencing January 1, 1991.
(b) Said forty-third series shall not be redeemable prior to
October 1, 1995; and on and after that date the fixed
redemption price on the shares of such forty-third series
shall be $102.82 per share is redeemed after September 30,
1995, but on or prior to September 30, 1996, $101.41 per
share if redeemed after September 30, 1996, but on or prior
to September 30, 1997, and $100 per share if redeemed after
September 30, 1997, plus in each case unpaid and accumulated
dividends, if any, to the redemption date.
(c) The amount payable upon the shares of said forty-third
series in the event of voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be $100 per
share plus an amount equivalent to the unpaid and
accumulated dividends thereon, if any, to the date of such
voluntary or involuntary dissolution, liquidation or winding
up.
(d) The $9.875 Cumulative Preferred Stock shall be subject
to redemption as and for a sinking fund pursuant to which
the Company will redeem, out of funds legally available
therefor, annually, on October 1, in each year commencing
with the year 1996 and ending in the year in which all
shares of the $9.875 Cumulative Preferred Stock have been
redeemed (each such date being hereinafter referred to as a
"$9.875 Cumulative Preferred Stock Sinking Fund Redemption
Date"), 50,000 shares of the $9.875 Cumulative Preferred
Stock at a price equal to $100 per share, plus an amount
equal to the unpaid and accumulated dividends on such share,
if any, to the date of redemption (the obligation of the
Company so to redeem the shares of the $9.875 Cumulative
Preferred Stock, being hereinafter referred to as the
"$9.875 Cumulative Preferred Stock Sinking Fund
Obligation"); the $9.875 Cumulative Preferred Stock Sinking
Fund Obligation during the specified period will be
cumulative; if on any $9.875 Cumulative Preferred Stock
Sinking Fund Redemption Date, the Company shall not have
funds legally available therefor sufficient to redeem the
full number of shares required to be redeemed on that date,
the $9.875 Cumulative Preferred Stock Sinking Fund
Obligation with respect to the shares not redeemed shall
carry forward to each successive $9.875 Cumulative Preferred
Stock Sinking Fund Redemption Date until such shares shall
31
<PAGE>
have been redeemed; whenever on any $9.875 Cumulative
Preferred Stock Sinking Fund Redemption Date, the funds of
the Company legally available for the satisfaction of the
$9.875 Cumulative Preferred Stock Sinking Fund Obligation
and all other sinking fund, mandatory redemption and similar
obligations then existing with respect to any other class or
series of its stock ranking on a parity as to dividends or
assets with the $9.875 Cumulative Preferred Stock (such
Obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligation") are
insufficient to permit the Company to satisfy fully its
Total Sinking Fund Obligation on that date, the Company
shall apply to the satisfaction of its $9.875 Cumulative
Preferred Stock Sinking Fund Obligation on that date that
proportion of such legally available funds which is equal to
the ratio of such $9.875 Cumulative Preferred Stock Sinking
Fund Obligation to such Total Sinking Fund Obligation; the
Company may, however, credit against the $9.875 Cumulative
Preferred Stock Sinking Fund Obligation for any year shares
of the $9.875 Cumulative Preferred Stock (including shares
of the $9.875 Cumulative Preferred Stock optionally redeemed
as hereinafter set forth) redeemed in any manner (other than
shares of the $9.875 Cumulative Preferred Stock redeemed
pursuant to the $9.875 Cumulative Preferred Stock Sinking
Fund Obligation), purchased or otherwise acquired, and not
previously credited against its $9.875 Cumulative Preferred
Stock Sinking Fund Obligation; notwithstanding the above,
the Company shall in no event apply any funds to the
satisfaction of its $9.875 Cumulative Preferred Stock
Sinking Fund Obligation, on any $9.875 Cumulative Preferred
Stock Sinking Fund Redemption Date, unless and until all
dividends accrued and payable on all then outstanding
shares of the $9.875 Cumulative Preferred Stock and
all other series of the Company's Preferred Stock shall
have been paid or funds shall have been set apart for their
payment for all past quarterly dividend periods ending on
or before said $9.875 Cumulative Preferred Stock Sinking Fund
Redemption Date; the Company will have the option on October
1, in each year, commencing with the year 1996, to redeem
up to an additional 50,000 shares of the $9.875 Cumulative
Preferred Stock, at a price equal to the unpaid and accumulated
dividends on such share, if any, to the date of redemption;
the Company's option to redeem up to an additional 50,000
shares of the $9.875 Cumulative Preferred Stock during
the specified period shall be noncumulative.] All shares
==========
redeemed.
=========
44. The $8.20 Cumulative Preferred Stock.
------------------------------------
[1,250,000] 338,872.25 shares of the authorized stock
==========
classified as Preferred Stock as provided in Division A of
this Article VI shall constitute the forty-fourth series of
Preferred Stock and are designated as $8.20 Cumulative
Preferred Stock, which series shall have, in addition to the
general terms and characteristics of all the authorized
shares of Preferred Stock of the Company, the following
distinctive terms and characteristics:
(a) The forty-fourth series of Preferred Stock
shall have a fixed dividend rate of Eight Dollars and Twenty
Cents ($8.20) per share per annum; and dividends on shares
of the forty-fourth series of Preferred Stock shall be
cumulative from the date of issuance and shall be payable on
the first days of January, April, July and October in each
year, commencing April 1, 1993;
32
<PAGE>
(b) Said forty-fourth series shall not be
redeemable prior to January 1, 1998; and on and after that
date the fixed redemption price on the shares of such forty-
fourth series shall be $100.00 per share plus unpaid and
accumulated dividends, if any, to the redemption date;
(c) The amount payable upon the shares of said
forty-fourth series in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company shall
be $100 per share plus an amount equivalent to the unpaid
and accumulated dividends thereon, if any, to the date of
such voluntary or involuntary dissolution, liquidation or
winding up.
45. The $7.98 Cumulative Preferred Stock.
------------------------------------
[500,000] 474,000 shares of the authorized stock classified as
=======
Preferred Stock as provided in Division A of this Article VI
shall constitute the forty-fifth series of Preferred Stock
and are designated as $7.98 Cumulative Preferred Stock,
which series shall have, in addition to the general terms
and characteristics of all the authorized shares of
Preferred Stock of the Company, the following distinctive
terms and characteristics:
(a) The forty-fifth series of Preferred Stock
shall have a fixed dividend rate of Seven Dollars and
Ninety-Eight Cents ($7.98) per share per annum. Dividends
on shares of the forty-fifth series of Preferred Stock shall
be cumulative from the date of issuance and shall be payable
on the first days of January, April, July and October
in each year commencing July 1, 1993.
(b) Said forty-fifth series shall not be
redeemable prior to April 1, 2003; and on and after that
date the fixed redemption price on the shares of such forty-
fifth series shall be $103.99 per share if redeemed after
March 31, 2003, but on or prior to March 31, 2004, $103.59
per share if redeemed after March 31, 2004, but on or prior
to March 31, 2005, $103.19 per share if redeemed after March
31, 2005, but on or prior to March 31, 2006, $102.79 per
share if redeemed after March 31, 2006, but on or prior to
March 31, 2007, $102.39 per share if redeemed after March
31, 2007, but on or prior to March 31, 2008, $101.99 per
share if redeemed after March 31, 2008, but on or prior to
March 31, 2009, $101.60 per share if redeemed after March
31, 2009, but on or prior to March 31, 2010, $101.20 per
share if redeemed after March 31, 2010, but on or prior to
March 31, 2011, $100.80 per share if redeemed after March
31, 2011, but on or prior to March 31, 2012, $100.40 per
share if redeemed after March 31, 2012, but on or prior to
March 31, 2013, and $100.00 per share if redeemed after
March 31, 2013, plus in each case unpaid and accumulated
dividends, if any, to the redemption date.
(c) The amount payable upon the shares of said
forty-fifth series in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company shall
be $100 per share plus an amount equivalent to the unpaid
and accumulated dividends thereon, if any, to the date of
such voluntary or involuntary dissolution, liquidation or
winding up.
46. The $6.98 Cumulative Preferred Stock.
------------------------------------
1,000,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
33
<PAGE>
shall constitute the forty-sixth series of Preferred Stock
and are designated as $6.98 Cumulative Preferred Stock,
which series shall have, in addition to the general terms
and characteristics of all the authorized shares of
Preferred Stock of the Company, the following distinctive
terms and characteristics:
(a) The forty-sixth series of Preferred Stock
shall have a fixed dividend rate of Six Dollars and Ninety-
Eight Cents ($6.98) per share per annum. Dividends on
shares of the forty-sixty series of Preferred Stock shall be
cumulative from the date of issuance and shall be payable on
the first days of January, April, July and October in each
year commencing July 1, 1993.
(b) Said forty-sixth series shall not be
redeemable prior to July 1, 2003; and on and after that date
the fixed redemption price on the shares of such forty-sixth
series shall be $100 per share plus unpaid and accumulated
dividends, if any, to the redemption date.
(c) The amount payable upon the shares of said
forty-sixth series in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company shall
be $100 per share plus an amount equivalent to the unpaid
and accumulated dividends thereon, if any, to the date of
such voluntary or involuntary dissolution, liquidation or
winding up.
(d) The $6.98 Cumulative Preferred Stock shall be
subject to redemption as and for a sinking fund pursuant to
which the Company will redeem 50,000 shares of the $6.98
Cumulative Preferred Stock, out of funds legally available
therefor, annually, on July 1, in each year commencing with
the year 2003 and ending in the year 2007 and all the
remaining outstanding shares of $6.98 Cumulative Preferred
Stock on July 1, 2008 (each such date being hereinafter
referred to as a "$6.98 Cumulative Preferred Stock Sinking
Fund Redemption Date"), at a price equal to $100 per share,
plus an amount equal to the unpaid and accumulated dividends
on such share, if any, to the date of redemption (the
obligation of the Company so to redeem the shares of the
$6.98 Cumulative Preferred Stock, being hereinafter referred
to as the "$6.98 Cumulative Preferred Stock Sinking Fund
Obligation"); the $6.98 Cumulative Preferred Stock Sinking
Fund Obligation during the specified period will be
cumulative; if on any $6.98 Cumulative Preferred Stock
Sinking Fund Redemption Date, the Company shall not have
funds legally available therefor sufficient to redeem the
full number of shares required to be redeemed on that date,
the $6.98 Cumulative Preferred Stock Sinking Fund Obligation
with respect to the shares not redeemed shall carry forward
to each successive $6.98 Cumulative Preferred Stock Sinking
Fund Redemption Date and each successive July 1 thereafter
until such shares shall have been redeemed; whenever on any
$6.98 Cumulative Preferred Stock Sinking Fund Redemption
Date, the funds of the Company legally available for the
satisfaction of the $6.98 Cumulative Preferred Stock Sinking
Fund Obligation and all other sinking fund, mandatory
redemption and similar obligations then existing with
respect to any other class or series of its stock ranking on
a parity as to dividends or assets with the $6.98 Cumulative
Preferred Stock (such Obligation and obligations
collectively being hereinafter referred to as the "Total
Sinking Fund Obligation") are insufficient to permit the
Company to satisfy fully its Total Sinking Fund Obligation
34
<PAGE>
on that date, the Company shall apply to the satisfaction of
its $6.98 Cumulative Preferred Stock Sinking Fund Obligation
on that date that proportion of such legally available funds
which is equal to the ratio of such $6.98 Cumulative
Preferred Stock Sinking Fund Obligation to such Total
Sinking Fund Obligation; the Company may, however, credit
against the $6.98 Cumulative Preferred Stock Sinking Fund
Obligation for any year shares of the $6.98 Cumulative
Preferred Stock (including shares of the $6.98 Cumulative
Preferred Stock optionally redeemed as hereinbefore set
forth) redeemed in any manner (other than shares of the
$6.98 Cumulative Preferred Stock redeemed pursuant to the
$6.98 Cumulative Preferred Stock Sinking Fund Obligation),
purchased or otherwise acquired, and not previously credited
against its $6.98 Cumulative Preferred Stock Sinking Fund
Obligation; notwithstanding the above, the Company shall in
no event apply any funds to the satisfaction of its $6.98
Cumulative Preferred Stock Sinking Fund Obligation, on any
$6.98 Cumulative Preferred Stock Sinking Fund Redemption
Date, unless and until all dividends accrued and payable on
all then outstanding shares of the $6.98 Cumulative
Preferred Stock and all other series of the Company's
Preferred Stock shall have been paid or funds shall have
been set apart for their payment for all past quarterly
dividend periods ending on or before said $6.98 Cumulative
Preferred Stock Sinking Fund Redemption Date; the Company
will have the option on July 1, in each year, commencing
with the year 2003, to redeem up to an additional 50,000
shares of the $6.98 Cumulative Preferred Stock, at a price
equal to $100 per share plus an amount equal to the unpaid
and accumulated dividends on such share, if any, to the
date of redemption; the Company's option to redeem up to an
additional 50,000 shares of the $6.98 Cumulative
Preferred Stock during the specified period shall be
noncumulative.
47. The $7.50 Cumulative Preferred Stock.
------------------------------------
[2,000,000] 392,233.50 shares of the authorized stock
==========
classified as Preferred Stock as provided in Division A of
this Article VI shall constitute the forty-seventh series of
Preferred Stock and are designated as $7.50 Cumulative
Preferred Stock, which series shall have, in addition to the
general terms and characteristics of all the authorized
shares of Preferred Stock of the Company, the following
distinctive terms and characteristics:
(a) The forty-seventh series of Preferred Stock
shall have a fixed dividend rate of Seven Dollars and Fifty
Cents ($7.50) per share per annum; and dividends on shares
of the forty-seventh series of Preferred Stock shall be
cumulative from the date of issuance and shall be payable on
the first days of January, April, July and October in each
year, commencing October 1, 1993;
(b) Said forty-seventh series shall not be
redeemable prior to August 1, 2001; and on and after that
date the fixed redemption price on the shares of such forty-
seventh series shall be $100 per share plus unpaid and
accumulated dividends, if any, to the redemption date;
(c) The amount payable upon the shares of said
forty-seventh series in the event of voluntary or
involuntary dissolution, liquidation or winding up of the
Company shall be $100 per share plus an amount equivalent to
35
<PAGE>
the unpaid and accumulated dividends thereon, if any, to the
date of such voluntary or involuntary dissolution,
liquidation or winding up.
48. The $6.375 Cumulative Preferred Stock.
-------------------------------------
1,000,000 shares of the authorized stock classified as
Preferred Stock as provided in Division A of this Article VI
shall constitute the forty-eighth series of Preferred Stock
and are designated as $6.375 Cumulative Preferred Stock,
which series shall have, in addition to the general terms
and characteristics of all the authorized shares of
Preferred Stock of the Company, the following distinctive
terms and characteristics:
(a) The forty-eighth series of Preferred Stock
shall have a fixed dividend rate of Six Dollars and Thirty-
seven and One-half Cents ($6.375) per share per annum.
Dividends on shares of the forty-eighth series of Preferred
Stock shall be cumulative from the date of issuance and
shall be payable on the first days of January, April, July
and October in each year commencing January 1, 1994.
(b) Said forty-eighth series shall not be
redeemable prior to October 1, 2003; and on and after that
date the fixed redemption price on the shares of such forty-
eighth series shall be $100 per share plus unpaid and
accumulated dividends, if any, to the redemption date.
(c) The amount payable upon the shares of said
forty-eighth series in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company shall
be $100 per share plus an amount equivalent to the unpaid
and accumulated dividends thereon, if any, to the date of
such voluntary or involuntary dissolution, liquidation or
winding up.
(d) The $6.375 Cumulative Preferred Stock shall
be subject to redemption as and for a sinking fund pursuant
to which the Company will redeem 50,000 shares of the $6.375
Cumulative Preferred Stock, out of funds legally available
therefor, annually, on October 1, in each year commencing
with the year 2003 and ending in the year 2007 and all the
remaining outstanding shares of $6.375 Cumulative Preferred
Stock on October 1, 2008 (each such date being hereinafter
referred to as a "$6.375 Cumulative Preferred Stock Sinking
Fund Redemption Date"), at a price equal to $100 per share,
plus an amount equal to the unpaid and accumulated dividends
on such share, if any, to the date of redemption (the
obligation of the Company so to redeem the shares of the
$6.375 Cumulative Preferred Stock being hereinafter referred
to as the "$6.375 Cumulative Preferred Stock Sinking Fund
Obligation"); the $6.375 Cumulative Preferred Stock Sinking
Fund Obligation during the specified period will be
cumulative; if on any $6.375 Cumulative Preferred Stock
Sinking Fund Redemption Date, the Company shall not have
funds legally available therefor sufficient to redeem the
full number of shares required to be redeemed on that date,
the $6.375 Cumulative Preferred Stock Sinking Fund
Obligation with respect to the shares not redeemed shall
carry forward to each successive $6.375 Cumulative Preferred
Stock Sinking Fund Redemption Date and each successive
October 1 thereafter until such shares shall have been
redeemed; whenever on any $6.375 Cumulative Preferred Stock
Sinking Fund Redemption Date, the funds of the Company
legally available for the satisfaction of the $6.375
36
<PAGE>
Cumulative Preferred Stock Sinking Fund Obligation and all
other sinking fund, mandatory redemption and similar
obligations then existing with respect to any other class or
series of its stock ranking on a parity as to dividends or
assets with the $6.375 Cumulative Preferred Stock (such
Obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligation") are
insufficient to permit the Company to satisfy fully its
Total Sinking Fund Obligation on that date, the Company
shall apply to the satisfaction of its $6.375 Cumulative
Preferred Stock Sinking Fund Obligation on that date that
proportion of such legally available funds which is equal to
the ratio of such $6.375 Cumulative Preferred Stock Sinking
Fund Obligation to such Total Sinking Fund Obligation; the
Company may, however, credit against the $6.375 Cumulative
Preferred Stock Sinking Fund Obligation for any year shares
of the $6.375 Cumulative Preferred Stock (including shares
of the $6.375 Cumulative Preferred Stock optionally redeemed
as hereinbefore set forth) redeemed in any manner (other
than shares of the $6.375 Cumulative Preferred Stock
redeemed pursuant to the $6.375 Cumulative Preferred Stock
Sinking Fund Obligation), purchased or otherwise acquired,
and not previously credited against its $6.375 Cumulative
Preferred Stock Sinking Fund Obligation; notwithstanding
the above, the Company shall in no event apply any funds
to the satisfaction of its $6.375 Cumulative Preferred
Stock Sinking Fund Obligation, on any $6.375 Cumulative
Preferred Stock Sinking Fund Redemption Date, unless and
until all dividends accrued and payable on all then
outstanding shares of the $6.375 Cumulative Preferred
Stock and all other series of the Company's Preferred
Stock shall have been paid or funds shall have been set
apart for their payment for all past quarterly dividend
periods ending on or before said $6.375 Cumulative Preferred
Stock Sinking Fund Redemption Date.
49. The $7.22 Cumulative Preferred Stock.
------------------------------------
[1,750,000] 301,132.50 shares of the authorized stock
==========
classified as Preferred Stock as provided in Division A of
this Article VI shall constitute the forty-ninth series of
Preferred Stock and are designated as $7.22 Cumulative
Preferred Stock, which series shall have, in addition to the
general terms and characteristics of all the authorized
shares of Preferred Stock of the Company, the following
distinctive terms and characteristics:
(a) The forty-ninth series of Preferred Stock
shall have a fixed dividend rate of Seven Dollars and
Twenty-two Cents ($7.22) per share per annum; and dividends
on shares of the forty-ninth series of Preferred Stock shall
be cumulative from the date of issuance and shall be payable
on the first days of January, April, July and October in
each year, commencing January 1, 1994;
(b) Said forty-ninth series shall not be
redeemable prior to November 1, 2001; and on and after that
date the fixed redemption price on the shares of such forty-
ninth series shall be $100 per share plus unpaid and
accumulated dividends, if any, to the redemption date;
(c) The amount payable upon the shares of said
forty-ninth series in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company shall
be $100 per share plus an amount equivalent to the unpaid
and accumulated dividends thereon, if any, to the date of
such voluntary or involuntary dissolution, liquidation or
37
<PAGE>
winding up.
Division C --- Common Stock
Subject to the rights expressly conferred upon the
holders of Preferred Stock, under prescribed conditions, by
this Article VI, and subordinate thereto, the holders of the
Common Stock alone shall:
1. Receive all dividends declared by the Board of
Directors; provided, however, so long as any shares of the
Preferred Stock are outstanding, the Corporation shall not
declare or pay any dividends on the Common Stock, except as
follows:
[(a)] If and so long as the Common Stock
Equity at the end of the calendar month
immediately preceding the date on which a
dividend on Common Stock is declared is, or
as a result of such dividend would become,
less than 20% of total capitalization, the
Corporation shall not declare such dividends
in an amount which, together with all other
dividends on Common Stock declared within
the year ending with and including the
date of such dividend declaration, exceeds
[50%] 75% of the net income of the Corporation
===
available for dividends on the Common Stock
for the twelve full calendar months immediately
preceding the month in which such dividends are
declared. [; and
=
(b) If and so long as the Common Stock Equity
at the end of the calendar month immediately
preceding the date on which a dividend on
Common Stock is declared is, or as a result
of such dividend would become, less than 25%
but not less than 20% of total
capitalization, the Corporation shall not
declare dividends on the Common Stock in an
amount which, together with all other
dividends on Common Stock declared within the
year ending with and including the date of
such dividend declaration, exceeds 75% of the
net income of the Corporation available for
dividends on the Common Stock for the twelve
full calendar months immediately preceding
the month in which such dividends are
declared; and
(c) At any time when the Common Stock Equity
is 25% or more of total capitalization, the
Corporation may not declare dividends on
shares of the Common Stock which would reduce
the Common Stock Equity below 25% of total
capitalization, except to the extent provided
in paragraph (a) and (b) above.]
For the purpose of this Section 1, (i) the term
"Common Stock Equity" shall mean the sum of the stated value
of the outstanding Common Stock and the retained earnings,
including reservations thereof, and other paid-in capital of
the Corporation, whether or not available for the payment of
dividends on the Common Stock; (ii) the term "total
capitalization" shall mean the sum of the stated capital
38
<PAGE>
applicable to the outstanding stock of all classes of the
Corporation, the retained earnings, including reservations
thereof, and other paid-in capital of the Corporation,
whether or not available for the payment of dividends on the
Common Stock of the Corporation, and the principal amount of
all outstanding debt of the Corporation (other than any
===============
obligation or liability which, by its terms or otherwise, is
============================================================
non-recourse to the Corporation whether or not such obligation
==============================================================
or liability is reflected in the financial statements of the
============================================================
Corporation) maturing more than twelve months after the date
============
of the determination of the total capitalization; and (iii)
the term "dividends on Common Stock" shall embrace dividends
on Common Stock (other than dividends payable only in shares
of Common Stock), distributions on, and purchases or other
acquisitions for value of, any Common Stock of the Corporation
or other stock, if any, subordinate to the Preferred Stock.
2. Receive all assets of the Corporation
available for distribution to its shareholders in the event
of any liquidation, dissolution, or winding up of the
Corporation. The Board of Directors, by vote of a majority
of the members thereof, may distribute in kind to the
holders of the Common Stock such remaining assets of the
Corporation, or may sell, transfer or otherwise dispose
of all or any of the remaining property and assets of
the Corporation to any other corporation or other
purchaser and receive payment therefor wholly or partially
in cash, property, stock or obligations of such purchaser,
and may sell all or any part of the consideration received
therefor and distribute the same or the proceeds thereof to
the holders of the Common Stock.
3. Possess exclusively full voting power for the
election of directors and for all other purposes except as
otherwise provided herein.
Division D --- Provisions Applicable to All Classes of Stock
1. Pre-emptive Rights. Upon any issue or sale for
------------------
money or other consideration of any stock of this
Corporation that may be authorized from time to time, no
holder of stock irrespective of the kind of such stock shall
have any pre-emptive or other right to subscribe for,
purchase or receive any proportionate or other share of the
stock so issued or sold (including treasury shares), but the
Board of Directors may dispose of all or any portion of such
stock as and when it may determine free of any such rights,
whether by offering the same to shareholders or by sale or
other disposition as said Board may deem advisable;
provided, however, that if the Board of Directors shall
determine to offer any new or additional shares of Common
Stock, or any security convertible into Common Stock, for
money, other than by a public offering of all of such shares
or an offering of all of such shares to or through
underwriters or investment bankers who shall have agreed
promptly to make a public offering of such shares, the same
shall first be offered pro rata to the holders of the then
outstanding shares of Common Stock of the Corporation upon
terms not less favorable to the purchaser (without deduction
39
<PAGE>
of such reasonable compensation, allowance or discount for
the sale, underwriting or purchase as may be fixed
thereafter by the Board of Directors) than those on which
the Board of Directors issues and disposes of such stock or
securities to other than such holders of Common Stock; and
provided further, that the time within which such pre-
emptive rights shall be exercised may be limited by the
Board of Directors to such time as the said Board may deem
proper, not less, however, than twenty days after mailing of
notice that such stock rights are available and may be
exercised. The foregoing provisions of this paragraph shall
not be changed unless the holders of record of not less than
two-thirds (2/3) of the number of shares of Common Stock
then outstanding shall consent thereto in writing or by
voting therefor in person or by proxy at the meeting of
stockholders at which any such change is considered.
2. Votes Per Share. [Any] Unless otherwise
--------------- ================
expressly provided in the resolution of the Board of Directors
==============================================================
of the Corporation establishing a series of Preferred Stock,
============================================================
any shareholder of the Corporation having the right to vote at
===
any meeting of the shareholders or of any class or series
thereof, as herein provided, shall be entitled to one vote
for each share of stock held by him. There shall be no
cumulative voting by any class, series, or shares of stock
of this Corporation.
3. Increase of Capital Stock. The capital stock of
-------------------------
the Corporation may be increased at any time, and from time to
time, upon the vote of the holders of record of not less than
[two-thirds] a majority of the aggregate number of shares of
==========
the capital stock of the Corporation then outstanding and
having power to vote upon such increase.
ARTICLE VII
-----------
The Corporation from time to time, subject to the
limitations or requirements hereinabove provided and to the
extent it may lawfully do so, may purchase any of its stock
outstanding at such price as may be [fixed] authorized by its
==========
Board of Directors and accepted by the holders of the stock
purchased, [to the extent of the aggregate of retained
earnings available therefor,] and may resell any stock so
purchased or otherwise acquired by it at such price as may be
[fixed] authorized by its said Board of Directors.
==========
ARTICLE VIII
------------
Subject to the other provisions hereof, in order
to acquire funds with which to make any redemption or
purchase of stock herein authorized, the Corporation,
subject to the limitations or requirements hereinabove
provided and to the extent it may lawfully do so, may issue
and sell Common Stock or Preferred Stock of any class then
authorized but unissued, or bonds, notes, or other evidences
of indebtedness convertible or not into Common Stock or
stock of any other class then authorized but unissued.
40
<PAGE>
ARTICLE IX
----------
The Corporation shall reimburse or indemnify any
former, present or future director, officer or employee of
the Corporation, or any person who may have served at its
request as a director, officer or employee of another
corporation, or any former, present or future director,
officer or employee of the Corporation who shall have served
or shall be serving as an administrator, agent or fiduciary
for the Corporation or for another corporation at the
request of the Corporation (and his heirs, executors and
administrators) from and against all expenses and
liabilities incurred by him or them, or imposed on him or
them, including, but not limited to, judgments, settlements,
court costs and attorneys' fees, in connection with, or
arising out of, the defense of any action, suit or
proceeding in which he may be involved by reason of his
being or having been such director, officer or employee,
except with respect to matters as to which he shall be adjudged
in such action, suit or proceeding to be liable because he
did not act in good faith, or because of dishonesty
or conflict of interest in the performance of his duty.
No former, present or future director, officer or
employee of the Corporation (or his heirs, executors and
administrators) shall be liable for any act, omission, step
or conduct taken or had in good faith, which is required,
authorized or approved by any order or orders issued
pursuant to the Public Utility Holding Company Act of 1935,
the Federal Power Act, or any other federal or state statute
regulating the Corporation or its subsidiaries, or any
amendments to any thereof. In any action, suit or
proceeding based on any act, omission, step or conduct, as
in this paragraph described, the provisions hereof shall be
brought to the attention of the court. In the event that
the foregoing provisions of this paragraph are found by the
court not to constitute a valid defense, each such director,
officer or employee (and his heirs, executors and
administrators) shall be reimbursed for, or indemnified
against, all expenses and liabilities incurred by him or
them, or imposed on him or them, including, but not limited
to, judgments, settlements, court costs and attorneys' fees,
in connection with, or arising out of, any such action, suit
or proceeding based on any act, omission, step or conduct
taken or had in good faith as in this paragraph described.
The foregoing rights shall not be exclusive of
other rights to which any such director, officer or employee
(or his heirs, executors and administrators) may otherwise
be entitled under any bylaw, agreement, vote of shareholders
or otherwise, and shall be available whether or not the
director, officer or employee continues to be a director,
officer or employee at the time of incurring such expenses
and liabilities. In furtherance, and not in limitation of
the foregoing provisions of this Article IX, the Corporation
may indemnify and insure any such persons to the fullest
extent permitted by the Texas Business Corporation Act, as
amended from time to time, or the laws of the State of
Texas, as in effect from time to time.
ARTICLE X
---------
A director of the Corporation shall not be liable
41
<PAGE>
to the Corporation or its shareholders for monetary damages
for any act or omission in the director's capacity as a
director, except that this provision does not eliminate or
limit liability of a director for:
(a) a breach of a director's duty of loyalty to
the Corporation or its shareholders;
(b) an act or omission not in good faith that
constitutes a breach of duty of a director to the
Corporation or an act or omission that involved
intentional misconduct or a knowing violation of
the law;
(c) a transaction from which a director received
an improper benefit, whether or not the benefit
resulted from an action taken within the scope of
the director's office; or
(d) an act or omission for which the liability of
a director is expressly provided for by statute.
If the laws of the State of Texas are amended to
authorize action further eliminating or limiting the
personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited
to the fullest extent permitted by such laws as so amended.
Any repeal or modification of this Article X shall not
adversely affect any right of protection of a director of
the Corporation existing at the time of such repeal or
modification.
ARTICLE XI
----------
The power to alter, amend or repeal the Bylaws of
the Corporation, or to adopt new Bylaws, is hereby delegated
to the Board of Directors subject to repeal or change by
action of the shareholders.
ARTICLE XII
-----------
The Corporation has heretofore complied with the
requirements of law as to the initial minimum capital
requirements without which it could not commence business
under the Texas Business Corporation Act.
Dated this ______ day of [December, 1993]______, 1997.
============
42
<PAGE>
PROXY
TEXAS UTILITIES ELECTRIC COMPANY
Energy Plaza
1601 Bryan Street
Dallas, TX 75201-3411
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert S. Shapard and
Glen H. Hibbs, and each of them, Proxies with power to appoint a
substitute, and hereby authorizes them to represent and to vote
all shares of Preferred Stock of Texas Utilities Electric Company
(Company) held of record by the undersigned at the special
meeting of shareholders of the Company to be held at the time and
place set forth in the Proxy Statement delivered with this Proxy,
and at any adjournments thereof, and to vote, as directed on the
reverse side of this card, on the specified matter coming before
said meeting, and in their discretion, upon such other matters
not specified as may come before said meeting or any
adjournments thereof.
(Continued, and to be signed and dated, on reverse side)
REVERSE SIDE
This proxy when properly executed will be voted in the manner
directed herein. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR APPROVAL OF THE PROPOSED RESTATED ARTICLES OF
INCORPORATION OF THE COMPANY.
Please mark your votes as indicated in this example [ X ]
_________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED RESTATED
---
ARTICLES OF INCORPORATION OF THE COMPANY.
Approval of Proposed Restated Articles of Incorporation of
the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Note: Please sign names exactly as printed hereon. Joint owners
should each sign. In signing as attorney, administrator, executor,
guardian, officer, partner or trustee, please give full title as
such. Receipt is acknowledged of the notice of meeting and proxy
statement.
Signature(s)______________________________ Date_________________
