PAGE 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended October 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 1-9618
NAVISTAR INTERNATIONAL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3359573
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611
- -------------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 836-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
- --------------------------------------------- -----------------------
Common stock, par value $0.10 per share New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Series A warrants New York Stock Exchange
Pacific Stock Exchange
$6.00 cumulative convertible preferred stock,
Series G (with $1.00 par value) New York Stock Exchange
Cumulative convertible junior preference stock,
Series D (with $1.00 par value) New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days: Yes X No
--- ---
As of January 20, 1994 the aggregate market value of Common Stock (excluding
Class B Common Stock) held by non-affiliates of the registrant was
$1,312,845,561.
As of January 24, 1994, the number of shares outstanding of the registrant's
Common Stock was 49,776,135 and the Class B Common Stock was 25,240,305.
Documents Incorporated by Reference
-----------------------------------
1993 Annual Report to Shareowners (Parts I, II and IV) 1993 Proxy Statement
(Parts I and III) Navistar Financial Corporation 1993 Annual Report on Form 10-K
(Part IV)
<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Section 12, 13 or 15(d) of
THE SECURITIES EXCHANGE ACT of 1934
Commission File Number 1-9618
NAVISTAR INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends its Annual Report on Form 10-K for
the fiscal year ended October 31, 1993, solely for the purpose of refiling
Exhibit 3.2. The Exhibit Index follows the signature page for this Amendment.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Navistar International Corporation
----------------------------------
(Registrant)
/s/ J. Steven Keate
----------------------------------
J. Steven Keate
Vice President and Controller
(Principal Accounting Officer)
May 4, 1998
<PAGE>
Page 3
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits
Page
----
Exhibit No. Description
----------- ----------- E-1
3.2 Restated Certificate
of Incorporation of
Navistar International
Corporation
(as amended and in
effect on July 1, 1993)
<PAGE>
EXHIBIT 3.2
RESTATED
CERTIFICATE OF INCORPORATION
of
NAVISTAR INTERNATIONAL CORPORATION
(as amended and in effect on July 1, 1993)
First: The name of the corporation (hereinafter called the
"Company") is
NAVISTAR INTERNATIONAL CORPORATION
Second: The address of its registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
Third: The nature of the business or purposes to be conducted
or promoted is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of Delaware, as
amended.
Fourth: The total number of shares of stock which the Company
shall have authority to issue is 176,000,000, consisting of:
(1) 30,000,000 shares, with a par value of $1.00 per share, are to be of a
class designated "Preferred Stock;
(2) 10,000,000 shares, with a par value of $1.00 per share, are to be of a
class designated "Preference Stock;"
(3) 110,000,000 shares, with a par value of $0.10 per share, are to be of a
class designated "Common Stock;" and
(4) 26,000,000 shares with a par value of $0.10 per share, are to be of a
class designated "Class B Common."
The Common Stock and Class B Common are hereafter collectively referred to
as the "Parent Common Stock."
I. Preferred Stock.
The Preferred Stock may be issued from time to time in one or more
series of any number of shares, provided that the aggregate number of shares
issued and not canceled of any and all such series shall not exceed the total
number of shares of Preferred Stock hereinabove authorized, and with distinctive
serial designations, all as shall hereafter be stated and expressed in the
resolution or resolutions providing for the issue of such Preferred Stock from
time to time adopted by the Board of Directors pursuant to authority so to do
which is hereby vested in the Board of Directors. Each series of Preferred Stock
(i) may have such voting powers, full or limited, or may be without voting
powers; (ii) may be subject to redemption at such time or times and at such
prices; (iii) may be entitled to receive dividends (which may be cumulative or
noncumulative) at such rate or rates, on such conditions, and at such times, and
payable in preference to, or in such relation to, the dividends payable on any
other class or classes or series of stock; (iv) may have such rights upon the
dissolution of, or upon any distribution of the assets of, the corporation; (v)
may be made convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes of
stock of the corporation, at such price or prices or at such rates of exchange,
and with such adjustments; (vi) may be entitled to the benefit of a sinking fund
to be applied to the purchase or redemption of shares of such series in such
amount or amounts; (vii) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of the Company or any subsidiary,
upon the issue of any additional stock (including additional shares of such
series or of any other series) and upon the payment of dividends or the making
of other distributions on, and the purchase, redemption or other acquisition by
the Company or any subsidiary of any outstanding stock of the Company; and
(viii) may have such other relative, participating, optional or other special
rights, qualifications, limitations or restrictions thereof; all as shall be
stated in said resolution or resolutions providing for the issue of such
Preferred Stock. Shares of any series of Preferred Stock which have been
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redeemed (whether through the operation of a sinking fund or otherwise) or
which, if convertible or exchangeable, have been converted into or exchanged for
shares of stock of any other class or classes shall have the status of
authorized and unissued shares of Preferred Stock of the same series and may be
reissued as a part of the series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors or as part of any
other series of Preferred Stock, all subject to the conditions or restrictions
on issuance set forth in the resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of Preferred Stock.
A. Series G Stock. The designated powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, of 4,800,000 shares of a series of
Preferred Stock are as follows:
(1) Designation. The designation of this series of Preferred
Stock shall be "$6.00 Cumulative Convertible Preferred Stock, Series G
(With $1.00 Par Value)" (hereinafter called the "Series G Stock").
(2) Dividends. The holders of shares of the Series G Stock
shall be entitled to receive, when and as declared by the Board of
Directors, dividends in cash in the amount of $6.00 per share per
annum, payable quarterly on the 15th day of January, April, July and
October in each year, commencing April 15, 1987 (each of the quarterly
periods ending on the 15th day of such months, respectively, being
hereinafter called a "dividend period"); provided, however, that the
holders of shares of Series G Stock shall be entitled to receive, when
and as declared by the Board of Directors, dividends in cash in the
amount of $3.75 per share per annum, and such dividends shall accrue at
such rate from the Date of Accrual to January 14, 1987. Dividends on
shares of the Series G Stock shall be cumulative from the Date of
Accrual with respect to such shares (whether or not there shall be net
profits or net assets of the Company legally available for the payment
of such dividends) so that, if at any time Full Cumulative Dividends
upon the Series G Stock to the end of the last completed dividend
period shall not have been paid, or declared and a sum sufficient for
payment thereof set apart, the amount of the deficiency in such
dividends shall be fully paid, but without interest, before any
dividend shall be declared or paid or any other distribution ordered or
made upon, or any purchase or redemption made of, any stock ranking as
to dividends or upon liquidation junior to the Series G Stock (other
than a dividend payable in such junior stock, or a purchase or
redemption made by issue or delivery of such junior stock); provided,
however, that any moneys theretofore deposited in any sinking fund with
respect to any preferred stock of the Company in compliance with the
provisions of such sinking fund may thereafter be applied to the
purchase or redemption of such preferred stock in accordance with the
terms of such sinking fund regardless of whether at the time of such
application Full Cumulative Dividends upon shares of the Series G Stock
outstanding to the end of the last completed dividend period shall have
been paid or declared and set apart for payment. All dividends upon the
shares of the Series G Stock and any other preferred stock ranking on a
parity as to dividends with the Series G Stock shall be declared pro
rata, so that the amounts of dividends declared per share on the Series
G Stock and such other preferred stock, shall in all cases bear to each
other the same ratio that accrued dividends per share on the shares of
the Series G Stock and such other preferred stock bear to each other.
Holders of shares of the Series G Stock shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of
Full Cumulative Dividends.
(3) Rights of Redemption. The shares of the Series G Stock
shall be subject to redemption as follows:
(a) Optional Redemption. Subject to subparagraph (b)
of this paragraph (3), the shares of the Series G Stock may be
redeemed at the option of the Company, in whole or in part, at
any time or from time to time upon not less than 30 days prior
notice to the holders of record of shares of the Series G
Stock to be so redeemed, sent by first class mail, postage
prepaid, to each registered holder of shares of the Series G
Stock at his address appearing on the Series G Stock register
maintained by the Company, at the redemption price of $50.00
per share, plus an amount equal to Accrued Dividends to and
including the date fixed for redemption of such shares
(hereinafter called the "Redemption Date").
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<PAGE>
(b) Pro Rata Redemption or Redemption by Lot. If less
than all shares of the Series G Stock are to be redeemed
pursuant to subparagraph (a) of this paragraph (3), the shares
to be redeemed shall be selected (x) by lot or (y) pro rata so
that there shall be redeemed from each registered holder of
such shares that number of whole shares, as nearly as
practicable to the nearest share, as bears the same ratio to
the total number of shares of such Series held by such holder
as the total number of shares to be redeemed bears to the
total number of shares of the Series G Stock at the time
outstanding. The determination of whether such selection shall
be made by lot or pro rata shall be made by the Board of
Directors. If the Board of Directors shall determine to redeem
less than all shares of the Series G Stock by lot, the
selection by lot of the shares of the Series G Stock shall be
conducted by an independent bank or trust company selected by
the Board of Directors of the Company.
(c) Sinking Fund, Etc. Shares of the Series G Stock
are not subject or entitled to the benefit of a sinking fund.
All or a portion of the shares of the series G Stock may be
purchased by the Company from time to time upon the best terms
obtainable.
(d) Effect of Redemption. Unless default be made in
the payment in full of the redemption price and any
accumulated and unpaid dividends, dividends on the shares of
Series G Stock called for redemption shall cease to accumulate
on the Redemption Date, and all rights of the holders of such
shares as stockholders of the Company by reason of the
ownership of such shares shall cease on the Redemption Date,
except the right to receive the amount payable upon redemption
of such shares on presentation and surrender of the respective
certificates representing such shares. After the Redemption
Date, such shares shall not be deemed to be outstanding and
shall not be transferable on the books of the Company except
to the Company.
(e) Receipt of Redemption Price. At any time on or
after the Redemption Date, the respective holders of record of
shares of Series G Stock to be redeemed shall be entitled to
receive the redemption price upon actual delivery to the
Company of certificates for the shares to be redeemed, such
certificates, if required by the company, to be properly
stamped for transfer and duly endorsed in blank or accompanied
by proper instruments of assignment and transfer thereof duly
executed in blank.
(f) Return of Deposits, Etc. Any moneys deposited
with the transfer agent, or other redemption agent, for the
redemption of any shares of Series G Stock which shall not be
claimed after five years from the Redemption Date shall be
repaid to the Company by such agent on demand, and the holder
of any such shares of Series G Stock shall thereafter look
only to the Company for any payment to which such holder may
he entitled. Any interest accrued on moneys so deposited shall
belong to the Company and shall be paid to it from time to
time on demand.
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<PAGE>
(4) Rights on Liquidation, Dissolution, Winding Up.
(a) In the event of any involuntary liquidation,
dissolution or winding up of the Company, the holders of
shares of the Series G Stock then outstanding shall be
entitled to be paid out of the assets of the Company available
for distribution to its stockholders, before any payment shall
be made to the holders of any class of capital stock of the
company ranking junior upon liquidation to the Series G Stock,
an amount equal to $50 per share plus an amount equal to all
Accrued Dividends thereon to and including the date of
payment.
(b) In the event of any voluntary liquidation,
dissolution or winding up of the Company, the holders of
shares of the Series G Stock then outstanding shall be
entitled to be paid out of the assets of the Company available
for distribution to its stockholders, before any payment shall
be made to the holders of any class of capital stock of the
company ranking junior upon liquidation to the Series G Stock,
an amount per share equal to the then applicable redemption
price specified in subparagraph (a) of paragraph (3) of this
Section B regarding Series G Stock, plus in each case an
amount equal to all Accrued Dividends thereon to and including
the date of payment. The merger or consolidation of the
Company into or with any other corporation or the merger or
consolidation of any other corporation into or with the
Company shall not in any event be considered a dissolution,
liquidation or winding up of the Company under this paragraph
(4).
(c) In the event the assets of the Company available
for distribution to the holders of shares of Series G Stock upon any
involuntary or voluntary liquidation, dissolution or winding up of the
Company shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to subparagraph (a) or (b), as the case
may be, of this paragraph (4), no such distribution shall be made on
account of any shares of any other class or series of preferred stock
ranking on a parity with the shares of Series G Stock upon liquidation
unless proportionate distributive amounts shall be paid on account of
the shares of Series G Stock, ratably, in proportion to the full
distributive amounts to which the holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
(5) Voting. The shares of the Series G stock shall not have
any voting powers, either general or special, except as required by
applicable law and as follows:
(a) Without the affirmative vote or consent of the
holders of at least two-thirds of the number of shares of
Series G stock at the time outstanding, voting or consenting
(as the case may be) separately as a class, given in person or
by proxy, either in writing or by resolution adopted at a
special meeting called for the purpose, the Company shall not
(i) create any preferred stock ranking prior to the Series G
Stock as to dividends or upon liquidation, or securities
convertible into stock ranking prior to the Series G Stock as
to dividends or upon liquidation or (ii) amend, alter or
repeal any of the preferences, special rights or powers of the
holders of the Series G Stock so as adversely to affect such
preferences, special rights or powers.
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<PAGE>
(b) Whenever dividends payable on any series of
Preferred Stock shall be in default in an aggregate amount
equivalent to six full quarterly dividends on all shares of
such series at the time outstanding, the number of directors
constituting the Board of Directors of the Company shall be
increased by two, and the holders of Preferred Stock shall
have, in addition to any other voting rights, the exclusive
and special right, voting separately as a class without regard
to series, to elect two persons to fill such newly created
directorships. Whenever such right of holders of shares of
Preferred Stock shall have vested, it may be exercised
initially either at a special meeting of such holders called
as provided below, or at any annual meeting of stockholders,
and thereafter at annual meetings of stockholders. The right
of holders of shares of Preferred Stock voting separately as a
class to elect members of the Board of Directors as aforesaid
shall continue until such time as all dividends accumulated on
all series of Preferred Stock shall have been paid in full, at
which time the special right of the holders of shares of
Preferred Stock so to vote separately as a class for the
election of directors shall terminate, subject to revesting in
the event of each and every subsequent default in an aggregate
amount equivalent to six full quarterly dividends. For
purposes only of this subparagraph (b), each holder of Series
G Stock shall be entitled to cast one-half vote for each share
of Series G Stock held by such holder.
At any time when such special voting power shall have
vested in the holders of shares of Preferred Stock as provided
in this subparagraph (b), a proper officer of the Company
shall, upon written request of the holders of record of at
least 10% of the number of shares of Preferred Stock at the
time outstanding, regardless of series, addressed to the
Secretary of the Company, call a special meeting of the
holders of shares of Preferred Stock and of any other class of
stock having voting power, for the purpose of electing
directors. Such meeting shall be held at the earliest
practicable date at the principal office of the Company. If
such meeting shall not be called by a proper officer of the
Company within 20 days after personal service of said written
request upon the Secretary of the Company, or within 20 days
after mailing the same within the United States of America by
registered mail addressed to the Secretary of the Company at
its principal office, then the holders of record of at least
10% of the number of shares of Preferred Stock at the time
outstanding, regardless of series, may designate in writing
one of their number to call such meeting at the expense of the
Company, and such meeting may be called by such person so
designated upon the notice required for annual meetings of
stockholders and shall be held at said principal office. Any
holder of shares of Preferred Stock so designated shall have
access to the stock books of the Company for the purpose of
causing meetings of stockholders to be called pursuant to
these provisions. Notwithstanding the provisions of this
subparagraph (b), no such special meeting shall be called
during the 90 days immediately preceding the date fixed for
the next annual meeting of stockholders.
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<PAGE>
At any meeting held for the purpose of electing
directors at which the holders of shares of Preferred Stock
shall have the special right, voting separately as a class, to
elect directors as provided in this subparagraph (b), the
presence, in person or by proxy, of the holders of 51% of the
number of shares of Preferred Stock at the time outstanding
shall be required to constitute a quorum of such class for the
election of any director by the holders of the Preferred Stock
as a class, each share of Series G Stock counting, for
purposes only of determining the presence of such a quorum, as
one-half share of Preferred Stock. At any such meeting or
adjournment thereof, (i) the absence of a quorum of Preferred
Stock shall not prevent the election of directors other than
those to be elected by the holders of shares of Preferred
Stock voting as a class and the absence of a quorum for the
election of such other directors shall not prevent the
election of the directors to be elected by holders of shares
of Preferred Stock voting as a class and (ii) in the absence
of either or both such quorums, a majority of the holders
present in person or by proxy of the stock or stocks which
lack a quorum shall have power to adjourn the meeting for the
election of directors which they are entitled to elect from
time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
During any period the holders of shares of Preferred
stock have the right to vote as a class for directors as
provided in this subparagraph (b), (i) the directors so
elected by the holders of the Preferred Stock shall continue
in office until termination of the right of the holders of the
Preferred Stock to vote as a class for directors, and (ii) any
vacancies in the Board of Directors shall be filled only by
vote of a majority (which majority may consist of only a
single director) of the remaining directors theretofore
elected by the holders of the class or classes of stock which
elected the director whose office shall have become vacant.
(6) Conversion Rights. The holders of shares of the Series G
Stock shall have the right, at their option, to convert each share of
the Series G Stock into two-fifteenths of a share of Common Stock of
the Company at any time on and subject to the following terms and
conditions:
(a) The shares of the Series G Stock shall be
convertible at the office of any transfer agent for the Series
G Stock, and at such other office or offices, if any, as the
Board of Directors may designate, into fully paid and
nonassessable shares (calculated as to each conversion to the
nearest 1/100th of a share) of Common Stock of the Company, at
the conversion price, determined as hereinafter provided, in
effect at the time of conversion, each share of the Series G
Stock being taken at $50.00 for the purpose of such
conversion. The price at which shares of Common Stock shall be
delivered upon conversion (herein called the "conversion
price") shall be initially $375.00 per share of Common Stock.
The conversion price shall be adjusted as provided in
subparagraph (d) of this paragraph (6).
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<PAGE>
(b) In order to convert shares of the Series G Stock
into Common Stock the holder thereof shall surrender at any
office hereinabove mentioned the certificate or certificates
therefor, duly endorsed to the Company or in blank, and give
written notice to the Company at said office that such holder
elects to convert such shares. No payment or adjustment shall
be made upon any conversion on account of any dividends
accrued on the shares of the Series G Stock surrender for
conversion or on account of any dividends on the Common Stock
issued upon such conversion.
Shares of the Series G Stock shall be deemed to have
been converted immediately prior to the close of business on
the day of the surrender of such shares for conversion in
accordance with the foregoing provisions, and the person or
persons entitled to receive the Common Stock issuable upon
such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at said office a
certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with a
cash payment in lieu of any fraction of a share, as
hereinafter provided, to the person or persons entitled to
receive the same. In case shares of the Series G Stock are
called for redemption, the right to convert such shares shall
cease and terminate at the close of business on the Redemption
Date, unless default shall be made in payment of the
redemption price.
(c) No fractional shares of Common Stock shall be
issued upon conversion of shares of the Series G Stock, but,
instead of any fraction of a share of Common Stock which would
otherwise be issuable in respect of the aggregate number of
shares of the Series G Stock surrendered for conversion at one
time by the same holder, the Company shall pay a cash
adjustment of such fraction in an amount equal to the same
fraction of the Closing Date Price on the date on which such
shares of the Series G Stock were duly surrendered for
conversion, or, if such date is not a Trading Day, on the next
Trading Day.
(d) The conversion price shall be adjusted from time
to time as follows:
(I) In case the Company shall (i) pay a
dividend or make a distribution on its outstanding
shares of Common Stock in Common Stock, (ii)
subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock
into a smaller number of shares, or (iv) issue any
shares by reclassification of its shares of Common
Stock, the conversion price in effect at the time of
the record date for such dividend or distribution or
the effective date of such subdivision, combination
or reclassification shall be adjusted so that the
holder of any shares of the Series G Stock
surrendered for conversion after such time shall be
entitled to receive the number of shares of capital
stock of the Company which he would have owned or
been entitled to receive had such shares of the
Series G Stock been converted immediately prior to
such time.
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(II) In case the company shall hereafter
issue rights or warrants to all holders of its Common
Stock entitling them (for a period expiring within
forty-five days after the record date mentioned
below) to subscribe for or purchase shares of Common
Stock at a price per share less than the current
market price per share--as determined pursuant to
clause (IV) of this subparagraph (d)--on the record
date mentioned below, the conversion price shall be
adjusted so that the same shall equal the price
determined by multiplying the conversion price in
effect immediately prior to the date of issuance of
such rights or warrants by a fraction, of which the
numerator shall be the number of shares of Common
Stock outstanding on the record date mentioned below
plus the number of shares of Common Stock which the
aggregate offering price of the total number of
shares of Common Stock so offered would purchase at
such current market price and of which the
denominator shall be the number of shares of Common
Stock outstanding on such record date plus the number
of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall
become effective at the opening of business on the
business day next following the record date for the
determination of stockholders entitled to receive
such rights or warrants; and to the extent that
shares of Common Stock are not delivered after the
expiration of such rights or warrants, the conversion
price shall be readjusted (but only with respect to
shares of the Series C Stock converted after such
expiration) to the conversion price which would then
be in effect had the adjustments made upon the
distribution of such rights or warrants been made
upon the basis of delivery of only the number of
shares of Common Stock actually delivered. No
adjustment in the conversion price shall be required
or made under this clause (II) or clause (III)
immediately below or otherwise under this paragraph
(6) in respect of any right granted by the Company to
all holders of its Common Stock to purchase
additional shares of Common Stock from the Company at
a discount from the current market price per share of
Common Stock by reinvestment of dividends on Common
Stock if either (i) such discount does not exceed 6%
of such current market price or (ii) the holders of
the Series G Stock shall be entitled to purchase
shares of Common Stock from the Company at the same
discount by reinvestment of dividends on the Series G
Stock.
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(III) In case the Company shall distribute to
all holders of its Common Stock evidences of its
indebtedness or assets-excluding any cash dividend or
distributions and dividends referred to in clause (I)
of this paragraph (6)--or subscription rights or
warrants (excluding those referred to in clause (II)
immediately above), then in each such case the
conversion price shall be adjusted so that the same
shall equal the price determined by multiplying the
conversion price in effect immediately prior to the
date of such distribution by a fraction of which the
numerator shall be the current market price per share
(determined as provided in clause (IV) immediately
below) of the Common Stock on the record date
mentioned below less the then fair market value (as
determined by the Board of Directors of the Company,
whose determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so
distributed or of such subscription rights or
warrants applicable to one share of Common Stock, and
the denominator shall be such current market price
per share of the Common Stock. Such adjustment shall
become effective on the opening of business on the
business day next following the record date for the
determination of stockholders entitled to receive
such distribution.
(IV) For the purpose of any computation under
clause (II) or (III) immediately above, the current
market price per share of Common Stock on any date
shall be deemed to be the average of the daily
Closing Price for the thirty consecutive Trading Days
selected by the Company commencing not more than
forty-five Trading Days before the day in question.
(V) In any case in which this paragraph (6)
shall require that an adjustment as a result of any
event become effective at the opening of business on
the business day next following a record date, the
Company may elect to defer until after the occurrence
of such event (i) issuing to the holder of any shares
of the Series G Stock converted after such record
date and before the occurrence of such event the
additional shares of Common Stock issuable upon such
conversion over and above the shares of Common Stock
issuable upon such conversion on the basis of the
conversion price prior to adjustment and (ii) paying
to such holder any amount in cash in lieu of a
fractional share of Common Stock pursuant to
subparagraph (c) of this paragraph (6); and, in lieu
of the shares the issuance of which is so deferred,
the Company shall issue or cause its transfer agents
to issue due bills or other appropriate evidence of
the right to receive such shares.
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<PAGE>
(VI) Any adjustment in the conversion price
otherwise required by this paragraph (6) to be made
may be postponed up to, but not beyond, three years
from the date on which it would otherwise be required
to be made provided that such adjustment (plus any
other adjustments postponed pursuant to this clause
(VI) and not theretofore made) would not require an
increase or decrease of more than $0.50 in such price
and would not, if made, entitle the holders of all
then outstanding shares of the Series G Stock upon
conversion to receive additional shares of Common
Stock equal in the aggregate to 3% or more of the
then issued and outstanding shares of Common Stock.
All calculations under this paragraph (6) shall be
made to the nearest cent or to the nearest 1/100 of a
share, as the case may be.
(e) Whenever the conversion price is adjusted as
herein provided:
(I) the Company shall compute the adjusted
conversion price in accordance with this paragraph
(6) and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted
conversion price, and such certificate shall
forthwith be filed with the transfer agent or agents
for the Series G Stock; and
(II) a notice stating that the conversion
price has been adjusted and setting forth the
adjusted conversion price shall, as soon as
practicable, be mailed to the holders of record of
the outstanding shares of the Series G stock.
(f) In case of any consolidation of the Company with,
or merger of the Company with or into, any other corporation
(other than a merger in which the Company is the surviving
corporation and which does not result in any reclassification
or change of the outstanding shares of the Company into which
shares of the Series G Stock are then convertible), or in case
of any conveyance or transfer of the property and assets of
the Company substantially as an entirety, each share of Series
G Stock shall thereafter be convertible into the number and
kind of shares of stock and other securities and cash,
property and rights receivable upon such consolidation,
merger, conveyance or transfer by a holder of the number and
kind of shares of the Company into which such shares of Series
G Stock might have been converted immediately prior to such
consolidation, merger, conveyance or transfer. The above
provisions of this subparagraph (f) shall similarly apply to
successive consolidations, mergers, conveyances or transfers.
(g) In case:
(I) the Company shall declare a dividend (or
any other distribution) on its Common Stock payable
otherwise than in cash out of its retained earnings;
or
(II) the Company shall authorize the granting
to the holders of its Common Stock of rights to
subscribe for or purchase any shares of capital stock
of any class or of any other rights; or
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<PAGE>
(III) of any reclassification of the capital
stock of the Company (other than a subdivision or
combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which
the Company is a party and for which approval of any
stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the
assets of the Company; or
(IV) of the voluntary or involuntary
dissolution, liquidation or winding up of the
Company;
then the Company shall cause to be mailed to the transfer
agent or agents for the Series G Stock and to the holders of
record of the outstanding shares of the Series G Stock at
least 20 days--or 10 days in any case specified in clause (I)
or (II) of this subparagraph (g)--prior to the applicable
record date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such
dividend, distribution or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights
are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
(h) The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the
conversion of the shares of the Series G Stock, the full
number of shares of Common Stock then deliverable upon the
conversion of all shares of the Series G Stock then
outstanding.
(i) The Company will pay any and all taxes that may
be payable in respect of the issuance or delivery of shares of
Common Stock on conversion of shares of this Series pursuant
hereto. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in a name
other than that in which the shares of this Series so
converted were registered, and no such issue or delivery shall
be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has
established, to the satisfaction of the Company, that such tax
has been paid.
(j) For the purpose of this paragraph (6) the term
"Common Stock" shall include any stock of any class of the
Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, and
which is not subject to redemption by the Company. However,
shares issuable on conversion of shares of the Series G Stock
shall include only shares of the class designated as Common
Stock of the Company as of the original date of issue of the
Series G Stock or Shares of any class or classes resulting
from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and
which are not subject to redemption by the Company, provided
that if at any time there shall be more than one such
resulting class, the shares of each such class then so
issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all
such classes resulting from all such reclassifications.
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<PAGE>
(k) As used in this paragraph (6), the term "Closing
Price" on any day shall mean the reported last sales price
regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked
prices regular way, in each case on the New York Stock
Exchange, or, if the Common Stock is not listed or admitted to
trading on such Exchange, on the principal national securities
exchange on which the Common Stock is listed or admitted to
trading on any national securities exchange, the average of
the closing bid and asked prices as furnished by any New York
Stock Exchange member firm selected from time to time by the
Company for that purpose; and the term "Trading Day" shall
mean a date on which the New York Stock Exchange (or any
successor to such Exchange) is open for the transaction of
business.
(7) Definitions.
(a) The term "Accrued Dividends" shall mean Full
Cumulative Dividends to the date as of which Accrued Dividends
are to be computed, less the amount of all dividends paid,
upon the relevant shares of Series G Stock.
(b) The term "Date of Accrual" shall mean, as to any
shares of the Series G Stock issued, January 1, 1987.
(c) The term "Full Cumulative Dividends" shall mean
(whether or not in any dividend period, or any part thereof,
in respect of which such term is used there shall have been
net profits or net assets of the Company legally available for
the payment of such dividends) that amount which shall be
equal to dividends at the full rate fixed for the Series G
Stock provided in paragraph (2) of this Section B regarding
Series G Stock for the period of time elapsed from the Date of
Accrual to the date as of which Full Cumulative Dividends are
to be computed (including an amount equal to the dividend at
such rate for any fraction of a dividend period included in
such period of time calculated on the basis of a 360-day year
of 12 30-day months).
(d) The term "Preferred Stock" shall mean any
Preferred Stock created and issued under this Article Fourth;
provided, however, that for purposes only of subparagraph (b)
of paragraph (5) of this Section B regarding Series G Stock,
each holder of series G Stock shall be entitled to cast
one-half vote for each share of series G Stock held by such
holder and for purposes of determining a quorum at any meeting
held for the purpose of electing directors at which the
holders of Preferred Stock shall have this special right,
voting separately as a class, to elect directors as provided
in such subparagraph (b), each share of Series G Stock shall
count, for purposes of determining the presence of a quorum of
such class at such meeting, as one-half share of Preferred
Stock. The term "preferred stock" shall mean shares of any
class of stock (including Preferred Stock) if the holders of
such class shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding
up, in preference or priority to the holders of shares of
Common Stock.
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<PAGE>
(e) For the purposes hereof any stock of any class or
classes of the Company shall be deemed to rank (i) prior to
shares of the Series G Stock, either as to dividends or upon
liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of
shares of the Series G Stock; (ii) on a parity with shares of
the Series G Stock, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share
thereof be different from those of the Series G Stock, if the
holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion
to their respective dividend rate or liquidation prices,
without preference or priority of one over the other as
between the holders of such stock and the holders of shares of
Series G Stock; and (iii) junior to shares of the Series G
Stock, either as to dividends or upon liquidation, if such
class shall be Common Stock or if the holders of the Series G
Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the
holders of shares of such class of classes.
(f) The shares of the Series G Stock shall rank
senior as to the dividends and upon liquidation to the shares
of the $120 Redeemable Convertible Preferred Stock, Series E
(With $1.00 Par Value) of the Company and to the shares of the
Convertible Junior Preference Stock, Series G (With $1.00 Par
Value) of the Company.
(8) Retirement of Redeemed or Converted Shares, Etc. Shares of
the Series G Stock which have been (i) redeemed or (ii) converted into
Common Stock pursuant to the provisions of paragraph (6) of this
Section B regarding Series G Stock shall have the status of authorized
and unissued Preferred Stock.
II. Preference Stock.
The Preference Stock may be issued from time to time in one or more
series of any number of shares, provided that the aggregate number of shares
issued and not canceled of any and all such series shall not exceed the total
number of shares of Preference Stock hereinabove authorized, and with
distinctive serial designations, all as shall hereafter be stated and expressed
in the resolution or resolutions providing for the issue of such Preference
Stock from time to time adopted by the Board of Directors pursuant to authority
so to do which is hereby vested in the Board of Directors. Each series of
Preference Stock (i) may have such voting powers, full or limited, or may be
without voting powers; (ii) may be subject to redemption at such time or times
and at such prices; (iii) may be entitled to receive dividends (which may be
cumulative or noncumulative) at such rate or rates, on such conditions, and at
such times, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or series of stock; (iv) may have such
rights upon the dissolution of, or upon any distribution of the assets of, the
corporation; (v) may be made convertible into, or exchangeable for, shares of
any other class or classes or of any other series of the same or any other class
or classes of stock of the corporation, at such price or prices or at such rates
of exchange, and with such adjustments; (vi) may be entitled to the benefit of a
sinking fund to be applied to the purchase or redemption of shares of such
series in such amount or amounts; (vii) may be entitled to the benefit of
conditions and restrictions upon the creation of indebtedness of the Company or
any subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of dividends
or the making of other distributions on, and the purchase, redemption or other
acquisition by the Company or any subsidiary of any outstanding stock of the
Company; and (viii) may have such other relative, participating, optional or
other special rights, qualifications, limitations or restrictions thereof; all
as shall be stated in said resolution or resolutions providing for the issue of
such Preference Stock. Shares of any series of Preference Stock which have been
redeemed (whether through the operation of a sinking fund or otherwise) or
which, if convertible or exchangeable, have been converted into or exchanged for
shares of stock of any other class or classes shall have the status of
authorized and unissued shares of Preference Stock of the same series and may be
reissued as a part of the series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preference Stock to be
- 13 -
<PAGE>
created by resolution or resolutions by the Board of Directors or as part of any
other series of Preference Stock, all subject to the conditions or restrictions
on issuance set forth in the resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of Preference Stock.
A. Series A Stock. The designated powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, of one (1) share of a series of Preference
Stock are as follows:
(1) Designation. The designation of this series of Preference
Stock shall be "Nonconvertible Junior Preference Stock, Series A (With
Par Value of $1.00)" (hereinafter called the "Series A Stock").
(2) Dividends. The holder of the Series A Stock shall not be
entitled to receive dividends with respect to the Series A Stock.
(3) Rights of Redemption. The Series A Stock shall be subject
to redemption as follows:
(a) Optional Redemption. At any time after the date
of the earliest to occur of (i) the passage of twelve
consecutive calendar months at all times during which the
Supplemental Benefit Trust holds less than 5% of the total
number of then outstanding shares of Parent Common Stock, (ii)
the date on which the Supplemental Benefit Program terminates
and (iii) the Profit Sharing Cessation Date, the Series A
stock may be redeemed at the option of the Company at any time
upon not less than five days' prior notice to the holder of
record of the Series A Stock sent by first class mail, postage
prepaid, to such holder at its address appearing on the Series
A Stock register maintained by the Company, at a redemption
price of $1.00 (hereinafter called the "Series A Redemption
Date").
(b) Effect of Redemption. All rights of the holder of
Series A Stock as a stockholder of the Company by reason of
the ownership of Series A Stock shall cease on the Series A
Redemption Date, except the right to receive the amount
payable upon redemption of such share on presentation and
surrender of the certificate representing such share. After
the Series A Redemption Date, such share shall not be deemed
to be outstanding.
(4) Rights on Liquidation, Dissolution, Winding Up.
(a) Liquidation Payment. In the event of any
involuntary liquidation, dissolution or winding up of the
Company, the holder of the Series A Stock (if then
outstanding) shall be entitled to be paid out of the assets of
the Company available for distribution to its stockholders,
before any payment shall be made to the holders of any class
of capital stock of the Company ranking junior upon
liquidation to the Series A Stock, an amount equal to $1.00
per share. The merger or consolidation of the Company into or
with any other corporation or the merger or consolidation of
any other corporation into or with the Company shall not in
any event be considered a dissolution, liquidation or winding
up of the Company under this paragraph (4).
(b) Proportionate Distribution. In the event the
assets of the Company available for distribution to the holder
of the Series A Stock upon any involuntary or voluntary
liquidation, dissolution or winding up of the Company shall be
insufficient to pay in full all amounts to which such holder
is entitled pursuant to subparagraph (a) of this paragraph
(4), no such distribution shall be made on account of any
shares of any other class or series of preference stock
ranking on a parity with the Series A Stock upon liquidation
unless proportionate distributive amounts shall be paid on
account of the Series A Stock, ratably, in proportion to the
full distributive amounts to which the holders of all such
parity shares are respectively entitled upon such liquidation,
dissolution or winding up.
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<PAGE>
(5) Voting. The Series A stock shall not have any voting
powers, either general or special, except as required by applicable law
and as follows:
(a) Change of Priority or Rights. Without the
affirmative vote or consent of the holder of the Series A
Stock, voting or consenting (as the case may be) separately as
a class, given in person or by proxy, either in writing or by
resolution adopted at a special meeting called for the
purpose, the Company shall not (i) change the number of
authorized shares of the Series A Stock or (ii) amend this
Certificate of Incorporation or take any other action
(including, without limitation, a merger or consolidation to
which the Company is a constituent party) which would have the
effect of eliminating the Series A Stock or of amending,
altering or repealing any of the preferences, special rights
or powers of the holder of the Series A Stock so as adversely
to affect such preferences, special rights or powers.
(b) Election of Directors. For so long as the
Supplemental Benefit Trust holds 20% or more of the total
number of then outstanding shares of Parent Common Stock, the
number of directors constituting the Board of Directors of the
Company shall be increased by two, and the holder of the
Series A Stock shall have, in addition to any other voting
rights, the exclusive and special right, voting separately as
a class, to elect two persons to serve as directors of the
Company (one of whom shall be designated the "First Designee,"
and the other of whom shall be designated the "Second
Designee") to fill such two directorships. Except for the
involuntary resignation of any such director under clauses (i)
or (ii) of this first paragraph of this subparagraph (b) or
the removal of any such director by the holder of the Series A
Stock, each director elected by the holder of the Series A
Stock shall have a one year term of office. The right of the
holder of Series A Stock to elect directors may be exercised
by written consent of such holder. The right of the holder of
the Series A Stock voting separately as a class to elect two
members of the Board of Directors as aforesaid shall continue
until such time as the Supplemental Benefit Trust holds less
than 20% of the total number of then outstanding shares of
Parent Common Stock. At such time, the special right of the
holder of the Series A Stock to vote separately as a class for
the election of directors shall be subject to the following
restrictions:
(i) Upon the earlier to occur of (A) the
date on which the Supplemental Benefit Trust has held
less than 20% but 19% or more of the total number of
then outstanding shares of Parent Common Stock at all
times for six consecutive months and (B) the date on
which the Supplemental Benefit Trust holds less than
19% of the total number of then outstanding shares of
Parent Common Stock, the holder of the Series A Stock
shall be entitled to elect only one director in total
and the Second Designee shall be deemed to have
resigned as a director effective immediately without
any further action on such person's part; and
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<PAGE>
(ii) Notwithstanding anything to the contrary
contained in clause (i) immediately above, upon the
earlier to occur of (A) the date on which the
Supplemental Benefit Trust has held less than 10% but
9% or more of the total number of then outstanding
shares of Parent Common Stock at all times for six
consecutive months and (B) the date on which the
Supplemental Benefit Trust holds less than 9% of the
total number of then outstanding shares of Parent
Common Stock, the holder of the Series A Stock shall
not be entitled to elect any directors and each
remaining director elected by such holder shall be
deemed to have resigned as a member of the Board of
Directors effective immediately without further
action on such person's part.
The special right of the holder of the Series A Stock
to vote separately as a class for the election of directors
shall be subject to revesting as follows:
(i) Upon the earlier to occur of (A) the
date on which the Supplemental Benefit Trust has held
more than 10% but not more than 11% of the total
number of then outstanding shares of Parent Common
Stock at all times for six consecutive months and (B)
the date on which the Supplemental Benefit Trust
holds more than 11% of the total number of then
outstanding shares of Parent Common Stock, the right
of the holder of Series A stock to elect a total of
one director shall vest immediately; and
(ii) Notwithstanding anything to the contrary
contained in clause (i) immediately above, upon the
earlier to occur of (A) the date on which the
Supplemental Benefit Trust has held more than 20% but
not more than 21% of the total number of then
outstanding shares of Parent Common Stock at all
times for six consecutive months and (B) the date on
which the Supplemental Benefit Trust holds more than
21% of the total then outstanding shares of Parent
Common Stock, the right of the holder of Series A
Stock to elect a total of two directors shall vest
immediately.
For purposes of this subparagraph (b), all
calculations of the Supplemental Benefit Trust's holdings of
the then outstanding shares of Parent Common Stock shall be
made as if the Common Stock and Class B Common were a single
class.
At any time when the holder of the Series A Stock has
the right to elect directors as provided in this subparagraph
(b), (i) such holder shall have the exclusive right to remove
the First Designee and/or the Second Designee, with or without
cause, from time to time and elect their successors and (ii)
any vacancies in the seats held by the First Designee or the
Second Designee shall be filled only by a vote of the holder
of the Series A Stock.
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<PAGE>
(6) Conversion Rights. The holder of the share of the Series A
Stock shall have no conversion rights with respect to such share.
(7) Nontransferability. The Series A Stock will be issued to
the Supplemental Benefit Trust and the Series A Stock and any rights
thereunder shall be nontransferable. Any attempted transfer shall be
void and of no effect. The Company shall place on the certificate
representing any issued share of the Series A Stock a legend consistent
with the provisions hereof.
(8) Definitions.
(a) Profit Sharing Cessation Date. The term "Profit
Sharing Cessation Date" shall have the meaning assigned to
such term in the Settlement Agreement.
(b) Settlement Agreement. The term "Settlement
Agreement" shall mean the Settlement Agreement, dated as of
March 31, 1993, and the exhibits thereto, in the class action
of Shy, et al. v. Navistar, (Civil Action No. C-3-92-333)
(S.D.O.), as any of the same may be amended from time to time
in accordance with the terms thereof. The Company shall
provide a copy of the Settlement Agreement to any holder of
shares of its stock upon request by such holder.
(c) Supplemental Benefit Program. The term
"Supplemental Benefit Program" shall have the meaning assigned
to such term in the Settlement Agreement.
(d) Supplemental Benefit Trust. The term
"Supplemental Benefit Trust" shall have the meaning assigned
to such term in the Settlement Agreement.
(9) Rank of Series A Stock. The share of the Series A Stock
shall rank junior upon liquidation to (i) the shares of the Series G
Stock, (ii) the shares of the Convertible Junior Preference Stock,
Series D (With Par Value of $1.00) (the "Series D Stock"), and (iii)
any other series of Preferred Stock or Preference Stock (other than the
Nonconvertible Junior Preference Stock, Series B (With Par Value of
$1.00) of the Company) (the "Series B Stock") authorized or designated
after the initial date of issuance of the Series A Stock. The share of
the Series A Stock shall rank on a parity upon liquidation with the
Series B Stock. The share of the Series A Stock shall rank senior upon
liquidation to the shares of the Parent Common Stock.
(10) Retirement of Redeemed Shares, Etc. When redeemed, the
share of the Series A Stock shall have the status of authorized and
unissued Preference Stock.
(11) No Fractional Shares. No fractional shares of Series A
Stock shall be issued.
(12) Stock Calculations. In making any calculations with
respect to holdings or ownership of the Company's stock, the Company's
stock records shall be conclusive evidence of such holdings and
ownership.
B. Series B Stock. The designated powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, of one (1) share of a series of Preference
Stock are as follows:
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<PAGE>
(1) Designation. The designation of this series of Preference
Stock shall be "Nonconvertible Junior Preference Stock, Series B (With
Par Value of $1.00)" (referred to herein as the "Series B Stock").
(2) Dividends. The holder of the share of the Series B Stock
shall not be entitled to receive dividends with respect to the Series B
Stock.
(3) Rights of Redemption. The Series B Stock shall be subject
to redemption as follows:
(a) Optional Redemption. At any time after the holder
of Series B Stock has not been entitled to vote separately as
a class to elect a director at any time for five consecutive
years, the Series B Stock may be redeemed at the option of the
Company, in whole or in part, at any time or from time to time
upon not less than five days' prior notice to the holder of
record of the Series B Stock sent by first class mail, postage
prepaid, to such holder at its address appearing on the Series
B Stock register maintained by the Company, at a redemption
price of $1.00 (hereinafter called the "Series B Redemption
Date").
(b) Effect of Redemption. All rights of the holder of
Series B Stock as a stockholder of the Company by reason of
the ownership of Series B Stock shall cease on the Series B
Redemption Date, except the right to receive the amount
payable upon redemption of such share on presentation and
surrender of the certificate representing such share. After
the Series B Redemption Date, such share shall not be deemed
to be outstanding.
(4) Rights on Liquidation, Dissolution, Winding Up.
(a) Liquidation Payment. In the event of any
involuntary liquidation, dissolution or winding up of the
Company, the holder of the Series B Stock (if then
outstanding) shall be entitled to be paid out of the assets of
the Company available for distribution to its stockholders,
before any payment shall be made to the holders of any class
of capital stock of the Company ranking junior upon
liquidation to the Series B Stock, an amount equal to $1.00
per share. The merger or consolidation of the Company into or
with any other corporation or the merger or consolidation of
any other corporation into or with the Company shall not in
any event be considered a dissolution, liquidation or winding
up of the Company under this paragraph (4).
(b) Proportionate Distribution. In the event the
assets of the Company available for distribution to the holder
of the Series B Stock upon any involuntary or voluntary
liquidation, dissolution or winding up of the Company shall be
insufficient to pay in full all amounts to which such holder
is entitled pursuant to subparagraph (a) of this paragraph
(4), no such distribution shall be made on account of any
shares of any other class or series of preference stock
ranking on a parity with the Series B Stock upon liquidation
unless proportionate distributive amounts shall be paid on
account of the Series B Stock, ratably, in proportion to the
full distributive amounts to which the holders of all such
parity shares are respectively entitled upon such liquidation,
dissolution or winding up.
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<PAGE>
(5) Voting. The Series B Stock shall not have any voting
powers, either general or special, except as required by applicable law
and as follows:
(a) Change of Priority or Rights. Without the
affirmative vote or consent of the holder of the Series B
Stock, voting or consenting (as the case may be) separately as
a class, given in person or by proxy, either in writing or by
resolution adopted at a special meeting called for the
purpose, the Company shall not (i) change the number of
authorized shares of the Series B Stock or (ii) amend this
Certificate of Incorporation or take any other action
(including, without limitation, a merger or consolidation to
which the Company is a constituent party) which would have the
effect of eliminating the Series B stock or of amending,
altering or repealing any of the preferences, special rights
or powers of the holder of the Series B Stock so as adversely
to affect such preferences, special rights or powers.
(b) Election of Director. Until the Fully Funded
Date, the number of directors constituting the Board of
Directors of the Company shall be increased by one, and the
holder of the Series B Stock shall have, in addition to any
other voting rights, the exclusive and special right, voting
separately as a class, to elect one person to fill such newly
created directorship. Except for the involuntary resignation
of any such director this subparagraph b or the removal of any
such director by the holder of the Series B Stock, the
director elected by the holder of the Series B stock shall
have a one year term of office. The right of the holder of
Series B Stock to elect a director may be exercised by written
consent of such holder. On the Fully Funded Date, the special
right of the holder of the Series B Stock so to vote
separately as a class for the election of a director shall
terminate (subject to subsequent revesting as provided below)
and the director elected by the holder of the Series B Stock
shall be deemed to have resigned effective immediately without
any further action upon such person's part. Subsequent to the
Fully Funded Date, the special right of the holder of Series B
Stock to vote separately as a class for the election of a
director shall revest at any time when the balance of the
Employers' funding contribution held under the Health Benefit
Trust falls below 85% of the Fully Funded Amount; provided,
however, that such revested special right of the holder of
Series B Stock to vote separately as a class for the election
of a director shall terminate (subject to revesting as
provided by this subparagraph (b)) if the balance of the
Employers' funding contribution held under the Health Benefit
Trust rises above 85% of the Fully Funded Amount.
At any time when the holder of the Series B Stock has
the right to elect a director as provided In this subparagraph
(b), (i) such holder shall have the exclusive right to remove
such director, with or without cause, from time to time and
elect his or her successor and (ii) any vacancies in the seat
held by the director elected by the holder of the Series B
Stock shall be filled only by vote of the holder of the Series
B Stock.
- 19 -
<PAGE>
(6) Conversion Rights. The holder of the share of the Series B
Stock shall have no conversion rights with respect to such share.
(7) Nontransferability. The Series B Stock shall be issued to
the UAW and the Series B Stock and any rights thereunder shall be
nontransferable. Any attempted transfer shall be void and of no effect.
The Company shall place on the certificate representing any issued
share of the Series A Stock a legend consistent with the provisions
hereof.
(8) Definitions.
(a) Employers. The term "Employers" shall have the
meaning assigned to such term in the Settlement Agreement.
(b) Fully Funded Amount. The term "Fully Funded
Amount" shall have the meaning assigned to such term in the
Settlement Agreement.
(c) Fully Funded Date. The term "Fully Funded Date"
shall have the meaning assigned to such term in the Settlement
Agreement.
(d) Health Benefit Trust. The term "Health Benefit
Trust" shall have the meaning assigned to such term in the
Settlement Agreement.
(e) UAW. The term "UAW" shall have the meaning
assigned to such term in the Settlement Agreement.
(9) Rank of Series B Stock. The share of the Series B Stock
shall rank junior upon liquidation to (i) the shares of the Series G
Stock, (ii) the shares of the Series D Stock, and (iii) any other
series of Preferred or Preference Stock (other than the Series A Stock)
authorized or designated after the initial date of issuance of the
Series B Stock. The share of the Series B Stock shall rank on a parity
upon liquidation with the Series A stock. The share of the Series B
Stock shall rank senior upon liquidation to the shares of the Parent
Common Stock.
(10) Retirement of Redeemed Shares, Etc. When redeemed, the
share of the Series B Stock shall have the status of authorized and
unissued Preference Stock.
(11) Fractional Shares. No fractional shares of Series B Stock
shall be issued.
(12) Stock Calculations. In making any calculations with
respect to holdings or ownership of the Company's stock, the Company's
stock records shall be conclusive evidence of such holdings and
ownership.
C. Series D Stock. The designated powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, of 3,000,000 shares of a series of
Preference Stock are as follows:
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<PAGE>
(1) Designation. The designation of this series of Preference
Stock shall be "Convertible Junior Preference Stock, Series D (with Par
Value of $1.00)" (referred to herein as the "Series D Stock").
(2) Dividends. The holders of shares of the Series D Stock
shall not be entitled to receive any dividends unless cash dividends
are declared on the shares of stock issuable upon conversion of the
Series D Stock (herein called "conversion stock"). In the event any
cash dividend is declared on the shares of conversion stock, following
the record date for such dividend the holders of shares of the Series D
Stock shall be entitled to receive, when, as, and to the extent
declared by the Board of Directors, a dividend in cash in an amount per
share equal to 120% of the cash dividend per share declared on the
shares of conversion stock multiplied by the number of shares of
conversion stock which, as of such record date, is deliverable on the
Conversion Date upon the conversion of a share of Series D Stock. if at
any time after the right to receive such dividend shall have accrued
such dividend shall not have been paid, or declared and a sum
sufficient for payment thereof set apart, the amount of the deficiency
in such dividend shall be fully paid, but without interest, before the
dividend on the conversion stock which gave rise to the accrual of such
dividend shall be paid and before any other dividend shall be declared
or paid or any other distribution ordered or made upon, or any other
purchase or redemption made of, any stock ranking as to dividends or
upon liquidation junior to the Series D stock (other than a dividend
payable in such junior stock or a purchase or redemption made by issue
or delivery of such junior stock); provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any preferred
stock of the Company in compliance with the provisions of such sinking
fund may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund
regardless of whether at the time of such application Full Accrued
Dividends upon shares of the Series D Stock shall have been paid or
declared and set apart for payment. At any time when any dividend has
accrued on the Series D Stock but has not been paid, all dividends
declared upon the shares of the Series D Stock and any other preferred
stock ranking on a parity as to dividends with the Series D stock shall
be declared pro rata, so that the amounts of dividends declared per
share on the Series D Stock and such other preferred stock shall in all
cases bear to each other the same ratio that accrued unpaid dividends
per share on the shares of the Series D Stock and such other preferred
stock (determined immediately prior to payment) bear to each other,
provided that in making such calculation, dividends accrued on such
other parity stock since the most recent January 15 or July 15 may be
ignored. Holders of shares of the Series D Stock shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess
of Full Accrued Dividends.
(3) Rights Of Redemption. The shares of the Series D Stock
shall be subject to redemption as follows:
(a) Optional Redemption. Subject to the succeeding
provisions of this subparagraph (a), the shares of the Series
D Stock may be redeemed at the option of the Company, in whole
or in part, at any time or from time to time upon not less
than 30 days' prior notice to the holders of record of shares
of the Series D stock to be so redeemed, sent by first class
mail, postage prepaid, to each registered holder of shares of
the Series D Stock at his address appearing on the Series D
Stock register maintained by the Company, at the redemption
price per share of $25.00, plus in each case an amount equal
to Unpaid Accrued Dividends to and including the date fixed
for redemption of such shares (hereinafter called a
"Redemption Date"). If less than all shares of the Series D
Stock are to be redeemed pursuant to this subparagraph (a),
the shares to be redeemed shall be selected pro rata so that
there shall be redeemed from each registered holder of such
shares that number of whole shares, as nearly as practicable
to the nearest share, as bears the same ratio to the total
number of shares of such Series held by such holder as the
total number of shares to be redeemed bears to the total
number of shares of the Series D Stock at the time
outstanding.
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<PAGE>
(b) No Mandatory Redemption. The shares of the Series
D Stock shall not be subject to mandatory redemption.
(c) No Sinking Fund. Shares of the Series D Stock are
not subject or entitled to the benefit of a sinking fund.
(d) Effect of Redemption. Unless default be made in
the payment in full of the redemption price and any Accrued
Dividends: dividends on the shares of Series D Stock called
for redemption shall cease to accrue on the Redemption Date on
which such shares are to be redeemed; all rights of the
holders of such shares as stockholders of the Company by
reason of the ownership of such shares shall cease on such
Redemption Date, except the right to receive the amount
payable upon redemption of such shares on presentation and
surrender of the respective certificates representing such
shares; and after such Redemption Date, such shares shall not
be deemed to be outstanding and shall not be transferable on
the books of the Company except to the Company.
(e) Receipt of Redemption Price. At any time on or
after a Redemption Date, the respective holders of record of
shares of Series D Stock to be redeemed on such Redemption
Date shall be entitled to receive the redemption price upon
actual delivery to the Company of certificates for the shares
to be redeemed, such certificates, if required by the Company,
to be properly stamped for transfer and duly endorsed in blank
or accompanied by proper instruments of assignment and
transfer thereof duly executed in blank.
(f) Return of Deposits. Any moneys deposited with the
transfer agent, or other redemption agent, for the redemption
of any shares of Series D Stock on a Redemption Date which
shall not be claimed after five years from such Redemption
Date shall be repaid to the Company by such agent on demand,
and the holder of any such shares of Series D Stock shall
thereafter look only to the Company for any payment to which
such holder may be entitled. Any interest accrued on moneys so
deposited shall belong to the Company and shall be paid to it
from time to time on demand.
(4) Rights on Liquidation, Dissolution, Winding up.
(a) Liquidation Payment. In the event of any
voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of shares of the Series D Stock
then outstanding shall be entitled to be paid out of the
assets of the Company available for distribution to its
stockholders, before any payment shall be made to the holders
of any class of capital stock of the Company ranking junior
upon liquidation to the Series D Stock, an amount equal to
$25.00 per share plus an amount equal to all Accrued Dividends
thereon as of the date of payment. The merger or consolidation
of the Company into or with any other corporation or the
merger or consolidation of any other corporation into or with
the Company shall not in any event be considered a
liquidation, dissolution or winding up of the Company under
this paragraph (4).
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<PAGE>
(b) Proportionate Distribution. In the event the
assets of the Company available for distribution to the
holders of shares of Series D Stock upon any voluntary or
involuntary liquidation, dissolution or winding up of the
Company shall be insufficient to pay in full all amounts to
which such holders are entitled pursuant to subparagraph (a)
of this paragraph (4), no such distribution shall be made on
account of any shares of any other class or series of
preferred stock ranking on a parity with the shares of Series
D Stock upon liquidation unless proportionate distributive
amounts shall be paid on account of the shares of Series D
Stock, ratably, in proportion to the full distributive amounts
to which the holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
(5) Voting. The shares of the Series D Stock shall not have
any voting powers, either general or special, except as required by
applicable law and as follows:
(a) Change of Priority or Rights. Without the
affirmative vote or consent of the holders of at least
two-thirds of the number of shares of Series D Stock at the
time outstanding, voting or consenting (as the case may be)
separately as a class, given in person or by proxy, either in
writing or by resolution adopted at a special meeting called
for the purpose, the Company shall not (i) amend, alter or
repeal any of the preferences, special rights or powers of the
holders of, the Series D Stock so as adversely to affect such
preferences, special rights or powers or (ii) increase above
3,000,000 the aggregate number of shares constituting the
Series D Stock or issue or reissue any shares of Series D
Stock (other than for purposes of exchanges or transfers) in
excess of the first 3,000,000 shares issued. No vote or
consent by the holders of the Series D Stock shall be required
as a condition to the creation or issuance of any class or
series of capital stock of the Company (including, without
limitation, capital stock which may rank senior to, or on a
parity with, the Series D Stock as to dividends or upon
liquidation or both).
(b) Default in Dividend Payments. Whenever dividends
payable on any series of Preference Stock shall be in default
in an aggregate amount equivalent to six full quarterly
dividends on all shares of such series at the time
outstanding, the number of directors constituting the Board of
Directors of the Company shall be increased by one and the
holders of Preference Stock shall have, in addition to any
other voting rights, the exclusive and special right, voting
separately as a class without regard to series, to elect one
person to fill such newly created directorship. Whenever such
right of holders of Preference Stock shall have vested, it may
be exercised initially either at a special meeting of such
holders called as provided below, or at any annual meeting of
stockholders, and thereafter at annual meetings of
stockholders. The right of holders of shares of Preference
Stock voting separately as a class to elect one member of the
Board of Directors as aforesaid shall continue until such time
as all dividends accumulated on all series of Preference stock
shall have been paid in full, at which time the special right
of the holders of shares of Preference Stock so to vote
separately as a class for the election of directors shall
terminate, subject to revesting in the event of each and every
subsequent default in an aggregate amount equivalent to six
full quarterly dividends.
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<PAGE>
At any time when such special voting power shall have
vested in the holders of Preference Stock as provided in this
subparagraph (b), a proper officer of the Company shall, upon
the written request of the holders of record of at least 10%
of the number of shares of Preference Stock at the time
outstanding and entitled to vote, regardless of series,
addressed to the Secretary of the Company, call a special
meeting of the holders of shares of Preference Stock and of
any other class of stock having voting power, for the purpose
of electing directors. Such meeting shall be held at the
earliest practicable date at the principal office of the
Company. If such meeting shall not be called by a proper
officer of the Company within 20 days after personal service
of said written request upon the Secretary of the Company, or
within 20 days after mailing the same within the United States
of America by registered mail addressed to the Secretary of
the Company at its principal office, then the holders of
record of at least 10% of the number of shares of Preference
Stock at the time outstanding and entitled to vote, regardless
of series, may designate in writing one of their number to
call such meeting at the expense of the Company, and such
meeting may be called by such person so designated upon the
notice required for annual meetings of stockholders and shall
be held at said principal office. Any holder of shares of
Preference Stock so designated shall have access to the stock
books of the Company for the purpose of causing meetings of
stockholders to be called pursuant to these provisions.
Notwithstanding the provisions of this subparagraph (b), no
such special meeting shall be called during the 90 days
immediately preceding the date fixed for the next annual
meeting of stockholders.
At any meeting held for the purpose of electing
directors at which the holders of shares of Preference Stock
shall have the special right, voting separately as a class, to
elect a director as provided in this subparagraph (b), the
presence, in person or by proxy, of the holders of 51% of the
number of shares of Preference Stock at the time outstanding
and entitled to vote shall be required to constitute a quorum
of such class for the election of any director by the holders
of the Preference Stock as a class, each share of Series D
Stock outstanding and entitled to vote counting, for purposes
only of determining the presence of such a quorum, as one
share of Preference Stock. At any such meeting or adjournment
thereof, (i) the absence of a quorum of Preference Stock shall
not prevent the election of directors other than those to be
elected by the holders of shares of Preference Stock voting as
a class and the absence of a quorum for the election of such
other directors shall not prevent the election of the
directors to be elected by holders of shares of Preference
Stock voting as a class and (ii) in the absence of either or
both such quorums, a majority of the holders present in person
or by proxy of the stock or stocks which lack a quorum shall
have power to adjourn the meeting for the election of
directors which they are entitled to elect from time to time,
without notice other than announcement at the meeting, until a
quorum shall be present.
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<PAGE>
During any period the holders of Preference Stock
have the right to vote as a class for a director as provided
in this subparagraph (b), (i) the director so elected by the
holders of the Preference Stock shall continue in office until
termination of the right of the holders of the Preference
Stock to vote as a class for directors, and (ii) any vacancies
in the Board of Directors shall be filled only by vote of a
majority (which majority may consist of only a single
director) of the remaining directors theretofore elected by
the holders of the class or classes of stock which elected the
director whose office shall have become vacant.
(6) Conversion Rights. The shares of the Series D Stock shall
be subject to conversion as follows:
(a) Optional Conversion. At any time, the holders of
shares of the Series D Stock shall have the right, at their
option, to convert each share of Series D Stock into shares of
any other stock of the Company on the following terms:
(I) Conversion Price. The shares of the
Series D Stock shall be convertible at the Company's
principal office and at such other office or offices,
if any, as the Board of Directors may designate, into
fully paid and nonassessable shares (calculated as to
each conversion to the nearest 1/100th of a share) of
Common Stock of the Company, at the conversion price,
determined as hereinafter provided, in effect at the
time of conversion, each share of Series D Stock
being taken at $25.00 for the purpose of such
conversion. The price at which shares of Common Stock
shall be delivered upon conversion (herein called the
"conversion price") shall be initially $80.00 per
share of Common Stock. The conversion price shall be
adjusted as provided in clause (IV) of this
subparagraph (a).
(II) Conversion Procedure. No payment or
adjustment shall be made upon the conversion of the
Series D Stock on account of any dividends declared
but unpaid on the shares of the Series D Stock
converted or on account of any dividends on the
Common Stock issued upon such conversion.
Shares of the Series D Stock shall be deemed
to have been converted immediately prior to the close
of business on the Conversion Date, and the person or
persons entitled to receive the Common Stock issuable
upon such conversion shall be treated for all
purposes as the record holder or holders of such
Common Stock at such time. Following the Conversion
Date, each holder of shares of the Series D Stock
converted will surrender, at the Company's principal
office or at any other office as the Board of
Directors may designate, the certificate or
certificates therefor, duly endorsed to the Company
or in blank. As promptly as practicable after such
surrender, the Company shall issue and shall deliver
at said office a certificate or certificates for the
number of full shares of Common Stock issuable upon
such conversion to the person or persons entitled to
receive the same.
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<PAGE>
In case shares of Series D Stock are called
for redemption, the right to convert such shares
shall cease and terminate at the close of business on
the Redemption Date on which such shares are to be
redeemed, unless default shall be made in payment of
the redemption price (in which event the right to
convert such shares shall cease when such redemption
price shall actually be paid).
(III) Cash Payment. No fractional shares of
Common Stock shall be issued upon conversion of
shares of the Series D Stock, but, instead of any
fraction of a share of Common Stock which would
otherwise be issuable in respect of the aggregate
number of shares of the Series D Stock held by the
same holder, the company shall pay a cash adjustment
of such fraction in an amount equal to the same
fraction of the Closing Price on the Conversion Date,
or, if the Conversion Date is not a Trading Day, on
the next Trading Day.
(IV) Conversion Price Adjustments. The
conversion price shall be adjusted from time to time
as follows:
(A) In case the Company shall here-
after (i) pay a dividend or make a distribu-
tion on its outstanding shares of Common
Stock in Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common
Stock into a smaller number of shares, or
(iv) issue any shares by reclassification of
its shares of Common Stock, the conversion
price in effect at the time of the record
date for such dividend or distribution or
the effective date of such subdivision,
combination or reclassification shall be
adjusted so that the holder of any shares
of the Series D Stock converted after such
time shall be entitled to receive the number
of shares of capital stock of the Company
which he would have owned or been entitled
to receive by reason of the conversion of
such shares of the Series D Stock had such
shares of the Series D Stock been converted
immediately prior to such time.
(B) In case the Company shall
hereafter issue rights or warrants to all
holders of its Common Stock entitling them
(for a period expiring within fortyfive days
after the record date mentioned below) to
subscribe for or purchase shares of Common
Stock at a price per share less than the
current market price per share--as
determined pursuant to subclause (D) of this
clause (IV)--on the record date for the
determination of the stockholders entitled
to receive such rights or warrants, the
conversion price shall be adjusted so that
the same shall equal the price determined by
multiplying the conversion price in effect
immediately prior to the date of issuance of
such rights or warrants by a fraction, of
which the numerator shall be the number of
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<PAGE>
shares of Common Stock outstanding on the
record date for the determination of the
stockholders entitled to receive such rights
or warrants plus the number of shares of
Common Stock which the aggregate offering
price of the total number of shares of
Common Stock so offered would purchase at
such current market price and of which the
denominator shall be the number of shares of
Common Stock outstanding on such record date
plus the number of additional shares of
Common Stock offered for subscription or
purchase. Such adjustment shall become
effective at the opening of business on the
business day next following the record date
for the determination of stockholders
entitled to receive such rights or warrants;
and to the extent that shares of Common
Stock are not delivered after the expiration
of such rights or warrants, the conversion
price shall be readjusted (but only with
respect to shares of the Series D Stock
converted after such expiration) to the
conversion price which would then be in
effect had the adjustments made upon the
distribution of such rights or warrants been
made upon the basis of delivery of only the
number of shares of Common Stock actually
delivered. No adjustment in the conversion
price shall be required or made under this
subclause (B) or subclause (C) immediately
below or otherwise under this subparagraph
(a) in respect of any right granted by the
Company to all holders of its Common Stock
to purchase additional shares of Common
Stock from the Company at a discount from
the current market price per share of Common
Stock by reinvestment of dividends on Common
Stock if either (i) such discount does not
exceed 6% of such current market price or
(ii) the holders of the Series D Stock shall
be entitled to purchase shares of Common
Stock from the Company at the same discount
by reinvestment of dividends on the Series D
Stock.
(C) In case the Company shall
hereafter distribute to all holders of its
Common Stock evidences of its indebtedness
or assets--excluding any cash dividend or
distributions and dividends referred to in
subclause (A) of this clause (IV)--or
subscription rights or warrants (excluding
those referred to in subclause (B)
immediately above), then in each such case
the conversion price shall be adjusted so
that the same shall equal the price
determined by multiplying the conversion
price in effect immediately prior to the
date of such distribution by a fraction of
which the numerator shall be the current
market price per share (determined as
provided in subclause (D) immediately below)
of the Common Stock on the record date for
the determination of stockholders entitled
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<PAGE>
to receive such distribution less the then
fair market value (as determined by the
Board of Directors of the Company, whose
determination shall be conclusive) of the
portion of the assets or evidences of
indebtedness so distributed or of such
subscription rights or warrants applicable
to one share of Common Stock, and the
denominator shall be such current market
price per share of the Common Stock. Such
adjustment shall become effective on the
opening of business on the business day next
following the record date for the
determination of stockholders entitled to
receive such distribution.
(D) For the purpose of any
computation under subclause (B) or (C)
immediately above, the current market price
per share of Common Stock on any date shall
be deemed to be the average of the daily
Closing Price for the thirty consecutive
Trading Days selected by the Company
commencing not more than forty-five Trading
Days before the day in question.
(E) In any case in which this
subparagraph (a) shall require that an
adjustment as a result of any event become
effective at the opening of business on the
business day next following a record date,
the Company may elect to defer until after
the occurrence of such event (i) issuing to
the holder of any shares of the Series D
Stock converted after such record date and
before the occurrence of such event the
additional shares of Common Stock issuable
upon such conversion over and above the
shares of Common Stock issuable upon such
conversion on the basis of the conversion
price prior to adjustment and (ii) paying to
such holder any amount in cash in lieu of a
fraction share of Common Stock pursuant to
clause (IV) of this subparagraph (a); and,
in lieu of the shares the issuance of which
is so deferred, the Company shall issue or
cause its transfer agents to issue due bills
or other appropriate evidence of the right
to receive such shares.
(F) Any adjustment in the conversion
price otherwise required by this
subparagraph (a) to be made may be postponed
up to, but not beyond, three years from the
date on which it would otherwise be required
to be made provided that such adjustment
(plus any other adjustments postponed
pursuant to this subclause (F) and not
theretofore made) would not require an
increase or decrease of more than $.50 in
such price and would not, if made, entitle
the holders of all then outstanding shares
of the Series D Stock upon conversion to
receive additional shares of Common Stock
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<PAGE>
equal in the aggregate to 3% or more of the
then issued and outstanding shares of Common
Stock. All calculations under this
subparagraph (a) shall be made to the
nearest cent or to the nearest 1/100 of a
share of Common Stock, as the case may be.
(V) Conversion Price Adjustment Certificates
and Notices. Whenever the conversion price is
adjusted as herein provided, the Company shall
compute the adjusted conversion price in accordance
with this subparagraph (a), shall prepare a notice
stating that the conversion price has been adjusted
and setting forth the adjusted conversion price and
shall mail such notice as soon as practicable to the
holders of record of the outstanding shares of the
Series D Stock.
(VI) Mergers, etc. In case of any
consolidation of the Company with, or merger of the
Company with or into, any other corporation (other
than a merger in which the Company is the surviving
corporation and which does not result in any
reclassification or change of the outstanding shares
of the Company into which shares of the Series D
Stock would have been converted had the automatic
conversion of the Series D Stock occurred immediately
prior thereto), or in case of any conveyance or
transfer of the property and assets of the Company
substantially as an entirety, lawful provision shall
be made as a part of the terms of such transaction so
that each share of Series D Stock shall be converted
on the Conversion Date into the number and kind of
shares of stock (and/or other securities, cash,
property or rights) receivable upon such
consolidation, merger, conveyance or transfer by a
holder of the number and kind of shares of the
Company into which such share of Series D Stock would
have been converted had the automatic conversion of
the Series D Stock occurred immediately prior to such
consolidation, merger, conveyance or transfer,
subject to subsequent adjustments as nearly
equivalent as practicable to the adjustments provided
for in this subparagraph (a). The above provisions of
this clause (VI) shall similarly apply to successive
consolidations, mergers, conveyances or transfers.
(VII) Reservation of Shares. The Company shall
at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the
conversion of the shares of the Series D Stock on the
Conversion Date, the full number of shares of Common
Stock which at the time is deliverable on the
Conversion Date upon the conversion of all shares of
the Series D Stock outstanding at such time.
(VIII) Taxes. The Company shall pay any and all
taxes that may be payable in respect of the issuance
or delivery of shares of Common Stock on conversion
of shares of Series D Stock pursuant hereto. The
Company shall not, however, be required to pay any
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<PAGE>
tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of
Common Stock in a name other than that in which the
shares of Series D Stock so converted were
registered, and no such issue or delivery shall be
made unless and until the person requesting such
issue has paid to the Company the amount of any such
tax, or has established, to the satisfaction of the
Company, that such tax has been paid.
(IX) Common Stock. For the purpose of this
paragraph (6) the term "Common Stock" shall include
any stock of any class of the Company which has no
preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the
Company, and which is not subject to redemption by
the Company. However, shares issuable on conversion
of shares of the Series D Stock shall include only
shares of the class designated as Common Stock of the
Company as of the original date of issue of the
Series D Stock or shares of any class or classes
resulting from any reclassification or
reclassifications thereof and which have no
preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the
Company, provided that if at any time there shall be
more than one such resulting class, the shares of
each such class then so issuable shall be
substantially in the proportion which the total
number of shares of such class resulting from all
such reclassifications bears to the total number of
shares of all such classes resulting from all such
reclassifications.
(X) Closing Price. As used in this paragraph
(6), the term "Closing Price" on any day shall mean
the reported last sales price regular way on such day
or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices
regular way, in each case on the New York Stock
Exchange, or, if the Common Stock is not listed or
admitted to trading on such Exchange, on the
principal national securities exchange on which the
Common Stock is listed or admitted to trading, or, if
not listed or admitted to trading on any national
securities exchange, the average of the closing bid
and asked prices as furnished by any New York Stock
Exchange member firm selected from time to time by
the Company for that purpose; and the term "Trading
Day" shall mean a date on which the New York Stock
Exchange (or any successor to such Exchange) is open
for the transaction of business.
(7) Definitions.
(a) Conversion Date. The term "Conversion Date" shall
mean the date on which the holder of shares of Series D Stock
exercises his or its option to convert the shares of Series D
Stock into Common Stock.
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(b) Accrued Dividends. The term "Accrued Dividends"
shall mean Full Accrued Dividends as of the date as of which
Accrued Dividends are to be computed, less the amount of all
dividends paid, upon the relevant shares of Series D Stock.
(c) Full Accrued Dividends. The term "Full Accrued
Dividends" shall mean the aggregate amount of dividends, if
any, which the holders of shares of Series D Stock shall have
become entitled to receive as of the date as of which Full
Accrued Dividends are to be computed.
(d) Preferred Stock. The tern "Preferred Stock" shall
mean any Preferred Stock created and issued under this Article
Fourth. The term "preferred stock" shall mean shares of any
class of stock (including any class of Preferred Stock or
Preference Stock) if the holders of such class shall be
entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of Common
Stock.
(e) Preference Stock. The term "Preference Stock"
shall mean any Preference Stock created and issued under this
Article Fourth.
(f) Ranking of Shares. For the purposes hereof any
stock of any class or classes of the Company shall be deemed
to rank (i) prior to shares of the Series D Stock, either as
to dividends or upon liquidation, if the holders of such class
or classes shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the
holders of shares of the Series D Stock; (ii) on a parity with
shares of the Series D Stock, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share
thereof be different from those of the Series D Stock, if the
holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion
to their respective dividend rates or liquidation prices,
without preference or priority of one over the other as
between the holders of such stock and the holders of shares of
Series D Stock; and (iii) junior to shares of the Series D
Stock, either as to dividends or upon liquidation, if such
class shall be Common Stock or if the holders of the Series D
Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the
holders of shares of such class or classes.
(8) Rank of Series D Stock. The shares of the Series D Stock
shall rank junior as to dividends and upon liquidation to the shares of
the $6.00 Cumulative Convertible Preferred Stock, Series G (With Par
Value of $1.00) of the Company. Except as otherwise fixed at the time
such class is created, the shares of the Series D Stock shall rank on a
parity as to dividends and upon liquidation with the shares of the
stock of any other class of Preferred Stock or Preference Stock.
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(9) Fractional Shares. The Series D Stock may be issued in
fractions of a share equal to one one-hundredth (.01) of a share or any
integral multiple thereof. Each fractional share of Series D Stock
issued shall have a corresponding fraction of the voting powers,
preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof,
attributable to a full share of Series D Stock.
(10) Retirement of Converted Shares, etc. Shares of the Series
D Stock which have been converted into Common Stock pursuant to the
provisions of paragraph (6) of this Section C regarding Series D Stock
shall have the status of authorized and unissued Preferred Stock but
shall not be reissued as Series D Stock.
III. Parent Common Stock.
Except as otherwise provided in this Section III or as otherwise
required by applicable law, all shares of Common Stock and Class B Common shall
be identical in all respects and shall entitle the holders thereof to the same
rights and privileges, subject to the same qualifications, limitations and
restrictions.
A. Voting Rights.
(1) Common Stock. Except as otherwise provided in this Section
III, as otherwise required by law or by the resolution or resolutions
providing for the issuance of any series of Preferred Stock or
Preference Stock and subject to the provisions of any applicable law or
of the By-laws of the Company, as from time to time amended, with
respect to the closing of the transfer books or the fixing of a record
date for the determination of stockholders entitled to vote, the
holders of outstanding shares of Common Stock shall exclusively possess
voting power for the election of directors and for other purposes, each
holder of record of shares of Common Stock being entitled to one vote
for each Share of Common Stock standing in his name on the books of the
Company.
(2) Class B Common. The holders of shares of Class B Common
shall have no right to vote on any matters to be voted on by the
stockholders of the Company except as follows:
(a) Without the affirmative vote or consent of the
holders of the Class B Common, voting or consenting (as the
case may be) separately as a class, in person or by proxy,
either in writing or by resolution adopted at a special
meeting called for the purpose, the Company shall not (i)
change the number of authorized shares of the Class B Common
or (ii) amend this Certificate of Incorporation or take any
other action (including, without limitation, a merger or
consolidation to which the Company is a constituent party)
which would have the effect of eliminating the Class B Common
or of amending, altering or repealing any of the preferences,
special rights or powers of the holders of the Class B Common
so as adversely to affect such preferences, special rights or
powers.
(b) The holders of shares of Class B Common shall
have the right to vote together with the holders of shares of
the Common Stock as a single class on any Super-Majority
Transaction submitted to the holders of Parent Common Stock
for their vote, approval or consent. When voting on any
Super-Majority Transaction, each holder of shares of Class B
Common shall be entitled to cast one vote for each share of
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Class B Common standing in his name on the books of the
Company.
(3) Super-Majority Transactions. The affirmative vote or
consent of the greater of (a) the holders of at least 85% of the shares
of the Parent Common Stock, voting as a single class, present in person
or by proxy at a meeting at which a Super-Majority Transaction is
submitted for a vote of the Company's stockholders and (b) the holders
of a majority of the voting power of all of the Parent Common Stock
shall be required to approve any Super-Majority Transaction.
B. Dividends. Except as otherwise provided by the resolution or
resolutions providing for the issue of any series of Preferred Stock or
Preference Stock, the holders of Parent Common Stock shall be entitled, to the
exclusion of the holders of Preferred Stock and Preference Stock of any and all
series, to receive such dividends as from time to time may be declared by the
Board of Directors. As and when dividends are declared or paid thereon, whether
in cash, property or securities of the Company, the holders of Common Stock and
the holders of Class B Common shall be entitled to participate in such dividends
ratably on a per share basis; provided, that (i) if dividends are declared which
are payable in shares of Common Stock or Class B Common, such dividends shall be
payable at the same rate on both Common Stock and Class B Common and the
dividends payable in shares of Common Stock shall be payable to holders of that
class of stock and the dividends payable in shares of Class B Common shall be
payable to holders of that class of stock, (ii) if the dividends consist of
other voting securities of the Company, the Company shall declare and pay in
respect of each share of Class B Common dividends consisting of an equal number
of non-voting securities of the Company which are otherwise identical to the
voting securities, which shall entitle the holder thereof to cast the same
number of votes upon any Super-majority Transaction as such holder would have
been entitled to cast had such holder received voting securities, rather than
nonvoting securities, with respect to such dividend and which are convertible
into or exchangeable for such voting securities on the same terms as the Class B
Common is convertible into the Common Stock, (iii) if the dividends consist of
the right to purchase additional shares of Common Stock or Class B Common, at
the Company's option, either (A) dividends shall be declared which are payable
at the same rate on both classes of stock and the dividends payable in the right
to purchase additional shares of Common Stock shall be payable to holders of
that class of stock and the dividends payable in the right to purchase
additional shares of Class B Common shall be payable to holders of that class of
stock or (B) in the case of a dividend payable in the right to purchase
additional shares of Common Stock, such dividend shall be payable to holders of
that class of stock and the Class B Common Conversion Ratio (as hereinafter
defined) shall be adjusted as provided in subparagraph 2 of Paragraph D of this
Section III.
C. Rights on Liquidation, Dissolution, Winding Up. In the event of any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, after payment shall have been made to the holders of Preferred
Stock and Preference Stock of the full amount for which they shall be entitled
pursuant to the resolution or resolutions providing for the issue of any series
of Preferred Stock or Preference Stock, the holders of the Parent Common Stock
shall be entitled, to the exclusion of the holders of Preferred Stock or
Preference Stock of any and all series, to share, ratably according to the
number of shares of Parent Common Stock held by them, in all remaining assets of
the Company available for distribution to its stockholders.
D. Conversion Rights.
(1) Conversion of Common Stock. The holders of shares of
Common Stock shall have no conversion rights with respect to such
shares.
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(2) Conversion of Class B Common Stock. With respect to each
share of Class B Common, upon the earlier to occur of (i) any transfer
of such share of Class B Common in accordance with Paragraph E of this
Section III (except for transfers permitted by subparagraph 3 of
Paragraph E) and (ii) the Event Date, such share shall convert
automatically into shares of Common Stock at a ratio (the "Class B
Common Conversion Ratio") which initially shall be one share of Common
Stock per share of Class B Common so converted; provided, that if and
whenever the Company shall hereafter issue rights pursuant to clause
(iii)(B) of Paragraph B of this Section III to all holders of its
Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price
per share--as determined pursuant to the penultimate sentence of this
subparagraph 2 of this paragraph D--on the record date for the
determination of the stockholders entitled to receive such rights, the
Class B Common Conversion Ratio shall be adjusted to an amount equal to
the product of the Class B Common Conversion Ratio in effect
immediately prior to the date of issuance of such rights and a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription or purchase
and of which the denominator shall be the number of shares of Common
Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at such current market
price. Such adjustment shall become effective at the opening of
business on the business day next following the record date for the
determination of stockholders entitled to receive such rights; and to
the extent that shares of Common Stock are not delivered after the
expiration of such rights, the Class B Common Conversion Ratio shall be
readjusted (but only with respect to shares of the Class B Common
converted after such expiration) to the Class B Common Conversion Ratio
which would then be in effect had the adjustments made upon the
distribution of such rights been made upon the basis of delivery of
only the number of shares of Common Stock actually delivered. For the
purpose of any computation under the immediately preceding sentence,
the current market price per share of Common Stock on any date shall be
deemed to be the average of the daily Closing Prices for the thirty
consecutive Trading Days selected by the company commencing not more
than fortyfive Trading Days before the day in question. Notwithstanding
anything else contained in this subparagraph 2 of this Paragraph D,
upon the termination of the Settlement Agreement in accordance with the
provisions of Section 13 thereof, all then outstanding shares of Class
B Common in the aggregate shall convert automatically, without any
further action on the Company's part, into one (1) share of Common
Stock.
(I) Mergers, etc. In case of any consolidation of the
Company with, or merger of the Company with or into, any other
corporation (other than a merger in which the Company is the
surviving corporation and which does not result in any
reclassification or change of the outstanding shares of the
Company into which shares of the Class B Common would have
been converted had the automatic conversion of the Class B
Common occurred immediately prior thereto), or in case of any
conveyance or transfer of the property and assets of the
Company substantially as an entirety, lawful provision shall
be made as a part of the terms of such transaction so that
each share of Class B Common (i) shall entitle the holder
thereof to receive, at the same time and on the same terms as
applicable to the shares of the Company into which the Class B
Common shall be convertible, any cash, securities (other than
equity securities of the Company), rights or other property
receivable upon such consolidation, merger, conveyance or
transfer by a holder of the number and kind of shares of the
Company into which such share of Class B Common would have
been converted had the automatic conversion of the Class B
Common occurred immediately prior to such consolidation,
merger, conveyance or transfer and (ii) shall be converted on
the Class B Common Conversion Date into the number and kind of
equity of the Company, if any, receivable upon such
consolidation, merger, conveyance or transfer by a holder of
the number and kind of share of the Company into which such
share of Class B Common would have been converted had the
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<PAGE>
automatic conversion of the Class B Common occurred
immediately prior to such consolidation, merger, conveyance or
transfer subject to subsequent adjustments as nearly
equivalent as practicable to the adjustments provided for in
this subparagraph 2 of paragraph D; provided however, that any
instrument convertible into or exchangeable for equity
securities of the Company shall be deemed for purposes of this
subparagraph 2(I) not to be equity securities of the Company;
and provided, further, that in the event that any instrument
convertible into or exchangeable for shares of Common Stock or
other voting securities of the Company is paid in any such
consolidation, merger, conveyance or transfer in respect of
the shares of the Company into which the shares of Class B
Common shall be convertible or exchangeable, the corresponding
instrument paid in respect of the Class B Common pursuant to
this subparagraph 2(I) may be convertible into or exchangeable
for Class B common or non-voting securities of the Company,
respectively, in the manner contemplated by paragraph B of
this Section III. The above provisions of this clause (I)
shall similarly apply to successive consolidations, mergers,
conveyances or transfers.
(II) Reservation of Shares. The Company shall at all
times reserve and keep available, free from preemptive rights,
out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of the shares of the Class
B Common on the Class B Common Conversion Date, the full
number of shares of Common Stock which at the time is
deliverable on the Class B Common Conversion Date upon the
conversion of all shares of the Class B Common outstanding at
such time.
(III) Taxes. The Company shall pay any and all taxes
that may be payable in respect of the issuance or delivery of
shares of Common Stock on conversion of shares of Class B
Common pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of
Class B Common so converted were registered, and no such issue
or delivery shall be made unless and until the person
requesting such issue has paid to the Company the amount of
any such tax, or has established, to the satisfaction of the
Company, that such tax has been paid.
(IV) Common Stock. For the purpose of this
subparagraph 2 of paragraph D the term "Common Stock" shall
include any stock of any class of the Company (other than the
Class B Common) which has no preference in respect of
dividends or of amounts payable in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
Company, and which is not subject to redemption by the
Company. However, shares issuable on conversion of shares of
the Class B Common shall include only shares of the class
designated as Common Stock of the Company as of the original
date of issue of the Class B Common or shares of any class or
classes resulting from any reclassification or
reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding
up of the Company and which are not subject to redemption by
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<PAGE>
the Company, provided that if at any time there shall be more
than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion
which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.
(V) Retirement of Converted Shares, etc. Shares of
the Class B Common which have been converted into Common Stock
pursuant to the provisions of this subparagraph 2 of paragraph
D regarding Class B Common shall have the status of retired
shares of Class B Common and shall not be reissued.
(VI) Rights Prior to Conversion. Notwithstanding
anything to the contrary contained in this Section III, in
case of any adjustment of the Class B Common Conversion Ratio
as provided in this subparagraph 2 of this Paragraph D, the
determination of the rights of the holders of Class B Common
to vote such shares in Super-Majority Transactions, to receive
dividends with respect to such shares, and to share ratably
with the holders of Common Stock in assets of the Company in
the event of any liquidation, dissolution or winding up of the
Company shall be made as if the number of shares of Class B
Common held by each such holder of the Class B Common were
equal to the product of the number of shares of Class B Common
actually hold by such holder at the time of such determination
and the Class B Common Conversion Ratio.
(VII) No Fractional shares. No fractional shares of
Common Stock shall be issued upon conversion of shares of the
Class B Common, but, instead of any fraction of a share of
Common Stock which would otherwise be issuable in respect of
the aggregate number of shares of the Class B Common held by
the same holder, the Company shall pay a full share of Common
Stock.
(VIII) Conversion Procedure. Following the Class B
Common Conversion Date, each holder of shares of the Class B
Common converted will surrender, at the Company's principal
office or at any other office as the Board of Directors may
designate, the certificate or certificates therefor, duly
endorsed to the Company or in blank. As promptly as
practicable after such surrender, the Company shall issue and
shall deliver at said office a certificate or certificates for
the number of shares of Common Stock issuable upon such
conversion to the person or persons entitled to receive the
same.
E. Transferability of Class B Common. Prior to the Event Date, the
shares of the Class B Common shall be nontransferable by the
Supplemental Benefit Trust or any other holder thereof except:
(1) pursuant to the terms of Article VIII of Exhibit B to
the Settlement Agreement;
(2) pursuant to any transaction which is approved by the Board
of Directors or with respect to which the Board of Directors consents
in writing;
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(3) to any financial institution as security for any
indebtedness or obligation of the holders of the shares of Class B
Common; or
(4) pursuant to any tender or exchange offer made by any
person or "group" (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, or any successor statute thereto),
for shares of Parent Common Stock.
Any attempted transfer of shares of the Class B Common in violation of the
provisions hereof shall be void and of no effect. The Company shall place on the
certificates representing shares of the Class B Common a legend consistent with
the provisions hereof.
F. Stock Splits, Recapitalizations, Etc. If the Company in any manner
subdivides or combines the outstanding shares of, or effects any
recapitalization or similar transaction with respect to, one class of
Parent Common Stock, the outstanding shares of the other class of
Parent Common Stock shall be proportionately subdivided, combined,
reclassified or the like in a similar manner.
G. Definitions.
(1) Class B Common Conversion Date. The term "Class B Common
Conversion Date," with respect to each share of Class B Common, shall
mean the date on which such share automatically converts into shares of
Common Stock pursuant to the terms and conditions contained herein.
(2) Closing Price. The term "Closing Price" on any day shall
mean the reported last sales price regular way on such day or, in case
no such sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in each case on the New York
Stock Exchange, or, if the Common Stock is not listed or admitted to
trading on such Exchange, on the principal national securities exchange
on which the Common Stock is listed or admitted to trading, or, if not
listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices as furnished by any New
York Stock Exchange member firm selected from time to time by the
Company for that purpose.
(3) Trading Day. The term "Trading Day" shall mean a day on
which the New York Stock Exchange (or any successor to such Exchange)
is open for the transaction of business.
(4) Event Date. The term "Event Date" shall have the meaning
assigned to such term in the Settlement Agreement.
(5) Navistar International Transportation Corp. The term
"Navistar International Transportation Corp." shall mean Navistar
International Transportation Corp., a Delaware corporation, or any
successor corporation thereto.
(6) Super-Majority Transaction. The term "Super-Majority
Transaction" shall mean (i) a merger or consolidation to which the
Company is a constituent party, if either (A) the stockholders of the
Company immediately before such merger or consolidation, do not own,
directly or indirectly, more than 50% of the combined voting power of
the then outstanding voting securities of the corporation surviving or
resulting from such merger or consolidation or (B) equity securities of
the Company or Navistar International Transportation Corp. would be
issued to stockholders of the other constituent corporation(s) to such
merger or consolidation which have a fair market value at the time of
the transaction in excess of $750 million, or (ii) the sale, transfer,
pledge or other disposition of all or substantially all of the assets
of the Company and its subsidiaries on a consolidated basis or Navistar
International Transportation Corp. and its subsidiaries on a
consolidated basis.
Subject to the provisions of this Certificate of Incorporation
and except as otherwise provided by law, the shares of stock of the
Company, regardless of class, may be issued for such consideration and
for such corporate purposes as the Board of Directors may from time to
time determine.
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No holder of stock of the Company shall have any preemptive
right with respect to stock of the Company.
Fifth: The Company is to have perpetual existence.
Sixth: Except as otherwise provided herein, any action
required or permitted to be taken by the stockholders of the Company must be
taken at a duly called annual or special meeting of such stockholders of the
Company and may not be effected by any consent in writing by such stockholders.
The private property of the stockholders of the Company shall not be
subject to the payment of corporate debts to any extent whatsoever.
Seventh: The number of directors which shall constitute the
whole Board of Directors of the Company shall be as specified in the By-laws of
the corporation, subject to the provisions of this Article Seventh.
The Board of Directors shall be and is divided into three classes:
Class I, Class II and Class III, which shall be as nearly equal in number as
possible. Each director shall serve for a term ending on the date of the third
annual meeting of stockholders following the annual meeting at which the
director was elected; provided, however, that each initial director in Class I
shall hold office until the annual meeting of stockholders in 1988; each initial
director in Class II shall hold office until the annual meeting of stockholders
in 1989; and each initial director in Class III shall hold office until the
annual meeting of stockholders in 1990. Notwithstanding the foregoing provisions
of this Article, each director shall serve until his successor is duly elected
and qualified or until his death, resignation or removal.
In the event of any increase or decrease in the authorized number of
directors, the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
three classes of directors so as to maintain such classes as nearly equal as
possible. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Newly created directorships resulting from any increase in the number
of directors to be elected by the holders of the Common Stock and any vacancies
on the Board of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled by the affirmative vote of a majority of
the remaining directors elected by the holders of the Common Stock then in
office (and not by stockholders), even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence shall
hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified.
Notwithstanding the foregoing, wherever the holders of any one or more
classes or series of stock issued by this Company having a preference over the
Parent Common Stock as to dividends or upon liquidation shall have the right,
voting separately by class or series, to elect directors by consent or at an
annual or special meeting of stockholders, the number, election, term of office,
filling of vacancies, terms of removal and other features of such directorships
shall be governed by the terms of the resolution or resolutions establishing
such class or series adopted pursuant thereto and such directors so elected
shall not be divided into classes pursuant to this Article Seventh unless
expressly provided by such terms.
The Board of Directors shall have power to hold its meetings outside the
State of Delaware at such place as from time to time may be designated by the
By-laws or by resolution of the Board of Directors. The By-laws may prescribe
the number of directors necessary to constitute a quorum.
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The capital of the Company may be increased from time to time by
resolution of the Board of Directors directing that a portion of the net assets
of the Company in excess of the amount theretofore determined to be capital be
transferred to capital account. Any and all shares of the Parent Common Stock
may be issued by the Company from time to time for such consideration as may be
fixed from time to time by the Board of Directors.
Eighth: The Board of Directors shall have power, without
stockholder action:
I. To make By-laws for the Company, and to amend, alter or
repeal any By-laws; but any By-laws made by the directors may be
altered, amended or repealed by the stockholders at any meeting,
provided notice of such proposed alteration, amendment or repeal be
included in the notice of such meeting.
II. To remove at any time any officer, agent or employee of
the Company, provided, however, that such power of removal may be
conferred by the By-laws or by the Board of Directors on any committee
or officer.
III. To fix and determine, and to vary the amount of, the
working capital of the Company, and to determine the use or investment
of any assets of the Company; to set apart out of any of the funds of
the Company available for dividends a reserve or reserves for any
proper purpose and to abolish any such reserve or reserves; and to
declare and authorize payment of such dividends as it shall determine
advisable and proper, subject to such restrictions as may be imposed by
law.
IV. To authorize the purchase or other acquisition of shares
of stock of the Company or any of its bonds, debentures, notes, scrip
or other securities or evidences of indebtedness.
V. To determine whether and to what extent, at what times
and places, and under what conditions and regulations, the accounts,
books and documents of the Company, or any of them, shall be open to
the inspection of the stockholders; and no stockholder shall have any
right to inspect any account, book or document of the Company, except
as conferred by the laws of the State of Delaware or as authorized by
resolution adopted by the Board of Directors or by the stockholders of
the Company entitled to vote in respect thereof.
VI. Except as otherwise provided by law, to determine the
places within or without the State of Delaware where any or all of the
books of the Company shall be kept.
VII. To authorize the sale, lease or other disposition of any
part or parts of the properties of the Company and to cease to conduct
the business connected therewith or again to resume the same, as it may
deem best.
VIII. To authorize the borrowing of money; the issuance of
bonds, notes, debentures and other obligations or evidences of
indebtedness of the Company, secured or unsecured, and the inclusion of
provisions as to redeemability and convertibility into shares of stock
of the Company or otherwise; and the mortgaging or pledging, as
security for money borrowed or bonds, notes, debentures or other
obligations issued by the Company, of any property of the Company, real
or personal, then owned or thereafter acquired by the Company.
The powers and authorities herein conferred upon the Board of Directors
are in furtherance and not in limitation of those conferred by the laws of the
State of Delaware. In addition to the powers and authorities herein or by
statute expressly conferred upon it, the Board of Directors may exercise all
such powers and do all such acts and things as may be exercised or done by the
Company, subject, nevertheless, to the provisions of the laws of the State of
Delaware, of this Certificate of Incorporation and of the By-laws of the
Company.
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The Board of Directors may, by resolution passed by a majority of the
whole Board of Directors, designate one or more committees, each committee to
consist of two (2) or more of the directors of the Company, which to the extent
provided in said resolution or resolutions or in the By-laws, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the Company, and may authorize the seal of the Company to be
affixed to all papers which may require it.
Subject to any limitation in the By-laws, the members of the Board of
Directors shall be entitled to reasonable fees, salaries or other compensation
for their services, as determined from time to time by the Board of Directors,
and to reimbursement for their expenses as such members. Nothing herein
contained shall preclude any director from serving the Company or its
subsidiaries or affiliates in any other capacity and receiving compensation
therefor.
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as it now exists or may hereafter be amended, no director of
the Company shall be liable to the Company or its stockholders for monetary
damages arising from a breach of fiduciary duty owed to the Company or its
stockholders. Any repeal or modification of this provision by the stockholders
of the Company shall not adversely affect any right or protection of a director
of the Company existing at the time of such repeal or modification.
Ninth: Indemnification:
I. Each person who was or is made a party or is threatened
to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or she is or was a
director or officer of the Company (which term shall include any
predecessor corporation of this Company) or is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans
("indemnitee"), whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or
agent, shall be identified and held harmless by the Company to the
fullest extent authorized by the Delaware General Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment), against all
expenses, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee
who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the indemnitee's heirs, executors and
administrators; provided however, that, except as provided in paragraph
II of this Article Ninth with respect to proceedings to enforce rights
to indemnification, the Company shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors. The right to indemnification conferred in this
Article Ninth shall be a contract right and shall include the right to
be paid by the Company the expenses incurred in defending any such
proceeding in advance of its final disposition; provided however, that,
if the Delaware General Corporation Law requires, the payment of such
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expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was
or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the
Company of an undertaking, by or on behalf of such indemnitee, to repay
all amounts so advanced if it ultimately be determined by final
judicial decision from which there is no further right to appeal that
such indemnitee is not entitled to be indemnified for such expenses
under this Article Ninth or otherwise.
II. If a claim under paragraph I of this Article Ninth is not
paid in full by the Company within sixty (60) days after a written
claim has been received by the Company, except in the case of a claim
for expenses incurred in defending a proceeding in advance of its final
disposition, in which case the applicable period shall be twenty (20)
days, the indemnitee may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit or in a suit brought by the Company
to recover payments by the Company of expenses incurred by an
indemnitee in defending in his or her capacity as a director or
officer, a proceeding in advance of its final disposition, the
indemnitee shall be entitled to be paid also the expense of prosecuting
or defending such claim. In any action brought by the indemnitee to
enforce a right to indemnification hereunder (other than an action
brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking, if any, has been tendered to the Company) or by the
Company to recover payments by the Company of expenses incurred by an
indemnitee in defending, in his or her capacity as a director or
officer, a proceeding in advance of its final disposition, the burden
of proving that the indemnitee is not entitled to be indemnified under
this Article Ninth or otherwise shall be on the Company. Neither the
failure of the Company (including the Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior
to the commencement of such action that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has
met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Company
(including the Board of Directors, independent legal counsel or its
stockholders) that the indemnitee has not met such applicable standard
of conduct, shall be a presumption that the indemnitee has not met the
applicable standard of conduct, or in the case of such an action
brought by the indemnitee, be a defense to the action.
III. The rights conferred on any person by paragraphs I and II
of this Article Ninth shall not be exclusive of any other right which
such person may have or hereafter acquire under any statute, this
certificate of incorporation by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
III. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Company or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or not
the Company would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
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V. Persons who are not included as indemnitees under
paragraph I of this Article Ninth but are employees of the Company or
any subsidiary may be indemnified to the extent authorized at any time
or from time to time by the Board of Directors.
Tenth: The Company reserves the right at any time and from
time to time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or inserted, in the manner
now or hereafter prescribed by law and this Certificate of Incorporation and all
rights, preference and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Article Tenth.
Eleventh:
I. Certain Restrictions on the Transfer of Stock.
In order to preserve the Tax Benefits, the restrictions set forth below
shall apply for the period beginning on the Article Eleventh Effective Date and
ending on the Expiration Date, unless the Board of Directors shall fix an
earlier or later date in accordance with Section VI of this Article Eleventh.
A. Definitions.
(1) Article Eleventh Effective Date. The time and date of the
legal effectiveness of the merger of the former Navistar International
Corporation with and into the Company.
(2) Control. The possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract, or otherwise. Such definition shall also apply to the terms
"controlling," "controlled by" and "under common control with."
(3) Effective Date Tier Entity. Any Person that, as of the
Article Eleventh Effective Date, was a First Tier Entity or a Higher
Tier Entity, for so long as such Person continues to have a Prohibited
Ownership Percentage.
(4) Expiration Date. The last day of the eight-year period
commencing on the Article Eleventh Effective Date.
(5) First Tier Entity. A "first tier entity" with respect to
the Company, as that term is used in Treasury Regulations Section
1.382-2T.
(6) 47 Percentage Point Increase. An increase of 47 percentage
points or more of the Stock owned by "5-percent shareholders" of the
Company (within the meaning of Treasury Regulations Section
1.382-2T(g)(1)) over the lowest percentage of Stock owned by such
5-percent shareholders at any time during the three-year period
preceding any determination date, such determination to be made in
accordance with Treasury Regulations Section 1.382-2T(c) as if the
determination date were a "testing date."
(7) Higher Tier Entity. An "higher tier entity" with respect
to the Company, as that tern is used in Treasury Regulations Section
1.382-2T.
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(8) Internal Revenue Code. The Internal Revenue Code of 1986,
as amended. Any reference to a particular Section or provision of the
Internal Revenue Code shall be deemed to also refer to any successor
Section or provision having similar effect.
(9) Ownership Change. An "ownership change" with respect to
the Company, as that term is used in Section 382(g) of the Internal
Revenue Code and Treasury Regulations Section 1.382-2T(a)(1), except
that for purposes of determining whether 5-percent shareholders have
increased their percentage interests by more than 50 percentage points,
there shall be added to the increase in their percentage interests an
amount equal to a fraction, the numerator of which is $50 million, and
the denominator of which is the value of all of the Stock. For example,
if the value of the Stock is $1,000,000,000 and the percentage increase
by 5-percent shareholders is 49.5% (i.e., the value of the Stock
representing the 49.5 percentage point increase is $495,000,000), for
purposes of determining whether there is an ownership change, there
shall be added to the 49.5 percentage points an increase of 0.5 percent
(i.e., $50,000,000/$1,000,000,000).
(10) Other Permitted Holders. Any Person, other than an
Effective Date Tier Entity or a Permitted Transferee, which has a
Prohibited Ownership Percentage permitted under Section I, whether
pursuant to a waiver under Paragraph D of Section I or otherwise.
(11) Permitted Transferee. Any transferee with a Prohibited
Ownership Percentage as to which the Board of Directors has consented
pursuant to Subparagraph C(2) or C(3) of Section I.
(12) Person. Any individual, corporation, estate, trust,
association, company, partnership, joint venture, or similar
organization, or any other entity described in Treasury Regulations
Section 1.382-3(a)(1)(i).
(13) Prohibited Ownership Percentage. Any ownership in the
Company that would cause a Person or Public Group to be a "5-percent
shareholder" of the Company within the meaning of Treasury Regulations
Section 1.382-2T(g)(1)(i) or (ii). For this purpose, whether a Person
or Public Group would be a "5-percent shareholder" shall be determined
(u) by substituting "4.5 percent" for "5 percent" each place it appears
in such provisions, (v) without giving effect to the following
provisions: Treasury Regulations Sections 1.382-2T(g)(2),
1.382-2T(g)(3), 1.382-2T(h)(2)(iii) and 1.382-2T(h)(6)(iii), (w) by
treating every Person or Public Group which owns Stock, whether
directly or by attribution, as directly owning such Stock
notwithstanding any further attribution of such Stock to other Persons
and notwithstanding Treasury Regulations Section 1.382-2T(h)(2)(i)(A),
(x) by substituting the term "Person" in place of "individual" in
Treasury Regulations Section 1.382-2T(g)(1)(i), (y) by taking into
account ownership of Stock at any time during the "testing period" as
defined in Treasury Regulations Section 1.382-2T(d)(1), and (z) by
treating each day during the testing period as if it were a "testing
date" as defined in Treasury Regulations Section 1.382-2T(a)(2)(i). In
addition, for the purpose of determining whether any Person or Public
Group has a Prohibited Ownership Percentage as of any date, the
definition of Stock set forth in Subparagraph A(15) of Section I shall
be applied in lieu of the definition in Treasury Regulations Section
1.382-2T(f)(18), except that any option shall be treated as Stock only
to the extent treating it as Stock would cause an increase in ownership
of such Person and such option would be deemed exercised pursuant to
Treasury Regulations in effect from time to time (disregarding whether
treating such option as exercised would cause an ownership change).
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(14) Public Group. A "public group" with respect to the
Company, as that term is used in Treasury Regulations Section
1.382-2T(f)(13), excluding any "direct public group" with respect to
the Company, as that term is used in Treasury Regulations Section
1.382-2T(j)(2)(ii).
(15) Stock. All classes of stock of the Company, all options
to acquire stock of the Company and all other interests that would be
treated as stock in the Company pursuant to Treasury Regulations
Section 1.382-2T(f)(18)(iii), other than (x) stock described in Section
1504(a)(4) of the Internal Revenue Code and (y) stock that would be
described in such Section 1504(a)(4) but is not so described solely
because it is entitled to vote as a result of dividend arrearages. As
used in Article Eleventh, the term "option" shall have the meaning set
forth in Treasury Regulations Section 1.3822(T)(h)(4).
(16) Tax Benefits. The net operating loss carryovers and
capital loss carryovers to which the Company is entitled under the
Internal Revenue Code, free of restrictions under Section 382 of the
Internal Revenue Code.
(17) Testing Date Action. Any Transfer or acquisition of Stock
or any other action (including the acquisition or issuance of an option
to Transfer or acquire Stock), if the effect of such Transfer,
acquisition or other action would be to cause a "testing date" with
respect to the Company within the meaning of Treasury Regulations
Section 1.382-2T(a)(2)(i), determined by treating every Person and
Public Group which has a Prohibited Ownership Percentage as a 5-percent
shareholder as used in such Section.
(18) Transfer. Any means of conveyance of legal or beneficial
ownership of Stock, whether such ownership is direct or indirect,
voluntary or involuntary, including, without limitation, an indirect
transfer of ownership through the transfer of any ownership interest of
any entity that owns Stock.
(19) Transferee Undertaking. A duly executed written
undertaking for the benefit of the Company by any transferee pursuant
to which the transferee agrees that (i) it will not take any of the
following actions without the prior consent of the Board of Directors:
(x) acquire any additional Stock, (y) Transfer any Stock in violation
of Paragraph B of Section I, or (z) take or cause to be taken any
Testing Date Action, (ii) upon request by the Company, it will furnish
or cause to be furnished to the Company all certificates representing
Stock held of record or beneficially, directly or indirectly, by it or
by any Person controlling, controlled by or under common control with
it for the purpose of placing a legend on such certificates to reflect
the undertakings described in clause (i) above, (iii) it acknowledges
that stop transfer orders may be entered with the transfer agent (or
agents) and the registrar (or registrars) of Stock against the transfer
of Stock subject to the undertakings described in clause (i) above
except in compliance with the requirements of such undertakings, and
(iv) it will agree to such other actions and remedies as the Company
may reasonably request in order to preserve the Tax Benefits.
(20) Treasury Regulations. The regulations promulgated by the
Secretary of the Treasury under the Internal Revenue Code. Any
reference to a particular Treasury Regulation or Section or provision
thereof shall be deemed to also refer to any successor Regulation or
Section or provision having similar effect.
B. Transfer Restrictions.
Unless otherwise consented to or waived by the Board of Directors, the
following Transfers and actions shall be prohibited:
(1) General. No Person shall Transfer any Stock to any other
Person to the extent that such Transfer, if effected, (i) would cause
the transferee or any Person or Public Group to have a Prohibited
Ownership Percentage, or (ii) would increase the ownership percentage
of any transferee or any Person or Public Group having a Prohibited
Ownership Percentage.
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(2) Additional Restrictions on Transform Involving Effective
Date Tier Entities. In addition to the restrictions under Subparagraph
B(i), (i) no Effective Date Tier Entity shall Transfer any Stock, and
no other Person shall Transfer any Stock to an Effective Date Tier
Entity if, in either case, after such Transfer, there would be a 47
Percentage Point Increase, and (ii) no Effective Date Tier Entity shall
take any other action (including the acquisition or issuance of an
option to Transfer or acquire Stock) if, after such action, there would
be a 47 Percentage Point Increase.
(3) Additional Restrictions on Transfers Involving Other
Permitted Holders. In addition to the restrictions under Subparagraph
B(i), (i) no other Permitted Holder shall Transfer any Stock, and no
other Person shall Transfer any Stock to an Other Permitted Holder, if,
in either case, such Transfer would constitute a Testing Date Action,
and (ii) no Other Permitted Holder shall take any other action that
would constitute a Testing Date Action.
(4) Additional Restrictions under Transferee Undertakings. In
addition to the restrictions under Subparagraph B(l), (i) no Person who
has delivered a Transferee Undertaking shall Transfer any Stock, and no
Person shall Transfer any Stock to any Person who has delivered a
Transferee Undertaking, if, in either case, such Transfer would result
in a violation of such Transferee Undertaking, and (ii) no Person who
has delivered a Transferee Undertaking shall take or cause to be taken
any other action that would constitute a Testing Date Action.
(5) Exception. Notwithstanding anything herein to the
contrary, the transfer restrictions set forth in this Paragraph B shall
not apply to any shares of Series D Stock of the Company which were
issued and outstanding on the Article Eleventh Effective Date.
C. Permitted Transfers.
(1) General. Unless otherwise restricted under Paragraph B of
Section I or under a Transferee Undertaking or other agreement,
Transfers of Stock may be made without the consent of the Board of
Directors.
(2) Transfers by Effective Date Tier Entities. Upon petition
by any Effective Date Tier Entity, the Board of Directors shall consent
to a proposed Transfer of Stock that complies with Subparagraph B(2) of
Section I but would otherwise be prohibited pursuant to Subparagraph
B(l) of Section I if it determines that (i) after giving effect to such
Transfer, the percentage of Stock owned by all Persons and Public
Groups with a Prohibited Ownership Percentage will not have increased
by more than 40 percentage points over the lowest percentage of Stock
owned by such Persons and Public Groups at any time during the
three-year period preceding the proposed date of such Transfer (such
determination to be made in accordance with the provisions of Treasury
Regulations Section 1.382-2T(c)) and (ii) the proposed transferee shall
have delivered a Transferee Undertaking.
(3) Transfers by Permitted Transferees. Upon petition by any
Permitted Transferee, the Board of Directors shall consent to a
proposed Transfer of Stock or Testing Date Action that would otherwise
be prohibited pursuant to Subparagraph B(i) or B(4) of Section I or
pursuant to any Transferee undertaking if it determines that (i) after
such proposed Transfer or Testing Date Action there would not be an
Ownership Change and (ii) in the case of any such proposed Transfer
that, if effected, would otherwise be prohibited under Subparagraph
B(1) of Section I, such Transfer would otherwise be permitted under
Subparagraph C(2) if such Transfer were proposed to be made by an
Effective Date Tier Entity.
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(4) Certain Additional Transfers to Permitted Transferees.
Upon petition by any Permitted Transferee, the Board of Directors shall
consent to a proposed Transfer of additional Stock to such Permitted
Transferee from a Person constituting an Effective Date Tier Entity or
another Permitted Transferee if it determines that such proposed
Transfer would otherwise be permitted under Subparagraph C(2) or C(3)
of Section I, as the case may be.
(5) Transfers by Other Permitted Holders. Upon petition by any
other Permitted Holder, the Board of Directors shall consent to a
proposed Transfer of Stock or Testing Date Action that would otherwise
be prohibited pursuant to Subparagraph B(1), B(3) or B(4) of Section I
or pursuant to any Transferee Undertaking if it determines that (i)
after such proposed Transfer or Testing Date Action there would not be
an Ownership Change and (ii) in the case of any such proposed Transfer
that, if effected, would otherwise be prohibited under Subparagraph
(B)(1) of Section I, such Transfer would not cause a 47 Percentage
Point Increase and the proposed transferee shall have delivered a
Transferee Undertaking.
D. Waivers. Notwithstanding anything herein to the contrary, the Board
of Directors may waive any of the restrictions contained in
Paragraph B of Section I of this Article Eleventh: (1) in the case of
any issuance of Stock by the Company which would otherwise be
prohibited under Subparagraph B(1) of Section I, if the transferee
agrees to be bound to the restrictions applicable to Permitted
Transferees; (2) in the event of a tender or exchange offer within
the meaning of the Securities Exchange Act of 1934, as amended, to
acquire Stock constituting more than fifty percent in value of the
outstanding Common Stock of the Company, so long as such waiver shall
apply to all Transfers pursuant to such tender or exchange offer; (3)
in connection with any Transfers of Stock in connection with
underwritten offerings of such Stock; (4) in connection with any
investment in or acquisition of a business or any business combination
involving the Company or any subsidiary of the Company; and (5) in any
other instance in which the Board of Directors reasonably and in good
faith determines that a waiver would be in the best interests of the
Company.
II. Attempted Transfer in Violation of Transfer Restrictions.
Unless the consent or waiver of the Board of Directors is obtained as
provided in Paragraph C or D of Section I, and except as provided in Paragraph C
of Section II below, any attempted Transfer of shares of Stock of the Company in
excess of the shares that could be Transferred to the transferee without
restriction under Paragraph B of Section I is not effective to transfer
ownership of such excess shares (the "Prohibited Shares") to the purported
acquiror thereof (the "Purported Acquiror"), and the Purported Acquiror shall
not be entitled to any rights as a shareholder of the Company with respect to
the Prohibited Shares, including, without limitation, the right to vote or to
receive dividends with respect thereto. Nothing contained in this Article
Eleventh shall preclude the settlement of any transaction involving Stock
entered into through the facilities of the New York Stock Exchange or any other
national securities exchange. The application of the provisions and remedies
described in the first sentence of this Section II and in Paragraphs A, B and C
of Section II below shall be deemed not to so preclude any such settlement.
Paragraphs A, B and C below shall apply only in the case of violations of the
restrictions contained in Subparagraph B(1) of Section I.
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A. Transfer of Certificates; Sale of Stock. Upon demand by the Company,
the Purported Acquiror shall transfer any certificate or other evidence of
purported ownership of the Prohibited Shares within the Purported Acquiror's
possession or control, together with any dividends or other distributions paid
by the Company with respect to the Prohibited Shares that were received by the
Purported Acquiror (the "Prohibited Distributions"), to an agent to be
designated by the Company (the "Agent"). If the Purported Acquiror has sold the
Prohibited Shares to an unrelated party in an arms-length transaction after
purportedly acquiring them, the Purported Acquiror shall be deemed to have sold
the Prohibited Shares for the Agent, and in lieu of transferring the Prohibited
Shares and Prohibited Distributions to the Agent shall transfer to the Agent the
Prohibited Distributions and the proceeds of such sale (the "Resale Proceeds")
except to the extent that the Agent grants written permission to the Purported
Acquiror to retain a portion of the Resale Proceeds not exceeding the amount
that would have been payable by the Agent to the Purported Acquiror pursuant to
Paragraph B of Section II if the Prohibited Shares had been sold by the Agent
rather than by the Purported Acquiror. Any purported Transfer of the Prohibited
Shares by the Purported Acquiror, other than a transfer described in one of the
two preceding sentences (unless such transfer itself violated the provisions of
Article Eleventh), shall not be effective to transfer any ownership of the
Prohibited Shares.
B. Allocation and Distribution of Proceeds. The Agent shall sell in an
arms-length transaction (through the New York Stock Exchange, if possible) any
Prohibited Shares transferred to the Agent by the purported Acquiror, and the
proceeds of such sale (the "Sales Proceeds"), or the Resale Proceeds, if
applicable, shall be allocated to the Purported Acquiror up to the following
amount: (1) where applicable, the purported purchase price paid or value of
consideration surrendered by the Purported Acquiror for the Prohibited Shares
and (2) where the purported Transfer of the Prohibited Shares to the Purported
Acquiror was by gift, inheritance, or any similar purported transfer, the fair
market value of the Prohibited Shares at the time of such purported Transfer.
Any Resale Proceeds or Sales Proceeds in excess of the amount allocable to the
Purported Acquiror pursuant to the preceding sentence, together with any
Prohibited Distributions (such excess amount and Prohibited Distributions are
collectively the "Subject Amounts"), shall be transferred to an entity
designated by the Company that is described in Section 501(c)(3) of the Internal
Revenue Code (the "Designated Charity"). In no event shall any such Prohibited
Shares or Subject Amounts inure to the benefit of the Company or the Agent, but
such Subject Amounts may be used to cover expenses incurred by the Agent in
performing its duties.
C. Limitation on Enforceability. Notwithstanding anything herein to the
contrary, with respect to any Transfer of Stock which would cause a Person or
Public Group (the "Prohibited Party") to violate a restriction provided for in
Subparagraph B(1) of Section I only on account of the attribution to the
Prohibited Party of the ownership of Stock by a Person or Public Group which is
not controlling, controlled by or under common control with the Prohibited
Party, which ownership is nevertheless attributed to the Prohibited Party,
Subparagraph B(1) of Section I shall not apply in a manner that would invalidate
such Transfer. In such case, the Prohibited Party and any Persons controlling,
controlled by or under common control with the Prohibited Party (collectively,
the "Prohibited Party Group") shall automatically be deemed to have disposed of,
and shall be required to dispose of, sufficient shares of Stock (which shares
shall consist only of shares held legally or beneficially, whether directly or
indirectly, by any member of the Prohibited Party Group, but not shares held
through another Person, other than shares held through a Person acting as agent
or fiduciary for any member of the Prohibited Party Group, and which shares
shall be disposed of in the inverse order in which they were acquired by members
of the Prohibited Party Group) to cause the Prohibited Party, following such
disposition, not to be in violation of Subparagraph B(1) of Section I; provided
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that in the event no member of the Prohibited Party Group (i) is an Effective
Date Tier Entity, Permitted Transferee or Other Permitted Holder and (ii) had
any actual knowledge that such Transfer was prohibited under Subparagraph B(1)
of Section I, such disposition shall only be effected to the extent necessary in
order to prevent an Ownership Change. Such disposition shall be deemed to occur
simultaneously with the Transfer giving rise to the application of this
provision, and such number of shares which are deemed to be disposed of shall be
considered Prohibited Shares and shall be disposed of through the Agent as
provided in Paragraph B of Section II, except that the maximum amount payable to
the Prohibited Party in connection with such sale shall be the fair market value
of the Prohibited Shares at the time of the Prohibited Transfer.
D. Other Remedies. In the event that the Board of Directors determines
that a Person proposes to take any action in violation of Paragraph B of Section
I, or in the event that the Board of Directors determines after the fact that an
action has been taken in violation of Paragraph B of Section I, the Board of
Directors, subject to the second and third sentences of the introductory
paragraph of Section II, may take such action as it deems advisable to prevent
or to refuse to give effect to any Transfer or other action which would result,
or has resulted, in such violation, including, but not limited to, refusing to
give effect to such Transfer or other action on the books of the Company or
instituting proceedings to enjoin such Transfer or other action. If any Person
shall knowingly violate Paragraph B of Section I, then that Person and all other
Persons controlling, controlled by or under common control with such Person
shall be jointly and severally liable for, and shall pay to the Company, such
amount as will, after taking account of all taxes imposed with respect to the
receipt or accrual of such amount and all costs incurred by the Company as a
result of such loss, put the Company in the same financial position as it would
have been in had such violation not occurred.
III. Prompt Enforcement Against Purported Acquiror.
Within 30 business days of learning of a purported Transfer of
Prohibited Shares to a Purported Acquiror or a Transfer of Stock to a Prohibited
Party, the Company through its Secretary or any Assistant Secretary shall demand
that the Purported Acquiror or Prohibited Party surrender to the Agent the
certificates representing the Prohibited Shares, or any Resale Proceeds, and any
Prohibited Distributions, and if such surrender is not made by the Purported
Acquiror or Prohibited Party within 30 business days from the date of such
demand, the Company shall institute legal proceedings to compel such surrender;
provided, however, that nothing in this Section III shall preclude the Company
in its discretion from immediately bringing legal proceedings without a prior
demand, and also provided that failure of the Company to act within the time
periods set out in this Section III shall not constitute a waiver of any right
of the Company to compel any transfer required by Section II. Upon a
determination by the Board of Directors that there has been or is threatened a
purported Transfer of Prohibited Shares to a Purported Acquiror or a Transfer of
Stock to a Prohibited Party or any other violation of Paragraph B of Section I,
the Board of Directors may authorize such additional action as it deems
advisable to give effect to the provisions of this Article Eleventh, including,
without limitation, refusing to give effect on the books of the Company to any
such purported Transfer or instituting proceedings to enjoin any such purported
Transfer.
IV. Obligation to Provide Information.
The Company may require as a condition to the registration of the
Transfer of any Stock that the proposed transferee furnish to the Company all
information reasonably requested by the Company with respect to all the direct
or indirect ownership of Stock by the proposed transferee and by Persons
controlling, controlled by or under common control with the proposed transferee.
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V. Legends.
All certificates evidencing Stock that is subject to the restrictions
on transfer set forth in this Article Eleventh shall bear a conspicuous legend
referencing such restrictions.
VI. Further Actions.
Subject to the second and third sentences of the introductory paragraph
of Section II, nothing contained in this Article Eleventh shall limit the
authority of the Board of Directors to take such other action to the extent
permitted by law as it deems necessary or advisable to protect the Company and
the interests of the holders of its securities in preserving the Tax Benefits.
Without limiting the generality of the foregoing, in the event of a change in
law (including applicable regulations) making one or more of the following
actions necessary, in the case of actions described in clauses (B), (C) and (D)
below, or desirable, in the case of actions described in clause (A) below, the
Board of Directors may (A) accelerate the Expiration Date, (B) extend the
Expiration Date, (C) conform any terms or numbers set forth in the transfer
restrictions in Section I to make such terms consistent with the Internal
Revenue Code and the Treasury Regulations following any changes therein to the
extent necessary to preserve the Tax Benefits, or (D) conform the definitions of
any terms set forth in this Article Eleventh to the definitions in effect
following such change in law; provided that the Board of Directors shall
determine in writing that such acceleration, extension, change or modification
is reasonably necessary to preserve the Tax Benefits or that the continuation of
these restrictions is no longer reasonably necessary for the preservation of the
Tax Benefits, which determination shall be based upon an opinion of legal
counsel to the Company and which determination shall be filed with the Secretary
of the Company and mailed by the Secretary to all stockholders of the Company
within ten days after the date of any such determination.
VII. Severability.
If any provision of this Article Eleventh or the application of any
such provision to any Person or under any circumstance shall be held invalid,
illegal, or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Article Eleventh.
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