=================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Preliminary Proxy Statement
Reading & Bates Corporation
(Name of Registrant as Specified In Its Charter)
$125 per Exchange Act Rules 14a-6(i)(2)
(Payment of Filing Fee)
=================================================================
READING & BATES CORPORATION
901 Threadneedle, Suite 200
Houston, Texas 77079
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 1994
The Annual Meeting of Stockholders of Reading & Bates
Corporation, a Delaware corporation (the "Company"), will be
held in the Colonade Room, Omni Houston Hotel, Four Riverway,
Houston, Texas 77056, on Tuesday, May 10, 1994 at 11:00 a.m.,
for the following purposes:
(1) To elect three Class III directors for terms
expiring in 1997;
(2) To act upon a proposal to amend the Company's
Restated Certificate of Incorporation, as heretofore amended
and supplemented (the "Charter"), so as to reclassify each
share of the Company's outstanding Class A (Cumulative
Convertible) Capital Stock (the "Class A Stock") into 10
shares of the Company's Common Stock, $.05 par value (the
"Common Stock"), and to delete all references to such Class A
Stock therefrom;
(3) To act upon a proposal to amend the Charter to
update and simplify Article THIRD thereof, to delete Articles
FIFTH through EIGHTH thereof, to delete all references to the
Company's Non-Voting Convertible Class B Common Stock
therefrom and to restate the Charter in its entirety;
(4) To act upon a proposal to ratify and approve the
reappointment of Arthur Andersen & Co. as independent public
accountants for the Company for its fiscal year 1994; and
(5) To transact such other business as may properly
be brought before the meeting or any postponement or
adjournment thereof.
Only holders of record of the Common Stock and Class
A Stock at the close of business on April 8, 1994 are entitled
to notice of and to vote at the meeting, or any postponement
or adjournment thereof.
Please mark, sign, date and return the enclosed
proxy card promptly, whether or not you expect to attend the
meeting. A return envelope is enclosed for your convenience
and requires no postage for mailing in the United States.
By Order of the Board of Directors
Houston, Texas Wayne K. Hillin
April [ ], 1994 Secretary
PLEASE MARK, SIGN AND DATE
THE ENCLOSED PROXY CARD AND MAIL IT AT
YOUR EARLIEST CONVENIENCE
=================================================================
READING & BATES CORPORATION
901 Threadneedle, Suite 200
Houston, Texas 77079
PROXY STATEMENT
Annual Meeting of Stockholders
May 10, 1994
The enclosed form of proxy is solicited by the Board of
Directors of Reading & Bates Corporation (the "Company") for
use at the Annual Meeting of Stockholders to be held on
Tuesday, May 10, 1994 at 11:00 a.m. in the Colonade Room, Omni
Houston Hotel, Four Riverway, Houston, Texas. This Proxy
Statement and form of Proxy are being mailed to stockholders
on or about April [ ], 1994.
At the Annual Meeting, stockholders will be asked to
elect three Class III directors for terms expiring in 1997 and
to consider and vote upon the following proposals
(collectively, the "Proposals"):
(i) a proposal to amend the Company's Restated Certificate
of Incorporation, as heretofore amended and
supplemented (the "Charter") so as to reclassify each
outstanding share of the Company's Class A (Cumulative
Convertible) Capital Stock (the "Class A Stock") into
10 shares of the Company's Common Stock, $.05 par value
(the "Common Stock"), and to delete all references to
such Class A Stock therefrom (the "Reclassification
Proposal");
(ii) a proposal to amend the Charter to update and simplify
Article THIRD thereof, to delete Articles FIFTH through
EIGHTH thereof, to delete all references to the
Company's Non-Voting Convertible Class B Common Stock
(the "Class B Stock") therefrom and to restate the
Charter in its entirety (the "Charter Amendment"); and
(iii) a proposal to ratify and approve the reappointment of
Arthur Andersen & Co. as independent public accountants
for the Company for its fiscal year 1994 (the "Auditors
Proposal").
__________________
The Board of Directors of the Company believes that
election of its director nominees and approval of each of the
Proposals is advisable and in the best interests of the
Company and its stockholders and recommends to the
stockholders of the Company the approval of each of the
nominees and the Proposals.
____________________
The date of this Proxy Statement is April [ ], 1994.
=================================================================
TABLE OF CONTENTS
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . .
VOTING . . . . . . . . . . . . . . . . . . . . . . . . .
Vote Required . . . . . . . . . . . . . . . . . . .
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP . . . . .
Principal Stockholders . . . . . . . . . . . . . . .
Class A Stock . . . . . . . . . . . . . . . . .
Preferred Stock . . . . . . . . . . . . . . . .
Common Stock . . . . . . . . . . . . . . . . .
Management Ownership . . . . . . . . . . . . . . . .
Common Stock and Preferred Stock . . . . . . .
ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . .
CLASS III DIRECTOR NOMINEES - TERMS EXPIRING IN 1997
CLASS II CONTINUING DIRECTORS - TERMS EXPIRING IN
1996 . . . . . . . . . . . . . . . . . . . . .
CLASS I CONTINUING DIRECTORS - TERMS EXPIRING IN
1995 . . . . . . . . . . . . . . . . . . . . .
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD . . . . .
The Audit Committee . . . . . . . . . . . . . . . .
The Compensation Committee . . . . . . . . . . . . .
The Executive Committee . . . . . . . . . . . . . .
The Pension (ERISA) Committee . . . . . . . . . . .
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS . . . .
Compensation Committee Report on Executive Compensation
Compensation Philosophy and Overall Objectives of
Executive Compensation Programs . . . . . .
Chief Executive Officer's Compensation and Corporate
Performance for Fiscal Year 1993 . . . .
Summary . . . . . . . . . . . . . . . . . . . .
Section 162(m) of the Internal Revenue Code . .
Compensation Committee Report on Repricing of Options
Ten Year Option Repricings . . . . . . . . . .
Compensation Committee Interlocks and
Insider Participation . . . . . . . . . . . . .
Summary Compensation Table . . . . . . . . . . . . .
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values . . . . . . . . .
Performance Graph . . . . . . . . . . . . . . . . .
Pension Plan Table . . . . . . . . . . . . . . . . .
Director Compensation . . . . . . . . . . . . . . .
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements . . . . . . . .
Mr. Angel . . . . . . . . . . . . . . . . . . .
Officer Agreements . . . . . . . . . . . . . .
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT . . . .
THE RECLASSIFICATION PROPOSAL . . . . . . . . . . . . . .
Purposes and Effects of the Reclassification
Proposal . . . . . . . . . . . . . . . . . . .
Description of Common Stock . . . . . . . . . . . .
Description of Class A Stock . . . . . . . . . . . .
Board Recommendation . . . . . . . . . . . . . . . .
THE CHARTER AMENDMENT . . . . . . . . . . . . . . . . . .
Purposes and Effects of the Charter Amendment . . .
Board Recommendation . . . . . . . . . . . . . . . .
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS . . . . . .
Board Recommendation . . . . . . . . . . . . . . . .
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . .
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING . . . . .
=================================================================
THE COMPANY
Reading & Bates Corporation is a Delaware corporation
engaged in the business of offshore contract oil drilling and
providing technical construction and project management services
to the upstream offshore oil and gas industry worldwide, with
principal executive offices located at 901 Threadneedle, Suite
200, Houston, Texas 77079, telephone (713) 496-5000.
VOTING
Shares represented by duly executed and unrevoked proxies in
the enclosed form received by the Board of Directors will be
voted at the Annual Meeting in accordance with the specifications
made therein by the stockholders, unless authority to do so is
withheld. If no specification is made, shares represented by
duly executed and unrevoked proxies in the enclosed form will be
voted for the election as directors of the nominees listed
herein, for each of the Proposals, and with respect to any other
matter that may properly come before the meeting, in the
discretion of the persons voting the respective proxies. Any
stockholder giving a proxy may revoke it at any time before it is
voted by filing with the Secretary of the Company an instrument
revoking it, by executing and returning a proxy bearing a later
date or by voting in person at the meeting. The Company has
employed Georgeson & Co., New York, New York, to assist in the
solicitation of proxies for a fee expected to be approximately
$10,000, plus reasonable expenses. In connection with its
engagement of such firm, the Company has also agreed to indemnify
Georgeson & Co. against certain liabilities arising from its
engagement by the Company. The cost of this solicitation will be
borne by the Company. Solicitation is being made by the use of
the mails, but may also be made by telephone, electronic
transmission and personal interviews.
Only holders of record of the Common Stock and Class A Stock
at the close of business on April 8, 1994 (the "Record Date")
will be entitled to vote at the Annual Meeting. On the Record
Date, there were outstanding 55,488,588 shares of Common Stock
and 60 shares of Class A Stock.
Each share of Common Stock is entitled to one vote, and each
share of Class A Stock is entitled to four votes. Each holder of
Class A Stock has cumulative voting rights in the election of
directors so that such holder has four votes per share multiplied
by the number of directors to be elected and may cast all such
votes for a single nominee or distribute them among as many
nominees as such holder may see fit.
Vote Required
The election of the director nominees requires a plurality
of the votes cast in respect of shares of Common Stock and Class
A Stock that are present in person or represented by proxy at the
Annual Meeting, voting together as a class (with the Common Stock
having one vote per share per nominee, and with the Class A Stock
having cumulative voting rights consisting of four votes per
share multiplied by the number of nominees which votes may be
cast all for a single nominee or distributed among the nominees
at the holder's discretion). Under Delaware law and the
Company's Charter and By-laws, shares as to which a stockholder
withholds authority to vote on the election of directors, and
shares as to which a broker indicates that it does not have
discretionary authority to vote ("broker non-votes") on the
election of directors, will not be counted as voting thereon and
therefore will not affect the election of the nominees receiving
a plurality of the votes cast.
The approval of the Reclassification Proposal requires the
affirmative vote of the holders of a majority in voting power of
the outstanding shares of Common Stock and Class A Stock voting
together as a class (with the Common Stock having one vote per
share and the Class A Stock having four votes per share) and the
affirmative vote of the holders of 66 2/3% of the outstanding
shares of Class A Stock, voting separately as a class (with the
Class A Stock having one vote per share). Under Delaware law and
the Charter and By-laws, abstentions and broker non-votes on the
Reclassification Proposal have the same legal effect on the
outcome of the vote as a vote "against" such Reclassification
Proposal, even though the stockholder or interested parties
analyzing the results of the voting may interpret such a vote
differently.
The approval of the Charter Amendment requires the
affirmative vote of the holders of a majority in voting power of
the outstanding shares of Common Stock and Class A Stock voting
together as a class (with the Common Stock having one vote per
share and the Class A Stock having four votes per share). Under
Delaware law and the Charter and By-laws, abstentions and broker
non-votes on the Charter Amendment have the same legal effect on
the outcome of the vote as a vote "against" such Charter
Amendment, even though the stockholder or interested parties
analyzing the results of the voting may interpret such a vote
differently.
The stockholders of the Company have no dissenters' or
appraisal rights in connection with the Proposals.
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
Principal Stockholders
The table below sets forth certain information as to those
persons known to the Company to be beneficial owners (as
determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of more
than 5% of the outstanding Common Stock. The percentage
ownership figures set forth in the table are calculated on the
basis of the number of shares of Common Stock outstanding as of
the Record Date. Unless otherwise indicated, the entities named
are believed to have sole voting and investment power with
respect to the shares listed.
Class A Stock
Substantially all of the original shares of the Company's
Class A Stock have been converted to Common Stock. All
cumulative dividends payable on the Class A Stock have been
declared and paid by the Company through the first quarter of
1994. On the Record Date, there remained outstanding 60 shares of
Class A Stock convertible in the aggregate into 81 shares of
Common Stock. The record holders of the Class A Stock are James
K. Boak and Robert J. Richmond, holding 50 and 10 shares,
respectively. See "THE RECLASSIFICATION PROPOSAL".
Preferred Stock
There are currently outstanding 2,990,000 shares of $1.625
Convertible Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), issued in a public offering in July 1993.
The Preferred Stock is convertible at the option of the holder at
any time into shares of the Company's Common Stock at a
conversion rate of 2.899 shares of Common Stock for each share of
Preferred Stock (equivalent to a conversion price of $8.625 per
share of Common Stock), subject to adjustment in certain events.
Annual dividends are $1.625 per share and are cumulative and are
payable quarterly commencing September 30, 1993. All cumulative
dividends payable on the Preferred Stock have been declared and
paid by the Company through the first quarter of 1994. The
Preferred Stock is redeemable at any time on and after September
30, 1996, at the option of the Company, in whole or in part, at a
redemption price of $26.1375 per share, and thereafter at prices
decreasing ratably annually to $25.00 per share on and after
September 30, 2003, plus accrued and unpaid dividends. The
holders of the Preferred Stock do not have any voting rights,
except as required by applicable law, and except that, among
other things, whenever accrued and unpaid dividends on the
Preferred Stock are equal to or exceed the equivalent of six
quarterly dividends payable on the Preferred Stock, the holders
of the Preferred Stock will be entitled to elect two directors to
the Board until the dividend arrearage has been paid in full.
The term of office of all directors so elected will terminate
immediately upon such payment. The Preferred Stock has a
liquidation preference of $25.00 per share, plus accrued and
unpaid dividends.
Common Stock
<TABLE>
<CAPTION
Amount and Nature
Name and Address of of Beneficial
Beneficial Owner Owner Percent of Class
- ---------------------------- ----------------- ----------------
<S> <C> <C>
BCL Investment Partners, L.P., 19,911,567<F1> 35.9%
3 Riverway, Suite 2010, Houston,
Texas 77056; Life Line Investments
Ltd., 80 Broad Street, Monrovia,
Liberia; Dedicated Holdings Ltd.,
80 Broad Street, Monrovia, Liberia;
Financial Investments Ltd., 80 Broad
Street, Monrovia, Liberia; Greenwing
Investments, Inc., 3 Riverway, Suite
2010, Houston, Texas 77056; N&M
Holdings N.V., Kaya Flamboyan 9, P.O.
Box 3895, Willemstad, Curacao,
Netherlands Antilles; Workships
Intermediaries N.V., Anthony Veder
Building, Erieweg, Willemstad
Curacao, Netherlands Antilles;
RBY, Ltd., 222 Delaware Avenue,
Wilmington, Delaware 19801;
Mr. Paul B. Loyd, Jr., 3 Riverway,
Suite 2010, Houston, Texas 77056;
Dr. Willem Cordia, Kasteel Withof,
Bredabaan 906, B-2930 Brasschaat,
Belgium; and Dr. Macko Laqueur,
Keizersgracht 565-567, 1017 DR
Amsterdam, The Netherlands
R&B Investment Partnership, 3,923,390<F2> 7.1%
L.P., R&B Investment Partnership
II, L.P. and Whitman Heffernan &
Rhein Workout Fund, L.P. by WHR
Management Company, L.P., as
general partner, 2 Park Place,
Bronxville, New York 10708; and
C. Kirk Rhein, Jr., Martin J.
Whitman, and James P. Heffernan,
c/o Whitman Heffernan Rhein &
Co., Inc., 767 Third Avenue, New
York, New York 10017
FMR Corp., 82 Devonshire 5,919,456<F3> 10.7%
Street, Boston Massachusetts
02109; Edward C. Johnson 3d, 82
Devonshire Street, Boston,
Massachusetts 02109; Fidelity
Management & Research Company,
82 Devonshire Street, Boston,
Massachusetts 02109 and Fidelity
Management Trust Company, 82
Devonshire Street, Boston,
Massachusetts 02109
<FN>
<F1> Based upon information contained in a Schedule 13D, as amended as
of May 5, 1993, filed by BCL Investment Partnership, L.P. ("BCL")
and the other reporting persons named therein and listed above,
and upon certain other information available to the Company.
BCL, a limited partnership, is the beneficial owner of 19,911,567
shares of Common Stock, including 36,250 shares held directly,
18,782,070 shares distributed by BCL to its partners (of which
300,000 were subsequently sold) and 1,393,247 shares held by N&M
Holding, N.V., a Netherlands Antilles corporation and an
indirect, wholly-owned subsidiary of ING Bank ("N&M"), as further
described below. The Schedule 13D states that under BCL's
partnership agreement, there are five general partners of BCL:
Serife Investments, N.V., a Netherlands Antilles corporation
("Serife"), Life Line Investments Ltd., a Liberian corporation
("LLI"), Dedicated Holdings Ltd., a Liberian corporation ("DHL"),
Financial Investments Ltd., a Liberian corporation ("FIL"), and
Greenwing Investments, Inc., a Delaware corporation
("Greenwing"). There is one limited partner of BCL: RBY, Ltd., a
Delaware limited partnership ("RBY") (see footnote (3) to the
table under "Management Ownership" below). The 18,782,070 shares
distributed by BCL (other than the 300,000 shares which were
subsequently sold) are held as follows: 2,099,180 shares are
held by DHL, 1,464,544 shares are held by FIL, 73,227 shares are
held by Forreal Ltd. ("Forreal"), 1,327,271 shares are held by
Greenwing, 1,610,999 shares are held by Incomare Holdings, Inc.
("Incomare"), 3,758,996 shares are held by LLI, 5,054,607 shares
are held by N&M, 2,509,359 shares are held by RBY, 146,454 shares
are held by Torarica N.V. ("Torarica"), and 1,830,680 shares are
held by Workships Intermediaries, N.V. ("Workships"). BCL,
Serife, LLI, DHL, FIL, Greenwing, RBY, N&M, Incomare, Torarica,
Forreal and Workships have entered into a stockholders agreement
pursuant to which the shares held by each of them will be voted
in such manner as BCL shall determine, and each has granted an
irrevocable proxy (each, an "Irrevocable Proxy") to BCL. In
addition, under certain conditions set forth in such stockholder
agreement, Serife has a right of first refusal (the "Refusal
Rights") should LLI, DHL and FIL propose to transfer any of their
Common Stock holdings to any person other than one of themselves.
Based upon the Schedule 13D and other information available to
the Company, the Company believes that BCL is ultimately
controlled by N&M, Dr. Cordia and Dr. Laqueur, through their
control of Workships, Den norske Bank AS ("DnB"), through its
control of LLI, DHL and FIL (as described below), and by Paul B.
Loyd, Jr., the Company's chairman, president and chief executive
officer, through his control of Greenwing. In addition, the
Schedule 13D indicates that BCL is party to an agreement with N&M
pursuant to which (i) N&M has agreed that if N&M receives and
wishes to accept an offer from a third party to buy any portion
of the 1,393,247 shares acquired by N&M from The Chase Manhattan
Bank, N.A. on March 30, 1993 (together with any securities
distributed by the Company with respect thereto and any Company
securities into which such shares may be converted, the "Subject
Shares"), it will first make an offer to sell such Subject Shares
to BCL upon the same terms and conditions applicable to such
third-party offer, (ii) BCL has agreed that if BCL receives and
accepts an offer from a third party to buy any portion of the
Common Stock owned by BCL, N&M will be entitled to participate in
the sale by selling to BCL the same percentage of Subject Shares
as the number of shares of Common Stock sold in such transaction
bears to the total number of shares of Common Stock owned by BCL
at the same per share price applicable to the transaction with
the third party, (iii) N&M has agreed that if N&M sells to a
third party any portion of the Subject Shares, N&M will pay BCL a
specified profit share percentage depending upon the per share
price of the Common Stock on the day such sale is completed and
(iv) N&M has agreed to vote the Subject Shares in accordance with
the instructions of BCL, unless such instructions are against
N&M's manifest interest. The Schedule 13D also indicates that
DHL, LLI and FIL have each entered into agreements pledging all
of their respective holdings of Common Stock to DnB, which holds
an indirect 10% interest in DHL, and Workships and Greenwing have
each entered into agreements pledging all of their respective
holdings of Common Stock to ING Bank. DnB has filed a Schedule
13D dated July 30, 1993 and an amendment thereto dated October 8,
1993, stating that due to certain defaults on loans secured by
the pledges of Common Stock by DHL, LLI and FIL and on loans to
the parents of each of such entities secured by pledges of
capital stock of DHL, LLI and FIL, DnB may be considered to be
the beneficial owner of 7,322,720 shares of Common Stock, which
beneficial ownership is disclaimed. As a result of such
defaults, DnB has taken effective control over DHL, LLI and FIL
by replacing the directors and officers thereof with persons
designated by DnB. In the event DnB forecloses upon all or any
of the Common Stock owned by DHL, LLI and FIL, the Irrevocable
Proxies and Refusal Rights granted by DHL, LLI and FIL with
respect to such foreclosed upon Common Stock will automatically
terminate and, as a result thereof, the number (and percentage)
of outstanding shares of Common Stock controlled by BCL would be
reduced.
<F2> Based upon information contained in a Schedule 13D, as amended as
of February 11, 1994, as filed by WHR Management Company, L.P.
("WHR"), as general partner of R&B Investment Partnership, L.P.
("RBIP I"), R&B Investment Partnership II, L.P. ("RBIP II") and
Whitman Heffernan & Rhein Workout Fund, L.P. ("Workout") and upon
certain other information available to the Company. Martin J.
Whitman, James P. Heffernan and C. Kirk Rhein, Jr. are general
partners of WHR. Each of Messrs. Whitman, Heffernan and Rhein
disclaims beneficial ownership of the Common Stock held by RBIP
I, RBIP II and Workout. WHR, RBIP I, RBIP II and Workout
directly own 127,211 shares, 178,668 shares, 130,215 shares and
3,487,296 shares of Common Stock, respectively. According to the
Schedule 13D, as amended, RBIP I and RBIP II distributed
7,698,657 shares of Common Stock on February 9, 1994 to their
respective limited partners. In addition, WHR retained certain
shares of Common Stock to satisfy obligations of certain limited
partners to WHR in its capacity as general partner of such
partnerships. According to the Schedule 13D, as amended, WHR is
required to dispose of such retained shares of Common Stock by
June 30, 1994 and June 30, 1995. Pursuant to an agreement between
the Company and RBIP I, certain compensation and benefits
(including an award of 90,000 shares of restricted Common Stock
to Mr. Rhein under the Company's 1992 Long-Term Incentive Plan
(the "1992 Plan")) are payable to WHR. Such restricted stock
award shares are included in the table above, and Mr. Rhein
disclaims beneficial ownership of such shares. See footnotes <F2>
and (10) to the table under "Management Ownership" below and
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS -- Compensation
Committee Report on Executive Compensation".
<F3> Based upon information contained in a Schedule 13G, as amended as
of February 11, 1994, filed by FMR Corp. FMR Corp., a
Massachusetts corporation, is the beneficial owner of 5,919,456
shares of Common Stock. Fidelity Management & Research Company
("Fidelity"), a wholly-owned subsidiary of FMR Corp. and an
investment adviser registered under the Investment Advisers Act
of 1940, is the beneficial owner of 5,803,536 shares of the
Common Stock as a result of acting as investment adviser to
several investment companies (the "Funds") registered under the
Investment Company Act of 1940. The number of shares of Common
Stock set forth in the table includes shares of Common Stock
beneficially owned in the form of 63,300 shares of Preferred
Stock. One of the Funds, Fidelity Magellan Fund, beneficially
owns 5,553,293 shares of Common Stock. The Chairman of FMR
Corp., Edward C. Johnson 3d, FMR Corp., through its control of
Fidelity, and the Funds have power to dispose of 5,803,536 shares
of Common Stock listed in the table. Neither FMR Corp. nor
Mr. Johnson has the sole power to vote or direct the voting of
the shares owned directly by the Funds, which power resides with
the Funds' respective Boards of Trustees. Fidelity carries out
the voting of the shares under written guidelines established by
the Funds' Boards of Trustees. Fidelity Management Trust
Company, a wholly-owned subsidiary of FMR Corp. and a bank as
defined in Section 3(a)(6) of the Exchange Act, is the beneficial
owner of 115,920 shares of the Common Stock listed in the table
as a result of its serving as investment manager of several
institutional accounts. The number of shares of Common Stock
owned by such institutional accounts set forth in the table
includes shares of Common Stock beneficially owned in the form of
40,000 shares of Preferred Stock. FMR Corp., through its control
of Fidelity Management Trust Company, has sole dispositive power
over 115,920 shares of Common Stock listed in the table and sole
power to vote or to direct the voting of 68,393 of such shares,
and no power to vote or to direct the voting of 47,527 of such
shares. Mr. Johnson owns 34.0% of the outstanding voting common
stock of FMR Corp. Various Johnson family members and trusts for
the benefit of Johnson family members own FMR Corp. voting common
stock. These Johnson family members, through their ownership of
such common stock, form a controlling group with respect to FMR
Corp.
Management Ownership
The following table indicates the total number of shares of
Common Stock and Preferred Stock beneficially owned as of the Record
Date by each continuing director, director nominee and Named Executive
(as hereinafter defined), and by directors and executive officers as a
group. Unless otherwise indicated, all shares are owned directly and
the owner has sole voting and investment power with respect thereto.
Common Stock and Preferred Stock
</TABLE>
<TABLE>
<CAPTION>
Individual or Shares of Percent of Shares of Percent of
Number of Common Stock Common Stock Preferred Stock Preferred Stock
Persons in Group Owned Owned Owned Owned
Beneficially Beneficially Beneficially Beneficially
- ---------------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C>
J.T. Angel<F1> 80,546<F2> *
A.L. Chavkin <F3>
W. Cordia 18,518,320<F4> 33.4%
C.A. Donabedian 5,760<F5> *
T. Kalborg <F6>
P.B. Loyd, Jr. 18,626,770<F2><F7> 33.6% 900<F8> <F8>
J.W. McLean 7,400<F5><F9> *
C.K. Rhein, Jr. 3,929,190<F2><F10> 7.1%
R.L. Sandmeyer 5,020<F5> *
S.A. Webster 14,000<F5><F9> * 1,000<F8> *
L.E. Voss, Jr. 71,557<F11><F12> * 1,000<F8> <F8>
W.K. Hillin 74,521<F9><F11><F12> *
T.W. Nagle 65,123<F11><F12> * 4,000<F8> <F8>
Directors and
Executive Officers
as a group
(including those
listed above -
15 persons) 41,398,626<F12> 74.6% 7,900<F8> <F8>
_____________
* Less than 1 percent.
<FN>
<F1> In October 1993, Mr. J.T. Angel resigned from his
positions as President and Chief Operating Officer, and
member of the Board of Directors, in order to pursue
other business interests. See "COMPENSATION OF
EXECUTIVE OFFICERS AND DIRECTORS -- Employment
Contracts, Termination of Employment and Change-in-
Control Arrangements -- Mr. Angel".
<F2> The Company has granted Restricted Stock Awards under
the 1992 Plan to each of Messrs. Angel, Loyd and Rhein,
of 90,000 shares, 120,000 shares and 90,000 shares of
Common Stock, respectively. Such shares awarded are
restricted as to transfer until vested pursuant to a
schedule whereby 1/24th of the total number of shares is
vested per calendar quarter through March 31, 1998
(subject to certain conditions including the occurrence
of a change of control of the Company and/or continued
employment). The shares listed for Mr. Angel include
such 90,000 shares and for Mr. Loyd include such 120,000
shares, net of 18,555 shares and 11,550 shares,
respectively, that Messrs. Angel and Loyd surrendered to
the Company to satisfy certain tax withholding
obligations. Following Mr. Angel's resignation in
October 1993, the Company delivered to Mr. Angel, free
of restrictions, his shares of restricted stock under
the 1992 Plan. See "COMPENSATION OF EXECUTIVE OFFICERS
AND DIRECTORS -- Employment Contracts, Termination of
Employment and Change-in-Control Arrangements -- Mr.
Angel". As stated in footnote (2) to the table under
"Principal Stockholders" above, pursuant to an agreement
between the Company and RBIP I, such 90,000 shares
awarded to Mr. Rhein included in the above table are
payable to and beneficially owned by WHR, and Mr. Rhein
disclaims beneficial ownership of such shares. See
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS --
Compensation Committee Report on Executive
Compensation".
<F3> Chemical Investment, Inc., of which Mr. Chavkin is
President, holds a limited partnership interest in BCL
through RBY. No beneficial ownership amount is included
in the table for Mr. Chavkin with respect to BCL's or
RBY's ownership of the Common Stock and beneficial
ownership is disclaimed by Mr. Chavkin. See footnote
(1) to the table under "Principal Stockholders."
<F4> The shares listed for Dr. Cordia are those reported as
beneficially owned by Dr. Cordia in the Schedule 13D
referred to in footnote (1) to the table under
"Principal Stockholders" above and do not include
1,393,247 additional shares held by N&M. Dr. Cordia is
one of the reporting persons named in that Schedule 13D,
and may be deemed to share, with the other reporting
persons described therein, voting and dispositive power
with respect to the shares beneficially owned by BCL.
<F5> The number set forth in the table includes options to
purchase 5,000 shares of Common Stock at a price of
$8.50 per share held by each of Mr. Donabedian, Mr.
McLean, Mr. Sandmeyer and Mr. Webster.
<F6> Mr. Kalborg and his affiliates received 1,399,645 shares
of Common Stock by distribution from RBIP I in February
1993. See footnote (2) to the table under "Principal
Stockholders."
<F7> The shares of Common Stock listed for Mr. Loyd include
those reported as beneficially owned by Mr. Loyd in the
Schedule 13D referred to in footnote (1) to the table
under "Principal Stockholders" above and do not include
1,393,247 additional shares held by N&M. Mr. Loyd
controls Greenwing, one of the five general partners of
BCL, and may be deemed to share, with the other general
partners, voting and dispositive power with respect to
the shares beneficially owned by BCL.
<F8> Each share of Preferred Stock is currently convertible
into 2.899 shares of Common Stock. The shares of Common
Stock listed in the table do not include shares of
Common Stock beneficially owned in the form of Preferred
Stock. Mr. Loyd disclaims beneficial ownership of 200
of the 900 shares of Preferred Stock owned directly by
his son and daughter.
<F9> The shares listed for Mr. McLean and Mr. Webster include
1,200 and 4,000 shares, respectively, directly owned by
their spouses. The shares listed for Mr. Hillin include
44 shares directly owned by his spouse and 16 shares
directly owned by his son and daughter. Mr. Hillin
disclaims beneficial ownership of such 16 shares.
<F10> The shares listed for Mr. Rhein include those reported
as beneficially owned by RBIP I, RBIP II, Workout, WHR
and the other persons named in footnote (2) to the table
under "Principal Stockholders". Mr. Rhein is one of
three general partners of WHR, the general partner of
RBIP I, RBIP II and Workout, and may be deemed to share
voting and dispositive power with respect to the shares
beneficially owned by WHR, RBIP I, RBIP II and Workout,
although beneficial ownership is disclaimed. See
footnote (2) to the table under "Principal
Stockholders". The shares listed for Mr. Rhein also
include 5,800 shares of Common Stock owned by a trust
for the benefit of Mr. Rhein's children. Mr. Rhein
disclaims beneficial ownership of such 5,800 shares.
<F11> The shares listed for Mr. Voss, Mr. Hillin and Mr. Nagle
include approximately 1,164 shares, 2,315 shares and 282
shares, respectively, held by a trustee under the
Company's savings plan.
<F12> The Company has granted options to purchase Common Stock
to certain key employees pursuant to its 1990 Stock
Option Plan (the "1990 Plan"). See "COMPENSATION OF
EXECUTIVE OFFICERS AND DIRECTORS -- Compensation
Committee Report on Repricing of Options". The shares
listed for Mr. Voss, Mr. Hillin and Mr. Nagle each
include 64,000 shares, the beneficial ownership of which
each such officer has the right to acquire pursuant to
currently exercisable options granted under such plan.
The shares listed for Directors and Executive Officers
as a group include a total of 296,000 shares, the
beneficial ownership of which such directors and
officers as a group have the right to acquire pursuant
to currently exercisable options granted under such
plan.
</TABLE>
ELECTION OF DIRECTORS
The Charter requires the division of the Board of
Directors into three classes having staggered terms of three
years each and provides that the Board is to determine, from time
to time, the number of directors to be on the Board at not less
than three nor more than eighteen. The Company's By-laws
currently require the number of directors to be between three and
thirteen. The number of directors is currently established at
nine. At the Annual Meeting, three Class III directors are to be
elected. Messrs. Arnold L. Chavkin, Paul B. Loyd, Jr. and Steven
A. Webster are nominees for Class III director. Each of Mr.
Chavkin and Mr. Webster is currently a Class III director whose
term expires in 1994. Mr. Loyd is currently a Class I director
whose term expires in 1995. Mr. Loyd is being nominated as a
Class III director to ensure that the number of directors of each
class is as nearly equal in number as possible, as required by
Article NINTH, Section 1(b) of the Charter. Upon election and
qualification as a Class III director, Mr. Loyd will no longer
serve as a Class I director.
It is the intention of the persons designated as proxies
in the enclosed proxy card, unless the proxy card is marked with
contrary instructions, to vote for the election of Messrs.
Chavkin, Loyd and Webster as Class III directors to serve until
the 1997 Annual Meeting of Stockholders and until their
successors have been duly elected and qualified. The persons
designated as proxies will have discretion to cast votes for
other persons in the event that any nominee for Class III
director is unable to serve. At present, it is not anticipated
that any of the nominees will be unable to serve.
The following table and accompanying footnotes set forth
certain information concerning each Class III director nominee
and the continuing Class I and Class II directors. Unless
otherwise indicated, each nominee and continuing director has
served in the positions set forth for more than five years.
<TABLE>
<CAPTION>
CLASS III DIRECTOR NOMINEES - TERMS EXPIRING IN 1997
<S> <C>
- --------------------- -------------------------------------
ARNOLD L. CHAVKIN, 42 Director of the Company since August
1991; general partner of Chemical Venture
Partners, a general partnership which
invests in leveraged buyouts,
recapitalizations, growth equities and
venture situations, since January 1992
and President of Chemical Investments,
Inc., an affiliate of Chemical Venture
Partners, since March 1991. Chemical
Venture Partners and Chemical
Investments, Inc. are affiliates of
Chemical Banking Corporation. Chemical
Investments, Inc. indirectly holds a
limited partnership interest in BCL. Mr.
Chavkin is also a director of RHI
Entertainment, Inc., a television and
film company, Morningstar Foods, Inc., a
specialty food producer, American Radio
Systems, Forcenergy and American
Recreation Company. Previously for six
years, Mr. Chavkin was a specialist in
investment and merchant banking at
Chemical Bank.
PAUL B. LOYD, JR., 47 Chairman and Chief Executive Officer of
the Company since June 1991, Director of
the Company since April 1991 and
President of the Company since October
1993. Mr. Loyd controls Greenwing, one
of the five general partners of BCL, a
major stockholder of the Company (see
"PRINCIPAL STOCKHOLDERS AND MANAGEMENT
OWNERSHIP"), and has been President of
Loyd & Associates, Inc., a financial
consulting firm, since 1989. Mr. Loyd
was Chief Executive Officer and a
director of Chiles-Alexander
International, Inc. from 1987 to 1989,
President and a director of Griffin-
Alexander Drilling Company, from 1984 to
1987, and prior to that, a director and
Chief Financial Officer of Houston
Offshore International, all of which are
companies in the offshore drilling
industry.<F1>
STEVEN A. WEBSTER, 42 Director of the Company since August
1991; Chairman and Chief Executive
Officer of Falcon Drilling Company Inc.,
a domestic-based drilling company, since
1988. Since 1984, Mr. Webster has also
been a general partner of Cerrito
Partners and Cerrito Investments Limited
Partnership, both investment funds with a
portfolio of private company investments
in various industries, and a general
partner of Equipment Asset Recovery Fund,
an investment fund that owns and operates
a heavy crane rental company. Mr.
Webster is also a director of Crown
Resources Corporation, which is in the
business of mining precious metals, and
London Property Trust, a real estate
investment trust.
CLASS II CONTINUING DIRECTORS - TERMS EXPIRING IN 1996
WILLEM CORDIA, 53 Director of the Company since April 1991.
Dr. Cordia is an investor with interests
in shipping and offshore services
companies, industrial and trading
companies and oil and gas exploration
companies. Dr. Cordia is one of the
controlling persons of BCL (see
"PRINCIPAL STOCKHOLDERS AND MANAGEMENT
OWNERSHIP") and has been a board member
of some twenty commercial enterprises
worldwide and two colleges in The
Netherlands since at least 1987. <F1>
TED KALBORG, 43 Director of the Company since April 1991.
Mr. Kalborg is an investor and investment
banker specializing in international
asset-intensive acquisitions and other
transactions. He is a Senior Partner and
Managing Director of Tufton Associates, a
private merchant banking group in London,
a director of North Sea Assets, a small
public company in London which provides
energy related services, and a director
of Oslo Shipholding, a Norwegian public
company which invests in different
shipping ventures, primarily in tanker
and chemical carrier vessels.<F1>
J. W. McLEAN, 72 Director of the Company from 1956 to 1987
and since February 1988. Mr. McLean is a
director of Devon Energy Corporation, an
energy company, and was formerly Chairman
and Chief Executive Officer of Banks of
Mid-America, Inc. and Liberty National
Bank & Trust Company prior to his
retirement in April 1987.
CLASS I CONTINUING DIRECTORS - TERMS EXPIRING IN 1995
CHARLES A.DONABEDIAN, 51 Director of the Company since 1989.
Since 1990, Mr. Donabedian has been
Chairman and Chief Executive Officer of
Triad Partners, Inc., which provides
product development, marketing and
sales consulting and services to the
financial service industry. Since May
1992, Mr. Donabedian has also been
President of Winston Financial
Incorporated (formerly Winston Midwest
Marketing, Inc.), which provides
product development, marketing and
sales consulting and services to the
financial services industry. Prior to
October 1990, he was President and
Chief Executive Officer of USF&G
Marketing Services Company, Inc., a
subsidiary of USF&G Corporation, an
insurance company, since at least 1987.
PAUL B. LOYD, JR., 47<F2> Chairman and Chief Executive Officer of
the Company since June 1991, Director
of the Company since April 1991 and
President of the Company since October
1993. Mr. Loyd controls Greenwing, one
of the five general partners of BCL, a
major stockholder of the Company (see
"PRINCIPAL STOCKHOLDERS AND MANAGEMENT
OWNERSHIP"), and has been President of
Loyd & Associates, Inc., a financial
consulting firm, since 1989. Mr. Loyd
was Chief Executive Officer and a
director of Chiles-Alexander
International, Inc. from 1987 to 1989,
President and a director of Griffin-
Alexander Drilling Company, from 1984
to 1987, and prior to that, a director
and Chief Financial Officer of Houston
Offshore International, all of which
are companies in the offshore drilling
industry.<F1>
C. KIRK RHEIN, JR., 41 Vice Chairman of the Company since May
1991 and Director of the Company since
March 1991. Mr. Rhein has also been
President, Chief Executive Officer and
Director of Danielson Holding
Corporation, a financial services
holding company, since 1990, and a
director of National American Insurance
Company of California, an insurance
company, since 1987. Since 1987 he has
been a Managing Director of Whitman
Heffernan Rhein & Co., Inc. Since 1989
he has been a general partner of WHR,
which manages RBIP I, RBIP II and
Workout (see "PRINCIPAL STOCKHOLDERS
AND MANAGEMENT OWNERSHIP"). Prior to
April 1, 1987, he was a partner in the
law firm of Anderson Kill Olick &
Oshinsky, P.C.<F1>
ROBERT L. SANDMEYER, 64 Director of the Company since September
1988. Dr. Sandmeyer has been Dean of
the College of Business Administration
at Oklahoma State University and
Professor of Economics since at least
1987.
<FN>
<F1> Dr. Cordia and Mr. Loyd were appointed directors of the
Company on April 8, 1991 pursuant to an agreement dated as
of March 27, 1991 between the Company and BCL. Messrs.
Kalborg and Rhein were appointed directors of the Company
on April 8, 1991 pursuant to an agreement dated as of March
27, 1991 between the Company and RBIP I. These agreements
(the "Agreements") were entered into in connection with the
recapitalization of the Company consummated on March 29,
1991. The Agreements have been terminated effective as of
September 14, 1993.
<F2> Upon election and qualification as a Class III director,
Mr. Loyd will no longer serve as a Class I director. If he
is not so elected and qualified, Mr. Loyd will continue as
a Class I director.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors met six times (including telephonic
meetings) during 1993 and each director attended at least 75% of
the total number of meetings of the Board of Directors and all of
the committees of the Board of Directors on which such director
served (except for Messrs. Angel and Chavkin).
The Board of Directors has standing Audit, Compensation,
Executive and Pension (ERISA) Committees. There is no nominating
committee.
The Audit Committee
The members of the Audit Committee are Arnold L. Chavkin,
Willem Cordia, Charles A. Donabedian, Ted Kalborg, J.W. McLean
and Robert L. Sandmeyer. The Audit Committee held five meetings
in 1993.
The Audit Committee meets with the Company's independent
accountants and internal auditor to review the Company's
accounting policies, internal controls and other accounting and
auditing matters; makes recommendations to the Board as to the
engagement of independent accountants; and reviews the letter of
engagement and statement of fees relating to the scope of the
annual audit and special audit work which may be recommended or
required by the independent accountants.
The Compensation Committee
The members of the Compensation Committee are Paul B. Loyd,
Jr., J. W. McLean, C. Kirk Rhein, Jr., Robert L. Sandmeyer and
Steven A. Webster. The Compensation Committee held five meetings
in 1993.
The Compensation Committee reviews the nature and amount of
compensation of officers of the Company and its subsidiaries and
recommends changes thereto.
The Executive Committee
The members of the Executive Committee are Paul B. Loyd,
Jr. and C. Kirk Rhein, Jr. The Executive Committee held 5
meetings in 1993.
The Executive Committee reviews and develops strategies and
policies of the Company and recommends changes thereto.
The Pension (ERISA) Committee
The members of the Pension (ERISA) Committee are Charles A.
Donabedian, J. W. McLean and R. L. Sandmeyer. The Pension
(ERISA) Committee held seven meetings in 1993.
The Pension (ERISA) Committee is responsible for monitoring
the Company's compliance with the Employee Retirement Income
Security Act of 1974 ("ERISA") in connection with its employee
benefit plans; for supervising the administration of the
Company's Pension Plan, including selection of investment
managers, determination of the investment guidelines within which
they operate, review of performance and amending the Pension
Plan; and for supervising the administration of the Company's
Savings Plan.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors
of the Company (the "Committee") has furnished the following
report on executive compensation. The Committee report documents
the components of the Company's executive officer compensation
programs and describes the basis on which 1993 compensation
determinations were made by the Committee with respect to the
executive officers of the Company, including the Chief Executive
Officer and the four other executive officers that are named in
the compensation tables who are currently employed by the Company
(the "current Executives").
Compensation Philosophy and Overall Objectives of Executive
Compensation Programs
It is the philosophy of the Company to ensure that
executive compensation be directly linked to continuous
improvements in corporate performance and increases in
stockholder value. The following objectives have been adopted by
the Committee as guidelines for compensation decisions:
* Provide a competitive total compensation package that
enables the Company to attract and retain key executives.
* Integrate all pay programs with the Company's annual and
long-term business objectives and strategy, and focus
executive behavior on the fulfillment of these objectives.
* Provide variable compensation opportunities that are
directly linked with the performance of the Company.
Cash Compensation -- cash compensation includes base salary and
annual incentive award programs. The base salary of each of the
Company's executive officers is determined by an evaluation of
the responsibilities of that position and by comparison to the
median level of salaries paid in the competitive market in which
the Company competes for comparable executive ability and
experience. Annually, the performance of each executive officer
is reviewed by the Committee in the case of the Company's Chief
Executive Officer and Vice Chairman (with the officer whose
performance is being evaluated not participating), and by the
Chief Executive Officer in the case of the other executive
officers, taking into account the Company's operating and
financial results for that year, the contribution of each
executive officer to such results, the achievement of goals
established for each such executive officer at the beginning of
each year, and competitive salary levels for persons in those
positions in the markets in which the Company competes. To
assist in its deliberations, the Committee is provided a report
from William M. Mercer Incorporated, a recognized independent
compensation consultant, setting out comparable salary and
incentive compensation information for a number of companies in
the energy service sector for comparison purposes. Following its
review of the performance of the Company's executive officers,
the Committee reports its recommendations for salary increases
and incentive awards to the Company's Board of Directors. In
1993 annual base salary increases were recommended by the
Committee and approved by the Company's Board of Directors for
all of the executive officers (other than the Chief Executive
Officer and the Vice Chairman) and incentive compensation awards
were approved for all of the executive officers (other than the
Vice Chairman). See "Summary Compensation Table" and "Chief
Executive Officer's Compensation and Corporate Performance for
Fiscal Year 1993". The Committee believes the recommended salary
increases and incentive awards were warranted and consistent with
the performance of such executives during 1993.
Stock-Based Incentives -- The Committee believes that it is
essential to align the interests of the executives and other
management personnel responsible for the growth of the Company
with the interests of the Company's stockholders. The Committee
believes this alignment is best accomplished through the
provision of stock-based incentives. Therefore, pursuant to the
recommendation of the disinterested members of the Committee, the
Company's Board of Directors and stockholders: (i) approved the
1990 Plan on November 29, 1990, and at a special meeting on March
26, 1991, respectively and (ii) approved the 1992 Plan on March
19, 1992 and May 20, 1992, respectively. See "Compensation
Committee Report on Repricing of Options" for a description of
the 1990 Plan. Under the 1992 Plan, 1,000,000 shares of the
Company's Common Stock (restated for the October 1992 one-for-
five reverse stock split) were available for award to executive
officers and other employees. During 1992, 120,000 shares,
90,000 shares and 90,000 shares of restricted Common Stock were
awarded to each of Messrs. Loyd, Angel and Rhein, respectively.
Restrictions as to one/twenty-fourth (1/24th) of the shares lapse
on each June 30, September 30, December 31 and March 31 beginning
in 1992 and ending March 31, 1998. During 1993, no further
awards were made under the 1992 Plan; however, restrictions on
shares previously awarded to such current Executives lapsed in
accordance with the foregoing schedule. The Committee continues
to review stock-based incentives and make recommendations, where
it deems appropriate, to the Company's Board of Directors, from
time to time, to assure the Company's executive officers and
other key employees are appropriately motivated and rewarded by
stock-based incentives. See "PRINCIPAL STOCKHOLDERS AND
MANAGEMENT OWNERSHIP -- Management Ownership".
Chief Executive Officer's Compensation and Corporate Performance
for Fiscal Year 1993
In determining the compensation of Mr. Paul B. Loyd, Jr., the
Chairman, President and Chief Executive Officer, the Committee
(with Mr. Loyd not participating) considered the Company's
operating and financial results for fiscal year 1993, evaluated
his individual performance and substantial contribution to those
results (including, among others, successful completion of the
convertible preferred stock offering which substantially improved
the Company's liquidity and capital base, the Company's
successful entry into the floating production system market and
the substantial improvement in the market price of the Company's
common stock) and considered the compensation range for other
chief executive officers of companies in the energy service
sector. Based on that review and assessment, the Committee (with
Mr. Loyd not participating) recommended, and the Company's Board
of Directors approved (with Mr. Loyd abstaining), an incentive
award to Mr. Loyd of $150,000, which represented 50% of his base
salary for 1993. No recommendation was made by the Committee to
increase Mr. Loyd's base salary of $300,000 per year.
Summary
Based on its review of all existing programs, the Committee
believes that the total compensation program for executive
officers of the Company is competitive with the compensation
programs provided by other corporations with which the Company
competes. The Committee also believes that the stock-based
incentives provide opportunities to participants that are
consistent with the returns that are generated on the behalf of
the Company's stockholders.
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code") disallows a corporation's deduction for remuneration
paid to its chief executive officer and its four other highest
compensated officers in excess of $1,000,000 per person effective
January 1, 1994. As neither the Company's chief executive
officer nor any of its four other highest compensated officers
has received remuneration in excess of such limitation in 1993 or
is anticipated to receive remuneration in excess of such
limitation in 1994, the Committee has deferred making any
recommendation to the Company's Board of Directors as to what
policy the Company should adopt with respect to remuneration of
the current Executives in excess of such limitation, until such
time as it appears reasonably foreseeable that such limitation
may be exceeded.
Compensation Committee Report on Repricing of Options
On November 29, 1990, and at a special meeting on March 26,
1991, the Company's Board of Directors and stockholders,
respectively, approved the 1990 Plan. The 1990 Plan authorized
options with respect to 1,966,000 shares of Common Stock
(restated for the October 1992 one-for-five reverse stock split)
to be granted during the 180-day period following the Company's
recapitalization consummated on March 29, 1991 to key employees
of the Company at an option price of $9.65625 per share (based on
the average market price for the ten days preceding the closing
of such recapitalization and restated for the October 1992 one-
for-five reverse stock split). On September 25, 1991, options
with respect to all 1,966,000 shares were granted to 162
employees allocated by the Board of Directors upon recommendation
of the Compensation Committee.
The options become exercisable in installments over a four-
year period, with 20% of the options being exercisable six months
following March 29, 1991 (the effective date of grant) and an
additional 20% becoming exercisable on each of the four
succeeding anniversaries of March 29, 1991, and are fully
exercisable thereafter for a term of ten years from the effective
date of grant. A reserve of 1,966,000 shares of Common Stock ha
been established to cover such options.
Pursuant to a delegation of authority by the Board of
Directors, the Executive Committee approved and the Board of
Directors ratified the adjustment of the exercise price of all of
the existing options under the 1990 Plan from the then current
exercise price of $9.65625 to $7.375, which was the last reported
sale price of the Common Stock on the New York Stock Exchange
Composite Transactions Tape on March 31, 1993 (as reported in The
Wall Street Journal). The Company's stockholders approved the
repricing of options under the 1990 Plan at the Company's Annual
Meeting on May 18, 1993.
The Board of Directors believes that the value of the
Company to its stockholders is necessarily dependent upon the
Company's ability to retain in its employ management personnel of
training, experience and ability. The 1990 Plan was established
as an employment incentive to retain the persons necessary for
the development and financial success of the Company,
particularly in light of the Company's recapitalization in March
1991. By repricing the existing options granted under the 1990
Plan, the Company can reward key employees holding such options
for their contributions to the Company.
<TABLE>
<CAPTION>
TEN YEAR OPTION REPRICINGS
Number of Securities Market Price of
Underlying Options Stock at Time
Name Date Repriced or Amended of Repricing
- -------------- ---- -------------------- ---------------
<S> <C> <C> <C>
P.B. Loyd, Jr. __ 0 __
Chairman and
Chief Executive
Officer
C.K. Rhein, Jr. __ 0 __
Vice Chairman
L.E. Voss, Jr.
Vice President-
Operations May 18, 1993 80000 $7.125
W.K. Hillin May 18, 1993 80000 $7.125
Senior Vice
President,
General Counsel
and Secretary
T.W. Nagle May 18, 1993 80000 $7.125
Vice President
and Chief Financial
Officer
J.T. Angel<F2> __ 0 __
</TABLE>
<TABLE>
<CAPTION>
Length of Original
Option Term Remaining
Exercise Price at New at Date of Repricing
Name Time of Repricing Exercise Price of Amendment
- --------------- ----------------- -------------- ----------------------
<S> <C> <C> <C>
P.B. Loyd, Jr. __ __ __
Chairman and
Chief Executive
Officer
C.K. Rhein, Jr. __ __ __
Vice Chairman
L.E. Voss, Jr. $9.65625 $7.375 7 years, 10 months<F1>
Vice President-
Operations
W.K. Hillin $9.65625 $7.375 7 years, 10 months<F1>
Senior Vice
President, General
Counsel and Secretary
T.W. Nagle $9.65625 $7.375 7 years, 10 months<F1>
Vice President
and Chief Financial
Officer
J.T. Angel<F2> __ __ __
<FN>
<F1> Under the 1990 Plan, as amended, the options expire on March
29, 2001. See "Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values".
<F2> See "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS --
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements -- Mr. Angel".
</TABLE>
Compensation Committee
of the Board of Directors
Paul B. Loyd, Jr.
J. W. McLean
C. Kirk Rhein, Jr.
Robert L. Sandmeyer
Steven A. Webster
Compensation Committee Interlocks and Insider Participation
Mr. Loyd is Chairman, President and Chief Executive Officer
of the Company, and Chairman of each of the Company's Norwegian subsidiaries,
Arcade Drilling AS and Arcade Shipping AS, and controls Greenwing, one of the
five general partners of BCL. See "PRINCIPAL STOCKHOLDERS AND MANAGEMENT
OWNERSHIP" and "ELECTION OF DIRECTORS". Mr. Rhein is Vice Chairman of the
Company and is a general partner of WHR, which is the general partner of RBIP
I, RBIP II and Workout. See "PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP"
and "ELECTION OF DIRECTORS".
Mr. Webster is Chairman and Chief Executive Officer of
Falcon Drilling Company, Inc. During 1993, Mr. Loyd served as a director of
Falcon Drilling Company, Inc., but did not serve on such company's
compensation committee.
Summary Compensation Table
There is shown below information concerning the annual and
long-term compensation for services in all capacities to the Company for the
years ended December 31, 1993, 1992 and 1991, of (i) the chief executive
officer during 1993, (ii) the other four most highly compensated executive
officers of the Company who were serving as executive officers at December 31,
1993 and (iii) a former executive officer who would have been listed under
(ii) but for the fact that the individual was not serving as an executive
officer at December 31, 1993 (collectively, the "Named Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------- -----------------------------------------
Name and Restricted Securities
Principal Stock Underlying All Other
Position Year Salary<F1> Bonus Award(s)<F2> Options<F3> Compensation<F4>
- ------------- ---- ---------- ----- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
P.B. Loyd, Jr. 1993 $300,000 $150,000 $ 0 0 $47,279
Chairman and 1992 300,000 0 120,000 0 4,364
Chief 1991 0 0 0 0 0
Executive
Officer
C.K. Rhein,
Jr.<F5> 1993 220,000 0 0 0 27,687
Vice Chairman 1992 220,000 0 90,000 0 0
1991 0 0 0 0 0
L.E. Voss, Jr. 1993 180,000 44,180 0 80,000 4,497
Vice President 1992 163,833 0 0 0 4,139
Operations 1991 133,500 0 0 80,000 0
W.K. Hillin 1993 167,000 21,870 0 80,000 4,497
Senior Vice 1992 157,000 0 0 0 4,078
President, 1991 155,000 0 0 80,000 0
General Counsel
and Secretary
T.W. Nagle 1993 150,000 37,400 0 80,000 4,497
Vice President 1992 138,452 0 0 0 4,114
& Chief 1991 108,900 0 0 80,000 0
Financial
Officer
J.T. Angel<F6> 1993 191,469 0 0 0 965,288
1992 250,000 0 90,000 0 3,936
1991 200,000 0 0 80,000<F7> 0
<FN>
<F1> Mr. Loyd and Mr. Rhein became executive officers in June 1991,
and received no salary for 1991.
<F2> 300,000 shares of Common Stock (restated for the October 1992
one-for-five reverse stock split of the Common Stock) were
issued under the 1992 Plan as of April 1, 1992, the date of
grant, at a price of $7.50 per share (adjusted for such
reverse stock split). Restrictions as to one/twenty-fourth
(1/24th) of the Common Stock lapse on each June 30, September
30, December 31 and March 31 in each of 1992, 1993, 1994,
1995, 1996, 1997 and through March 31, 1998. The stock awards
entitle the beneficiaries to all rights as a stockholder from
the date of grant (including the right to receive dividends
when, as and if declared). The total number of shares of
Restricted Common Stock as to which restrictions have not
lapsed, and related value, as of December 31, 1993, held by
Messrs. Loyd and Rhein were as follows:
Shares Value
------ --------
Mr. Loyd 85,000 $595,500
Mr. Rhein 63,750 446,250
<F3> The stock options awarded in 1991 pursuant to the 1990 Plan
have been restated to reflect the October 1992 one-for-five
reverse stock split of the Common Stock. In addition, the
stock options included for 1993 represent such stock options
awarded pursuant to the 1990 Plan which were repriced pursuant
to the repricing proposal approved by the Company's
stockholders at the 1993 Annual Meeting. See "Compensation
Committee Report on Repricing of Options".
<F4> Pursuant to the transitional provisions set forth in the proxy
rules, amounts of Other Annual Compensation and All Other
Compensation are excluded for 1991. For 1992 and 1993, the
All Other Compensation column includes the amount of the
Company's contribution for each Named Executive under the
Reading & Bates Savings Plan, except Mr. Rhein who has waived
his right to participate in such Plan.
<F5> Pursuant to the agreement referred to in footnote 2 to the
table under "PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP -
- Principal Stockholders" above, the compensation payable to
Mr. Rhein is paid to and beneficially owned by WHR.
<F6> See "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS --
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements -- Mr. Angel".
<F7> The stock options awarded to Mr. Angel in 1991 were
relinquished on April 1, 1992 as a condition to his
participation in the 1992 Plan.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year-End<F1> at Fiscal Year-End<F1>
---------------------- -----------------------
Shares
Acquired on Value Un- Un-
Name Exercise Realized Exercisable exercisable Exercisable exercisable
- ----------- ---------- -------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
P.B. Loyd, Jr. 0 0 0 0 0 0
C.K. Rhein, Jr. 0 0 0 0 0 0
L.E. Voss, Jr. 0 0 48,000 32,000 0 0
W.K. Hillin 0 0 48,000 32,000 0 0
T.W. Nagle 0 0 48,000 32,000 0 0
J.T. Angel<F2> 0 0 0 0 0 0
<FN>
<F1> The stock options granted during 1991 pursuant to the 1990
Plan were granted at an option price of $1.93125 per share;
after the October 1992 one-for-five reverse stock split of the
Common Stock the option price was adjusted to $9.65625. On
May 18, 1993, the option price was further adjusted to $7.375.
The number of unexercised stock options at December 31, 1993
reflects such reverse stock split. At December 31, 1993 the
stock options were not "in-the-money". See "Compensation
Committee Report on Repricing of Options".
<F2> See "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS --
Employment Contracts, Termination of Employment and Change-in-
Control Arrangements -- Mr. Angel".
</TABLE>
Performance Graph
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER
RETURN AMONG READING & BATES CORPORATION,
S&P 500 INDEX AND A PEER GROUP INDEX
See below for description of Performance Graph. A copy of
the Graph has been faxed and a complete paper copy of the
Proxy has been couried to Letty G. Lynn, Branch Chief at
(202)272-2677.
The above graph assumes $100 invested on December 31, 1988 in the
stock or the indexes and shows the value of such investment, assuming
reinvestment of dividends, on December 31 of the year indicated. The
new peer group is comprised of the following companies: Arethusa
(Off-Shore) Ltd., Atwood Oceanics Inc., Chiles Offshore Corporation,
Energy Services Inc., Global Marine Inc., Rowan Companies Inc., Sonat
Offshore Drilling Inc. and the Western Company of North America.
Arethusa (Off-Shore) Ltd. and Sonat Offshore Drilling Inc. were added
to the new peer group as these companies are in the same line of
business as the Company and both had their initial public offerings in
1993. Consequently, peer weightings were adjusted to account for the
two new group members. Moreover, the Western Company of North America
sold its offshore drilling assets in October 1993. As a result, that
company was removed from the peer group indexes as of that date. The
following table shows the values that are displayed on the graph:
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Reading & Bates
Corporation $100 $ 71 $ 49 $ 40 $ 21 $ 34
S & P 500 Index 100 132 128 166 179 197
Peer Group (New) 100 320 288 148 163 283
Peer Group (Old) 100 320 288 148 163 292
</TABLE>
Pension Plan Table
Assuming that an employee is entitled to an annual social security
benefit of $13,536 at normal retirement date and has an annual social
security covered compensation amount of $22,800, the Pension Plan
Table illustrates the amount of annual pension benefits payable by the
Company under a single-life annuity basis to a person in specified
average compensation and years-of-service classifications.
<TABLE>
<CAPTION>
36-Month Average Years of Service
Remuneration 15 20 25 30 35
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$50,000 13,137 17,516 21,895 26,274 30,653
100,000 28,559 38,079 47,599 57,118 66,638
150,000 43,982 58,642 73,303 87,963 102,624
200,000 59,404 79,205 99,007 118,808 138,609
250,000 74,826 99,769 124,711 149,653 174,595
300,000 90,249 120,332 150,415 180,498 210,581
350,000 105,671 140,895 176,119 211,342 246,566
400,000 121,094 161,458 201,823 242,187 282,552
450,000 136,516 182,021 227,527 273,032 318,537
500,000 151,938 202,585 253,231 303,877 354,523
</TABLE>
Retirement benefits under the Reading & Bates Pension Plan (the
"Domestic Plan") are based on an employee's highest average monthly
base compensation for 36 consecutive months of credited service,
integrating a portion of the primary social security benefit payable
to the employee. The benefit is based on the higher of three
formulas, A, B and C, as outlined below. Formula A is based on pay,
service and primary social security benefit frozen at December 31,
1988, while Formulas B and C are based on pay, service and social
security covered compensation as of the date of termination of
employment. Formula A is as follows: 2.75% of an employee's average
monthly compensation multiplied by the number of years of credited
service for the first 20 years; plus 2% of an employee's average
monthly compensation multiplied by the number of years of credited
service from 21 through 25 years; plus 1.50% of an employee's average
monthly compensation multiplied by the number of years of credited
service from 26 through 30 years; plus 1% of an employee's average
monthly compensation multiplied by the number of years of credited
service from 31 through 35 years; plus .50% of an employee's average
monthly compensation multiplied by the number of years of credited
service from 36 through 40 years; minus 50% of an employee's primary
social security benefit. Formula B is as follows: 2.4% of an
employee's average monthly compensation multiplied by the number of
years of credited service through December 31, 1991 (up to a maximum
of 35 years); minus .65% of an employee's social security covered
compensation multiplied by the number of years of credited service
through December 31, 1991 (up to a maximum of 35 years); plus an
amount determined under Formula C based solely on the number of years
credited service which accrued after December 31, 1991. Formula C is
as follows: 2.0% of an employee's average monthly compensation
multiplied by the number of years of credited service for the first 35
years; minus .65% of an employee's social security covered
compensation multiplied by the number of years of credited service for
the first 35 years. This benefit structure is the result of a plan
amendment effective January 1, 1989. The formula in effect prior to
this date was Formula A, based on pay, service and primary social
security benefit at date of retirement. Compensation covered by the
Domestic Pension Plan consists of base wages to the maximum extent
allowed under current laws but not to exceed $135,840 (or an amount
equal to the difference between $200,000 for 1989 and succeeding years
(as adjusted at the same time an manner provided under Code Section
415(d)) and $100,000, or the maximum annual compensation limit
provided for in Code Section 401(a)(17)). Messrs. Loyd, Voss, Hillin
and Nagle respectively, have 2, 26, 21 and 17 years of credited
service under the Domestic Plan. Mr. Rhein has waived his right to
participate in the Pension Plan. The Named Executives, except Mr.
Rhein, will be entitled to receive the estimated annual benefits based
upon their 1993 salary amounts set forth under "Salary" in the Summary
Compensation Table.
Assuming that an employee is entitled to an annual social
security benefit of $13,536 at normal retirement date and has an
annual social security covered compensation amount of $22,800, the
Pension Plan Table illustrates the amount of annual pension benefits
payable by the Company under the Domestic Plan and the Retirement
Benefit Replacement Plan (described below) under Formula C on a single
life annuity basis to a person in specified average compensation and
years-of-service classifications.
The maximum pension benefit allowable under current laws for
persons who retired at age 65 in 1994, is $118,800. The Domestic Plan
limits the annual compensation that is considered for plan purposes to
$150,000 for 1994. Retirement benefits based on pay in excess of the
foregoing limitations will be paid pursuant to the Reading & Bates
Retirement Benefit Replacement Plan, which was adopted by the
Company's Board of Directors in 1978. The Retirement Benefit
Replacement Plan is designed to restore to affected employees the
dollar amount of pension and pension-related benefits which could no
longer be provided under the Domestic Plan as a result of the
compensation limitation contained in the Domestic Plan and benefit
limitations imposed on the Domestic Plan by ERISA. The Pension Plan
Table includes aggregate benefits payable under both the Domestic Plan
and the Retirement Benefit Replacement Plan.
Retirement benefits under the Reading & Bates Offshore Pension
Plan (the "Offshore Plan") are determined under formulas similar to
those detailed above as the Domestic Plan's Formulas A and C. Formula
A under the Offshore Plan is identical to Formula A under the Domestic
Plan except that pay, service and primary social security benefit are
frozen at December 31, 1990; plus an amount determined under Formula C
based solely on the number of years of credited service which accrued
after December 31, 1990 is added to the benefit determined. Formula C
for the Offshore Plan is identical to Formula C under the Domestic
Plan. Compensation covered under the Offshore Plan is the same as
that covered by the Domestic Plan without the monetary limits. The
Pension Plan Table can also be used to illustrate the amount of annual
pension benefits payable by the Company under Formula C of the
Offshore Plan.
Director Compensation
Each nonemployee director is paid a fee of $18,000 per year
($4,500 per quarter). The Company pays each director an additional
fee of $500 for each meeting (other than telephonic meetings) attended
by that director. In addition, each nonemployee director is paid for
attending each committee meeting at the rate of $700 for committee
chairmen and $500 for other committee members. The Company also
reimburses its directors for travel, lodging and related expenses they
may incur attending board and committee meetings. Nonemployee
directors who are not executive officers of the Company are provided
life insurance coverage. No other benefits under the Company's
employee benefit plans are payable to or on behalf of these directors.
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements
Mr. Angel. The Company had an employment contract with Mr.
Angel covering an employment period from January 1, 1992 through
January 1, 1995, providing for an annual base salary of not less than
$250,000 and for his participation in other benefit plans and programs
of the Company, including the 1992 Plan. On October 6, 1993, Mr.
Angel, President and Chief Operating Officer, and a member of the
Board of Directors, resigned from those positions in order to pursue
other business interests. Mr. Angel and the Company entered into a
severance agreement effective as of the date of Mr. Angel's
resignation.
Under the severance agreement, the Company has agreed to (a)
make a lump-sum payment to Mr. Angel of salary earned through the date
of termination and a bonus based on the highest annual bonus during
the preceding three-year period prorated in accordance with the period
in the current year prior to the termination, (b) make a lump-sum
payment to Mr. Angel of the amount determined by multiplying 1.25
times the sum of the highest aggregate annual base salary and annual
bonus paid to him with respect to any one fiscal year ending within
the three-year period ending on the date of termination times three,
(c) deliver to Mr. Angel his remaining 90,000 shares under the 1992
Plan free of restrictions and (d) continue to provide certain welfare
plan and other benefits for a period of three years or as long as such
plan or benefits allow. In addition, the agreement provides that if
any payment to Mr. Angel would be subject to any excise tax under Code
Section 4999, a "gross-up" payment will be made to place Mr. Angel in
the same net after-tax position as would have been the case if no
excise tax had been payable. As provided in the agreement, the
Company engaged Arthur Andersen & Co. to determine whether the
benefits payable to Mr. Angel were subject to an excise tax payment
and an additional income tax gross-up payment by the Company. Arthur
Andersen & Co. has advised that no excise tax is currently payable to
Mr. Angel as a result of payments made to him pursuant to the
severance agreement. In the fourth quarter of 1993, the Company
recorded a charge of approximately $1.1 million against earnings
related to the severance agreement with Mr. Angel.
Officer Agreements. The Company has entered into employment
agreements with Messrs. Loyd, Rhein, Voss, Hillin and Nagle. The
agreements with Messrs. Loyd, Rhein, Voss, Hillin and Nagle provide
that for a continuing three-year employment period (ending currently
on March 31, 1997) the officers will receive annual base salaries of
not less than $300,000, $220,000, $220,000, $180,000 and $175,000,
respectively, and, except in the case of Mr. Rhein, will participate
in other benefit plans and programs of the Company. Each of such
employment agreements was amended effective as of October 1, 1993 by
agreement between the Company and each executive.
As amended, each of such agreements provides that if the officer
terminates his employment for good reason or during the 180-day period
following a change of control of the Company, the Company will (a)
make a lump sum payment to him of salary earned through the date of
termination and a bonus based on the highest annual bonus paid him
during the preceding three-year period prorated in accordance with the
period in the current year prior to the termination, (b) make a lump
sum payment to him of the amount determined by multiplying 1.25 times
the sum of the highest aggregate annual base salary and annual bonus
(or equal to such salary and bonus if such termination occurs after
October 31, 1997) paid to the officer with respect to any one fiscal
year ending within the three-year period ending on the date of
termination times three, (c) in the case of Messrs. Loyd and Rhein,
deliver to such executive the shares under the 1992 Plan free of
restrictions and (d) except in the case of Mr. Rhein, continue to
provide certain welfare plan and other benefits for a period of three
years or as long as such plan or benefits allow.
For purposes of the employment agreements, "good reason"
includes (i) a change in the officer's position, authority, duties or
responsibilities, (ii) changes in the office or location at which he
is based without his consent (such consent not to be unreasonably
withheld), (iii) certain breaches of the agreement and (iv) in the
case of Messrs. Loyd and Rhein, (x) any determination by such
executive that termination of his employment with the Company is, in
his sole opinion, in the best interests of the Company or Messrs. Loyd
or Rhein and in such event (A) the date of termination is not less
than 180 days (or such shorter period as may be mutually agreed
between such executive and the Company) following the giving of notice
of termination as provided in the employment agreements and (B)
Greenwing and Workout, respectively, shall have disposed of
(including, without limitation, by means of a distribution to its
stockholders) not less than 50% of the Company's Common Stock
beneficially owned, directly or indirectly, by such entity as of
October 11, 1993 and (y) the occurrence of October 11, 2003. A
"change of control" for purposes of the agreements with Messrs. Voss,
Hillin and Nagle would occur if a person or group (other than (i) such
officer, (ii) the Company or any of its subsidiaries or affiliates,
(iii) any person subject as of the date of the agreement to the
reporting or filing requirements of Section 13(d) of the Exchange Act
with respect to the securities of the Company or any affiliates, (iv)
any trustee or other fiduciary holding or owning securities under an
employee benefit plan of the Company, (v) any underwriter temporarily
holding or owning securities of the Company, or (vi) any corporation
owned directly or indirectly by the current stockholders of the
company in substantially the same proportion as their then ownership
of stock of the Company) becomes the beneficial owner, directly or
indirectly, of securities of the Company representing forty percent
(40%) or more of the combined voting power of the Company's then
outstanding securities. A "change of control" for purposes of the
agreements with Messrs. Loyd and Rhein would occur if any person or
group (subject to the same exceptions described in the change of
control provisions above for the agreements with Messrs. Voss, Hillin
and Nagle) becomes the beneficial owner, directly or indirectly, of
securities of the Company representing twenty-two and one-half percent
(22.5%) or more of the combined voting power of the Company's then
outstanding securities.
The same benefits payable to each officer under the agreement if
he terminates his employment for good reason or following a change of
control would also be payable to him if the Company terminates his
employment other than for cause (as defined in the agreement) or if he
dies or becomes disabled under the terms of the agreement. "Cause"
for purposes of the agreements with Messrs. Loyd and Rhein includes
(i) dishonesty by such executive which results in substantial personal
enrichment at the expense of the Company or (ii) demonstratively
willful repeated violations of such executive's obligations under the
employment agreements which are intended to result in material injury
to the Company. "Cause" for purposes of the agreements with Messrs.
Voss, Hillin and Nagle includes (i) dishonesty by such executive which
results in substantial personal enrichment at the expense of the
Company, (ii) such executive's willful engagement in conduct which is
materially injurious to the business or reputation of the Company, or
(iii) such executive's failure substantially to perform his duties
with the Company in a reasonably satisfactory manner, in each case as
determined in good faith by the affirmative vote of at least two-
thirds of the members of the Board. For purposes of the employment
agreements with Messrs. Loyd, Rhein, Voss, Hillin and Nagle, no act or
failure to act on the part of such executives shall be deemed
"willful" unless done or admitted to be done by such executive not in
good faith and without reasonable belief that his action or omission
was in the best interests of the Company.
The agreements provide that if any payment to one of the covered
officers will be subject to any excise tax under Code Section 4999, a
"gross-up" payment would be made to place the officer in the same net
after-tax position as would have been the case if no excise tax had
been payable. Based on their current compensation levels, the amount
of income which the officers could recognize under the agreements
(together with any other compensation payable by reason of a change of
control) before payment of an excise tax would be required and such a
tax gross-up payment would be payable by the Company would be
approximately $1,507,000 in the case of Mr. Loyd, $1,129,000 in the
case of Mr. Rhein, $449,000 in the case of Mr. Voss, $505,000 in the
case of Mr. Hillin, and $380,000 in the case of Mr. Nagle. The
aggregate present value of the benefits payable under the respective
agreements in the event their provisions became operative is
approximately $1,678,000 in the case of Mr. Loyd, $820,000 in the case
of Mr. Rhein, $873,000 in the case of Mr. Voss, $716,000 in the case
of Mr. Hillin, and $721,000 in the case of Mr. Nagle, assuming that
such provisions became operative on April 1, 1994 and based solely on
the provisions of the agreements relating to payments respecting
salary and bonus. Provisions of the agreements relating to payments
respecting other benefits would increase the amounts payable. Based
on these assumptions, 20% excise tax payments would be imposed under
Code Section 4999 with respect to the present value of all benefits
payable by reason of a change of control in excess of $311,000 in the
case of Mr. Loyd, $145,000 in the case of Mr. Rhein, $146,000 in the
case of Mr. Voss, $110,000 in the case of Mr. Hillin and $120,000 in
the case of Mr. Nagle, and the Company would be required to make
gross-up payments so as to place the officers in the same respective
net after-tax positions as would have been the case if no excise tax
had been payable.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's
directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission ("SEC") and the New
York Stock Exchange initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of
the Company. Directors, officers and greater than ten percent
shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies
of such reports furnished to the Company and written representations
that no other reports were required, during the fiscal year ended
December 31, 1993 all reports required by Section 16(a) to be filed by
its directors, officers and greater than ten percent beneficial owners
were filed on a timely basis except that: BCL and Messrs. McLean,
Webster and McIntire each filed late one Form 4 with respect to a
single transaction; Mr. Ofner filed late two Form 4's each with
respect to a single transaction; and Messrs. Loyd and Angel each filed
late one Form 5 with respect to the surrender of restricted stock,
which had been awarded under the 1992 Plan approved by the Company's
stockholders under Rule 16b-3, to satisfy tax withholding obligations.
THE RECLASSIFICATION PROPOSAL
The Board of Directors has approved the Reclassification
Proposal and has directed that the Reclassification Proposal be
submitted to the Company's stockholders for consideration and action.
If both the Reclassification Proposal and the Charter Amendment are
approved by the stockholders, the Company will effect the
Reclassification Proposal and the Charter Amendment, and will amend
and restate the Charter in substantially the form set forth in Exhibit
99.A hereto. If the Reclassification Proposal is not approved but the
Charter Amendment is approved, the Company will effect the Charter
Amendment, and will amend and restate the Charter in substantially the
form set forth in Exhibit 99.B hereto. See "THE CHARTER AMENDMENT".
Purposes and Effects of the Reclassification Proposal
As of the Record Date, there were 60 shares of Class A Stock
outstanding, convertible in the aggregate into 81 shares of Common
Stock. See "Description of Common Stock" and "Description of Class A
Stock". The Reclassification Proposal contemplates the amendment of
the Charter so as to reclassify each outstanding share of Class A
Stock into 10 shares of Common Stock (with cash payments to be made in
lieu of fractional shares) and to delete all references to the Class A
Stock from the Charter.
The Board of Directors believes that the small number of
remaining outstanding shares of Class A Stock and the dividend and
other rights thereof are immaterial to the holders of such Class A
Stock and that elimination of the Class A Stock pursuant to the
Reclassification Proposal will significantly reduce administrative
burdens and expenses currently associated with the Class A Stock,
including obligations to maintain a transfer agent for the Class A
Stock, obligations to provide special notices to holders of Class A
Stock under certain circumstances, and obligations to calculate,
declare and distribute dividends on the Class A Stock in an amount (a
maximum of $48.00 per year) which is otherwise immaterial to the
holders of Class A Stock.
In addition, holders of Class A Stock will benefit from the
liquidity of the trading market for shares of Common Stock, which are
listed for trading on the New York and Pacific Stock Exchanges. Any
Common Stock issued in connection with the Reclassification Proposal
will be listed on the New York Stock Exchange and the Pacific Stock
Exchange and will be freely tradeable by holders thereof who are not
affiliates of the Company. On the Record Date, the reported closing
price of the Common Stock on The New York Stock Exchange was $[___]
per share. The Class A Stock is not listed or approved for trading on
or with any securities exchange or association.
Consummation of the Reclassification Proposal will not alter the
number of authorized shares of Common Stock, which will remain
425,000,000 shares. The aggregate number of shares of capital stock
which the Company has authority to issue will be reduced by 285
shares, representing elimination of the 285 shares of Class A Stock
currently authorized, and all references to the Class A Stock will be
deleted from the Charter. Consummation of the Reclassification
Proposal will have no material federal tax or accounting consequences.
In the event that the Reclassification Proposal is adopted and
becomes effective, all powers, preferences, privileges, voting and
other special or relative rights and qualifications of the Class A
Stock, including priorities with respect to dividends and liquidation,
existing prior to the effective date of the amendment will be
terminated. The former holders of Class A Stock will thereafter be
entitled to receive shares of Common Stock and will, as owners of such
Common Stock, have rights identical in all respects to other holders
of Common Stock.
If the Reclassification Proposal is adopted, an amendment to the
Charter will be filed with the Secretary of State of Delaware
immediately following the Annual Meeting (the "Effective Date"). The
proposed amendments to the Charter in substantially the form to be
implemented in connection with the Reclassification Proposal and the
Charter Amendment are set forth in full in Exhibit A hereto.
On the Effective Date, each share of Class A Stock issued and
outstanding immediately prior to the Effective Date will be
reclassified as and changed into ten shares of Common Stock, subject
to the treatment of fractional share interests as described below.
Shortly after the Effective Date, the Company will send transmittal
forms to holders of the Class A Stock to be used in forwarding their
certificates formerly representing shares of Class A Stock for
surrender and exchange for the whole shares of Common Stock into which
their Class A Stock was reclassified and cash in lieu of any fraction
of a share of Common Stock to which such holders would otherwise be
entitled. No certificates or scrip representing fractional share
interests in Common Stock will be issued, and no such fractional share
interest will entitle the holder thereof to vote or to any rights of a
stockholder of the Company. In lieu of any such fractional share
interest, each holder of the Class A Stock who otherwise would be
entitled to receive a fractional share of Common Stock will be paid
cash upon surrender of certificates formerly representing the Class A
Stock held by such holder in an amount equal to the product of such
fraction multiplied by the closing price of the Common Stock on the
New York Stock Exchange on the Effective Date (or if the Common Stock
is not so traded on such date, such closing price on the next
preceding day on which such stock was traded on the New York Stock
Exchange).
Description of Common Stock
The holders of Common Stock are entitled to one vote per share
and generally vote together with the Class A Stock as a single class.
Holders of Common Stock do not have cumulative voting rights in
elections for directors. Holders of shares of Common Stock are
entitled to receive such dividends as the Board of Directors may from
time to time declare out of funds of the Company legally available for
the payment of dividends, subject to the prior rights of holders of
any outstanding preferred stock and Class A Stock. Upon any
liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to receive pro rata all of the assets of the
Company available for distribution to stockholders, subject to the
prior rights of holders of any outstanding preferred stock or Class A
Stock. See "PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP".
Description of Class A Stock
The holders of Class A Stock are entitled to four votes per
share and vote together with the Common Stock as a single class,
subject to the right to a separate class vote in certain specific
instances and as required by law. If the holders of one or more
series of preferred stock (including the Preferred Stock) are entitled
to elect members of the Company's Board of Directors by reason of
default in payment of dividends, the holders of Class A Stock are
entitled to vote together with such holders of preferred stock
(including the Preferred Stock) for the election of such directors.
Holders of Class A Stock have cumulative voting rights in elections of
directors. Holders of Class A Stock are entitled to receive, when, as
and if declared by the Board of Directors, cumulative cash dividends
in preference to any dividends on the Common Stock at the annual rate
of $.30 per share on a parity with holders of preferred stock
(including the Preferred Stock) and additional noncumulative dividends
of $.50 per share in any year in which a dividend (other than a
dividend payable in Common Stock) is paid or declared on the Common
Stock. No interest is paid on accrued dividends. All cumulative
dividends payable on the Class A Stock have been declared and paid by
the Company through the first quarter of 1994. Upon any liquidation,
dissolution or winding up of the Company, holders of Class A Stock are
entitled to receive $12 per share, plus all accrued and unpaid
cumulative dividends, on a parity with holders of preferred stock
(including the Preferred Stock) before any distribution may be made to
holders of Common Stock. The 60 outstanding shares of Class A Stock
are currently convertible into 81 shares of Common Stock. Provision
is made for adjustment in the conversion rate in the event of stock
splits, stock dividends, subdivisions, reclassification or mergers and
in certain other events. The Class A Stock is not subject to
redemption. See "PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP."
Board Recommendation
The Board recommends a vote FOR the adoption of the
Reclassification Proposal.
THE CHARTER AMENDMENT
The Board of Directors has approved the Charter Amendment and
has directed that the Charter Amendment, as alternatively set forth in
Exhibits A and B hereto, be submitted to the Company's stockholders
for consideration and action. If both the Reclassification Proposal
and the Charter Amendment are approved by the stockholders, the
Company will effect the Reclassification Proposal and the Charter
Amendment, and will amend and restate the Charter substantially in the
form set forth in Exhibit A hereto. If the Reclassification Proposal
is not approved but the Charter Amendment is approved, the Company
will effect the Charter Amendment, and will amend and restate the
Charter in substantially the form set forth in Exhibit B hereto. See
"THE RECLASSIFICATION PROPOSAL".
Purposes and Effects of the Charter Amendment
The Charter Amendment provides for the amendment of the Charter
to (i) amend Article THIRD thereof to delete the detailed statement of
the business, objects or purposes to be transacted, promoted or
carried on by the Company and replace such statement with a general
statement of purpose authorizing the Company to engage in any lawful
act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware, (ii) delete Articles
FIFTH through EIGHTH thereof, (iii) amend the Charter to delete all
reference to the Class B Stock and (iv) restate the Charter in its
entirety, in order to integrate the provisions of the Charter which
will be and remain in effect and operative following the Annual
Meeting.
Approval by the Company's stockholders of the Charter Amendment
will constitute ratification and approval of all of the terms and
provisions of the Charter as set forth in Exhibit A hereto (if the
Reclassification Proposal is also approved) or Exhibit B hereto (if
the Reclassification Proposal is not approved).
Article THIRD of the Charter currently contains a detailed
statement of the business, objects or purposes to be transacted,
promoted or carried on by the Company. The Company believes that such
statement of purposes effectively authorizes the Company to engage in
any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law. The Company is not aware
of any business or activity currently engaged in or carried on by the
Company or expected to be engaged in or carried on by the Company in
the future which is not authorized or permitted pursuant to the
existing terms and provisions of Article THIRD. Nevertheless, the
Company believes that the detailed statement of purpose now contained
in Article THIRD is antiquated and unnecessarily complicated and
detailed. Accordingly, the Company seeks to amend Article THIRD to
authorize the Company to engage in any lawful act or activity, in
accordance with what the Company believes to be modern corporate
practice and custom. This change to Article THIRD will modernize,
abbreviate and simplify the Charter without altering the Company's
authority lawfully to engage in all aspects of its business as
currently conducted or as to be conducted in the future.
Articles FIFTH through EIGHTH of the Charter currently set forth
the minimum amount of capital with which the Company will commence
business, the names and places of the Company's incorporators, the
fact that the Company is to have perpetual existence and the fact that
stockholder's private property shall not be subject to the payment of
corporate debts. The deletion of Articles FIFTH through EIGHTH will
modernize, abbreviate and simplify the Charter without altering the
legal rights or obligations of the Company or its stockholders under
the Delaware General Corporation Law.
Pursuant to the Charter, the Company currently has 41,113,980
shares of Class B Stock authorized. None of such shares of Class B
Stock are currently issued or outstanding. The Class B Stock was
authorized for issuance to certain creditors of the Company in
connection with the Company's business, financial and capital
restructuring consummated in September 1989. In connection with the
Company's recapitalization consummated in March 1991, all of the
issued shares of Class B Stock were converted into Common Stock by the
holders thereof. The Company has no plans to issue Class B Stock in
the future. Accordingly, the Board of Directors has approved the
deletion of all references to the Class B Stock in the Charter by
means of the Charter Amendment.
Consummation of the Charter Amendment will not alter the number
of authorized shares of Common Stock, which will remain 425,000,000
shares. The aggregate number of shares of capital stock which the
Company has authority to issue will be reduced by 41,113,980 shares,
representing elimination of the 41,113,980 shares of Class B Stock
currently authorized, and all references to the Class B Stock will be
deleted from the Charter. Consummation of the Charter Amendment will
have no material federal tax or accounting consequences.
Pursuant to the restatement of the Charter by means of the
Charter Amendment, provisions governing the terms of the Preferred
Stock will be incorporated into the body of the Charter from the
existing Certificate of Designations for the Preferred Stock and, in
connection therewith, various stylistic and formal changes will be
made to the existing text of such Certificate of Designations. None
of these changes will alter in any respect the rights, privileges,
duties or obligations of the Company or the holders of the Preferred
Stock.
Board Recommendation
The Board recommends a vote FOR the adoption of the Charter
Amendment.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has approved the Auditors Proposal which
involves reappointment of Arthur Andersen & Co. as the independent public
accountants for the Company for its fiscal year 1994.
The Board of Directors selected and the stockholders voted to
ratify and approve the appointment of Arthur Andersen & Co. as
independent accountants for the Company for its fiscal year 1992 to
replace Coopers & Lybrand effective as of November 25, 1992, and for
its fiscal year 1993.
There were no disagreements with Coopers & Lybrand regarding
accounting principles and practices for the two fiscal years ended
December 31, 1991, and the subsequent interim period ended
November 25, 1992. The decision to change accountants was approved by
the Company's Audit Committee of the Board of Directors.
Representatives of Arthur Andersen & Co. will attend the Annual
Meeting, will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
Board Recommendation
The Board recommends a vote FOR approval and ratification of the
Auditors Proposal.
STOCKHOLDER PROPOSALS
The date by which proposals of stockholders intended to be
presented at the 1995 Annual Meeting of Stockholders must be received
by the Company for inclusion in the Company's Proxy Statement and form
of Proxy relating to that meeting is December 15, 1994.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
Management does not intend to bring any other matters before the
Annual Meeting nor does it know of any matters which other persons
intend to bring before the Annual Meeting. However, if any other
matters properly come before the Annual Meeting, the persons named in
the accompanying Proxy will be authorized to vote thereon pursuant to
discretionary authority.
This Proxy Statement is accompanied by a copy of the Company's
Annual Report on Form 10-K for the year ended December 31, 1993.
READING & BATES CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS -- MAY 10, 1994
The undersigned hereby appoints Paul B. Loyd, Jr., C. Kirk
Rhein, Jr. and T. W. Nagle, or any of them, as proxies and attorneys
with several powers of substitution, hereby revoking any prior Proxy,
and hereby authorizes them to represent the undersigned and to vote as
designated below all the shares of Common Stock (the "Common Stock")
and all of the shares of Class A (Cumulative Convertible) Capital
Stock (the "Class A Stock"), of Reading & Bates Corporation (the
"Company") held of record by the undersigned on April 8, 1994 at the
Annual Meeting of Stockholders to be held on May 10, 1994 (the "Annual
Meeting"), or any postponement or adjournment thereof.
The Board of Directors recommends a vote FOR:
1. Election of the following nominees as Class III directors for
terms expiring in 1997: Arnold L. Chavkin, Paul B. Loyd, Jr.
and Steven A. Webster:
[ ] FOR [ ] WITHHOLD [ ] FOR, except
withhold from: _____________
2. Approval and adoption of a proposal to amend the Company's Restated
Certificate of Incorporation (the "Charter") so as to reclassify each
share of the Company's Class A Stock into 10 shares of Common Stock and
to delete all references to such Class A Stock therefrom, as more fully
described in the Company's Proxy Statement
with respect to the Annual Meeting (the "Reclassification Proposal"):
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval and adoption of a proposal to amend the Charter to update and
simplify Article THIRD thereof, to delete Articles FIFTH through EIGHTH
thereof, to delete all references to the Class B Stock therefrom and to
restate the Charter in its entirety as more fully described in the
Company's Proxy Statement with respect to the Annual Meeting (the
"Charter Amendment"):
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Ratification and approval of the reappointment of Arthur Andersen & Co.
as independent public accountants for the Company for its fiscal year
1994:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion on any other matter that may properly come before the
meeting.
You may specify your votes by marking the appropriate boxes above. You need not
mark any boxes, however, if you wish to vote all items in accordance with the
Board of Directors' recommendations. If your votes are not specified, your
shares will be voted FOR the election of the nominees for directors, FOR the
approval and adoption of the Reclassification Proposal, FOR the approval and
adoption of the Charter Amendment and FOR the ratification and approval of the
reappointment of Arthur Andersen & Co. as independent public accountants.
DATED: ____________________, 1994
_________________________________
(Signature)
(NOTE: in the case of a joint ownership, each such
owner should sign. Executors, Administrators,
guardians, trustees, etc. should add their title as
such, and where more than one executor, etc. is
named, a majority must sign. If the signer is a
corporation, please sign full corporation name by a
duly authorized officer.)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE
READING & BATES CORPORATION
EXHIBIT INDEX
Exhibit
Number Description
99.A Restated Certificate of Incorporation
of Reading & Bates Corporation as if
the Reclassification Proposal and the
Charter Amendment are approved by the
stockholders.
99.B Restated Certificate of Incorporation
of Reading & Bates Corporation as if
the Reclassification Proposal is not
approved but the Charter Amendment is
approved by the stockholders.
Exhibit 99.A
Restated Certificate of Incorporation
Of
Reading & Bates Corporation
(formerly Reading & Bates Offshore Drilling Company)
(The proposed amendments to and restatement of the Company's
Restated Certificate of Incorporation pursuant to the
Reclassification Proposal and the Charter Amendment combined,
to be acted on at the Annual Meeting will be in substantially
the form set forth in this Exhibit 99.A.)
(Language proposed to be deleted by amendment is in brackets
[ ], while language proposed to be added is in BOLDFACE.)
First. The name of the Corporation is Reading & Bates
Corporation.
Second. Its principal office in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street, in
the City of Wilmington, County of New Castle, Delaware. The
name and address of its resident agent is The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street,
City of Wilmington, County of New Castle, Delaware.
[Third. The nature of the business, or objects or purposes to
be transacted, promoted or carried on are as follows:
1. To buy, own, sell and lease petroleum lands; to locate
petroleum, gas, and other mineral lands under the laws of
the United States, any state, territory, or possession
thereof, or under the laws of any government, foreign or
domestic; to drill and bore wells for oil, water, gas, or
other substance, both on dry land and offshore
operations, and otherwise; to buy, sell, own, lease,
construct and operate oil wells and gas, machinery,
tanks, and pipe lines, and to buy, sell, own, and lease
all necessary lands, buildings and personal property in
connection therewith and necessary for said purposes; to
buy, own, sell, lease, construct, and operate factories,
machinery, tanks, and pipe lines for the refining and
distilling and distribution of petroleum oils, gas, and
other hydrocarbon substances or mixtures thereof; to
explore for and develop said petroleum lands and
petroleum, gas, and other minerals, in any locality
whatsoever, and to utilize therein barges, boats, shrimp
boats, piers, platforms, and other structures, machinery,
and equipment as same shall be necessary and desirable
therefor.
2. To purchase, sell, and own royalties in oil and gas lands
and leases; to pay mortgages, notes, taxes, assessments,
and other charges that are or may become a lien or charge
against any lands or leases in which this company may
have a royalty interest.
3. To buy, acquire, sell, retain, deal in, or otherwise
dispose of absolutely or contingently, petroleum, and/or
gas properties and interests (whether like or different,
and any right, title, or interest therein, and to do all
other acts and things required to be done in connection
therewith.
4. To engage in the transportation of oil, gas, salt,
sulphur, or other minerals, either produced by this
Corporation or other persons or corporations, by means of
pipe lines, tramways, railroads, boats, barges or other
conveyances or to lease or sublease all or any part
thereof to other persons or corporations for the purpose,
and, in order to fully carry out said objects and
purposes, to purchase, lease, or otherwise acquire, pipe
lines, tramways, railroads, boats, barges, tanks cars,
locomotives, pumping stations, steam plants, air plants
and all other machinery, apparatus and paraphernalia
necessary or incidental thereto. To build, construct,
lease, purchase, or otherwise acquire buildings,
machinery and other apparatus for refining, smelting,
manufacturing or otherwise working up the products of
mineral lands, either produced by this Corporation or
other persons or corporations, and to refine, smelt,
manufacture or otherwise work-up the by-products of said
minerals and to operate the said plant and market the
products or by-products as manufactured to the best
advantage. To engage in a general oil or mineral
brokerage business by buying, selling or otherwise
trading in mineral lands or the products or by-products
of mineral lands. To carry on such other business
pertaining to oil, gas, salt, sulphur or other minerals
as may be found necessary or desirable or such as is
generally engaged in by a corporation of this kind.
5. To carry on the business of exploring for and of mining,
milling, concentrating, converting, smelting, treating,
preparing for market, manufacturing, buying, selling,
exchanging, or otherwise producing and dealing in all
kinds of ores, metals and minerals, including uranium,
thorium, and all radioactive ores, the products and
by-products thereof, of every kind and description and by
whatsoever process the same can be or may hereafter be
produced, and generally and without limit as to amount,
to buy, sell, exchange, lease, acquire and deal in lands,
mines and mineral rights and claims, and to conduct all
business appertaining thereto; to purchase, lease or
otherwise acquire mining rights, timber rights, oil and
gas rights, mines, buildings, dwellings, plants,
machinery, tools and other properties whatsoever which
this Corporation may from time to time find to be for its
advantage and purposes, to mine and market any mineral or
other product that may be found in or on such lands, to
explore, work, exercise, develop or turn to account the
same; to construct and operate, not as a public utility,
or for public use, railways and tramways for mining and
moving same; to build and lease houses for the use of
miners and others, including the purchase and sale of
same.
6. To construct, install, maintain and operate conduits and
lines of tubing and piping for the transportation of oil
or natural gas; to transport such oil and gas by means of
such pipes, tank cars, or otherwise, and to buy, sell and
supply the same to others; and to lay, buy, lease, sell,
and operate pipes, pipe lines and storage tanks to be
used for the purpose of transporting oil and gas.
7. To buy, sell and furnish oil and gas for light, heat and
other purposes; to lease, purchase, lay down, construct,
renew, maintain and operate pipe lines, tubes, tanks,
pump stations, connections, fixtures, storage houses, and
such machinery, apparatus, devices and facilities as may
be necessary to operate such pipes, pipe lines and other
properties.
8. To acquire, by purchase or otherwise, own, hold, lease,
use and occupy such lands, rights-of-way, easements,
franchises, buildings and structures as may be necessary
to the purposes of the Corporation; and to exercise,
carry out and enjoy any power, authority or privilege
which any government, federal or state, has enacted, or
shall enact, make or grant, or which the Corporation may
otherwise become lawfully vested with, including therein
powers to acquire land and interests therein by eminent
domain in pursuance of the purposes of the Corporation.
9. To acquire, by purchase or otherwise, own, hold, store,
use, sell, lease, exchange, dispose of, transport,
transmit, distribute, deal in, compress, blend, furnish
and supply oil and/or natural gas, and other mineral
solutions in any form or of any kind whatsoever, and the
products and by-products of petroleum and other oils,
natural gas, and other mineral solutions.
10. To lease, purchase or acquire in any manner, lay down,
construct, install, own, hold, maintain, operate, sell,
exchange, lease, encumber, or in any manner dispose of
works, buildings, pipe lines, mains, distribution
systems, compressor stations, machinery, appliances,
apparatus, tanks, pump stations, connections, fixtures,
storage houses, devices and facilities as may be
necessary, useful or convenient in the acquisition,
storage, transportation and distribution of natural gas,
artificial gas, oil and other mineral solutions and
liquified minerals, or any of them, and the products,
by-products and residual products thereof.
11. To acquire, by purchase or otherwise, own, hold, store,
use, sell, lease, exchange, dispose of, transport,
transmit, distribute, deal in, furnish and supply any
substances, articles or things of which, or in the
production of which, petroleum or other oils, natural
gas, gas, or other mineral solutions form a part.
12. To acquire, by purchase or otherwise, own, hold, sell,
lease, exchange, dispose of, finance, deal in, construct,
build, establish, equip, improve, use, operate, maintain
and work upon any and all kinds of plants and systems for
the purchase, sale, supply, storage and utilization,
transportation, transmission, distribution, regulation,
control, application or disposition of petroleum and
other oils, natural gas, gas, and other mineral solutions
of any and every kind, and the products and by-products
of petroleum and other oils, natural gas, gas, and other
mineral solutions, and any and all kinds of works,
plants, manufactories, structures, systems, machinery,
pipes, conduits, apparatus, devices, equipment, supplies,
articles and merchandise of any and every kind pertaining
to or in anywise connected with the purchase, sale,
supply, storage, utilization, transportation,
transmission, regulation, control, application or
disposition of petroleum and other oils, natural gas,
gas, and other mineral solutions of any and every kind
and the products and by-products of natural gas, gas,
petroleum and other oils, and other mineral solutions.
13. To make, enter into and carry out any arrangements with
any domestic or foreign governmental, municipal or public
authority or with any corporation, association, firm,
syndicate, entity or individual, domestic or foreign, to
obtain therefrom or otherwise to acquire by purchase,
lease, assignment or otherwise any powers, rights,
privileges, immunities, franchises, guaranties, grants
and concessions; to acquire, hold, own, exercise,
exploit, dispose of and realize upon the sale, and to
undertake and prosecute any business dependent thereon;
and to promote, cause to be formed and aid in any way any
corporation, association, partnership, syndicate or
entity for any such purposes.
14. To purchase or otherwise acquire, hold, own, occupy,
develop, improve, sell, dispose of and convey real
property, and any and every interest therein, either
within or without the State of Delaware, and anywhere in
the world; to extract, remove, produce or prepare from
any such property, any animal, vegetable, mineral, acid
or other products or materials therein or thereon, either
agricultural pursuits, mining, quarrying, smelting,
concentrating, refining or by any other method or means
now known or that may hereafter be discovered or invented
and to avail itself in every manner of each and every
resource or such property by reducing it to proper form,
and by use, sale or other disposition thereof. To buy,
exchange, contract for, lease, and in any and all other
ways acquire, take, hold, and own, and to deal in, sell,
mortgage, lease, or otherwise dispose of lands, mining
claims, mineral rights, oil wells, gas wells, oil lands,
gas lands, and other real property, and rights and
interest in and to real property, and to manage, operate,
maintain, improve, and develop the properties, and each
and all of them.
15. To purchase, lease, or otherwise acquire real estate in
incorporated towns or cities, or additions thereto, or
elsewhere located, and to develop such real estate, and
to design, construct, enlarge, repair or remodel, or
otherwise engage in the construction of suitable
structures and appurtenances to carry out the purposes of
the Corporation, and to engage in the contracting
business, or to contract with others to build, construct,
repair, remodel, or otherwise secure structures,
buildings, and improvements of every kind and character
to be located thereupon.
16. To enter into, make, perform, carry out and discharge
contracts of any and all kinds for any lawful purpose
without limit as to amount with any person, firm,
association, partnership or corporation, either public or
private.
17. To organize, incorporate, reorganize, finance, and to aid
and assist financially or otherwise, companies, corpora-
tions, joint stock companies, syndicates, partnerships,
and associations of all kinds engaged ln similar business
as herein expressed; and to subscribe for, endorse, own,
and hold the bonds, stocks, securities, debentures, notes
or undertakings of any such company, corporation, joint
stock company, syndicate, partnership, or association,
and to make any guaranty in connection therewith, or
otherwise for the payment of money or for the performance
of any obligation or undertaking and to do any and all
things necessary or convenient to carry any of such
purposes into effect.
18. To have one or more offices, to carry on all or any of
its operations and business and without restriction or
limit as to amount to purchase or otherwise acquire,
hold, own, mortgage, sell, convey or otherwise dispose
of, real and personal property of every class and
description in any of the states, districts, territories
or colonies of the United States, and in any and all
foreign countries, subject to the laws of such state,
district, territory, colony or country.
19. To improve, manage, develop, sell, assign, transfer,
lease, mortgage, pledge, or otherwise dispose of or turn
to account or deal with all or any part of the property
of the Corporation, and from time to time to vary any
investment or employment of capital of the Corporation.
20. To acquire, purchase, apply for or obtain any and all
letters of patent, licenses, patent rights, trademarks,
patented processes and similar rights granted by the
United States or any other sovereign or government or any
interest therein, or any inventions which may be capable
of being used for or in connection with any of the
objects or purposes of this Corporation, and to use,
exercise, develop, sell, dispose of, lease, grant rights
in respect thereto, or other interests in the same, and
otherwise turn the same to account and to carry on any
business, manufacturing or otherwise, which may be deemed
to aid, effectuate or develop directly or indirectly the
object or any of them.
21. To acquire all or any part of the good will, rights,
property and business of any person, firm, association or
corporation heretofore or hereafter engaged in any
business similar to any business which the Corporation
has the power to conduct, to pay for the same in cash or
stock or bonds of the Corporation or otherwise, to hold,
utilize, or in any manner dispose of the whole or any
part of the rights and properties so acquired, and to
assume ln connection therewith any liabilities of any
such person, firm, association or corporation and conduct
in any lawful manner the whole or any part of the
business thus acquired.
22. To do all and everything necessary, suitable, convenient
and proper for the accomplishment of any of the purposes
or the attainment of any of the objects or the
furtherance of the powers hereinbefore set forth, either
alone or in association with other corporations, firms,
or individuals, and to do every other act or thing
incidental or appurtenant to or growing out of or
connected with the aforesaid business or powers or any
part or parts thereof, provided the same be consistent
with the laws under which this Corporation is organized.
23. To acquire by purchase, subscription or otherwise and to
own, hold for investment or otherwise, and to use, sell,
assign, transfer, mortgage, pledge, exchange or otherwise
dispose of, alone or in syndicate or otherwise in
conjunction with others, real and personal property of
every sort and description and wheresoever situated,
including shares of stock, bonds, debentures, notes,
scrip, securities, evidences of indebtedness, contracts
or obligations of any corporation, associations,
syndicates or trust estates, domestic or foreign, or of
any firm or individual, or of the United States of
America, or of any state, territory or dependency of the
United States of America, or of any foreign country, or
of any municipality or local authority within or without
the United States of America, and also to issue in
exchange therefor stocks, bonds or other securities or
evidences of indebtedness to the Corporation, and while
the owner or holder of any such property, to receive,
collect and dispose of the interest, dividends and income
on or from such property, and to possess and exercise in
respect thereto all of the rights, powers and privileges
of ownership, including all voting power thereon.
24. To buy, sell and otherwise deal in open accounts and
other similar evidences of debt and to loan money and to
take notes, open accounts and other similar evidences of
debt as collateral security therefor.
25. To aid in any manner any corporation, association or
trust estate, domestic or foreign, or any firm or
individual, in which any shares of stock or in which any
bonds, debentures, notes, securities, evidences of
indebtedness, contracts or obligations are held by or for
the Corporation, directly or indirectly, or in which, or
in the welfare of which, the Corporation shall have any
interest, and to do any acts designed to protect,
preserve, improve or enhance the value of any property at
any time held or controlled by the Corporation or in
which it may be at any time interested, directly or
indirectly, or through other corporations or otherwise;
and to cause to be forced, merged, consolidated, or
reorganized or liquidated and to promote, take charge of
or aid in any way permitted by law the formation, merger,
consolidation, reorganization or liquidation of any
corporation, association or entity in the United States
of America, or elsewhere.
26. To guarantee and to assume the payment of dividends upon
any capital stock and to endorse or otherwise guarantee
the principal or interest, or both, of any bonds,
debentures, notes, scrip or other obligations or
evidences of indebtedness, or the performance of any
contracts or obligations, of any other corporation, trust
estate or association, domestic or foreign, or of any
firm in which the corporation may have a lawful interest,
in so far and to the extent that such guaranty may be
permitted by law.
27. To borrow or raise moneys for any of the purposes of the
Corporation and to issue bonds, promissory notes, bills
of exchange, debentures, and other obligations and
evidences of indebtedness, whether secured by mortgage,
pledge or otherwise, or unsecured, for money borrowed or
in payment for property purchased, leased or acquired or
for any other lawful object; to mortgage or pledge all or
any part of its properties, rights, interests and
franchises, including any or all shares of stocks, bonds,
debentures, notes, scrip or other obligations or
evidences of indebtedness at any time owned by it.
28. To sue and be sued in any court of law or equity and to
delegate by power of attorney to any person or persons
authority to commence, prosecute, defend, compromise or
settle any claims, actions or suits in behalf of or
against the Corporation, either at law or in equity or
otherwise.
29. To purchase or otherwise acquire its own shares of stock
(so far as may be permitted by law) and its bonds,
debentures, notes, scrip or other securities or evidences
of indebtedness, and to cancel or to hold, transfer,
reissue, sell or otherwise dispose of the same from time
to time to such extent and in such manner and upon such
terms and conditions as the Board of Directors may in its
discretion determine.
30. To do all and everything necessary and proper for the
accomplishment of the objects herein enumerated or
necessary or incidental to the protection and benefit of
the Corporation, and in general to carry on any lawful
business necessary or incidental to the attainment of the
purposes of the Corporation, whether such business is
similar in nature to the objects and powers hereinabove
set forth or otherwise; but nothing herein contained is
to be construed as giving the Corporation the power of
constructing, maintaining and operating public utilities
or doing a banking business within the State of Delaware.
31. To do any or all things herein set forth to the same
extent as natural persons might or could do, as
principal, agent, factor, contractor, trustee or
otherwise, and either alone or in conjunction with any
other individuals, firms, associations, syndicates, trust
estates or corporations.
32. To conduct its business in the State of Delaware, other
states, the District of Columbia, the territories and
colonies of the United States of America and in foreign
countries, and to have one or more offices without as
well as within the State of Delaware and to hold,
purchase, mortgage and convey real or personal property
without as well as within the State of Delaware.
The foregoing clauses shall be construed as objects, purposes
and powers, and it is hereby expressly provided that the
foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the powers of the corporation.
The business or purpose of the Corporation is from time to
time to do any one or more of the acts or things hereinabove
set forth and it shall have power to conduct and carry on its
said business, or any part thereof, and to have one or more
offices to carry on any authorized operations and businesses
without restriction or limit as to number in any of the states
or territories of the United States or any and all foreign
countries. To conduct all of the aforesaid activities and any
other activities and any other acts connected therewith or
incidental thereto in any state or territory of the United
States or in any foreign country. To do such other and
further things as are required and as are usually done in
business of like nature and authorized by law. It is the
intention that said clauses be construed both as purposes and
powers; and generally that the Corporation shall be authorized
to exercise and enjoy all other powers, rights, and privileges
granted to or conferred upon corporations of this kind by the
laws of the State of Delaware, and the enumeration of certain
powers as herein specified is not intended as exclusive of or
as a waiver of any of the powers, rights or privileges granted
or conferred by the laws of said state, now or hereafter
enforced.]
(Existing Article Third (relating to the Corporation's nature
of business, objects or purposes) is to be deleted in its
entirety.)
THIRD. THE PURPOSE OF THE CORPORATION IS TO ENGAGE IN ANY
LAWFUL ACT OR ACTIVITY FOR WHICH CORPORATIONS MAY BE ORGANIZED
UNDER THE GENERAL CORPORATE LAW OF THE STATE OF DELAWARE.
Fourth. The aggregate number of shares of all classes of
stock which the Corporation shall have authority to issue is
[476,114,265]435,000,000, of which [41,113,980 shares shall be
Non-voting Convertible Class B Common Stock of the Par Value
of Five Cents ($.05) per share (hereinafter called "Class B
Stock"), 285 shares (less those shares converted into shares
of Common Stock pursuant to the provisions of this Article
Fourth) shall be Class A (Cumulative Convertible) Capital
Stock, No Par Value (hereinafter called "Class A Stock"),]
10,000,000 shares shall be Preferred Stock of the Par Value of
One Dollar ($1) per share (hereinafter called "Preferred
Stock"), and the remaining 425,000,000 shares shall be Common
Stock of the Par Value of Five Cents ($.05) per share
(hereinafter called "Common Stock"). The powers, preferences,
privileges, voting and other special or relative rights, and
the qualifications, limitations or restrictions thereof,
granted to or imposed upon the shares of [Class B Stock, Class
A Stock and] Common Stock shall be as fixed in Section[s] One
[through Six] of this Article Fourth, subject, however, to the
provisions of Section [Seven]TWO of this Article Fourth. The
powers, preferences, privileges, voting and other special or
relative rights, and the qualifications thereof, granted to or
imposed upon the shares of Preferred Stock shall be as fixed
in Section [Seven]TWO of this Article Fourth, or as may be
fixed by the Board of Directors in accordance with the
provisions thereof.
UPON THIS RESTATED CERTIFICATE OF INCORPORATION BECOMING
EFFECTIVE (THE "EFFECTIVE DATE"), EACH SHARE OF THE CLASS A
STOCK ISSUED AND OUTSTANDING IMMEDIATELY PRIOR TO THE
EFFECTIVE DATE SHALL AUTOMATICALLY AND WITHOUT ANY ACTION ON
THE PART OF THE HOLDER THEREOF BE RECLASSIFIED AS AND CHANGED
INTO 10 SHARES OF THE COMMON STOCK (SUBJECT TO THE TREATMENT
OF FRACTIONAL SHARE INTERESTS AS DESCRIBED BELOW), AND ALL
POWERS, PREFERENCES, PRIVILEGES, VOTING AND OTHER SPECIAL OR
RELATIVE RIGHTS AND QUALIFICATIONS OF THE CLASS A STOCK,
INCLUDING PRIORITIES WITH RESPECT TO DIVIDENDS AND LIQUIDATION
AND RIGHTS OF ACCUMULATED DIVIDENDS AND SINKING FUND PAYMENTS
EXISTING ON THE EFFECTIVE DATE, SHALL TERMINATE AND BE OF NO
FURTHER FORCE AND EFFECT. EACH HOLDER OF A CERTIFICATE OR
CERTIFICATES WHICH IMMEDIATELY PRIOR TO THE EFFECTIVE DATE
REPRESENTED OUTSTANDING SHARES OF CLASS A STOCK (THE "OLD
CERTIFICATES," WHETHER ONE OR MORE) SHALL BE ENTITLED TO
RECEIVE UPON SURRENDER OF SUCH OLD CERTIFICATES TO THE
COMPANY'S TRANSFER AGENT FOR CANCELLATION, A CERTIFICATE OR
CERTIFICATES (THE "NEW CERTIFICATES," WHETHER ONE OR MORE)
REPRESENTING THE NUMBER OF WHOLE SHARES OF COMMON STOCK INTO
WHICH AND FOR WHICH THE SHARES OF THE CLASS A STOCK, FORMERLY
REPRESENTED BY SUCH OLD CERTIFICATES SO SURRENDERED, ARE
RECLASSIFIED UNDER THE TERMS HEREOF. FROM AND AFTER THE
EFFECTIVE DATE, OLD CERTIFICATES SHALL REPRESENT ONLY THE
RIGHT TO RECEIVE NEW CERTIFICATES (AND, WHERE APPLICABLE, CASH
IN LIEU OF FRACTIONAL SHARES AS PROVIDED BELOW) PURSUANT TO
THE PROVISIONS HEREOF. NO CERTIFICATES OR SCRIP REPRESENTING
FRACTIONAL SHARE INTERESTS IN COMMON STOCK WILL BE ISSUED, AND
NO SUCH FRACTIONAL SHARE INTEREST WILL ENTITLE THE HOLDERS
THEREOF TO VOTE, OR TO ANY RIGHTS OF A SHAREHOLDER OF THE
COMPANY. A HOLDER OF OLD CERTIFICATES SHALL RECEIVE, IN LIEU
OF ANY FRACTIONS OF A SHARE OF THE COMMON STOCK TO WHICH THE
HOLDER WOULD OTHERWISE BE ENTITLED, A CASH PAYMENT THEREFOR ON
THE BASIS OF THE CLOSING PRICE OF THE COMMON STOCK ON THE NEW
YORK STOCK EXCHANGE, ON THE EFFECTIVE DATE, AS REPORTED ON THE
COMPOSITE TAPE OF THE NEW YORK STOCK EXCHANGE INC. (OR IN THE
EVENT THE COMMON STOCK IS NOT SO TRADED ON THE EFFECTIVE DATE,
SUCH CLOSING PRICE ON THE NEXT PRECEDING DAY ON WHICH SUCH
STOCK WAS TRADED ON THE NEW YORK STOCK EXCHANGE). IF MORE
THAN ONE OLD CERTIFICATE SHALL BE SURRENDERED AT ONE TIME FOR
THE ACCOUNT OF THE SAME STOCKHOLDER, THE NUMBER OF FULL SHARES
OF THE COMMON STOCK FOR WHICH CERTIFICATES SHALL BE ISSUED,
SHALL BE COMPUTED ON THE BASIS OF THE AGGREGATE NUMBER OF
SHARES REPRESENTED BY THE OLD CERTIFICATES SO SURRENDERED. IN
THE EVENT THAT THE TRANSFER AGENT DETERMINES THAT A HOLDER OF
OLD CERTIFICATES HAS NOT TENDERED ALL HIS CERTIFICATES FOR
EXCHANGE, THE TRANSFER AGENT SHALL CARRY FORWARD ANY
FRACTIONAL SHARE UNTIL ALL CERTIFICATES OF THAT HOLDER HAVE
BEEN PRESENTED FOR EXCHANGE SUCH THAT PAYMENT FOR FRACTIONAL
SHARES TO ANY ONE PERSON SHALL NOT EXCEED THE VALUE OF ONE
SHARE. IF ANY NEW CERTIFICATE IS TO BE ISSUED IN A NAME OTHER
THAN THAT IN WHICH THE OLD CERTIFICATES SURRENDERED FOR
EXCHANGE ARE ISSUED, THE OLD CERTIFICATES SO SURRENDERED SHALL
BE PROPERLY ENDORSED AND OTHERWISE IN PROPER FORM FOR
TRANSFER, AND THE PERSON OR PERSONS REQUESTING SUCH EXCHANGE
SHALL AFFIX ANY REQUISITE STOCK TRANSFER TAX STAMPS TO THE OLD
CERTIFICATES SURRENDERED, OR PROVIDE FUNDS FOR THEIR PURCHASE,
OR ESTABLISH TO THE SATISFACTION OF THE TRANSFER AGENT THAT
SUCH TAXES ARE NOT PAYABLE. FROM AND AFTER THE EFFECTIVE DATE
THE AGGREGATE AMOUNT OF CAPITAL REPRESENTED BY THE SHARES OF
COMMON STOCK INTO WHICH AND FOR WHICH THE SHARES OF THE CLASS
A STOCK ARE RECLASSIFIED UNDER THE TERMS HEREOF SHALL BE THE
SAME AS THE AGGREGATE AMOUNT OF CAPITAL REPRESENTED BY THE
SHARES OF THE CLASS A STOCK SO RECLASSIFIED, UNTIL THEREAFTER
REDUCED OR INCREASED IN ACCORDANCE WITH APPLICABLE LAW.
[Section 1. Class B Stock.
The Class B Stock shall be identical in all respects to
and will have the same powers, preferences, rights,
qualifications, limitations, restrictions and relative rights
as the Common Stock except as specifically provided in this
Section 1.
(a) Voting. The Class B Stock shall have no voting
rights whatsoever except as required by law.
(b) Conversion of Class B Stock. Shares of the Class B
Stock shall be convertible into Common Stock on the following
terms and conditions:
(1) Subject to and upon compliance with the
provisions of this Paragraph (b), any Holder may at any
time or from time to time at his option convert
(hereinafter a "Voluntary Conversion") any shares of
Class B Stock into an equal number of shares of Common
Stock. The Holder shall surrender such shares of Class B
Stock for Voluntary Conversion by delivering the
certificate or certificates evidencing ownership of such
shares with proper endorsement or instruments of transfer
to the Corporation at the office or agency in the Borough
of Manhattan in the City of New York, New York, to be
maintained by the Corporation for that purpose, and such
Holder shall give written notice to the Corporation at
said office or agency that he elects to convert such
shares of Class B Stock in accordance with the provisions
of subparagraph (1) of this Paragraph (b). Such notice
shall also state the name or names (with addresses) in
which the certificate or certificates evidencing
ownership of Common Stock which shall be issuable on such
Voluntary Conversion shall be issued. In the case of
lost, stolen or destroyed certificates evidencing
ownership of shares of Class B Stock, to be surrendered
for Voluntary Conversion, the Holder shall submit proof
of loss, theft or destruction and such indemnity as shall
be required by the Corporation. Notwithstanding the
foregoing sentence, in the case of any Holder which is an
institutional holder (such term to include, without
limitation, bank holding companies, banks, insurance
holding companies and insurance companies, whether
incorporated in the United States or elsewhere), the
affidavit of such Holder's Treasurer or Assistant
Treasurer (or other responsible officials), setting forth
the circumstances with respect to such loss, theft or
destruction, shall be accepted as satisfactory evidence
thereof, and no indemnity shall be required as a
condition to the execution and delivery by the
Corporation of a new certificate in lieu of such
certificate other than such Holder's written agreement to
indemnify the Corporation, in form and substance
reasonably satisfactory to the Corporation. Every such
notice of election to convert shall constitute a contract
between the Holder of such shares of Class B Stock and
the Corporation, whereby such Holder shall be deemed to
subscribe for the amount of the Common Stock which he
will be entitled to receive upon such Voluntary
Conversion and, in payment and satisfaction of such
subscription, to surrender such shares of Class B Stock
and to release the Corporation from all obligation
thereon, and whereby the Corporation shall be deemed to
agree that the surrender of such shares of Class B Stock
and the extinguishment of its obligation thereon shall
constitute full payment for the Common Stock so
subscribed for and to be issued upon such Voluntary
Conversion. As soon as practicable but in no event more
than five Business Days after the receipt of such notice
and certificate or certificates evidencing ownership of
such shares of Class B Stock, the Corporation shall issue
and shall deliver at said office or agency to the person
for whose account such shares of Class B Stock were so
surrendered, or on his written order, a certificate or
certificates for the number of shares of Common Stock
issuable upon the Voluntary Conversion of such shares of
Class B Stock, together with a certificate or
certificates evidencing ownership of shares of Class B
Stock, if any, which were not to be converted, but which
constituted part of the shares of Class B Stock
represented by the certificate or certificates
surrendered by such person. Such Voluntary Conversion
shall be deemed to have been effected on the date on
which the Corporation shall have received such notice
and, if any, the certificate or certificates for such
shares of Class B Stock and the person or persons in
whose name or names any certificate or certificates for
Common Stock shall be issuable upon such conversion shall
be deemed to have become on said date the holder or
holders of record of the shares represented thereby;
provided that any such surrender on any date when the
stock transfer books of the Corporation shall be closed
shall constitute the person in whose name the certificate
or certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on
which such stock transfer books are open, but such
conversion shall be to the number of shares of Common
Stock that would have been received upon conversion on
the date upon which such surrender occurs; further
provided, however, that the stock transfer books of the
Corporation shall not be closed on any Business Day. All
shares of Common Stock issued upon Voluntary Conversion
of Class B Stock shall be validly issued, fully paid and
nonassessable.
(2) On the Automatic Conversion Date, each share of
Class B Stock shall automatically and without any action
on the part of the Holder thereof be converted
(hereinafter referred to as the "Automatic Conversion")
into one share of Common Stock, and all powers,
preferences, privileges and other special or relative
rights and qualifications of the Class B Stock existing
on the Automatic Conversion Date shall terminate and be
of no further force and effect. Following the surrender
to the Corporation (at the office or agency in the
Borough of Manhattan in the City of New York, New York,
to be maintained by the Corporation for that purpose) of
a certificate or certificates which immediately prior to
the Automatic Conversion Date represented outstanding
shares of Class B Stock, the Corporation, as soon as
practicable but in no event more than five Business Days
after the receipt of such certificate or certificates,
shall issue and shall deliver at said office or agency to
the person for whose account such shares of Class B Stock
were so surrendered, or on his written order, a
certificate or certificates for the number of shares of
Common Stock issuable upon the Automatic Conversion of
such shares of Class B Stock. In the case of lost,
stolen or destroyed certificates evidencing ownership of
shares of Class B Stock, the Holder shall submit proof of
loss, theft or destruction and such indemnity as shall be
required by the Corporation. Notwithstanding the
foregoing sentence, in the case of any Holder which is an
institutional holder (such term to include, without
limitation, bank holding companies, banks, insurance
holding companies and insurance companies, whether
incorporated in the United States or elsewhere), the
affidavit of such Holder's Treasurer or Assistant
Treasurer (or other responsible officials), setting forth
the circumstances with respect to such loss, theft or
destruction, shall be accepted as satisfactory evidence
thereof, and no indemnity shall be required as a
condition to the execution and delivery by the
Corporation of a new certificate in lieu of such
certificate other than such Holder's written agreement to
indemnify the Corporation, in form and substance
reasonably satisfactory to the Corporation. From and
after the Automatic Conversion Date the certificates
previously evidencing ownership of shares of Class B
Stock shall represent only the right to receive
certificates evidencing Common Stock pursuant to the
provisions hereof. All shares of Common Stock issued
upon Automatic Conversion of Class B Stock shall be
validly issued, fully paid and nonassessable.
(3) A. In case the Corporation shall pay or make
any dividend or other distribution to holders of the
Common Stock of cash, securities or property of any
nature whatsoever, then the Corporation shall at the same
time pay or make a dividend or distribution of the same
kind to Holders of the Class B Stock in an amount per
share of Class B Stock equal to the amount of such cash,
securities or property payable in respect of one share of
Common Stock, and likewise in case the Corporation shall
pay or make any dividend or other distribution to Holders
of the Class B Stock of cash, securities or property of
any nature whatsoever, then the Corporation shall at the
same time pay or make a dividend or distribution of the
same kind to holders of the Common Stock in an amount per
share of Common Stock equal to the amount of such cash,
securities or property payable in respect of one share of
Class B Stock; provided that, at any time prior to the
Automatic Conversion Date, if dividends or other
distributions made with respect to the Common Stock or
Class B Stock are payable in Common Stock or Class B
Stock (or in securities convertible into or exercisable
or exchangeable for such stock) only shares of Common
Stock or securities convertible into or exercisable or
exchangeable for shares of Common Stock shall be
distributed with respect to the Common Stock and only
shares of Class B Stock or securities convertible into or
exercisable or exchangeable for shares of Class B Stock
shall be distributed with respect to the Class B Stock,
and in any such case the number of shares of Class B
Stock distributed (or issuable upon conversion or
exercise of or exchange for any other security
distributed) with respect to each outstanding share of
Class B Stock shall be equal to the number of shares of
Common Stock distributed (or issuable upon conversion or
exercise of or exchange for any security distributed)
with respect to each outstanding share of Common Stock
and the terms of any such convertible, exercisable or
exchangeable securities distributed to the holders of
Common Stock and Class B Stock shall otherwise be
identical. The record date for determining Holders
entitled to receive such dividend or other distribution
to Holders shall be the same as the record date for
determining holders of Common Stock entitled to receive
such dividend or other distribution to holders of Common
Stock entitled to receive such dividend or other
distribution to holders of Common Stock. The
determination whether any holder holds shares of Common
Stock or Class B Stock shall be made on the record date,
except that only shares of Common Stock (or securities
convertible into or exercisable or exchangeable for
Common Stock) shall be distributed to any holder of
Common Stock or of Class B Stock if the Automatic
Conversion Date shall follow the record date and precede
the date on which the distribution is made by the Corporation.
B. In case the Corporation shall at any time or
from time to time (i) subdivide its outstanding shares of
Common Stock into a greater number of shares or (ii)
combine its outstanding shares of Common Stock into a
smaller number of shares, the Corporation shall at the
same time and in the same manner likewise subdivide or
combine its outstanding shares of Class B Stock into a
number of shares equal to that into which the Common
Stock is subdivided or combined. In case the Corporation
shall at any time or from time to time (i) subdivide its
outstanding shares of Class B Stock into a greater number
of shares or (ii) combine its outstanding shares of Class
B Stock into a smaller number of shares, the Corporation
shall at the same time and in the same manner likewise
subdivide or combine its outstanding shares of Common
Stock into a number of shares equal to that into which
the Class B Stock is subdivided or combined.
C. No consolidation or merger of the Corporation
with another corporation or other entity, nor any sale,
transfer or other disposition of all or substantially all
of its assets to another corporation or other entity,
shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities,
cash or assets with respect to or in exchange for Common
Stock, unless the Holders shall receive in such
transaction the kind and amount of stock, securities,
cash or assets receivable upon such consolidation, merger
or sale by a holder of the number of shares of Common
Stock into which the shares of Class B stock might have
been converted immediately prior to such consolidation,
merger or sale, except that, prior to the Automatic
Conversion Date, at the option of the Corporation, in
lieu of any voting security (or security convertible into
such a voting security or any option or right to acquire
any said voting or convertible security) such Holders may
receive securities (or securities convertible into such
securities or options or rights to acquire such
securities) having the voting rights of Class B Stock and
being convertible into such voting securities (in a
manner similar to the conversion rights of Class B Stock
into Common Stock) but otherwise having identical terms
as such voting security. If such securities having the
voting rights of Class B Stock are so issued, appropriate
adjustment shall be made in the application of the
provisions set forth in this Article Fourth with respect
to the rights and interests thereafter of the Holders to
the end that the provisions set forth in this Article
Fourth shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or
other securities or property thereafter deliverable upon
the conversion of shares of Class B Stock.
D. Other Action Affecting Common Stock. If the
Corporation takes any action affecting its Common Stock
after the date hereof, other than an action described in
any of subsections A to C of this subparagraph,
inclusive, which would have an adverse effect upon the
rights of any Holder hereunder, then appropriate
provision shall be made, on a basis consistent with the
principles of this subparagraph(3), in such manner and at
such time as the Board of Directors of the Corporation
shall in good faith determine to be equitable under the
circumstances.
(4) The Corporation shall pay all reasonable
expenses in connection with, and any tax in respect of
the issue of stock certificates upon, conversion (either
through Voluntary Conversion or pursuant to Automatic
Conversion) of shares of Class B Stock. The Corporation
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 stock in a name other than that of
the holder of the shares converted or any affiliate
thereof, and the Corporation shall not be required to
issue or deliver any such stock certificate unless and
until the person or persons requesting the issuance
thereof shall have paid to the Corporation the amount of
any such tax or shall have established to the
satisfaction of the Corporation that such tax has been
paid.
(5) The Corporation shall at all times reserve and
keep available out of its authorized Common Stock the
full number of shares of Common Stock deliverable upon
the conversion (either through Voluntary Conversion or
pursuant to Automatic Conversion) of all shares of Class
B Stock at any time authorized to be issued, and shall
take all such action as may be required from time to time
in order that it may validly and legally issue fully paid
and nonassessable shares of Common Stock upon conversion
of the Class B Stock. All shares of Common Stock which
shall be so issuable, when issued upon such conversion,
shall be duly and validly issued and fully paid and
nonassessable. Before taking any action which would
result in an issuance of Class B Stock or Common Stock
issuable upon conversion thereof, the Corporation shall
use its best efforts to obtain all authorizations or
exceptions therefor, or consents thereto, as may be
necessary from any public regulatory body or bodies
having jurisdiction over the Corporation. The
Corporation will use its best efforts to, when such
shares are issued, list on each national securities
exchange on which the Common Stock is listed all shares
of Common Stock issuable on conversion of Class B Stock.
(6) Shares of Class B Stock converted (either
through Voluntary Conversion or pursuant to Automatic
Conversion) shall be retired and may not be reissued.
(7) For the purpose of this Paragraph (b):
A. "Automatic Conversion Date" shall mean
such date, not earlier than the date seven years
after the Effective Date as defined in the
Conversion and Exchange Agreement dated as of March
27, 1991 among the Company and the other parties
listed on the signature pages thereof, as the
Company shall by notice to the Holders specify as
the "Automatic Conversion Date."
B. "Holder" shall mean a holder of record of
any of the outstanding shares of Class B Stock.
C. "Business Day" shall mean any day on which
commercial banks are not authorized or required to
close in the Borough of Manhattan, the City of New
York, New York.
Section 2. Dividends.
The Class A Stock shall be entitled to receive the
following dividends, but only as and when declared by the
Board of Directors, out of the funds of the Corporation at the
time lawfully available therefor, payable in cash at but not
exceeding the following rates:
(a) cumulative dividends, at the rate of thirty cents
($.30) per share per fiscal year of the Corporation,
which shall be cumulative, and shall accrue from day
to day from the date of issue or from such other
date as may be fixed by the Board of Directors prior
to the issue thereof, whether or not earned or
declared, and shall be payable quarterly on the last
day of March, June, September and December in each
year, except that the first dividend shall be
payable on the quarterly dividend payment date next
succeeding the expiration of 35 days after the date
any shares of Class A Stock are issued; and
(b) non-cumulative dividends, at the rate of an addi-
tional fifty cents ($.50) per share per fiscal year
of the Corporation, which shall be non-cumulative,
and shall be payable only in any fiscal year of the
Corporation in which any dividend (other than a
dividend in shares of Common Stock of the
Corporation) is to be paid or declared on the Common
Stock of the Corporation.
So long as any shares of Class A Stock are outstanding,
in no event shall any dividend or distribution whatsoever
(other than dividends payable in Junior Shares) be paid or
declared upon or in respect of any Junior Shares, nor shall
any moneys be set aside for or applied to the purchase,
redemption or other acquisition or reduction of any Junior
Shares, unless all cumulative dividends on the Class A Stock
required to be paid for all past fiscal years shall have been
paid and both the full cumulative dividend and the full non-
cumulative dividend on the Class A Stock for the then current
fiscal year shall have been paid (or declared and a sum
sufficient for the payment thereof set apart).
If and so long as there are dividends in arrears on any
shares of Class A Stock, the Corporation shall not purchase
any shares of Class A Stock unless an offer to purchase on a
comparable basis is made in writing to the holders of all the
outstanding shares of Class A Stock.
Subject to the foregoing, the Board of Directors may
declare, out of the funds of the Corporation at the time
lawfully available therefor, dividends upon the then
outstanding Junior Shares and no holder of shares of Class A
Stock shall be entitled to share therein.
Arrears in the payment of cumulative dividends shall not
bear interest.
As used in this Article Fourth, the term "Junior Shares"
shall mean shares of Common Stock and Class B Stock and of any
other stock of the Corporation ranking junior with respect to
dividends or assets to the Class A Stock.
Section 3. Distribution on Dissolution.
Upon any liquidation, dissolution or winding up, of the
Corporation, whether voluntary or involuntary, the holders of
the Class A Stock shall be entitled to be paid in cash, before
any distribution shall be made on Junior Shares, an amount per
share equal to the aggregate of (i) $12, plus (ii) the amount
of all unpaid cumulative dividends accrued or in arrears to
the date of payment; but the holders of Class A Stock shall be
entitled to no further participation in any such distribution,
and after such payment to the holders of Class A Stock, the
remaining assets of the Corporation shall be divided and
distributed ratably among the holders of Junior Shares in
accordance with the respective amounts payable with respect to
each class of Junior Shares. If, upon any such liquidation,
dissolution or winding up, the assets thus distributable among
the holders of Class A Stock shall be insufficient to permit
the payment to the holders thereof of the full preferential
amount to which they are entitled as aforesaid, then the
entire assets so distributable shall be distributed ratably
among the holders of Class A Stock. Neither a consolidation
nor a merger of the Corporation, nor the sale, transfer or
lease of all or substantially all its assets, shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 3; however, in
the event of a merger or consolidation of the Corporation, the
value of the Class A Stock of the Corporation (for all
purposes, including the requirement of payment of such value
as provided in the General Corporation Law of the State of
Delaware) shall be deemed to be (and each purchaser or holder
of Class A Stock by virtue of such purchase or holding shall
agree that such value shall be) not in excess of an amount per
share equal to the aggregate of (a) $12, plus (b) the amount
of all unpaid cumulative dividends accrued or in arrears to
the date on which the agreement of consolidation or merger is
recorded in the proper county in the State of Delaware.
Section 4. Conversion of Class A Stock.
The holders of shares of Class A Stock shall have the
right, at their option, to convert such shares into shares of
Common Stock of the Corporation on the following terms and
conditions:
(a) Right of Conversion; Conversion Price. The shares
of Class A Stock shall be convertible, at any time, at the
office of the Corporation's Transfer Agent for the Class A
Stock in Tulsa, Oklahoma, into full paid and non-assessable
shares (calculated to the nearest 1/100th of a share, frac-
tions of less than 1/100th being disregarded) of Common Stock
of the Corporation, as such shares shall then be constituted,
at the conversion price in effect at the time of conversion
determined as hereinafter provided, each share of Class A
Stock being taken at $12 for the purpose of such conversion.
The price at which shares of Common Stock shall be delivered
upon conversion shall be $3.00 per share of Common Stock,
provided, however, that such conversion price shall be subject
to adjustment from time to time in certain instances as
hereinafter provided (the price at which shares of Common
Stock shall at any particular time be deliverable upon
conversion is hereinafter called the "conversion price" at
such time). The Corporation shall make no payment or
adjustment on account of dividends accrued, whether or not in
arrears, on the shares of Class A Stock surrendered for
conversion or on account of any dividends declared and payable
to the holders of the Common Stock of record on a date prior
to the date of surrender of the Class A Stock for conversion.
(b) Termination of Conversion Right. In case of the
dissolution, liquidation, winding-up, merger or consolidation
of the Corporation, such right of conversion shall cease and
terminate at the close of business on the third full business
day preceding the date on which such dissolution, liquidation,
winding-up, merger or consolidation shall become effective.
(c) Surrender and Delivery of Certificates; Effective
Date. Before any holder of shares of Class A Stock shall be
entitled to convert the same into Common Stock, he shall
surrender the certificate or certificates therefor, duly
endorsed, at the office of the Transfer Agent, and shall give
written notice to the Corporation at said office that he
elects to convert the same. The Corporation will, as soon as
practicable thereafter, issue and deliver at said office to
such holder of shares of Class A Stock, or to his nominee or
nominees, certificates for the number of full shares of Common
Stock to which he shall be entitled as aforesaid, together
with a cash payment, scrip certificate or other evidence of a
fractional interest in shares of Common Stock in lieu of any
fraction of a share as hereinafter provided. Shares of Class
A Stock shall be deemed to have been converted as of the close
of business on the date of surrender of such shares for
conversion as provided above, and the person or persons in
whose name or names any certificate or certificates for Common
Stock shall be issuable upon such conversion shall be deemed
to have become as of the close of business on said date the
holder or holders of record for all purposes of the shares
represented thereby.
(d) Adjustment of Conversion Price on Issue or Sale of
Certain Stock. In case the Corporation shall at any time or
from time to time, issue or sell any shares of Participating
Stock (other than shares of Common Stock issued upon
conversion of shares of Class A Stock) for a consideration per
share less than the conversion price in effect immediately
prior to the time of such issue or sale, said conversion price
shall be adjusted to a price (calculated to the nearest cent)
determined by dividing (i) an amount equal to the sum of (x)
the number of shares of Participating Stock outstanding
immediately prior to such issue or sale multiplied by the then
existing conversion price, plus (y) the consideration, if any,
received by the Corporation upon such issue or sale by (ii)
the total number of shares of Participating Stock outstanding
immediately after such issue or sale. For the purposes of
this Section 4 the number of shares of Participating Stock
outstanding at any given time shall include shares in the
treasury of the Corporation and shares issuable in respect to
scrip certificates or other evidences of fractional interests
in shares of Participating Stock.
For the purposes of this paragraph (d) the provisions
contained in the following subparagraphs (A) to (F), inclu-
sive, shall also be applicable:
(A) In case at any time the Corporation shall in
any manner grant any rights to subscribe for or to
purchase, or any options for the purchase of (i) Par-
ticipating Stock, or (ii) any stock (other than the Class
A Stock) or other securities convertible into or
exchangeable for Participating Stock (such convertible or
exchangeable stock or securities being hereinafter called
"Convertible Securities"), and the price per share for
which Participating Stock is issuable upon the exercise
of such rights or options or upon conversion or exchange
of such Convertible Securities (determined by dividing
(1) the total amount, if any, received or receivable by
the Corporation as consideration for the granting of such
rights or options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon
the exercise of such rights or options, plus, in the case
of such Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable to
the Corporation upon the conversion or exchange thereof,
by (2) the total maximum number of shares of
Participating Stock issuable upon the exercise of such
rights or options or upon the conversion or exchange of
all such Convertible Securities issuable upon the
exercise of such rights or options) shall be less than
the conversion price in effect immediately prior to the
time of the granting of such rights or options, then the
total maximum number of shares of Participating Stock
issuable upon the exercise of such rights or options or
upon conversion or exchange of the total maximum amount
of such Convertible Securities issuable upon the exercise
of such rights or options shall (as of the date of
granting of such rights or options) be deemed to be
outstanding and to have been issued for said price per
share; provided that (i) no further adjustment of the
conversion price shall be made upon the actual issue of
such Participating Stock or of such Convertible
Securities upon exercise of such rights or options or
upon the actual issue of such Participating Stock upon
conversion or exchange of such Convertible Securities,
(ii) upon the expiration of such rights or options, if
any thereof shall not have been exercised, the number of
shares of Participating Stock theretofore deemed to be
issued and outstanding in accordance with the preceding
provisions of this subparagraph (A) shall be reduced by
the number of shares of Participating Stock as to which
such rights or options shall not have been exercised and
by the number of shares of Participating Stock issuable
upon conversion or exchange of the Convertible Securities
as to which such rights or options shall not have been
exercised, and the conversion price shall forthwith be
readjusted upwards accordingly, and (iii) upon the
termination of the right to convert or exchange for
Participating Stock any such Convertible Securities
issued upon exercise of such rights or options, the
number of shares of Participating Stock theretofore
deemed to be issued and outstanding in accordance with
the preceding provisions of this subparagraph (A) shall
be reduced by the number of shares of Participating Stock
as to which such right or conversion or exchange shall
not have been exercised, and the conversion price shall
forthwith be readjusted upwards accordingly.
(B) In case the Corporation shall in any manner
issue or sell any Convertible Securities, and the price
per share for which Participating Stock is issuable upon
conversion or exchange thereof (determined by dividing
(1) the total amount, if any, received or receivable by
the Corporation as consideration for the sale of such
Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the
Corporation upon the conversion or exchange thereof, by
(2) the total maximum number of shares of Participating
Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the
conversion price in effect immediately prior to the time
of such issue or sale, then the total maximum number of
shares of Participating Stock issuable upon conversion or
exchange of all such Convertible Securities shall (as of
the date of the issue or sale of such Convertible
Securities) be deemed to be outstanding and to have been
issued for said price per share; provided, however, that
(i) if any such issue or sale of such Convertible
Securities is made upon exercise of any rights to
subscribe for or to purchase or any option to purchase
any such Convertible Securities for which an adjustment
of the conversion price has been or is to be made
pursuant to other provisions of this paragraph (d) no
further adjustment of the conversion price shall be made
by reason of such issue or sale or the issue of such
Participating Stock upon conversion or exchange of such
Convertible Securities, and (ii) upon termination of the
right to convert or to exchange such Convertible
Securities for Participating Stock, the number of shares
of Participating Stock theretofore deemed to be issued
and outstanding in accordance with the preceding
provisions of this subparagraph (B) shall be reduced by
the number of shares of Participating Stock as to which
such right of conversion or exchange shall not have been
exercised, and the conversion price shall forthwith be
readjusted upwards accordingly.
(C) In case the Corporation shall pay a dividend or
make any other distribution upon any stock of the
Corporation in Participating Stock or in Convertible
Securities, any Participating Stock or Convertible
Securities, as the case may be, issued in payment of such
dividend or distribution shall be deemed to have been
issued or sold without consideration.
(D) In case any shares of Participating Stock or
Convertible Securities or any rights or options to
purchase any such Stock or Securities shall be issued for
cash, the consideration received therefor shall be deemed
to be the amount received by the Corporation therefor,
without deduction therefrom or any expenses incurred or
any underwriting commissions or concessions paid or
allowed by the corporation in connection therewith. In
case any shares of Participating Stock or Convertible
Securities or any rights or options to purchase any such
Stock or Securities shall be issued otherwise than for a
consideration consisting solely of cash, then, for the
purposes of this paragraph (d), the Board of Directors of
the Corporation shall determine the fair value of such
consideration, and such Participating Stock, Convertible
Securities, rights or options shall be deemed to have
been issued for an amount of cash equal to the value so
determined by the Board of Directors. In case any shares
of Participating Stock or Convertible Securities or any
rights or options to purchase any such Stock or
Securities shall be issued together with other stock or
securities or other assets of the Corporation for a
consideration which is received for both, the Board of
Directors of the Corporation shall determine what part of
the consideration so received is to be deemed to be the
consideration for the issue of such shares of
Participating Stock, Convertible Securities, rights or
options.
(E) In case the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them (1) to receive a dividend or other
distribution payable other than in cash, or (2) to
subscribe for or purchase Participating Stock or Con-
vertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares
of Participating Stock deemed to have been issued or sold
upon the declaration of such dividend or the making of
such other distribution or the date of the granting of
such right of subscription or purchase, as the case may
be.
(F) In case the Corporation shall issue or sell any
Participating Stock having voting power (other than as a
result of events of default) on the election of directors
greater than one vote per share (hereinafter called
"Special Voting Securities"), or grant any rights for the
purchase of any Special Voting Securities, or issue or
sell or grant any rights or options for the purchase of
any securities convertible into or exchangeable for
Special Voting Securities, then the total number of such
Special Voting Securities to be issued or sold or
thereafter outstanding shall be deemed for the purposes
of this paragraph (d) to be the number computed by
multiplying (i) the number of such Securities so to be
issued or sold or outstanding by (ii) the number of votes
per security (other than votes given as a result of event
of default) to which each such security is or would upon
issuance or sale be entitled on the election of
directors.
(e) Adjustment of Conversion Price on Declaration of
Property Dividends. In case the Corporation shall declare a
dividend upon the Participating Stock of the Corporation
payable otherwise than in cash, Participating Stock or
Convertible Securities, the conversion price in effect
immediately prior to the declaration of such dividend shall be
reduced by an amount equal to the fair value of the dividend
per share of the Participating Stock outstanding at the time
of such declaration as determined by the Board of Directors of
the Corporation. Such reduction shall take effect as of the
date a record is taken for the purposes of such dividend, or,
if a record is not taken, the date as of which the holders of
Participating Stock to be entitled to such dividends are to be
determined.
(f) Adjustment of Conversion Price on Reorganization,
etc. In the case of any capital reorganization, reclassifi-
cation, substitution, exchange or other alteration in the
terms of the Common Stock of the Corporation or in case of the
consolidation or merger of the Corporation or the conveyance
of all or substantially all of the assets of the Corporation,
each share of the Class A Stock shall thereafter be
convertible into the number of shares of stock or other
securities or property to which a holder of the number of
shares of Common Stock of the Corporation deliverable upon
conversion of such shares of the Class A Stock would have been
entitled upon such reorganization, reclassification,
substitution, change, alteration, consolidation, merger or
conveyance; and, in any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the
application of the provisions herein set forth with respect to
the rights and interests thereafter of the holders of the
Class A Stock, to the end that the provisions set forth herein
(including, provisions with respect to adjustments of the
conversion price) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon conversion of shares of
Class A Stock.
(g) Exception for Minor Adjustments of Conversion Price.
Anything in this Section 4, to the contrary notwithstanding,
the Corporation shall not be required to give effect to any
adjustment in the conversion price unless and until the net
effect of one or more adjustments, determined as above
provided, shall have resulted in a change of the conversion
price by at least twenty-five cents ($.25), but when the
cumulative net effect of more than one adjustment so
determined shall be to change the conversion price by at least
ten cents ($.10), such change in the conversion price shall
thereupon be given effect.
(h) Computation and Notice of Adjustments of Conversion
Price. Whenever the conversion price is adjusted as herein
provided, the Treasurer of the Corporation shall compute the
adjusted conversion price in accordance with this Section 4
and shall prepare a certificate setting forth such adjusted
conversion price and showing in detail the facts upon which
such adjustment is based, including a statement of the
consideration received or to be received by the Corporation
for any additional stock issued or sold or deemed to have been
issued or sold and of the number of shares of Common Stock
outstanding or deemed to be outstanding, and such certificate
shall forthwith be filed with the Transfer Agent. At the same
time the Corporation shall mail to each holder of record of
shares of Class A Stock a notice stating the adjusted
conversion price.
(j) Notice to Holders of Class A Stock in Certain
Events. In case:
(i) the Corporation shall authorize the granting to
the holders of its Common Stock of rights to subscribe
for or purchase any shares of stock of any class or to
receive any other rights; or
(ii) of any capital reorganization, reclassifica-
tion, reduction, or other alteration in the terms of the
Common Stock of the Corporation, or in case of the
consolidation or merger of the Corporation or the
conveyance or lease of all or substantially all the
assets of the Corporation; or
(iii) of the voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation, then, and in any such case, the Corporation
shall cause to be mailed to the Transfer Agent and to the
holders of record of the outstanding shares of Class A
Stock, at least sixty (60) days prior to the date
hereinafter specified, a notice stating (x) the record
date or other date as of which the holders of Common
Stock to be entitled to such rights are to be determined,
or (y) the estimated date on which such reclassification,
reorganization, reduction, alteration, consolidation,
merger, conveyance, lease, dissolution, liquidation or
winding-up is to become effective.
In case the Corporation shall declare a dividend (or
any other distribution) on the Common Stock, the
Corporation shall cause to be mailed to the Transfer
Agent and to the holders of record of the outstanding
shares of Class A Stock at least fourteen (14) days prior
to the record date or other date as of which the holders
of Common Stock to be entitled to such dividend or
distribution are to be determined a notice stating such
record or other date, the payment for such dividend or
distribution, and the amount thereof.
(k) Reservation of Shares of Common Stock for Issuance on
Conversion. The Corporation shall at all times reserve and
keep available, out of its authorized but unissued Common
Stock, as such Stock shall then be constituted, solely for the
purpose of effecting the conversion of shares of Class A
Stock, the full number of shares of such Common Stock
deliverable upon the conversion of all shares of Class A Stock
from time to time outstanding. The Corporation shall from
time to time, in accordance with the laws of the State of
Delaware, increase the authorized amount of its Common Stock
if at any time the number of authorized shares of Common Stock
remaining unissued shall not be sufficient to permit the
conversion of all the shares of Class A Stock at the time
outstanding.
(m) Provision in Lieu of Fractional Shares. No frac-
tional shares of Common Stock are to be issued upon conver-
sion, but in lieu thereof the Corporation shall:
(i) issue scrip certificates or other evidence of
such fractional interests, for any fraction of a share
which would otherwise be issuable, such certificates or
other evidence of fractional interests to be exchangeable
within such period (which shall end not less than two
years following the date of issue thereof) as the Board
of Directors of the Corporation shall determine, together
with other scrip certificates or other evidence of
fractional interests representing in the aggregate one or
more full shares, for stock certificates representing
such full share or shares, and upon the expiration of
such period to be exchangeable for cash within such
further period (which shall end not less than six years
following the date of issue thereof) and upon such
further terms as the Board of Directors of the
Corporation shall determine; and such scrip certificates
or other evidence of fractional interests to be in such
form and to contain such terms and provisions as shall be
fixed by the Board of Directors on or before the issuance
thereof, provided that they shall not entitle the bearer
or holder thereof to exercise any voting right, or to
receive dividends or to participate in the assets of the
Corporation in the event of liquidation, dissolution or
winding-up, nor to any rights whatever except as therein
expressly set forth; or
(ii) At its option, pay a cash adjustment in respect
of any fraction of a share which would otherwise be
issuable, in any amount equal to the same fraction of the
market price (determined as hereinafter provided) per
share of Common Stock on the day of conversion. For the
purposes of the foregoing, the term "market price" shall
mean the last sale price regular way, or, in case no such
sale takes place on such day, the average of the closing
bid and asked prices regular way, in either case as
officially quoted on a national securities exchange if
the Common Stock is at the time listed thereon, or if the
Common Stock is not at the time so listed, the average of
the closing bid and asked prices as furnished by any
recognized dealer in securities selected by the
Corporation for the purpose.
(n) Payment of Taxes. The Corporation will pay any and
all issue and other taxes that may be payable in respect of
any issue or delivery of shares of Common Stock on conversion
of shares of Class A Stock pursuant hereto. The Corporation
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 the Class A 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
Corporation the amount of any such tax, or has established, to
the satisfaction of the Corporation, that such tax has been
paid.
(o) Limitation on Reduction of Conversion Price. The
Corporation shall not take any action which would, pursuant to
the provisions of this Section 4 reduce the conversion price
to an amount less than the par value per share, if any, of the
Common Stock into which shares of the Class A Stock are at the
time convertible.
(p) Definition of "Participating Stock". As used in this
Section 4, the term "Participating Stock" means (i) any common
stock of the Corporation, (ii) any securities of the
Corporation with no fixed limit on dividends or assets,
including securities of any class which has the right to share
above a stated initial preference in such dividends or assets,
and (iii) any securities (other than the Class A Stock
initially authorized) of any class of the Corporation having
voting power (other than as a result of events of default) on
the election of directors.
(q) Retirement of Converted Shares. All shares of Class
A Stock converted into shares of Common Stock pursuant to this
Section 4 shall not be reissued, and the Corporation shall
cause all such shares to be cancelled and retired, and (if
appropriate) its capital reduced, in the manner provided by
law.
Section 5. Voting Rights.
(a) Number of Votes Per Share; Cumulative Voting. Except
as otherwise expressly provided in this Article FOURTH or by
law, at every meeting of stockholders the Class A Stock shall
be entitled to four votes per share and the Common Stock shall
be entitled to one vote per share. In all elections for
directors each holder of Class A Stock shall have as many
votes as shall equal four times the number of shares of Class
A Stock held by such holder multiplied by the number of
directors to be elected, and any such holder may cast all such
votes for a single candidate or may distribute them among the
candidates as such holder may see fit.
In all elections for directors, commencing with the
Annual Meeting of Stockholders held in 1982, each holder of
Common Stock shall have the right to cast one vote for each
share of Common Stock held by such holder for each of such
number of candidates as there are directors to be elected, but
no such holder of Common Stock shall have any right to
cumulate his votes and cast them for one candidate or dis-
tribute them among two or more candidates.
(b) Class Vote Necessary in Certain Events. In addition
to the vote of the stockholders of the Corporation as required
by paragraph (a) of this Section 5, so long as any shares of
Class A Stock are outstanding the Corporation shall not,
without the affirmative vote at a meeting (at which the Class
A Stock shall vote as a class with one vote per share, and the
notice of which meeting shall state the general character of
the matters to be submitted thereat), or the written consent
with or without a meeting, of the holders of at least
two-thirds of the then outstanding shares of Class A Stock:
(i) authorize or increase the authorized amount of
any additional class of stock ranking prior to the Class
A Stock as to dividends or assets; or authorize or
increase the authorized amount of any class of securities
or obligations convertible into or evidencing the right
to purchase any class of stock with such priority; or
(ii) amend, alter or repeal of the provisions of the
Certificates of Incorporation or reduce the capital of
the Corporation so as adversely to affect the special
rights, preferences or powers of the Class A Stock or its
holders; provided, however, that the amendment of the
Certificate of Incorporation so as to increase the
authorized amount of Class A Stock or to authorize or
increase the authorized amount of any stock which is on a
parity with or ranks junior to the Class A Stock with
respect, to the payment of dividends and the distribution
of assets shall not be deemed to affect adversely the
special rights, preferences or powers of the Class A
Stock or its holders; or
(iii) merge or consolidate, unless the agreement of
merger or consolidation provides that each share of Class
A Stock outstanding at the time of the merger or
consolidation and in connection therewith shall be
redeemed and shall receive, in full payment in redemption
thereof, an amount of money in cash equal to the sum of
(x) $12, plus (y) the amount of all unpaid cumulative
dividends accrued or in arrears to the effective date of
the merger or consolidation.
For the purposes of determining whether the affirmative
vote at a meeting, or the written consent, required by
this paragraph (b) has been obtained, affirmative votes
at any meeting shall be deemed to be the equivalent of
written consents, and written consents with or without a
meeting shall be deemed to be the equivalent of
affirmative votes at any meeting.]
(Existing Section 1 (relating to Class B Stock); Section 2
(relating to the distribution of dividends to holders of Class
A Stock); Section 3 (relating to the distribution on
dissolution to holders of Class A Stock); Section 4 (relating
to the conversion of Class A Stock) and Section 5 (relating to
the voting rights of holders of Class A Stock) of Article
Fourth are to be deleted in their entirety.)
Section [6]1. .Issuance of COMMON Stock; Preemptive Rights.
Shares of [Class A Stock,] Common Stock [and Class B Stock] may be
issued at any time and from time to time by the Corporation, and authority
is hereby expressly granted to and vested in the Board of Directors, to
the extent permitted by law, (a) to issue shares of [Class A Stock,]
Common Stock [and Class B Stock] for such consideration [(in the case of
Common Stock and Class B Stock] at not less than par value[)], and in such
circumstances as may now or hereafter be permitted by law, and (b) to
determine that only a part of the consideration so received shall be
capital. No holder of stock of any class of the Corporation shall have
any preemptive right to subscribe for or purchase any part of any new or
additional issue or sale or reservation of stock or securities of any
class or kind whatsoever.
Section [7]2. Statement of Preferences, Limitations, andRelative
Rights in Respect of Shares of Preferred Stock and Authority of Board of
Directors to fix Designations, Powers, Preferences, Rights,
Qualifications, Limitations and Restrictions Thereof Not Fixed Hereby.
(a) Shares of Preferred Stock may be issued FROM time to time in one
or more series as may be determined from time to time by the Board of
Directors, each such series to be distinctly designated. All shares of any
one series of Preferred Stock so designated by the Board of Directors
shall be alike in every particular. The voting rights, if any, of each
such series, dividend rates, and preferences and relative, participating,
optional and other special rights of each such series and the
qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding; and,
subject to the provisions of Paragraphs (d) through (h) of this Section
[7]2, the Board of Directors of the Corporation is hereby expressly
granted authority to fix, by resolutions duly adopted prior to the
issuance of any shares of a particular series of Preferred Stock so
designated by the Board of Directors, the voting powers of stock of such
series, if any, and the designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but without
limiting the generality of the foregoing, the following:
(i) The rate and times at which, and the terms and
conditions on which, dividends on Preferred Stock of such series
will be paid;
(ii) The right, if any, of the holders of Preferred Stock of
such series to convert the same into, or exchange the same for,
shares of other classes or series of stock of the Corporation and
the terms and conditions of such conversion or exchange;
(iii) The redemption price or prices and the time or times at
which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed;
(iv) The rights of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, dissolution or
winding-up, or merger, consolidation, distribution or sale of
assets, of the Corporation;
(v) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(vi) Provisions, if any, for the vote or consent of the
holders of a stated percentage of the outstanding shares of
Preferred Stock of such series with respect to changes in the
rights, preferences or limitations of the shares of such series, or
the designation or issuance of series of the Preferred Stock by the
Board of Directors, or the authorization or issuance of other
classes or series of preferred stock;
provided, however, that the holders of shares of Preferred Stock [shall
rank on a parity with, or rank junior to, the holders of Class A Stock
with respect to the payment of dividends and the distribution of assets of
the Corporation available for distribution to stockholders and] shall have
no right to participate with the holders of Common Stock [and Class B
Stock] in any distribution or dividends in excess of the preferential
dividend fixed for such Preferred Stock or in the assets of the
Corporation available for distribution to stockholders in excess of the
preferential amount fixed for such Preferred Stock.
(b) Until the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of Paragraph
(a) of this Section [7]2) [and the Class A Stock (fixed in Section 2 of
this Article Fourth)] shall have been met and until the Corporation shall
have complied with all the requirements, if any, with respect to the
setting aside of sums as sinking funds or redemption or purchase accounts
with respect to the Preferred Stock (fixed in accordance with the
provisions of Paragraph (a) of this Section [7]2), no dividend or
distribution shall be paid or declared upon or in respect of any Common
Stock [or Class B Stock].
(c) Until distribution in full of the preferential amount to be
distributed to the holders of Preferred Stock (fixed in accordance with
the provisions of Paragraph (a) of this Section [7]2) [and Class A Stock
(fixed in Section 2 of this Article Fourth)] in the event of the voluntary
or involuntary liquidation, dissolution or winding-up of the Corporation,
no such distribution shall be made to the holders of Common Stock [or
Class B Stock].
(d) No holder of Preferred Stock of the Corporation shall have any
preemptive or preferential rights of subscription to any shares of any
stock of the Corporation of any class, now or hereafter authorized, or to
any obligations convertible into stock of the Corporation, issued or sold,
nor any right of subscription to any thereof other than such, if any, as
the Board of Directors of the Corporation in its discretion from time to
time may determine, and at such price as the Board of Directors from time
to time may fix, pursuant to the authority hereby conferred by the
RESTATED Certificate of Incorporation, and the Board of Directors may
issue stock of the Corporation, or obligations convertible into stock,
without offering such issue of stock or such obligations, either in whole
or in part, to the holders of Preferred Stock of the Corporation.
(e) The powers and rights of the holders of Common Stock [and Class
B Stock] shall be subordinated to the powers, preferences and rights of
the holders of Preferred Stock. The relative powers, preferences and
rights of each series of Preferred Stock in relation to the powers,
preferences and rights of each other series of Preferred Stock shall, in
each case, be as fixed from time to time by the Board of Directors
pursuant to authority granted in the RESTATED Certificate of
Incorporation; provided, however, that except as may be provided by law
and except as set forth in Paragraph (f) and Paragraph (g) of this Section
[7]2, no holder of shares of Preferred Stock of any series shall be
entitled to more than one vote in respect of each share of such stock held
by him on any matter voted on by stockholders other than elections of
directors, in which case the Board of Directors may accord cumulative
voting rights to holders of shares of any series of Preferred Stock.
(f) Notwithstanding the provisions of Paragraph (e) of this Section
[7]2, the Board of Directors, acting pursuant to authority granted in this
RESTATED Certificate of Incorporation in respect of any series of
Preferred Stock, may provide that if this Corporation shall have defaulted
in the payment of dividends on any such series of Preferred Stock in any
amount equivalent to or exceeding six full quarterly dividends (whether or
not consecutive) or the Corporation shall have defaulted in making any two
mandatory sinking fund payments on any such series of Preferred Stock, the
holders of one or more or all of such series of Preferred Stock in respect
of which any such default shall have occurred (voting as a single class
[together with the holders of Class A Stock]) shall be entitled to elect,
in the aggregate, not more than two directors.
(g) The issuance of shares of any series of Preferred Stock by the
Board of Directors of the Corporation shall be subject to such limitations
and restrictions as may be provided for in the RESTATED Certificate of
Incorporation or by the Board of Directors, pursuant to authority granted
in the RESTATED Certificate of Incorporation, including provision for the
consent, by class vote, of the holders of a stated percentage of the
outstanding shares of any series of Preferred Stock.
(h) Subject to the provisions of Paragraph (g) of this Section [7]2,
shares of any series of Preferred Stock may be authorized or issued, in
aggregate amounts not exceeding the total number of shares of Preferred
Stock authorized by the RESTATED Certificate of Incorporation, from time
to time as the Board of Directors of the Corporation shall determine and
for such consideration as shall be fixed by the Board of Directors.
(i) $1.625 Convertible Preferred Stock [($1.00 Par Value)]:
1. Number Of Shares and Designation. 2,990,000 shares of the
Preferred Stock, $1.00 par value per share, of the Corporation are hereby
constituted as a series of the preferred stock designated as "$1.625
Convertible Preferred Stock".
2. Definitions. For purposes of the $1.625 CONVERTIBLE
Preferred Stock, the following terms shall have the meanings indicated:
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors
to perform any of its responsibilities with respect to the $1.625
CONVERTIBLE Preferred Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the City of New
York are authorized or obligated by law or executive order to close.
"Change of Control" shall have the meaning set forth in
paragraph (e)(i) of [Section]SUBSECTION 8 [hereof] OF THIS PARAGRAPH
(I).
["Class A Stock" shall have the meaning set forth in paragraph
(a) of Section 10 hereof.]
"Closing Price" with respect to a particular security on
any day shall mean on such day the reported last sales price,
regular way, for such security or, in case no sale takes place
on such day, the average of the reported closing bid and asked
prices, regular way, for such security in either case as
reported on the New York Stock Exchange, on the principal
national securities exchange on which such security is listed
or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the National
Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ National
Market System") or, if such security is not quoted on the
NASDAQ National Market System, the average of the closing bid
and asked prices for such security in the over-the-counter
market as reported by NASDAQ or, if bid and asked prices for
such security on each such date shall not have been reported
by NASDAQ, the average of the bid and asked prices for such
security for such day as furnished by any New York Stock
Exchange member firm regularly making a market in such
security selected for such purpose by the board of directors
or similar governing body of the issuer of such security or,
if no such quotations are available, the fair market value of
such security furnished by any New York Stock Exchange member
firm selected from time to time by the board of directors or
similar governing body of the issuer of such security for that
purpose.
["Common Stock" shall mean the Common Stock of the
Corporation, par value $.05 per share.]
"Conversion Price" shall mean the conversion price per share
of Common Stock into which the $1.625 CONVERTIBLE Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to
[Section]SUBSECTION [7 hereof] OF THIS PARAGRAPH (I). The initial
Conversion Price will be $8.625 (equivalent to the rate of 2.899
shares of Common Stock for each share of $1.625 CONVERTIBLE
Preferred Stock).
"Current Market Price" per share of Common Stock on any date
shall mean the average of the daily Closing Prices for the 30
consecutive Trading Dates commencing 45 Trading Dates before the
date of determination.
"Defaulted Preferred Stock" shall have the meaning set forth
in paragraph (a) of [Section]SUBSECTION 10 [hereof] OF THIS
PARAGRAPH (I).
"dividend payment date" shall have the meaning set forth in
paragraph (a) of [Section]SUBSECTION 3 [hereof] OF THIS PARAGRAPH
(I).
"dividend payment record date" shall have the meaning set
forth in paragraph (a) of [Section]SUBSECTION 3 [hereof] OF THIS
PARAGRAPH (I).
"Dividend Periods" shall mean quarterly dividend periods
commencing on the first day of January, April, July and October of
each year and ending on and including the day preceding the first
day of the next succeeding Dividend Period (other than the initial
Dividend Period which shall commence on the Issue Date and end on
and include September 30, 1993).
"Fundamental Change" shall have the meaning set forth in
paragraph (e)(ii) of [Section]SUBSECTION 8 [hereof] OF THIS
PARAGRAPH (I).
"Issue Date" shall mean the first date on which shares of
$1.625 CONVERTIBLE Preferred Stock are issued.
"Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Redemption Price" shall have the meaning set forth in
paragraph (a) of [Section]SUBSECTION 5 [hereof] OF THIS PARAGRAPH
(i).
"Securities" shall have the meaning set forth in paragraph
(d)(iii) of [Section]SUBSECTION 7 [hereof] OF THIS PARAGRAPH (I)
"Trading Date" with respect to any security means (i) if such
security is listed or admitted for trading on the New York Stock
Exchange or another national securities exchange, a day on which the
New York Stock Exchange or such other national securities exchange
is open for trading, (ii) if such security is quoted on the NASDAQ
National Market System, or any similar system of automated
dissemination of quotations of securities prices, a day on which
trades may be made on such system, (iii) if not quoted as described
in clause (ii), days on which quotations are reported by the
National Quotation Bureau Incorporated or (iv) otherwise, any
Business Day.
"Transaction" shall have the meaning set forth in paragraph
(e) of [Section]SUBSECTION 7 [hereof] OF THIS PARAGRAPH (I).
"Transfer Agent" means American Stock Transfer & Trust
Company, New York, New York or such other agent or agents of the
Corporation as may be designated by the Board of Directors as the
transfer agent or conversion agent for the $1.625 CONVERTIBLE
Preferred Stock.
3. Dividends. (a) The holders of shares of the $1.625
CONVERTIBLE Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
therefor, cumulative cash dividends at an annual rate of $1.625 per share
of $1.625 CONVERTIBLE Preferred Stock. Such dividends shall be cumulative
from the Issue Date, whether or not in any Dividend Period or Periods
there shall be funds of the Corporation legally available for the payment
of such dividends and whether or not such dividends are declared, and
shall be payable quarterly, when, as and if declared by the Board of
Directors, on March 31, June 30, September 30 and December 31 in each year
(each a "dividend payment date"), commencing on September 30, 1993. If
any dividend payment date shall be on a day other than a Business Day,
then the dividend payment date shall be on the next succeeding Business
Day. Each such dividend shall be payable in arrears to the holders of
record of shares of the $1.625 CONVERTIBLE Preferred Stock, as they appear
on the stock records of the Corporation at the close of business on those
dates (each such date, a "dividend payment record date"), not less than 10
days nor more than 60 days preceding the dividend payment dates thereof,
as shall be fixed by the Board of Directors. Dividends on the $1.625
CONVERTIBLE Preferred Stock shall accrue (whether or not declared) on a
daily basis from the Issue Date and accrued dividends for each Dividend
Period shall accumulate to the extent not paid on the dividend payment
date first following the Dividend Period for which they accrue. As used
herein, the term "accrued" with respect to dividends includes both accrued
and accumulated dividends. Accrued and unpaid dividends for any past
Dividend Periods may be declared and paid at any time, without reference
to any regular dividend payment date, to holders of record on such date,
not exceeding 45 days preceding the payment date thereof, as may be fixed
by the Board of Directors.
(b) The amount of dividends payable for each full Dividend
Period for the $1.625 CONVERTIBLE Preferred Stock shall be computed by
dividing the annual dividend amount by four (rounded down to the nearest
cent). The amount of dividends payable for the initial Dividend Period on
the $1.625 CONVERTIBLE Preferred Stock and any other period shorter or
longer than a full Dividend Period on the $1.625 CONVERTIBLE Preferred
Stock shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. Holders of shares of $1.625 CONVERTIBLE Preferred
Stock called for redemption on a redemption date falling between the close
of business on a dividend payment record date and the opening of business
on the corresponding dividend payment date shall, in lieu of receiving
such dividend on the dividend payment date fixed therefor, receive such
dividend payment together with all other accrued and unpaid dividends on
the date fixed for redemption (unless such holder converts such shares in
accordance herewith). Holders of shares of $1.625 CONVERTIBLE Preferred
Stock shall not be entitled to any dividends, whether payable in cash,
property or securities, in excess of cumulative dividends, as herein
provided, on the $1.625 CONVERTIBLE Preferred Stock. No interest, or sum
of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the $1.625 CONVERTIBLE Preferred Stock which are in
arrears.
(c) So long as any shares of the $1.625 CONVERTIBLE Preferred
Stock are outstanding, no dividends, except as described in the next
succeeding sentence, shall be declared or paid or set apart for payment on
any class or series of stock of the Corporation ranking, as to dividends,
on a parity with the $1.625 CONVERTIBLE Preferred Stock, for any period
unless full cumulative dividends on all outstanding shares of $1.625
CONVERTIBLE Preferred Stock have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set
apart for such payment for all Dividend Periods terminating on or prior to
the date of payment, or setting apart for payment, of such full cumulative
dividends on such parity stock. When dividends are not paid in full or a
sum sufficient for such payment is not set apart, as aforesaid, upon the
shares of the $1.625 CONVERTIBLE Preferred Stock and any other class or
series of stock ranking on a parity as to dividends with the $1.625
CONVERTIBLE Preferred Stock, all dividends declared upon shares of the
$1.625 CONVERTIBLE Preferred Stock and all dividends declared upon such
other stock shall be declared and paid pro rata so that the amounts of
dividends per share declared and paid on the $1.625 CONVERTIBLE Preferred
Stock and such other stock shall in all cases bear to each other the same
ratio that accrued and unpaid dividends per share on the shares of the
$1.625 CONVERTIBLE Preferred Stock and on such other stock bear to each
other.
(d) So long as any shares of the $1.625 CONVERTIBLE Preferred
Stock are outstanding, no other stock of the Corporation ranking on a
parity with the $1.625 CONVERTIBLE Preferred Stock as to dividends or upon
liquidation, dissolution or winding up shall be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund or otherwise for the purchase or redemption
of any shares of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior to the $1.625
CONVERTIBLE Preferred Stock as to dividends and upon liquidation,
dissolution or winding up) unless (i) the full cumulative dividends, if
any, accrued on all outstanding shares of the $1.625 CONVERTIBLE Preferred
Stock shall have been paid or set apart for payment for all past Dividend
Periods and (ii) sufficient funds shall have been set apart for the
payment of the dividend for the current Dividend Period with respect to
the $1.625 CONVERTIBLE Preferred Stock.
(e) So long as any shares of the $1.625 CONVERTIBLE Preferred
Stock are outstanding, no dividends (other than dividends or distributions
paid in shares of Common Stock or other stock ranking junior to the $1.625
CONVERTIBLE Preferred Stock as to dividends and upon liquidation,
dissolution or winding up) shall be declared or paid or set apart for
payment and no other distribution shall be declared or made or set apart
for payment, in each case upon the Common Stock or any other stock of the
Corporation ranking junior to the $1.625 CONVERTIBLE Preferred Stock as to
dividends or upon liquidation, dissolution or winding up, nor shall any
Common Stock nor any other such stock of the Corporation ranking junior to
the $1.625 CONVERTIBLE Preferred Stock as to dividends or upon
liquidation, dissolution or winding up be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available
for a sinking fund or otherwise for the purchase or redemption of any
shares of any such stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to the $1.625
CONVERTIBLE Preferred Stock as to dividends and upon liquidation,
dissolution or winding up) unless, in each case (i) the full cumulative
dividends, if any, accrued on all outstanding shares of the $1.625
CONVERTIBLE Preferred Stock and any other stock of the Corporation ranking
on a parity with the $1.625 CONVERTIBLE Preferred Stock as to dividends
shall have been paid or set apart for payment for all past Dividend
Periods and all past dividend periods with respect to such other stock and
(ii) sufficient funds shall have been set apart for the payment of the
dividend for the current Dividend Period with respect to the $1.625
CONVERTIBLE Preferred Stock and for the current dividend period with
respect to any other stock of the Corporation ranking on a parity with the
$1.625 CONVERTIBLE Preferred Stock as to dividends.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation (whether capital
or surplus) shall be made to or set apart for the holders of Common Stock
or any other series or class or classes of stock of the Corporation
ranking junior to the $1.625 CONVERTIBLE Preferred Stock upon liquidation,
dissolution or winding up, the holders of the shares of $1.625 CONVERTIBLE
Preferred Stock shall be entitled to receive $25.00 per share plus an
amount per share equal to all dividends (whether or not earned or
declared) accrued and unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further
payment. No payment on account of any liquidation, dissolution or winding
up of the Corporation shall be made to the holders of any class or series
of stock ranking on a parity with the $1.625 CONVERTIBLE Preferred Stock
in respect of the distribution of assets upon dissolution, liquidation or
winding up unless there shall likewise be paid at the same time to the
holders of the $1.625 CONVERTIBLE Preferred Stock like proportionate
amounts determined ratably in proportion to the full amounts to which the
holders of all outstanding shares of $1.625 CONVERTIBLE Preferred Stock
and the holders of all outstanding shares of such parity stock are
respectively entitled with respect to such distribution. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distributable among the holders of
the shares of $1.625 CONVERTIBLE Preferred Stock shall be insufficient to
pay in full the preferential amount aforesaid and liquidating payments on
any other shares of stock ranking, as to liquidation, dissolution or
winding up, on a parity with the $1.625 CONVERTIBLE Preferred Stock, then
such assets, or the proceeds thereof, shall be distributed among the
holders of shares of $1.625 CONVERTIBLE Preferred Stock and any such other
stock ratably in accordance with the respective amounts which would be
payable on such shares of $1.625 CONVERTIBLE Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the
purposes of this [Section]SUBSECTION 4, neither a consolidation or merger
of the Corporation with one or more corporations or other entities nor a
sale, lease, exchange or transfer of all or any part of the Corporation's
assets for cash, securities or other property shall be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary.
(b) Subject to the rights of the holders of shares of any
series or class or classes of stock ranking on a parity with or prior to
the $1.625 CONVERTIBLE Preferred Stock upon liquidation, dissolution or
winding up, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of
$1.625 CONVERTIBLE Preferred Stock, as provided in this
[Section]SUBSECTION 4, any other series or class or classes of stock
ranking junior to the $1.625 CONVERTIBLE Preferred Stock upon liquidation,
dissolution or winding up shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of $1.625
CONVERTIBLE Preferred Stock shall not be entitled to share therein.
(c) Written notice of any liquidation, dissolution or
winding up of the Corporation, stating the payment date or dates when and
the place or places where the amounts distributable in such circumstances
shall be payable, shall be given by first class mail, postage prepaid, not
less than 30 days prior to any payment date stated therein, to the holders
of record of the $1.625 CONVERTIBLE Preferred Stock at their respective
addresses as the same shall appear on the stock records of the
Corporation.
5. Redemption at the Option of the Corporation.
(a) $1.625 CONVERTIBLE Preferred Stock may not be redeemed by
the Corporation prior to September 30, 1996. On or after such date the
Corporation, at its option, may redeem the shares of $1.625 CONVERTIBLE
Preferred Stock, in whole or in part, out of funds legally available
therefor, at any time or from time to time, subject to the notice
provisions and provisions for partial redemption described below, during
the twelve-month periods beginning on September 30 in each of the
following years at the following redemption prices per share plus an
amount equal to accrued and unpaid dividends, if any, to (and including)
the date fixed for redemption, whether or not earned or declared (the
"Redemption Price").
<TABLE>
<CAPTION>
Year Price per share
---- ---------------
<S> <C>
1996 26.1375
1997 25.9750
1998 25.8125
1999 25.6500
2000 25.4875
2001 25.3250
2002 25.1625
2003 and thereafter 25.0000
</TABLE>
(b) In the event the Corporation shall redeem shares of
$1.625 CONVERTIBLE Preferred Stock, notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the redemption date, to each holder of record
of the shares to be redeemed, at such holder's address as the same appears
on the stock records of the Corporation. Each such notice shall state:
(i) the redemption date; (ii) the number of shares of $1.625 CONVERTIBLE
Preferred Stock to be redeemed and, if less than all the shares held by
such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (iii) the Redemption Price; (iv) the place or places
where certificates for such shares are to be surrendered for payment of
the redemption price; (v) the then current Conversion Price; and (vi)
that dividends on the shares to be redeemed shall cease to accrue on such
redemption date. If, on the date fixed for redemption, funds necessary
for the redemption shall be available therefor and shall have been
irrevocably deposited or set aside, then, notwithstanding that the
certificates evidencing any shares of $1.625 CONVERTIBLE Preferred Stock
so called for redemption shall not have been surrendered, the dividends
with respect to the shares so called shall cease to accrue after the date
fixed for redemption, such shares shall no longer be deemed outstanding,
all rights of the holders of such shares as stockholders of the Company
shall cease, and all rights whatsoever with respect to the shares so
called for redemption (except the right of the holders to receive the
Redemption Price without interest upon surrender of their certificates
therefor) shall terminate.
Upon surrender in accordance with said notice of the
certificates for any such shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation
at the applicable Redemption Price aforesaid. If fewer than all the
outstanding shares of $1.625 CONVERTIBLE Preferred Stock are to be
redeemed, shares to be redeemed shall be selected by the Corporation from
outstanding shares of $1.625 CONVERTIBLE Preferred Stock not previously
called for redemption by lot or pro rata (as near as may be) or by any
other method determined by the Board of Directors of the Corporation in
its sole discretion to be equitable. If fewer than all the shares
represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder
thereof.
In the event that the Corporation has failed to pay accrued
and unpaid dividends on the $1.625 CONVERTIBLE Preferred Stock, it may not
redeem less than all of the then outstanding shares of the $1.625
CONVERTIBLE Preferred Stock until all such accrued and unpaid dividends
and the then current quarterly dividends have been paid in full.
Notwithstanding the foregoing, if notice of redemption has
been given pursuant to this [Section]SUBSECTION 5 and any holder of shares
of $1.625 CONVERTIBLE Preferred Stock shall, prior to the close of
business on the redemption date, give written notice to the Corporation
pursuant to [Section]SUBSECTION 7(b) [hereof] OF THIS PARAGRAPH(I) of the
conversion of any or all of the shares to be redeemed held by such holder
(accompanied by a certificate or certificates for such shares, duly
endorsed or assigned to the Corporation), then (i) the Corporation shall
not have the right to redeem such shares, (ii) the conversion of such
shares to be redeemed shall become effective as provided in
[Section]SUBSECTION 7 OF THIS PARAGRAPH (I) and (iii) any funds which
shall have been deposited for the payment of the Redemption Price for such
shares shall be returned to the Corporation immediately after such
conversion (subject to declared dividends payable to holders of shares of
$1.625 CONVERTIBLE Preferred Stock on the dividend payment record date for
such dividends being so payable, to the extent set forth in
[Section]SUBSECTION 7 [hereof] OF THIS PARAGRAPH(I), regardless of
whether such shares are converted subsequent to such dividend payment
record date and prior to the related dividend payment date).
6. Shares to be Retired. All shares of $1.625 CONVERTIBLE
Preferred Stock purchased, redeemed, exchanged or converted by the
Corporation shall be retired and cancelled and shall be restored to the
status of authorized but unissued shares of [p]Preferred [s]Stock, without
designation as to series, and may thereafter be reissued.
7. Conversion. Holders of shares of $1.625 CONVERTIBLE
Preferred Stock shall have the right to convert all or a portion of such
shares into shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of
this [Section]SUBSECTION 7, a holder of shares of $1.625 CONVERTIBLE
Preferred Stock shall have the right, at such holder's option, at any time
to convert all or any of such shares into the number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) obtained by dividing the aggregate
liquidation preference of the shares to be converted by the Conversion
Price and by surrender of such shares, such surrender to be made in the
manner provided in paragraph (b) of this [Section]SUBSECTION 7; provided,
however, that the right to convert shares called for redemption pursuant
to [Section]SUBSECTION 5 [hereof] OF THIS PARAGRAPH(I) shall terminate at
the close of business on the date fixed for such redemption. No share of
$1.625 CONVERTIBLE Preferred Stock may be converted in part into Common
Stock.
(b) In order to exercise the conversion right, the holder of
each share of $1.625 CONVERTIBLE Preferred Stock to be converted shall
surrender the certificate representing such share, duly endorsed or
assigned to the Corporation or in blank, at the office of the Transfer
Agent in the Borough of Manhattan, City of New York, accompanied by
written notice to the Corporation that the holder thereof elects to
convert such share of $1.625 CONVERTIBLE Preferred Stock. Unless the
shares issuable on conversion are to be issued in the same name as the
name in which such share of $1.625 CONVERTIBLE Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly
executed by the holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence
reasonably satisfactory to the Corporation demonstrating that such taxes
have been paid or are not required to be paid).
Holders of shares of $1.625 CONVERTIBLE Preferred Stock at the
close of business on a dividend payment record date shall be entitled to
receive the dividend payable on such shares on the corresponding dividend
payment date (except that holders of shares called for redemption on a
redemption date falling between the close of business on such dividend
payment record date and the opening of business on the corresponding
dividend payment date shall, in lieu of receiving such dividend on the
dividend payment date fixed therefor, receive such dividend payment
together with all other accrued and unpaid dividends on the date fixed for
redemption, unless such holders convert such shares called for redemption
IN ACCORDANCE HEREWITH [pursuant to the Certificate of Designations
relating to the Preferred Stock)] notwithstanding the conversion thereof
following such dividend payment record date and prior to such dividend
payment date. However, shares of $1.625 CONVERTIBLE Preferred Stock
surrendered for conversion during the period between the close of business
on any dividend payment record date and the opening of business on the
corresponding dividend payment date (except shares of $1.625 CONVERTIBLE
Preferred Stock called for redemption on a redemption date during such
period) must be accompanied by payment of an amount equal to the dividend
payment with respect to such shares of $1.625 CONVERTIBLE Preferred Stock
presented for conversion on such dividend payment date. A holder of
shares of $1.625 CONVERTIBLE Preferred Stock on a dividend payment record
date who (or whose transferee) surrenders any such shares for conversion
into shares of Common Stock on the corresponding dividend payment date
will receive the dividend payable by the Corporation on such shares of
$1.625 CONVERTIBLE Preferred Stock on such date and the converting holder
need not include payment in the amount of such dividend upon surrender of
shares of $1.625 CONVERTIBLE Preferred Stock for conversion on the
dividend payment date. Except as provided in this paragraph, the
Corporation shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on converted shares of $1.625 CONVERTIBLE
Preferred Stock or for dividends on the shares of Common Stock issued upon
such conversion.
As promptly as practicable after the surrender of certificates
for shares of $1.625 CONVERTIBLE Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such office to such holder,
or on such holder's written order, a certificate or certificates for the
number of shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this [Section]SUBSECTION 7,
and any fractional interest in respect of a share of Common Stock arising
upon such conversion shall be settled as provided in paragraph (c) of this
[Section]SUBSECTION 7.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of $1.625 CONVERTIBLE Preferred Stock shall have
been surrendered and such notice received by the Corporation as aforesaid,
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby at such time on such date and such
conversion shall be at the Conversion Price in effect at such time on such
date, unless the stock transfer books of the Corporation shall be closed
on that date, in which event such person or persons shall be deemed to
have become such holder or holders of record at the close of business on
the next succeeding day on which such stock transfer books are open, but
such conversion shall be at the Conversion Price in effect on the date
upon which such shares shall have been surrendered and such notice
received by the Corporation. All shares of Common Stock delivered upon
conversion of the $1.625 CONVERTIBLE Preferred Stock will upon delivery be
duly and validly issued and fully paid and nonassessable.
(c) In connection with the conversion of any shares of $1.625
CONVERTIBLE Preferred Stock, no fractional shares or scrip representing
fractions of shares of Common Stock shall be issued upon conversion of the
$1.625 CONVERTIBLE Preferred Stock. Instead of any fractional interest in
a share of Common Stock which would otherwise be deliverable upon the
conversion of a share of $1.625 CONVERTIBLE Preferred Stock, the
Corporation shall pay to the holder of such share an amount in cash
(computed to the nearest cent) equal to the Closing Price of Common Stock
on the Trading Date immediately preceding the date of conversion
multiplied by the fraction of a share of Common Stock represented by such
fractional interest. If more than one share of $1.625 CONVERTIBLE
Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number
of shares of $1.625 CONVERTIBLE Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time
as follows:
(i) In case the Corporation shall after the Issue Date
(A) pay a dividend or make a distribution on its Common Stock
that is paid or made (1) in shares of its Common Stock or (2)
in rights to purchase stock or other securities if such rights
are not separable from the Common Stock except upon the
occurrence of a contingency, (B) subdivide or split its
outstanding Common Stock into a greater number of shares, (C)
combine its outstanding Common Stock into a smaller number of
shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in
effect immediately prior thereto shall be adjusted or (in the
case of clause (A)(2)) other provision shall be made so that
the holder of any share of $1.625 CONVERTIBLE Preferred Stock
thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock of the
Corporation and rights to purchase stock or other securities
which such holder would have owned or have been entitled to
receive after the occurrence of any of the events described
above had such share been surrendered for conversion
immediately prior to the occurrence of such event or the
record date therefor, whichever is earlier. In the event of
the redemption of any rights referred to clause (A), such
holder shall have the right to receive, in lieu of any such
rights, any cash, property or securities paid in respect of
such redemption; provided, however, that if the value of such
cash, property or securities is less than $.10 per share of
Common Stock, such holder shall not be entitled to such cash,
property or securities. An adjustment made pursuant to this
subparagraph (i) shall become effective immediately after the
close of business on the record date for determination of
stockholders entitled to receive such dividend or distribution
in the case of a dividend or distribution (except as provided
in paragraph (h) below) and shall become effective immediately
after the close of business on the effective date in the case
of a subdivision, split, combination or reclassification. Any
shares of Common Stock issuable in payment of a dividend shall
be deemed to have been issued immediately prior to the close
of business on the record date for such dividend for purposes
of calculating the number of outstanding shares of Common
Stock under clauses (ii) and (iii) below.
(ii) In case the Corporation shall issue after the Issue
Date rights or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 days after the
issuance date) to subscribe for or purchase Common Stock at a
price per share less than the Current Market Price per share
of Common Stock at the record date for the determination of
stockholders entitled to receive such rights or warrants, then
the Conversion Price in effect immediately prior thereto shall
be adjusted to equal the price determined by multiplying (A)
the Conversion Price in effect immediately prior to the date
of issuance of such rights or warrants by (B) a fraction, the
numerator of which shall be the sum of (1) the number of
shares of Common Stock outstanding on the date of issuance of
such rights or warrants (without giving effect to any such
issuance) and (2) the number of shares which the aggregate
proceeds from the exercise of such rights or warrants for
Common Stock would purchase at such Current Market Price, and
the denominator of which shall be the sum of (1) the number of
shares of Common Stock outstanding on the date of issuance of
such rights or warrants (without giving effect to any such
issuance) and (2) the number of additional shares of Common
Stock offered for subscription or purchase. Such adjustment
shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately
after such record date. In determining whether any rights or
warrants entitle the holders of Common Stock to subscribe for
or purchase shares of Common Stock at less than such Current
Market Price, there shall be taken into account any
consideration received by the Corporation upon issuance and
upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the
Board of Directors (whose determination shall, if made in good
faith, be conclusive).
(iii) In case the Corporation shall pay a dividend or make
a distribution to all holders of its Common Stock after the
Issue Date of any shares of capital stock of the Corporation
or its subsidiaries (other than Common Stock) or evidences of
its indebtedness or assets, including securities (any of the
foregoing being hereinafter in this subparagraph (iii) called
the "Securities"), but excluding rights, warrants, dividends
and distributions referred to in subparagraphs (i) and (ii)
above, regular periodic cash dividends payable out of the
Corporation's surplus that may from time to time be fixed by
the Board of Directors and dividends and distributions in
connection with the liquidation, dissolution or winding up of
the Corporation, then in each such case, the Conversion Price
shall be adjusted so that it shall equal the price determined
by multiplying (A) the Conversion Price in effect on the
record date mentioned below by (B) a fraction, the numerator
of which shall be the Current Market Price per share of the
Common Stock on the record date mentioned below less the then
fair market value as determined by the Board of Directors
(whose determination shall, if made in good faith, be
conclusive) as of such record date of the portion of the
Securities applicable to one share of Common Stock, and the
denominator of which shall be the Current Market Price per
share of the Common Stock on such record date; provided,
however, that in the event the then fair market value (as so
determined) of the portion of Securities so distributed
applicable to one share of Common Stock is equal to or greater
than the Current Market Price per share of Common Stock on the
record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each
holder of shares of $1.625 CONVERTIBLE Preferred Stock shall
have the right to receive the amount and kind of Securities
such holder would have received had such holder converted each
such share of $1.625 CONVERTIBLE Preferred Stock immediately
prior to the record date for the distribution of the
Securities. Except as provided in paragraph (h) below, such
adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive
such distribution.
(iv) Notwithstanding anything in subparagraph (ii) above,
if such rights or warrants shall by their terms provide for an
increase or increases with the passage of time or otherwise in
the price payable to the Corporation upon the exercise
thereof, the Conversion Price upon any such increase becoming
effective shall forthwith be readjusted (but to no greater
extent than originally adjusted by reason of such issuance or
sale) to reflect the same. Upon the expiration or termination
of such rights or warrants, if any such rights or warrants
shall not have been exercised, then the Conversion Price shall
forthwith be readjusted and thereafter be the rate which it
would have been had an adjustment been made on the basis that
(A) the only rights or warrants so issued or sold were those
so exercised and they were issued or sold for the
consideration actually received by the Corporation upon such
exercise plus the consideration, if any, actually received by
the Corporation for the granting of all such rights or
warrants whether or not exercised and (B) the Corporation
issued and sold a number of shares of Common Stock equal to
those actually issued upon exercise of such rights or
warrants, and such shares were issued and sold for a
consideration equal to the aggregate exercise price in effect
under the rights or warrants actually exercised at the
respective dates of their exercise. For purposes of
subparagraph (ii), the aggregate consideration received by the
Corporation in connection with the issuance of shares of
Common Stock or of rights or warrants shall be deemed to be
equal to the sum of the aggregate offering price (before
deduction of underwriting discounts or commissions and
expenses payable to third parties) of all such securities plus
the minimum aggregate amount, if any, payable upon the
exercise of such rights or warrants into shares of Common
Stock.
(v) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this subparagraph (v)
are not required to be made shall be carried forward and taken
into account in any subsequent adjustment; and provided,
however, that any adjustment shall be required and shall be
made in accordance with the provisions of this
[Section]SUBSECTION 7 (other than this subparagraph (v)) not
later than such time as may be required in order to preserve
the tax-free nature of a distribution to the holder of shares
of Common Stock. All calculations under this
[Section]SUBSECTION 7 shall be made to the nearest cent (with
$.005 being rounded upward) or to the nearest 1/100th of a
share (with .005 of a share being rounded upward), as the
case may be. Anything in this paragraph (d) to the contrary
notwithstanding, the Corporation shall be entitled, to the
extent permitted by law, to make such reductions in the
Conversion Price, in addition to those required by this
paragraph (d), as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of
shares, distribution of rights or warrants to purchase stock
or securities, or a distribution of other assets or any other
transaction which could be treated as any of the foregoing
transactions pursuant to Section 305 of the Internal Revenue
Code of 1986, as amended, hereafter made by the Corporation to
its stockholders shall not be taxable to such stockholders.
(e) In case the Corporation shall be a party to any
transaction (including without limitation a merger, consolidation,
statutory share exchange, sale of all or substantially all of the
Corporation's assets or recapitalization of the Common Stock (each of the
foregoing being referred to as a "Transaction"), in each case as a result
of which shares of Common Stock shall be converted into the right to
receive stock, securities or other property (including cash or any
combination thereof), then the $1.625 CONVERTIBLE Preferred Stock
remaining outstanding will thereafter no longer be subject to conversion
into Common Stock pursuant to THIS [Section]SUBSECTION 7, but instead
shall be convertible into the kind and amount of shares of stock and other
securities and property receivable (including cash) upon the consummation
of such Transaction by a holder of that number of shares or fraction
thereof of Common Stock into which one share of $1.625 CONVERTIBLE
Preferred Stock was convertible immediately prior to such Transaction.
The Corporation shall not be a party to any Transaction unless the terms
of such Transaction are consistent with the provisions of this paragraph
(e) and it shall not consent or agree to the occurrence of any Transaction
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of
the $1.625 CONVERTIBLE Preferred Stock which will contain provisions
enabling the holders of the $1.625 CONVERTIBLE Preferred Stock which
remains outstanding after such Transaction to convert into the
consideration received by holders of Common Stock at the Conversion Price
immediately after such Transaction. In the event that at any time, as a
result of an adjustment made pursuant to this [Section]SUBSECTION 7, the
$1.625 CONVERTIBLE Preferred Stock shall become subject to conversion into
any securities other than shares of Common Stock, thereafter the number of
such other securities so issuable upon conversion of the shares of $1.625
CONVERTIBLE Preferred Stock shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of $1.625 CONVERTIBLE Preferred
Stock contained in this [Section]SUBSECTION 7. The provisions of this
paragraph (e) shall similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock that would cause an
adjustment to the Conversion Price of the $1.625 CONVERTIBLE
Preferred Stock pursuant to the terms of any of the paragraphs
above (including such an adjustment that would occur but for
the terms of the first sentence of subparagraph (d)(v) above);
(ii) the Corporation shall authorize the granting to
the holders of the Common Stock of rights or warrants to
subscribe for or purchase any shares of any class or any other
rights or warrants;
(iii) there shall be any reclassification or change of
the Common Stock (other than an event to which paragraph
(d)(i) of this [Section]SUBSECTION 7 applies) or any
consolidation, merger or statutory share exchange to which the
Corporation is a party and for which approval of any
stockholders of the Corporation is required, or the sale or
transfer of all or substantially all of the assets of the
Corporation or any Fundamental Change or Change of Control
(each as defined in [Section]SUBSECTION 8 OF THIS PARAGRAPH
(I) below); or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then, in addition to actions otherwise required to be taken pursuant to
[Section]SUBSECTION 8 OF THIS PARAGRAPH (I), the Corporation shall cause
to be filed with the Transfer Agent and shall cause to be mailed to the
holders of shares of the $1.625 CONVERTIBLE Preferred Stock at their
addresses as shown on the stock records of the Corporation, as promptly as
possible, but at least 30 days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken
for the purpose of such dividend, distribution or granting of rights or
warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution or rights or warrants are to be determined or (B) the date on
which such reclassification, change, consolidation, merger, statutory
share exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective or occur, 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, change, consolidation, merger,
statutory share exchange, sale, transfer, dissolution, liquidation or
winding up. Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in this
[Section]SUBSECTION 7.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officers' certificate signed by the President or a Vice President and the
Chief Financial Officer or the Secretary of the Corporation setting forth
the Conversion Price after such adjustment, the method of calculation
thereof and setting forth a brief statement of the facts requiring such
adjustment and upon which such adjustment is based. If the calculation of
the adjustment requires a determination by the Board of Directors pursuant
to paragraph (d)(iii) of this [Section]SUBSECTION 7 or any similar
provision, such certificate shall include a copy of the resolution of the
Board of Directors relating to such determination. Promptly after
delivery of such certificate, the Corporation shall prepare a notice of
such adjustment of the Conversion Price setting forth the adjusted
Conversion Price, the facts requiring such adjustment and upon which such
adjustment is based and the date on which such adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion
Price to the holder of each share of $1.625 CONVERTIBLE Preferred Stock at
such holder's last address as shown on the stock records of the
Corporation.
(h) In any case in which paragraph (d) of this
[Section]SUBSECTION 7 provides that an adjustment shall become effective
immediately after a record date for an event and the date fixed for
conversion pursuant to THIS [Section]SUBSECTION 7 occurs after such record
date but before the occurrence of such event, the Corporation may defer
until the actual occurrence of such event (i) issuing to the holder of any
share of $1.625 CONVERTIBLE Preferred Stock surrendered for conversion the
additional shares of Common Stock issuable upon such conversion by reason
of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction
pursuant to paragraph (c) of this [Section]SUBSECTION 7.
(i) For purposes of this [Section]SUBSECTION 7, the number of
shares of Common Stock at any time outstanding shall not include any
shares of Common Stock then owned or held by or for the account of the
Corporation or any corporation controlled by the Corporation.
(j) If any single action would require adjustment pursuant to
more than one paragraph of this [Section]SUBSECTION 7, only one adjustment
shall be made and such adjustment shall be the amount of adjustment which
has the highest absolute value to the holders of the $1.625 CONVERTIBLE
Preferred Stock.
(k) In case the Corporation shall take any action affecting
the Common Stock, other than action described in this [Section]SUBSECTION
7, which in the opinion of the Board of Directors would materially
adversely affect the conversion rights of the holders of the shares of
$1.625 CONVERTIBLE Preferred Stock, the Conversion Price for the $1.625
CONVERTIBLE Preferred Stock may be adjusted, to the extent permitted by
law, in such manner, if any, and at such time, as the Board of Directors
may determine to be equitable in the circumstances. Subject to the
foregoing, there shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth
in this [Section]SUBSECTION 7.
(l) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or both, for the
purpose of effecting conversion of the $1.625 CONVERTIBLE Preferred Stock,
the full number of shares of Common Stock deliverable upon the conversion
of all outstanding shares of $1.625 CONVERTIBLE Preferred Stock not
theretofore converted. For purposes of this paragraph (l), the number of
shares of Common Stock which shall be deliverable upon the conversion of
all outstanding shares of $1.625 CONVERTIBLE Preferred Stock shall be
computed as if at the time of computation all such outstanding shares were
held by a single holder.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value of the shares of
Common Stock deliverable upon conversion of the $1.625 CONVERTIBLE
Preferred Stock, the Corporation will take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Conversion Price.
The Corporation will endeavor to make the shares of Common
Stock required to be delivered upon conversion of the $1.625 CONVERTIBLE
Preferred Stock eligible for trading upon the NASDAQ National Market
System or upon any national securities exchange upon which the Common
Stock shall then be traded, prior to such delivery.
Prior to the delivery of any securities which the Corporation
shall be obligated to deliver upon conversion of the $1.625 CONVERTIBLE
Preferred Stock, the Corporation will endeavor to comply with all federal
and state laws and regulations thereunder requiring the registration of
such securities with, or any approval of or consent to the delivery
thereof by, any governmental authority.
(m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or
delivery of the shares of $1.625 CONVERTIBLE Preferred Stock (or any other
securities issued on account of the $1.625 CONVERTIBLE Preferred Stock
pursuant hereto) or shares of Common Stock on conversion of the $1.625
CONVERTIBLE Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of
$1.625 CONVERTIBLE Preferred Stock (or any other securities issued on
account of the $1.625 CONVERTIBLE Preferred Stock pursuant hereto) or
shares of Common Stock in a name other than the name in which the shares
of $1.625 CONVERTIBLE Preferred Stock with respect to which such Common
Stock shares are issued were registered and the Corporation shall not be
required to make any issue or delivery unless and until the person
requesting such issue or delivery has paid to the Corporation the amount
of any such tax or has established, to the reasonable satisfaction of the
Corporation, that such tax has been paid or is not required to be paid.
(n) The Corporation shall not take any action which results
in an adjustment of the number of shares of Common Stock issuable upon
conversion of a share of $1.625 CONVERTIBLE Preferred Stock if the total
number of shares of Common Stock issuable after such action upon
conversion of the $1.625 CONVERTIBLE Preferred Stock then outstanding,
together with the total number of shares of Common Stock then outstanding,
would exceed the total number of shares of Common Stock then authorized
under the RESTATED Certificate of Incorporation. Subject to the
foregoing, the Corporation shall take all such actions as it may deem
reasonable under the circumstances to provide for the issuance of such
number of shares of Common Stock as would be necessary to allow for the
conversion from time to time, and taking into account adjustments as
herein provided, of outstanding shares of the $1.625 CONVERTIBLE Preferred
Stock in accordance with the terms and provisions of the RESTATED
Certificate of Incorporation.
8. Special Conversion Rights.
(a) Upon the occurrence of a Change of Control with respect
to the Corporation, each holder of $1.625 CONVERTIBLE Preferred Stock
shall have the right, at the holder's option, for a period of 30 days
after the mailing of a notice by the Corporation to the holders of the
$1.625 CONVERTIBLE Preferred Stock pursuant to [Section]SUBSECTION 12
[hereof] OF THIS PARAGRAPH(I) that a Change of Control has occurred, to
convert all, but not less than all, of such holder's $1.625 CONVERTIBLE
Preferred Stock into Common Stock of the Corporation at an adjusted
Conversion Price per share equal to the Special Conversion Price (as
defined in paragraph (e) below). The Corporation may, at its option, in
lieu of providing Common Stock upon any such special conversion, pay to
the holder cash equal to the Market Value (as defined in paragraph (e)
below) of the Common Stock multiplied by the number of shares of Common
Stock into which such shares of $1.625 CONVERTIBLE Preferred Stock would
have been convertible immediately prior to such Change of Control at an
adjusted Conversion Price equal to the Special Conversion Price. The
special conversion right arising upon a Change of Control shall only be
applicable with respect to the first Change of Control that occurs after
the Issue Date of any shares of $1.625 CONVERTIBLE Preferred Stock.
$1.625 CONVERTIBLE Preferred Stock which becomes convertible pursuant to a
special conversion right shall, unless so converted, remain convertible
into the number of shares of Common Stock that the holders of the $1.625
CONVERTIBLE Preferred Stock would have owned immediately after the Change
of Control if the holders had converted the $1.625 CONVERTIBLE Preferred
Stock immediately before the effective date of the Change of Control,
subject to adjustment as provided in [Section]SUBSECTION 7 [hereof] OF
THIS PARAGRAPH(I).
(b) Upon the occurrence of a Fundamental Change with respect
to the Corporation, each holder of $1.625 CONVERTIBLE Preferred Stock
shall have a special conversion right, at the holder's option, for a
period of 30 days after the mailing of a notice by the Corporation to the
holders of the $1.625 CONVERTIBLE Preferred Stock pursuant to
[Section]SUBSECTION 12 [hereof] OF THIS PARAGRAPH(I) that a Fundamental
Change has occurred, to convert all, but not less than all, of such
holder's $1.625 CONVERTIBLE Preferred Stock into the kind and amount of
cash, securities, property or other assets receivable upon such
Fundamental Change by a holder of the number of shares of Common Stock
into which such shares of $1.625 CONVERTIBLE Preferred Stock would have
been convertible immediately prior to such Fundamental Change at an
adjusted Conversion Price equal to the Special Conversion Price. The
[Company] CORPORATION or a successor corporation, as the case may be, may,
at its option and in lieu of providing the consideration as required above
upon such conversion, pay to the holder cash equal to the Market Value of
the Common Stock multiplied by the number of shares of Common Stock into
which such shares of $1.625 CONVERTIBLE Preferred Stock would have been
convertible immediately prior to such Fundamental Change at an adjusted
Conversion Price equal to the Special Conversion Price. $1.625
CONVERTIBLE Preferred Stock which becomes convertible pursuant to a
special conversion right shall, unless so converted, remain convertible
into the kind and amount of cash, securities, property or other assets
that the holders of the $1.625 CONVERTIBLE Preferred Stock would have
owned immediately after the Fundamental Change if the holders had
converted the $1.625 CONVERTIBLE Preferred Stock immediately before the
effective date of the Fundamental Change, subject to adjustment as
provided in [Section]SUBSECTION 7 [hereof ] OF THIS PARAGRAPH(I).
(c) Upon the occurrence of a Change of Control or a
Fundamental Change with respect to the Corporation, within 30 days after
such occurrence, the Corporation shall mail to each registered holder of
$1.625 CONVERTIBLE Preferred Stock a notice of such occurrence (the
"Special Conversion Notice") setting forth the following:
(i) the event constituting the Change of Control or
Fundamental Change;
(ii) the conversion date upon exercise of the applicable
special conversion right;
(iii) the Special Conversion Price;
(iv) the conversion rate (and related conversion price)
then in effect under [Section]SUBSECTION 7 and the continuing
conversion rights, if any, under [Section]SUBSECTION 7 OF THIS
PARAGRAPH (i);
(v) the name and address of the paying agent and
conversion agent;
(vi) that holders who want to convert shares of $1.625
CONVERTIBLE Preferred Stock must satisfy the requirements of
[Section]SUBSECTION 7(b) OF THIS PARAGRAPH (I) (specifying such
requirements) and must exercise such conversion right within the 30-
day period after the mailing of such notice by the Corporation;
(vii) that exercise of such conversion right shall be
irrevocable and no dividends on shares of $1.625 CONVERTIBLE
Preferred Stock (or portions thereof) tendered for conversion shall
accrue from and after the conversion date; and
(viii) that the Corporation (or a successor corporation, if
applicable) may, at its option, elect to pay cash (specifying the
amount thereof per share) for all shares of $1.625 CONVERTIBLE
Preferred Stock tendered for conversion.
(d) A holder of $1.625 CONVERTIBLE Preferred Stock must
exercise the special conversion right within the 30-day period after the
mailing of the Special Conversion Notice or such special conversion right
shall expire. Such right must be exercised in accordance with
[Section]SUBSECTION 7(b) OF THIS PARAGRAPH (I) to the extent the
procedures in [Section]SUBSECTION 7(b) OF THIS PARAGRAPH (I) are
consistent with the special provisions of this [Section]SUBSECTION 8.
Exercise of such conversion right shall be irrevocable, to the extent
permitted by applicable law, and dividends on $1.625 CONVERTIBLE Preferred
Stock tendered for conversion shall cease to accrue from and after the
conversion date. The conversion date with respect to the exercise of a
special conversion right arising upon a Change of Control or Fundamental
Change shall be the 30th day after the mailing of the Special Conversion
Notice. In taking any action in connection with any Change of Control or
Fundamental Change or related special conversion right, the Company will
comply with all applicable federal securities laws and regulations.
(e) The following definitions shall apply to terms used in
this [Section]SUBSECTION 8:
(i) a "Change of Control" with respect to the
Corporation shall be deemed to have occurred at such time as any
person (within the meaning of Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
including a group (within the meaning of Rule 13d-5 under the
Exchange Act and any successor rule), together with any of its
Affiliates or Associates (as defined below), files or becomes
obligated to file a report (or any amendment or supplement thereto)
on Schedule 13D or 14D-1 pursuant to the Exchange Act disclosing
that such person has become the beneficial owner of either (i)
66-2/3% or more of the shares of Common Stock of the Corporation
then outstanding or (ii) securities representing 66-2/3% or more of
the combined voting power of the Voting Stock (as defined below) of
the Corporation then outstanding; provided, however, that a Change
of Control shall not be deemed to have occurred with respect to any
transaction that constitutes a Fundamental Change. An "Affiliate"
of a specified person is a person that directly or indirectly
controls, or is controlled by, or is under common control with, the
person specified. An "Associate" of a person means (1) any
corporation or organization, other than the Corporation or any
subsidiary of the Corporation, of which the person is an officer or
partner or is, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities; (2) any trust or estate
in which the person has a substantial beneficial interest or as to
which the person serves as trustee or in a similar fiduciary
capacity; and (3) any relative or spouse of the person, or any
relative of the spouse, who has the same home as the person or who
is a director or officer of the person or any of its parents or
subsidiaries. As used herein, a person shall be deemed to have
"beneficial ownership" with respect to, and shall be deemed to
"beneficially own," any securities of the Corporation in accordance
with Section 13 of the Exchange Act and the rules and regulations
(including Rule 13d-3, Rule 13d-5 and any successor rules)
promulgated by the Securities and Exchange Commission thereunder;
provided, however, that a person shall be deemed to have beneficial
ownership of all securities that any such person has a right to
acquire whether such right is exercisable immediately or only after
the passage of time and without regard to the 60-day limitation
referred to in Rule 13d-3.
(ii) a "Fundamental Change" with respect to the
Corporation means (i) the occurrence of any transaction or event in
connection with which 66-2/3% or more of the outstanding Common
Stock of the Corporation shall be exchanged for, converted into,
acquired for or constitute solely the right to receive cash,
securities, property or other assets (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) or
(ii) the conveyance, sale, lease, assignment, transfer or other
disposal of all or substantially all of the Corporation's property,
business or assets; provided, however that a Fundamental Change
shall not be deemed to have occurred with respect to either of the
following transactions or events: (a) any transaction or event in
which more than 50% (by value as determined in good faith by the
Board of Directors of the Corporation) of the consideration received
by holders of Common Stock consists of Marketable Stock (as defined
below); or (b) any consolidation or merger of the Corporation in
which the holders of Common Stock of the Corporation immediately
prior to such transaction own, directly or indirectly, (1) 50% or
more of the common stock of the sole surviving corporation (or of
the ultimate parent of such sole surviving corporation) outstanding
at the time immediately after such consolidation or merger and (2)
securities representing 50% or more of the combined voting power of
the surviving corporation's Voting Stock (as defined below) (or of
the Voting Stock of the ultimate parent of such surviving
corporation) outstanding at such time.
(iii) "Voting Stock" means, with respect to any person,
capital stock of such person having general voting power under
ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of
whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency).
(iv) the "Special Conversion Price" shall mean (i) the
higher of (a) the Market Value of the Common Stock or (b) $5.50 per
share (which amount will, each time the Conversion Price is adjusted
as provided elsewhere herein, be adjusted so that the ratio of such
dollar amount to the Conversion Price, after giving effect to any
such adjustment, shall always be the same as the ratio of $5.50 to
the initial Conversion Price, without giving effect to any such
adjustment) multiplied by (ii) a ratio the numerator of which is
$25.00 and the denominator of which is the Redemption Price (or, if
prior to the date on which the Company may begin to redeem the
$1.625 CONVERTIBLE Preferred Stock, the Redemption Price applicable
commencing on such date).
(v) the "Market Value" of the Common Stock or any other
Marketable Stock shall be the average of the Closing Price of the
Common Stock or such other Marketable Stock, as the case may be, for
the five Trading Dates ending on the last Trading Date preceding the
date of the Change of Control or Fundamental Change; provided,
however, that if the Marketable Stock is not traded on any national
securities exchange or similar quotation system as described in the
definition of "Marketable Stock" during such period, then the Market
Value of such Marketable Stock shall be the average of the Closing
Price of such Marketable Stock during the first five Trading Dates
commencing with the first day after the date on which such
Marketable Stock was first distributed to the general public and
traded on the New York Stock Exchange, the American Stock Exchange,
the NASDAQ National Market System or any similar system of automated
dissemination of quotations of securities prices in the United
States.
(vi) "Marketable Stock" shall mean Common Stock or common
stock of any corporation that is the successor to all or
substantially all of the business or assets of the Corporation as a
result of a Fundamental Change (or of the ultimate parent of such
successor), which is (or will, upon distribution thereof, be) listed
or quoted on the New York Stock Exchange, the American Stock
Exchange, the NASDAQ National Market System or any similar system of
automated dissemination of quotations of securities prices in the
United States.
9. Ranking. (a) Any class or classes of stock of the
Corporation shall be deemed to rank:
(i) prior to the $1.625 CONVERTIBLE Preferred Stock, as to
dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class shall be
entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of $1.625 CONVERTIBLE
Preferred Stock;
(ii) on a parity with the $1.625 CONVERTIBLE Preferred Stock,
as to dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices
per share thereof be different from those of the $1.625 CONVERTIBLE
Preferred Stock, if the holders of such class of stock and the
$1.625 CONVERTIBLE Preferred Stock shall be entitled to the receipt
of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion to
their respective amounts of accrued and unpaid dividends per share
or liquidation prices, without preference or priority of one over
the other; and
(iii) junior to the $1.625 CONVERTIBLE Preferred Stock, as to
dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, if such stock shall be Common Stock or if
the holders of $1.625 CONVERTIBLE Preferred Stock shall be entitled
to receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of shares of such stock.
[(b) The Preferred Stock shall rank on a parity with the
Class A Stock, as to dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, as the case may be, in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation prices per share.]
10. Voting. (a) Except as herein provided or as otherwise
from time to time required by law, holders of $1.625 CONVERTIBLE Preferred
Stock shall have no voting rights. Whenever, at any time or times,
dividends payable on the shares of $1.625 CONVERTIBLE Preferred Stock at
the time outstanding have not been paid in an aggregate amount equal to at
least six quarterly dividends on such shares (whether or not consecutive),
the holders of $1.625 CONVERTIBLE Preferred Stock shall have the right,
voting separately as a class with [holders of the Corporation's Class A
(Cumulative Convertible) Capital Stock, no par value (the "Class A Stock")
and] the holders of shares of any one or more other series of stock
ranking on a parity as to dividends with the $1.625 CONVERTIBLE Preferred
Stock upon which like voting rights have been conferred and are
exercisable (the $1.625 CONVERTIBLE Preferred Stock, [the Class A Stock,]
and any such other stock, collectively for purposes hereof, the "Defaulted
Preferred Stock"), to elect two directors of the Corporation at the
Corporation's next annual meeting of stockholders and at each subsequent
annual meeting of stockholders; provided, however, that if such voting
rights shall become vested more than 90 days or less than 20 days before
the date prescribed for the annual meeting of stockholders, thereupon the
holders of the shares of Defaulted Preferred Stock shall be entitled to
exercise their voting rights at a special meeting of the holders of shares
of Defaulted Preferred Stock as set forth herein. At elections for such
directors, each holder of Preferred Stock shall be entitled to one vote
for each share held (the holders of shares of any other series of
Defaulted Preferred Stock ranking on such a parity being entitled to such
number of votes, if any, for each share of stock held as may be granted to
them). Upon the vesting of such right of the holders of Defaulted
Preferred Stock, the then authorized number of members of the Board of
Directors shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of outstanding Defaulted
Preferred Stock as hereinafter set forth. The right of holders of
Defaulted 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 Defaulted Preferred Stock shall have been
paid, or declared and funds set aside for payment in full, at which time
such right shall terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every subsequent default of
the character above mentioned. As long as any shares of $1.625
CONVERTIBLE Preferred Stock shall remain outstanding, the number of
directors of the Corporation (excluding any directors elected by vote of
the holders of shares of Defaulted Preferred Stock) elected at any meeting
of stockholders of the Corporation at which directors are to be elected
shall not be such as would cause the number of directors in office after
such meeting (excluding any directors elected by vote of the holders of
shares of Defaulted Preferred Stock) to exceed the number which is two
less than the maximum number of directors permitted by the RESTATED
Certificate of Incorporation.
(b) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the holders of
shares of Defaulted Preferred Stock called as hereinafter provided, or at
any annual meeting of stockholders held for the purpose of electing
directors, and thereafter at such meetings, or by the written consent of
such holders pursuant to Section 228 of the General Corporation Law of the
State of Delaware.
(c) At any time when such voting right shall have vested in
the holders of shares of Defaulted Preferred Stock entitled to vote
thereon, and if such right shall not already have been initially
exercised, an officer of the Corporation shall, upon the written request
of 10% of the holders of record of shares of such Defaulted Preferred
Stock then outstanding, addressed to the Secretary of the Corporation,
call a special meeting of holders of shares of such Defaulted Preferred
Stock. Such meeting shall be held at the earliest practicable date upon
the notice to holders of Defaulted Preferred Stock given as required for
annual meetings of stockholders at the place for holding annual meetings
of stockholders of the corporation or, if none, at a place designated by
the Secretary of the Corporation. If such meeting shall not be called by
the proper officers of the Corporation within 30 days after the personal
service of such written request upon the Secretary of the Corporation, or
within 30 days after mailing the same within the United States, by
registered mail, addressed to the Secretary of the Corporation at its
principal office (such mailing to be evidenced by the registry receipt
issued by the postal authorities), then the holders of record of 10% of
the shares of Defaulted Preferred Stock then outstanding may designate in
writing any person to call such meeting at the expense of the Corporation,
and such meeting may be called by such person so designated upon the
notice to holders of Defaulted Preferred Stock given as required for
annual meetings of stockholders and shall be held at the same place as is
elsewhere provided in this paragraph. Any holder of shares of Defaulted
Preferred Stock then outstanding that
would be entitled to vote at such meeting shall have access to the stock
books of the Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions of this paragraph.
Notwithstanding the provisions of this paragraph, however, no such special
meeting shall be called or held during a period within 45 days immediately
preceding the date fixed for the next annual meeting of stockholders.
(d) The directors elected as provided herein shall serve
until the next annual meeting or until their respective successors shall
be elected and shall qualify; any director elected by the holders of
Defaulted Preferred Stock may be removed without cause by, and shall not
be removed without cause otherwise than by, the vote of the holders of a
majority of the outstanding shares of the Defaulted Preferred Stock who
are entitled to participate in such election of directors, voting
separately as a class, at a meeting called for such purpose or by written
consent as permitted by law and the RESTATED Certificate of Incorporation
and By-laws of the Corporation. If the office of any director elected by
the holders of Defaulted Preferred Stock, voting separately as a class,
becomes vacant by reason of death, resignation, retirement,
disqualification or removal from office or otherwise, the remaining
director elected by the holders of Defaulted Preferred Stock, voting
separately as a class, may choose a successor who shall hold office for
the unexpired term in respect of which such vacancy occurred. Upon any
termination of the right of the holders of Defaulted Preferred Stock to
vote for directors as herein provided, the term of office of all directors
then in office elected by the holders of Defaulted Preferred Stock, voting
separately as a class, shall terminate immediately. Whenever the terms of
office of the directors elected by the holders of Defaulted Preferred
Stock, voting separately as a class, shall so terminate and the special
voting powers vested in the holders of Defaulted Preferred Stock shall
have expired, the number of directors shall be reduced by the number of
directors whose term of office shall have terminated as provided
hereinabove.
(e) So long as any shares of the $1.625 CONVERTIBLE Preferred
Stock remain outstanding, the affirmative vote or consent of the holders
of at least 66-2/3% of the shares of $1.625 CONVERTIBLE Preferred Stock
outstanding at the time given either by written consent or in person or by
proxy at any special or annual meeting, shall be necessary to permit,
effect or validate any one or more of the following:
(i) the authorization, creation or issuance, or any increase
in the authorized or issued amount, of any class or series of stock,
or any security convertible into stock of such class or series,
ranking prior to the $1.625 CONVERTIBLE Preferred Stock as to
dividends or the distribution of assets upon liquidation,
dissolution or winding up;
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the RESTATED
Certificate of Incorporation [(including the Certificate of
Designations relating to the Preferred Stock)] which would adversely
affect any right, preference, privilege or voting power of the
$1.625 CONVERTIBLE Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of authorized
preferred stock or the creation and issuance of other series of
preferred stock, or any increase in the amount of authorized shares
of any such other series of preferred stock, in each case ranking on
a parity with or junior to the $1.625 CONVERTIBLE Preferred Stock
with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up, shall not be
deemed to adversely affect such rights, preferences, privileges or
voting powers; or
(iii) the authorization of any reclassification of the $1.625
CONVERTIBLE Preferred Stock.
The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of $1.625
CONVERTIBLE Preferred Stock shall have been redeemed.
11. Record Holders. The Corporation and the Transfer Agent
may deem and treat the record holder of any shares of $1.625 CONVERTIBLE
Preferred Stock as the true and lawful owner thereof for all purposes, and
neither the Corporation nor the Transfer Agent shall be affected by any
notice to the contrary.
12. Notice. Except as may otherwise be provided by law or
provided for herein, all notices referred to herein shall be in writing,
and all notices hereunder shall be deemed to have been given upon receipt,
in the case of a notice of conversion given to the Corporation as
contemplated in [Section]SUBSECTION 7(b) [hereof] OF THIS PARAGRAPH(I),
or, in all other cases, upon the earlier of receipt of such notice or
three Business Days after the mailing of such notice if sent by registered
mail (unless first-class mail shall be specifically permitted for such
notice under the terms hereof) with postage prepaid, addressed: if to the
Corporation, to its offices at 901 Threadneedle, Suite 200, Houston, Texas
77079-2902 (Attention: Corporate Secretary) or other agent of the
Corporation designated as permitted hereby; or, if to any holder of the
$1.625 CONVERTIBLE Preferred Stock, to such holder at the address of such
holder of the $1.625 CONVERTIBLE Preferred Stock as listed in the stock
record books of the Corporation (which shall include the records of the
Transfer Agent), or to such other address as the Corporation or holder, as
the case may be, shall have designated by notice similarly given.
[Fifth. The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars ($1,000.00).
Sixth. The names and places of residence of each of the incorporators are
as follows:
<TABLE>
<CAPTION>
Name Place of Residence
------------ -------------------
<S> <C>
A. D. Atwell Wilmington, Delaware
H. C. Broadt Wilmington, Delaware
H. E. Prange Wilmington, Delaware
</TABLE>
Seventh. The Corporation is to have perpetual existence.
Eighth. The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatsoever.
Ninth]FIFTH.
Section l.
(a) The number of directors which constitute the whole board shall
not be less than three persons nor more than eighteen persons.
The exact number of directors shall be determined from time to
time by the Board of Directors pursuant to a resolution
adopted by a majority of the entire Board of Directors.
(b) Commencing at the Annual Meeting of Stockholders held in 1982,
the Board of Directors shall be divided into three classes,
Class I, Class II and Class III, with respect to their terms
of office. All classes shall be as nearly equal in number as
possible. Subject to such limitations, when the number of
directors is changing, any newly-created directorships or any
decrease in directorships shall be apportioned among the
classes by action of the Board of Directors or the
stockholders.
(c) The terms of office of the directors initially classified
shall be as follows: that of Class I shall expire at the
Annual Meeting of Stockholders to be held in 1983; that of
Class II shall expire at the Annual Meeting of Stockholders to
be held in 1984; and that of Class III shall expire at the
Annual Meetings of Stockholders to be held in 1985. At each
Annual Meeting of Stockholders after such initial classifica-
tion, directors to replace those whose terms expire at such
Annual Meeting shall be elected to hold office until the third
succeeding Annual Meeting.
(d) Vacancies in the Board of Directors and newly created
directorships resulting from any increase in the authorized
number of directors may be filled for the full term or any
remainder of a full term by a majority of the directors then
in office, although less than a quorum, or by a sole remaining
director.
(e) Notwithstanding anything contained in this RESTATED
Certificate of Incorporation or the By-laws of the Corporation
to the contrary (and notwithstanding the fact that a lesser
percentage may be specified by law, this RESTATED Certificate
of Incorporation or the By-laws of the Corporation), the
affirmative vote of the holders of at least eighty percent
(80%) of the outstanding shares of capital stock entitled to
vote for the election of directors, voting together as a
single class, shall be required to amend, modify or repeal the
provisions set forth in Section l of this Article [Ninth]
FIFTH.
Section 2. All Corporate powers shall be exercised by the Board of
Directors except as otherwise provided by statute or by this RESTATED
Certificate of Incorporation.
In furtherance and not in limitation of the powers conferred by statute,
the board of directors is expressly authorized:
(a) To fix, determine and vary from time to time the amount to be
maintained as surplus and the amount or amounts to be set apart as
working capital or for any other lawful purposes.
(b) To set apart out of any of the funds of the Corporation available
for dividends a reserve or reserves for any proper purposes or to
abolish any such reserve in the manner in which it was created.
(c) To make, amend, alter, change, add to or repeal by-laws for the
Corporation, without any action on the part of the stockholders, but
subject to the power of the holders of stock having voting power to
alter, amend or repeal the by-laws made by the Board of Directors.
(d) To authorize and cause to be executed mortgages and liens, without
limit as to amount, upon the real and personal property of the
Corporation, including the securities of other corporations owned by
the Corporation, without any action or consent of stockholders.
(e) To authorize the payment of fees for attendance at meetings of the
Board of Directors, of the Executive Committee and of other
committees, and to determine the amount of such fees.
(f) To designate by resolution passed by a majority of the total number
of directors at the time provided for, one or more committees, each
committee to consist of two or more of the directors of the
Corporation, which to the extent provided in the resolution or in
the by-laws of the Corporation shall have and may exercise the
powers of the Board of Directors in the management of the business
and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it.
[Tenth]SIXTH. A director of the Corporation shall not be disqualified by
his office from dealing or contracting with the Corporation either as a
vendor, purchaser or otherwise, nor shall any transaction or contract of
the Corporation be void or voidable by reason of the fact that any
director or any firm of which any director is a member or any corporation
of which any director is a shareholder, officer or director, is in any way
interested in such transaction or contract, provided that such transaction
or contract is or shall be authorized, ratified or approved either (1) by
a vote of a majority of a quorum of the Board of Directors, without
counting in such majority or quorum any director so interested or member
of a firm so interested, or a stockholder, officer or director of a
corporation so interested, or (2) by the written consent, or by the vote
at any stockholders"' meeting, of the holders of record of a majority of
all the outstanding shares of stock of the Corporation entitled to vote;
nor shall any director be liable to account to this cCorporation for any
profits realized by or from or through any such transaction or contract of
the Corporation authorized, ratified or approved as aforesaid by reason of
the fact that he, or any firm of which he is a member, or any corporation
of which he is a shareholder, officer or director, was interested in such
transaction or contract. Nothing herein contained shall create liability
in the events above described or prevent the authorization, ratification
or approval of such transactions or contracts in any other manner
permitted by law.
[Eleventh]SEVENTH. Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware may, on the
application in a summary way of this Corporation or of any creditor or
stockholder thereof, or on the application of any receiver or receivers
appointed for this Corporation under the provisions of section 291 of
Title 8 of the Delaware Code, or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation
under the provision of section 279 of Title 8 of the Delaware Code, order
a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as consequence
of such compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the creditors or class
of creditors, and/or on all the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
[Twelfth]EIGHTH. Elections of directors need not be by ballot unless the
By-laws of the Corporation shall so provide.
[Thirteenth]NINTH. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this RESTATED Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and
all rights conferred upon stockholders herein are granted subject to this
reservation.
[Fourteenth]TENTH.
Section l. Elimination of Certain Liability of Directors. A
director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.
Section 2. Indemnification and Insurance.
(a) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in
any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a director or
officer, of the Corporation or is, or was serving at the
request of the Corporation 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, 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 indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation
to provide prior to such amendment), against all expense
(including attorneys' fees), judgments, fines and amounts paid
or to be paid in settlement), actually and reasonably incurred
or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and
administrators; provided however, that, except as provided in
paragraph (b) hereof, the corporation shall indemnify any such
person seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the board of
directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its
final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Section or
otherwise. The Corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of
the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph
(a) of this Section is not paid in full by the Corporation
within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it
permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation
(including its board of directors, independent legal counsel,
or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination
by the Corporation (including its board of directors,
independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
the claimant has not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and
the payment of expenses incurred in defending a proceeding in
advance of its final disposition conferred in this Article
[Fourteenth]TENTH shall not be exclusive of any other right
which any person may have or hereafter acquired under any
statute, provision of the RESTATED Certificate of
Incorporation, By-Law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee
or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against
any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware
General Corporation Law.
[Fifteenth]ELEVENTH.
Section 1. Vote Required for Certain Business Combinations.
A. Higher vote for Certain Business Combinations. In addition to
any affirmative vote required by law or this RESTATED
Certificate of Incorporation, and except as otherwise
expressly provided in Section 2 of this Article
[Fifteenth]ELEVENTH:
(i) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested
Stockholder (as hereinafter defined) or (b) any other
corporation (whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation would be,
an[d] Affiliate (as hereinafter defined) of an Interested
Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value (as
hereinafter defined) of $10,000,000 or more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested
Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market
Value of $10,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of any Interested
Stockholder; or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which
has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested
Stockholder;
shall require the affirmative vote of the holders of at least 80% of
the voting power of the then outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors, excluding any Preferred Stock issued after May 10, 1983
which the Board of Directors determines to exclude from the
operation of this Article (the "Voting Stock"), voting together as a
single class (it being understood that for purposes of this Article
[Fifteenth]ELEVENTH, each share of Voting Stock shall have the
number of votes granted to it pursuant to Article Fourth of this
RESTATED Certificate of Incorporation). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required,
or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
B. Definition of "Business Combination." The term "Business
Combination" as used in this Article [Fifteenth]ELEVENTH shall mean
any transaction which is referred to in any one or more of clauses
(i) through (v) of paragraph A of this Section 1.
Section 2. When Higher Vote is Not Required.
The provisions of Section 1 of this Article [Fifteenth]ELEVENTH shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law
and any other provision of this RESTATED Certificate of Incorporation, if
all of the conditions specified in either of the following paragraphs A or
B are met.
A. Approval by Continuing Directors. The Business Combination shall
have been approved by a majority of the Continuing Directors (as
hereinafter defined).
B. Price, Form of Consideration and Procedure Requirements: All of the
following conditions shall have been met:
(i) The aggregate amount of the cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the
Business Combination (the "Consummation Date") of the
consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall be
an amount at least equal to the higher of the following (it
being intended that the requirements of this paragraph B(i)
shall be required to be met with respect to all shares of
Common Stock outstanding, whether or not the Interested
Stockholder has previously acquired any shares of the Common
Stock):
(a) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting
dealers"' fees) paid by the Interested Stockholder for
any shares of Common Stock acquired by it (1) within the
two-year period immediately prior to the first public
announcement of the proposal of the Business Combination
(the "Announcement Date") or (2) in the transaction in
which it became an Interested Stockholder, whichever is
higher, plus interest compounded annually from the date
on which the Interested Stockholder became an Interested
Stockholder (the "Determination Date") through the
Consummation Date at the prime rate of interest of The
Chase Manhattan Bank, N.A. (or other major bank
headquartered in New York City selected by a majority of
the Continuing Directors) from time to time in effect in
New York City, less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any
dividends paid in other than cash, on each share of
Common Stock from the Determination Date through the
Consummation Date in an amount up to but not exceeding
the amount of such interest payable per share of Common
Stock; or
(b) the Fair Market Value per share of Common Stock on the
first trading day after the Announcement Date.
(ii) The aggregate amount of the cash and the Fair Market Value as
of the Consummation Date of the consideration other than cash
to be received per share by holders of shares of any class of
outstanding Voting Stock, other than the Common Stock, in such
Business Combination shall be an amount at least equal to the
higher of the following (it being intended that the
requirements of this paragraph B(ii) shall be required to be
met with respect to every such other class of outstanding
Voting Stock (excluding anyd Preferred Stock issued after
May 10, 1983 which the Board of Directors determines to
exclude from the operation of this Article), whether or not
the Interested Stockholder has previously acquired any shares
of a particular class of Voting Stock):
(a) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting
dealers"' fees) paid by the Interested Stockholder for
any shares of such class of Voting Stock acquired by it
(1) within the two-year period immediately prior to the
Announcement Date or (2) in the transaction in which it
became an Interested Stockholder, whichever is higher,
plus interest compounded annually from the Determination
Date through the Consummation Date at the prime rate of
interest of The Chase Manhattan Bank, N.A. (or other
major bank headquartered in New York City selected by a
majority of the Continuing Directors) from time to time
in effect in New York City, less the aggregate amount of
any cash dividends paid, and the Fair Market Value of
any dividends paid in other than cash, on each share of
such class of Voting Stock from the Determination Date
through the Consummation Date in an amount up to but not
exceeding the amount of such interest payable per share
of such class of Voting Stock; or
(b) The Fair Market Value per share of such class of Voting
Stock on the first trading day after the Announcement
Date; or
(c) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of
Voting Stock are entitled in the event of any voluntary
or involuntary liquidation, dissolution or winding up of
the Corporation, whichever is higher.
(iii) The consideration to be received by holders of a particular
class of outstanding Voting Stock shall be in cash or in the
same form as the Interested Stockholder has previously paid
for shares of such class of Voting Stock. If the Interested
Stockholder has paid for shares of any class of Voting Stock
with varying forms of consideration, the form of consideration
for such class of Voting Stock shall be either cash or the
form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by it.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination: (a) except as approved by a majority of the
Continuing Directors, there shall have been no failure to
declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on the
outstanding Preferred Stock; (b) there shall have been (l) no
reduction in the annual rate of dividends paid on the Common
Stock (except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the
Continuing Directors, and (2) an increase in such annual rate
of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate is
approved by a majority of the Continuing Directors; and (c)
such Interested Stockholder shall have not become the
beneficial owner of any additional shares of Voting Stock
except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such Business
Combination or otherwise.
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of
the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, rules or regulations) shall be mailed to public
stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such
proxy or information statement is required to be mailed
pursuant to such Act or subsequent provisions).
Section 3. Certain Definitions.
For the purposes of this Article [Fifteenth]ELEVENTH:
A. A "person" shall mean any individual, firm, corporation or other
entity.
B. "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary (as hereinafter defined) and other
than any profit sharing, thrift, employee stock ownership,
retirement or other employee benefit plan of the Company or any
Subsidiary or any trustee of, or the fiduciary with respect to any
such plan when acting in such capacity) who or which:
(i) is the beneficial owner (as hereinafter defined), directly or
indirectly, or more than 10 percent (10%) of the Voting Stock;
or
(ii) is an Affiliate (as hereinafter defined) of the Corporation
and at any time within the two-year period immediately prior
to the date in question was the beneficial owner, directly or
indirectly, of ten percent (10%) or more of the Voting Stock;
or
(iii) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned
by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction
or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or
indirectly; or
(ii) which such person or any of its Affiliates or Associates has
(a) the right to acquire (whether such right is exercisable
immediately or only after the passage [or]F time), pursuant to
any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote pursuant to
any agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates
or Associates has any agreement, arrangement or understanding
of the purpose of acquiring, holding, voting or disposing of
any shares of Voting Stock.
D. For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph B of this Section 3, the number of
shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of paragraph C of this Section 3
but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or
otherwise.
E. "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect
on March l, 1983.
F. "Subsidiary" means any corporation of which a majority of any class
of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Interested Stockholder set forth in paragraph B of
this Section 3, the term "Subsidiary" shall mean only a corporation
of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
G. "Continuing Director" means any member of the Board of Directors of
the Corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the
time that the Interested Stockholder became an Interested Stock-
holder, and any successor of a Continuing Director who is
unaffiliated with the Interested Stockholder and is recommended or
elected to succeed a Continuing Director by a majority of Continuing
Directors then on the Board.
H. "Fair Market Value" means: (i) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape
for New York Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite tape, on the New York Stock Exchange, or, if
such stock is not listed on such Exchange, on the principal United
States securities exchange registered under the Securities Exchange
Act of 1934 on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding
the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use,
or if no such quotations are available, the fair market value on the
date in question of a share of such stock as determined by the Board
in good faith: and (ii) in the case of property other than cash or
stock, the fair market value of such property on the date in
question as determined by a majority of the Continuing Directors in
good faith.
I. In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received"
as used in paragraphs B(i) and (ii) of Section 2 of this Article
[Fifteenth]ELEVENTH shall include the shares of Common Stock and/or
the shares of any other class of outstanding Voting Stock retained
by the holders of such shares.
Section [5]4. Certain Determinations.
The Continuing Directors of the Corporation shall have the power and duty
to determine for the purposes of this Article [Fifteenth]ELEVENTH, on the
basis of information known to them after reasonable inquiry, (A) whether a
person is an Interested Stockholder, (B) the number of shares of Voting
Stock beneficially owned by any person, (C) whether a person is an
Affiliate or Associate of another, and (D) whether the assets which are
the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or
any Subsidiary in any Business Combination has, an aggregate Fair Market
Value of $10,000,000 or more.
Section [6]5. No Effect on Fiduciary Obligations of Interested
Stockholders.
Nothing contained in this Article [Fifteenth]ELEVENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Section [7]6. Amendment, Repeal, etc.
Notwithstanding any other provisions of this RESTATED Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that a lesser percentage may be specified by law, this RESTATED
Certificate of Incorporation or the By-Laws of the Corporation), the
affirmative vote of the holders of eighty percent (80%) or more of the
voting power of the shares of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend, modify or repeal
this Article [Fifteenth]ELEVENTH of this RESTATED Certificate of
Incorporation.
[Sixteenth]TWELFTH. Notwithstanding any other provisions of this RESTATED
Certificate of Incorporation or the By-laws of the Corporation to the
contrary, no action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be taken
by written consent without a meeting except (1) any action which may be
taken solely upon the vote or consent of holders of [the Class A Capital
Stock or] any series of Preferred Stock, or (2) any action taken upon the
signing of a consent in writing, setting forth the action so taken, by all
the stockholders of the Corporation entitled to vote thereon.
Notwithstanding any other provisions of this RESTATED Certificate of
Incorporation or the By-laws of the Corporation to the contrary (and
notwithstanding the fact that a lesser percentage may be specified by law,
this RESTATED Certificate of Incorporation or the By-laws of the
Corporation), the affirmative vote of the holders of eighty percent (80%)
or more of the outstanding shares of capital stock entitled to vote for
the election of directors, voting together as a single class, shall be
required to amend, modify or repeal this Article [Sixteenth]TWELFTH.
[We, the undersigned, being each of the incorporators hereinbefore named,
for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declaring and certifying that the facts herein stated are true, and
accordingly have hereunto set our hands and seal this 19th day of October,
A.D., 1955.]
[A. D. Atwell (Seal)]
[H. C. Broadt (Seal)]
[H. E. Prange (Seal)]
[State of delaware )
) ss.
County of new castle )
Be it remembered that on this 19th day of October, A.D., 1955,
personally came before me, a Notary Public for the State of Delaware, A.
C. Atwell, H. C. Broadt and H. E. Prange, all of the parties to the
foregoing certificate of incorporation, known to me personally to be such,
and severally acknowledged the said certificate to be the act and deed of
the signers respectively and that the facts therein are truly set forth.
Given under my hand and seal of office the day and year aforesaid.]
[M. Ruth Mannering
Notary Public]
[M. Ruth Mannering
Notary Public
Appointed Feb. 12, 1955
Term Two Years
State Of Delaware]
IN WITNESS WHEREOF, THIS RESTATED CERTIFICATE OF
INCORPORATION, WHICH RESTATES, INTEGRATES AND FURTHER AMENDS THE
PROVISIONS OF THE CORPORATION'S CERTIFICATE OF INCORPORATION, ORIGINALLY
FILED ON OCTOBER 19, 1955 IN THE OFFICE OF THE SECRETARY OF STATE OF
DELAWARE, HAVING BEEN DULY ADOPTED BY THE BOARD OF DIRECTORS AND THE
STOCKHOLDERS OF THE CORPORATION IN ACCORDANCE WITH THE PROVISIONS OF
SECTIONS 242 AND 245 OF THE GENERAL CORPORATION LAW OF DELAWARE, HAS BEEN
EXECUTED THIS 10TH DAY OF MAY 1994.
READING & BATES CORPORATION
BY:___________________________
PAUL B. LOYD, JR., CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
SEAL
ATTEST: ____________________________
SECRETARY OF THE CORPORATION
EXHIBIT 99.B
Restated Certificate Of Incorporation
Of
Reading & Bates Corporation
(formerly Reading & Bates Offshore Drilling Company)
(The proposed amendments to and restatement of the Company's
Restated Certificate of Incorporation pursuant to the Charter
Amendment to be acted on at the Annual Meeting will be in
substantially the form set forth in this Exhibit 99.B.)
(Language proposed to be deleted by amendment is in brackets
[ ], while language proposed to be added is in BOLDFACE.)
First. The name of the Corporation is Reading & Bates
Corporation.
Second. Its principal office in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street, in
the City of Wilmington, County of New Castle, Delaware. The
name and address of its resident agent is The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street,
City of Wilmington, County of New Castle, Delaware.
[Third. The nature of the business, or objects or purposes to
be transacted, promoted or carried on are as follows:
1. To buy, own, sell and lease petroleum lands; to locate
petroleum, gas, and other mineral lands under the laws
of the United States, any state, territory, or
possession thereof, or under the laws of any government,
foreign or domestic; to drill and bore wells for oil,
water, gas, or other substance, both on dry land and
offshore operations, and otherwise; to buy, sell, own,
lease, construct and operate oil wells and gas,
machinery, tanks, and pipe lines, and to buy, sell, own,
and lease all necessary lands, buildings and personal
property in connection therewith and necessary for said
purposes; to buy, own, sell, lease, construct, and
operate factories, machinery, tanks, and pipe lines for
the refining and distilling and distribution of
petroleum oils, gas, and other hydrocarbon substances or
mixtures thereof; to explore for and develop said
petroleum lands and petroleum, gas, and other minerals,
in any locality whatsoever, and to utilize therein
barges, boats, shrimp boats, piers, platforms, and other
structures, machinery, and equipment as same shall be
necessary and desirable therefor.
2. To purchase, sell, and own royalties in oil and gas
lands and leases; to pay mortgages, notes, taxes,
assessments, and other charges that are or may become a
lien or charge against any lands or leases in which this
company may have a royalty interest.
3. To buy, acquire, sell, retain, deal in, or otherwise
dispose of absolutely or contingently, petroleum, and/or
gas properties and interests (whether like or different,
and any right, title, or interest therein, and to do all
other acts and things required to be done in connection
therewith.
4. To engage in the transportation of oil, gas, salt,
sulphur, or other minerals, either produced by this
Corporation or other persons or corporations, by means
of pipe lines, tramways, railroads, boats, barges or
other conveyances or to lease or sublease all or any
part thereof to other persons or corporations for the
purpose, and, in order to fully carry out said objects
and purposes, to purchase, lease, or otherwise acquire,
pipe lines, tramways, railroads, boats, barges, tanks
cars, locomotives, pumping stations, steam plants, air
plants and all other machinery, apparatus and
paraphernalia necessary or incidental thereto. To
build, construct, lease, purchase, or otherwise acquire
buildings, machinery and other apparatus for refining,
smelting, manufacturing or otherwise working up the
products of mineral lands, either produced by this
Corporation or other persons or corporations, and to
refine, smelt, manufacture or otherwise work-up the
by-products of said minerals and to operate the said
plant and market the products or by-products as
manufactured to the best advantage. To engage in a
general oil or mineral brokerage business by buying,
selling or otherwise trading in mineral lands or the
products or by-products of mineral lands. To carry on
such other business pertaining to oil, gas, salt,
sulphur or other minerals as may be found necessary or
desirable or such as is generally engaged in by a
corporation of this kind.
5. To carry on the business of exploring for and of mining,
milling, concentrating, converting, smelting, treating,
preparing for market, manufacturing, buying, selling,
exchanging, or otherwise producing and dealing in all
kinds of ores, metals and minerals, including uranium,
thorium, and all radioactive ores, the products and
by-products thereof, of every kind and description and
by whatsoever process the same can be or may hereafter
be produced, and generally and without limit as to
amount, to buy, sell, exchange, lease, acquire and deal
in lands, mines and mineral rights and claims, and to
conduct all business appertaining thereto; to purchase,
lease or otherwise acquire mining rights, timber rights,
oil and gas rights, mines, buildings, dwellings, plants,
machinery, tools and other properties whatsoever which
this Corporation may from time to time find to be for
its advantage and purposes, to mine and market any
mineral or other product that may be found in or on such
lands, to explore, work, exercise, develop or turn to
account the same; to construct and operate, not as a
public utility, or for public use, railways and tramways
for mining and moving same; to build and lease houses
for the use of miners and others, including the purchase
and sale of same.
6. To construct, install, maintain and operate conduits and
lines of tubing and piping for the transportation of oil
or natural gas; to transport such oil and gas by means
of such pipes, tank cars, or otherwise, and to buy, sell
and supply the same to others; and to lay, buy, lease,
sell, and operate pipes, pipe lines and storage tanks to
be used for the purpose of transporting oil and gas.
7. To buy, sell and furnish oil and gas for light, heat and
other purposes; to lease, purchase, lay down, construct,
renew, maintain and operate pipe lines, tubes, tanks,
pump stations, connections, fixtures, storage houses,
and such machinery, apparatus, devices and facilities as
may be necessary to operate such pipes, pipe lines and
other properties.
8. To acquire, by purchase or otherwise, own, hold, lease,
use and occupy such lands, rights-of-way, easements,
franchises, buildings and structures as may be necessary
to the purposes of the Corporation; and to exercise,
carry out and enjoy any power, authority or privilege
which any government, federal or state, has enacted, or
shall enact, make or grant, or which the Corporation may
otherwise become lawfully vested with, including therein
powers to acquire land and interests therein by eminent
domain in pursuance of the purposes of the Corporation.
9. To acquire, by purchase or otherwise, own, hold, store,
use, sell, lease, exchange, dispose of, transport,
transmit, distribute, deal in, compress, blend, furnish
and supply oil and/or natural gas, and other mineral
solutions in any form or of any kind whatsoever, and the
products and by-products of petroleum and other oils,
natural gas, and other mineral solutions.
10. To lease, purchase or acquire in any manner, lay down,
construct, install, own, hold, maintain, operate, sell,
exchange, lease, encumber, or in any manner dispose of
works, buildings, pipe lines, mains, distribution
systems, compressor stations, machinery, appliances,
apparatus, tanks, pump stations, connections, fixtures,
storage houses, devices and facilities as may be
necessary, useful or convenient in the acquisition,
storage, transportation and distribution of natural gas,
artificial gas, oil and other mineral solutions and
liquified minerals, or any of them, and the products,
by-products and residual products thereof.
11. To acquire, by purchase or otherwise, own, hold, store,
use, sell, lease, exchange, dispose of, transport,
transmit, distribute, deal in, furnish and supply any
substances, articles or things of which, or in the
production of which, petroleum or other oils, natural
gas, gas, or other mineral solutions form a part.
12. To acquire, by purchase or otherwise, own, hold, sell,
lease, exchange, dispose of, finance, deal in,
construct, build, establish, equip, improve, use,
operate, maintain and work upon any and all kinds of
plants and systems for the purchase, sale, supply,
storage and utilization, transportation, transmission,
distribution, regulation, control, application or
disposition of petroleum and other oils, natural gas,
gas, and other mineral solutions of any and every kind,
and the products and by-products of petroleum and other
oils, natural gas, gas, and other mineral solutions, and
any and all kinds of works, plants, manufactories,
structures, systems, machinery, pipes, conduits,
apparatus, devices, equipment, supplies, articles and
merchandise of any and every kind pertaining to or in
anywise connected with the purchase, sale, supply,
storage, utilization, transportation, transmission,
regulation, control, application or disposition of
petroleum and other oils, natural gas, gas, and other
mineral solutions of any and every kind and the products
and by-products of natural gas, gas, petroleum and other
oils, and other mineral solutions.
13. To make, enter into and carry out any arrangements with
any domestic or foreign governmental, municipal or
public authority or with any corporation, association,
firm, syndicate, entity or individual, domestic or
foreign, to obtain therefrom or otherwise to acquire by
purchase, lease, assignment or otherwise any powers,
rights, privileges, immunities, franchises, guaranties,
grants and concessions; to acquire, hold, own, exercise,
exploit, dispose of and realize upon the sale, and to
undertake and prosecute any business dependent thereon;
and to promote, cause to be formed and aid in any way
any corporation, association, partnership, syndicate or
entity for any such purposes.
14. To purchase or otherwise acquire, hold, own, occupy,
develop, improve, sell, dispose of and convey real
property, and any and every interest therein, either
within or without the State of Delaware, and anywhere in
the world; to extract, remove, produce or prepare from
any such property, any animal, vegetable, mineral, acid
or other products or materials therein or thereon,
either agricultural pursuits, mining, quarrying,
smelting, concentrating, refining or by any other method
or means now known or that may hereafter be discovered
or invented and to avail itself in every manner of each
and every resource or such property by reducing it to
proper form, and by use, sale or other disposition
thereof. To buy, exchange, contract for, lease, and in
any and all other ways acquire, take, hold, and own, and
to deal in, sell, mortgage, lease, or otherwise dispose
of lands, mining claims, mineral rights, oil wells, gas
wells, oil lands, gas lands, and other real property,
and rights and interest in and to real property, and to
manage, operate, maintain, improve, and develop the
properties, and each and all of them.
15. To purchase, lease, or otherwise acquire real estate in
incorporated towns or cities, or additions thereto, or
elsewhere located, and to develop such real estate, and
to design, construct, enlarge, repair or remodel, or
otherwise engage in the construction of suitable
structures and appurtenances to carry out the purposes
of the Corporation, and to engage in the contracting
business, or to contract with others to build,
construct, repair, remodel, or otherwise secure
structures, buildings, and improvements of every kind
and character to be located thereupon.
16. To enter into, make, perform, carry out and discharge
contracts of any and all kinds for any lawful purpose
without limit as to amount with any person, firm,
association, partnership or corporation, either public
or private.
17. To organize, incorporate, reorganize, finance, and to
aid and assist financially or otherwise, companies,
corporations, joint stock companies, syndicates,
partnerships, and associations of all kinds engaged ln
similar business as herein expressed; and to subscribe
for, endorse, own, and hold the bonds, stocks,
securities, debentures, notes or undertakings of any
such company, corporation, joint stock company,
syndicate, partnership, or association, and to make any
guaranty in connection therewith, or otherwise for the
payment of money or for the performance of any
obligation or undertaking and to do any and all things
necessary or convenient to carry any of such purposes
into effect.
18. To have one or more offices, to carry on all or any of
its operations and business and without restriction or
limit as to amount to purchase or otherwise acquire,
hold, own, mortgage, sell, convey or otherwise dispose
of, real and personal property of every class and
description in any of the states, districts, territories
or colonies of the United States, and in any and all
foreign countries, subject to the laws of such state,
district, territory, colony or country.
19. To improve, manage, develop, sell, assign, transfer,
lease, mortgage, pledge, or otherwise dispose of or turn
to account or deal with all or any part of the property
of the Corporation, and from time to time to vary any
investment or employment of capital of the Corporation.
20. To acquire, purchase, apply for or obtain any and all
letters of patent, licenses, patent rights, trademarks,
patented processes and similar rights granted by the
United States or any other sovereign or government or
any interest therein, or any inventions which may be
capable of being used for or in connection with any of
the objects or purposes of this Corporation, and to use,
exercise, develop, sell, dispose of, lease, grant rights
in respect thereto, or other interests in the same, and
otherwise turn the same to account and to carry on any
business, manufacturing or otherwise, which may be
deemed to aid, effectuate or develop directly or
indirectly the object or any of them.
21. To acquire all or any part of the good will, rights,
property and business of any person, firm, association
or corporation heretofore or hereafter engaged in any
business similar to any business which the Corporation
has the power to conduct, to pay for the same in cash or
stock or bonds of the Corporation or otherwise, to hold,
utilize, or in any manner dispose of the whole or any
part of the rights and properties so acquired, and to
assume ln connection therewith any liabilities of any
such person, firm, association or corporation and
conduct in any lawful manner the whole or any part of
the business thus acquired.
22. To do all and everything necessary, suitable, convenient
and proper for the accomplishment of any of the purposes
or the attainment of any of the objects or the
furtherance of the powers hereinbefore set forth, either
alone or in association with other corporations, firms,
or individuals, and to do every other act or thing
incidental or appurtenant to or growing out of or
connected with the aforesaid business or powers or any
part or parts thereof, provided the same be consistent
with the laws under which this Corporation is organized.
23. To acquire by purchase, subscription or otherwise and to
own, hold for investment or otherwise, and to use, sell,
assign, transfer, mortgage, pledge, exchange or
otherwise dispose of, alone or in syndicate or otherwise
in conjunction with others, real and personal property
of every sort and description and wheresoever situated,
including shares of stock, bonds, debentures, notes,
scrip, securities, evidences of indebtedness, contracts
or obligations of any corporation, associations,
syndicates or trust estates, domestic or foreign, or of
any firm or individual, or of the United States of
America, or of any state, territory or dependency of the
United States of America, or of any foreign country, or
of any municipality or local authority within or without
the United States of America, and also to issue in
exchange therefor stocks, bonds or other securities or
evidences of indebtedness to the Corporation, and while
the owner or holder of any such property, to receive,
collect and dispose of the interest, dividends and
income on or from such property, and to possess and
exercise in respect thereto all of the rights, powers
and privileges of ownership, including all voting power
thereon.
24. To buy, sell and otherwise deal in open accounts and
other similar evidences of debt and to loan money and to
take notes, open accounts and other similar evidences of
debt as collateral security therefor.
25. To aid in any manner any corporation, association or
trust estate, domestic or foreign, or any firm or
individual, in which any shares of stock or in which any
bonds, debentures, notes, securities, evidences of
indebtedness, contracts or obligations are held by or
for the Corporation, directly or indirectly, or in
which, or in the welfare of which, the Corporation shall
have any interest, and to do any acts designed to
protect, preserve, improve or enhance the value of any
property at any time held or controlled by the
Corporation or in which it may be at any time
interested, directly or indirectly, or through other
corporations or otherwise; and to cause to be forced,
merged, consolidated, or reorganized or liquidated and
to promote, take charge of or aid in any way permitted
by law the formation, merger, consolidation,
reorganization or liquidation of any corporation,
association or entity in the United States of America,
or elsewhere.
26. To guarantee and to assume the payment of dividends upon
any capital stock and to endorse or otherwise guarantee
the principal or interest, or both, of any bonds,
debentures, notes, scrip or other obligations or
evidences of indebtedness, or the performance of any
contracts or obligations, of any other corporation,
trust estate or association, domestic or foreign, or of
any firm in which the corporation may have a lawful
interest, in so far and to the extent that such guaranty
may be permitted by law.
27. To borrow or raise moneys for any of the purposes of the
Corporation and to issue bonds, promissory notes, bills
of exchange, debentures, and other obligations and
evidences of indebtedness, whether secured by mortgage,
pledge or otherwise, or unsecured, for money borrowed or
in payment for property purchased, leased or acquired or
for any other lawful object; to mortgage or pledge all
or any part of its properties, rights, interests and
franchises, including any or all shares of stocks,
bonds, debentures, notes, scrip or other obligations or
evidences of indebtedness at any time owned by it.
28. To sue and be sued in any court of law or equity and to
delegate by power of attorney to any person or persons
authority to commence, prosecute, defend, compromise or
settle any claims, actions or suits in behalf of or
against the Corporation, either at law or in equity or
otherwise.
29. To purchase or otherwise acquire its own shares of stock
(so far as may be permitted by law) and its bonds,
debentures, notes, scrip or other securities or
evidences of indebtedness, and to cancel or to hold,
transfer, reissue, sell or otherwise dispose of the same
from time to time to such extent and in such manner and
upon such terms and conditions as the Board of Directors
may in its discretion determine.
30. To do all and everything necessary and proper for the
accomplishment of the objects herein enumerated or
necessary or incidental to the protection and benefit of
the Corporation, and in general to carry on any lawful
business necessary or incidental to the attainment of
the purposes of the Corporation, whether such business
is similar in nature to the objects and powers
hereinabove set forth or otherwise; but nothing herein
contained is to be construed as giving the Corporation
the power of constructing, maintaining and operating
public utilities or doing a banking business within the
State of Delaware.
31. To do any or all things herein set forth to the same
extent as natural persons might or could do, as
principal, agent, factor, contractor, trustee or
otherwise, and either alone or in conjunction with any
other individuals, firms, associations, syndicates,
trust estates or corporations.
32. To conduct its business in the State of Delaware, other
states, the District of Columbia, the territories and
colonies of the United States of America and in foreign
countries, and to have one or more offices without as
well as within the State of Delaware and to hold,
purchase, mortgage and convey real or personal property
without as well as within the State of Delaware.
The foregoing clauses shall be construed as objects, purposes
and powers, and it is hereby expressly provided that the
foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the powers of the corporation.
The business or purpose of the Corporation is from time to
time to do any one or more of the acts or things hereinabove
set forth and it shall have power to conduct and carry on its
said business, or any part thereof, and to have one or more
offices to carry on any authorized operations and businesses
without restriction or limit as to number in any of the
states or territories of the United States or any and all
foreign countries. To conduct all of the aforesaid
activities and any other activities and any other acts
connected therewith or incidental thereto in any state or
territory of the United States or in any foreign country. To
do such other and further things as are required and as are
usually done in business of like nature and authorized by
law. It is the intention that said clauses be construed both
as purposes and powers; and generally that the Corporation
shall be authorized to exercise and enjoy all other powers,
rights, and privileges granted to or conferred upon cor-
porations of this kind by the laws of the State of Delaware,
and the enumeration of certain powers as herein specified is
not intended as exclusive of or as a waiver of any of the
powers, rights or privileges granted or conferred by the laws
of said state, now or hereafter enforced.]
(Existing Article Third (relating to the Corporation's nature
of business, objects or purposes) is to be deleted in its
entirety.)
THIRD. THE PURPOSE OF THE CORPORATION IS TO ENGAGE IN ANY
LAWFUL ACT OR ACTIVITY FOR WHICH CORPORATIONS MAY BE
ORGANIZED UNDER THE GENERAL CORPORATE LAW OF THE STATE OF
DELAWARE.
Fourth. The aggregate number of shares of all classes of
stock which the Corporation shall have authority to issue is
[476,114,265]435,000,285, of which [41,113,980 shares shall
be Non-voting Convertible Class B Common Stock of the Par
Value of Five Cents ($.05) per share (hereinafter called
"Class B Stock"),] 285 shares (less those shares converted
into shares of Common Stock pursuant to the provisions of
this Article Fourth) shall be Class A (Cumulative
Convertible) Capital Stock, No Par Value (hereinafter called
"Class A Stock"), 10,000,000 shares shall be Preferred Stock
of the Par Value of One Dollar ($1) per share (hereinafter
called "Preferred Stock"), and the remaining 425,000,000
shares shall be Common Stock of the Par Value of Five Cents
($.05) per share (hereinafter called "Common Stock"). The
powers, preferences, privileges, voting and other special or
relative rights, and the qualifications, limitations or
restrictions thereof, granted to or imposed upon the shares
of [Class B Stock,] Class A Stock and Common Stock shall be
as fixed in Sections One through [Six]FIVE of this Article
Fourth, subject, however, to the provisions of Section
[Seven]SIX of this Article Fourth. The powers, preferences,
privileges, voting and other special or relative rights, and
the qualifications thereof, granted to or imposed upon the
shares of Preferred Stock shall be as fixed in
Section [Seven]SIX of this Article Fourth, or as may be fixed
by the Board of Directors in accordance with the provisions
thereof.
[Section 1. Class B Stock.
The Class B Stock shall be identical in all respects to
and will have the same powers, preferences, rights,
qualifications, limitations, restrictions and relative rights
as the Common Stock except as specifically provided in this
Section 1.
(a) Voting. The Class B Stock shall have no voting
rights whatsoever except as required by law.
(b) Conversion of Class B Stock. Shares of the Class B
Stock shall be convertible into Common Stock on the following
terms and conditions:
(1) Subject to and upon compliance with the
provisions of this Paragraph (b), any Holder may at any
time or from time to time at his option convert
(hereinafter a "Voluntary Conversion") any shares of
Class B Stock into an equal number of shares of Common
Stock. The Holder shall surrender such shares of
Class B Stock for Voluntary Conversion by delivering the
certificate or certificates evidencing ownership of such
shares with proper endorsement or instruments of
transfer to the Corporation at the office or agency in
the Borough of Manhattan in the City of New York, New
York, to be maintained by the Corporation for that
purpose, and such Holder shall give written notice to
the Corporation at said office or agency that he elects
to convert such shares of Class B Stock in accordance
with the provisions of subparagraph (1) of this
Paragraph (b). Such notice shall also state the name or
names (with addresses) in which the certificate or
certificates evidencing ownership of Common Stock which
shall be issuable on such Voluntary Conversion shall be
issued. In the case of lost, stolen or destroyed
certificates evidencing ownership of shares of Class B
Stock, to be surrendered for Voluntary Conversion, the
Holder shall submit proof of loss, theft or destruction
and such indemnity as shall be required by the
Corporation. Notwithstanding the foregoing sentence, in
the case of any Holder which is an institutional holder
(such term to include, without limitation, bank holding
companies, banks, insurance holding companies and
insurance companies, whether incorporated in the United
States or elsewhere), the affidavit of such Holder's
Treasurer or Assistant Treasurer (or other responsible
officials), setting forth the circumstances with respect
to such loss, theft or destruction, shall be accepted as
satisfactory evidence thereof, and no indemnity shall be
required as a condition to the execution and delivery by
the Corporation of a new certificate in lieu of such
certificate other than such Holder's written agreement
to indemnify the Corporation, in form and substance
reasonably satisfactory to the Corporation. Every such
notice of election to convert shall constitute a
contract between the Holder of such shares of Class B
Stock and the Corporation, whereby such Holder shall be
deemed to subscribe for the amount of the Common Stock
which he will be entitled to receive upon such Voluntary
Conversion and, in payment and satisfaction of such
subscription, to surrender such shares of Class B Stock
and to release the Corporation from all obligation
thereon, and whereby the Corporation shall be deemed to
agree that the surrender of such shares of Class B Stock
and the extinguishment of its obligation thereon shall
constitute full payment for the Common Stock so
subscribed for and to be issued upon such Voluntary
Conversion. As soon as practicable but in no event more
than five Business Days after the receipt of such notice
and certificate or certificates evidencing ownership of
such shares of Class B Stock, the Corporation shall
issue and shall deliver at said office or agency to the
person for whose account such shares of Class B Stock
were so surrendered, or on his written order, a
certificate or certificates for the number of shares of
Common Stock issuable upon the Voluntary Conversion of
such shares of Class B Stock, together with a
certificate or certificates evidencing ownership of
shares of Class B Stock, if any, which were not to be
converted, but which constituted part of the shares of
Class B Stock represented by the certificate or
certificates surrendered by such person. Such Voluntary
Conversion shall be deemed to have been effected on the
date on which the Corporation shall have received such
notice and, if any, the certificate or certificates for
such shares of Class B Stock and the person or persons
in whose name or names any certificate or certificates
for Common Stock shall be issuable upon such conversion
shall be deemed to have become on said date the holder
or holders of record of the shares represented thereby;
provided that any such surrender on any date when the
stock transfer books of the Corporation shall be closed
shall constitute the person in whose name the
certificate or certificates are to be issued as the
record holder thereof for all purposes on the next
succeeding day on which such stock transfer books are
open, but such conversion shall be to the number of
shares of Common Stock that would have been received
upon conversion on the date upon which such surrender
occurs; further provided, however, that the stock
transfer books of the Corporation shall not be closed on
any Business Day. All shares of Common Stock issued
upon Voluntary Conversion of Class B Stock shall be
validly issued, fully paid and nonassessable.
(2) On the Automatic Conversion Date, each share
of Class B Stock shall automatically and without any
action on the part of the Holder thereof be converted
(hereinafter referred to as the "Automatic Conversion")
into one share of Common Stock, and all powers,
preferences, privileges and other special or relative
rights and qualifications of the Class B Stock existing
on the Automatic Conversion Date shall terminate and be
of no further force and effect. Following the surrender
to the Corporation (at the office or agency in the
Borough of Manhattan in the City of New York, New York,
to be maintained by the Corporation for that purpose) of
a certificate or certificates which immediately prior to
the Automatic Conversion Date represented outstanding
shares of Class B Stock, the Corporation, as soon as
practicable but in no event more than five Business Days
after the receipt of such certificate or certificates,
shall issue and shall deliver at said office or agency
to the person for whose account such shares of Class B
Stock were so surrendered, or on his written order, a
certificate or certificates for the number of shares of
Common Stock issuable upon the Automatic Conversion of
such shares of Class B Stock. In the case of lost,
stolen or destroyed certificates evidencing ownership of
shares of Class B Stock, the Holder shall submit proof
of loss, theft or destruction and such indemnity as
shall be required by the Corporation. Notwithstanding
the foregoing sentence, in the case of any Holder which
is an institutional holder (such term to include,
without limitation, bank holding companies, banks,
insurance holding companies and insurance companies,
whether incorporated in the United States or elsewhere),
the affidavit of such Holder's Treasurer or Assistant
Treasurer (or other responsible officials), setting
forth the circumstances with respect to such loss, theft
or destruction, shall be accepted as satisfactory
evidence thereof, and no indemnity shall be required as
a condition to the execution and delivery by the
Corporation of a new certificate in lieu of such
certificate other than such Holder's written agreement
to indemnify the Corporation, in form and substance
reasonably satisfactory to the Corporation. From and
after the Automatic Conversion Date the certificates
previously evidencing ownership of shares of Class B
Stock shall represent only the right to receive
certificates evidencing Common Stock pursuant to the
provisions hereof. All shares of Common Stock issued
upon Automatic Conversion of Class B Stock shall be
validly issued, fully paid and nonassessable.
(3) A. In case the Corporation shall pay or make
any dividend or other distribution to holders of the
Common Stock of cash, securities or property of any
nature whatsoever, then the Corporation shall at the
same time pay or make a dividend or distribution of the
same kind to Holders of the Class B Stock in an amount
per share of Class B Stock equal to the amount of such
cash, securities or property payable in respect of one
share of Common Stock, and likewise in case the
Corporation shall pay or make any dividend or other
distribution to Holders of the Class B Stock of cash,
securities or property of any nature whatsoever, then
the Corporation shall at the same time pay or make a
dividend or distribution of the same kind to holders of
the Common Stock in an amount per share of Common Stock
equal to the amount of such cash, securities or property
payable in respect of one share of Class B Stock;
provided that, at any time prior to the Automatic
Conversion Date, if dividends or other distributions
made with respect to the Common Stock or Class B Stock
are payable in Common Stock or Class B Stock (or in
securities convertible into or exercisable or
exchangeable for such stock) only shares of Common Stock
or securities convertible into or exercisable or
exchangeable for shares of Common Stock shall be
distributed with respect to the Common Stock and only
shares of Class B Stock or securities convertible into
or exercisable or exchangeable for shares of Class B
Stock shall be distributed with respect to the Class B
Stock, and in any such case the number of shares of
Class B Stock distributed (or issuable upon conversion
or exercise of or exchange for any other security
distributed) with respect to each outstanding share of
Class B Stock shall be equal to the number of shares of
Common Stock distributed (or issuable upon conversion or
exercise of or exchange for any security distributed)
with respect to each outstanding share of Common Stock
and the terms of any such convertible, exercisable or
exchangeable securities distributed to the holders of
Common Stock and Class B Stock shall otherwise be
identical. The record date for determining Holders
entitled to receive such dividend or other distribution
to Holders shall be the same as the record date for
determining holders of Common Stock entitled to receive
such dividend or other distribution to holders of Common
Stock entitled to receive such dividend or other
distribution to holders of Common Stock. The
determination whether any holder holds shares of Common
Stock or Class B Stock shall be made on the record date,
except that only shares of Common Stock (or securities
convertible into or exercisable or exchangeable for
Common Stock) shall be distributed to any holder of
Common Stock or of Class B Stock if the Automatic
Conversion Date shall follow the record date and precede
the date on which the distribution is made by the
Corporation.
B. In case the Corporation shall at any time or
from time to time (i) subdivide its outstanding shares
of Common Stock into a greater number of shares or (ii)
combine its outstanding shares of Common Stock into a
smaller number of shares, the Corporation shall at the
same time and in the same manner likewise subdivide or
combine its outstanding shares of Class B Stock into a
number of shares equal to that into which the Common
Stock is subdivided or combined. In case the
Corporation shall at any time or from time to time (i)
subdivide its outstanding shares of Class B Stock into a
greater number of shares or (ii) combine its outstanding
shares of Class B Stock into a smaller number of shares,
the Corporation shall at the same time and in the same
manner likewise subdivide or combine its outstanding
shares of Common Stock into a number of shares equal to
that into which the Class B Stock is subdivided or
combined.
C. No consolidation or merger of the Corporation
with another corporation or other entity, nor any sale,
transfer or other disposition of all or substantially
all of its assets to another corporation or other
entity, shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock,
securities, cash or assets with respect to or in
exchange for Common Stock, unless the Holders shall
receive in such transaction the kind and amount of
stock, securities, cash or assets receivable upon such
consolidation, merger or sale by a holder of the number
of shares of Common Stock into which the shares of Class
B stock might have been converted immediately prior to
such consolidation, merger or sale, except that, prior
to the Automatic Conversion Date, at the option of the
Corporation, in lieu of any voting security (or security
convertible into such a voting security or any option or
right to acquire any said voting or convertible
security) such Holders may receive securities (or
securities convertible into such securities or options
or rights to acquire such securities) having the voting
rights of Class B Stock and being convertible into such
voting securities (in a manner similar to the conversion
rights of Class B Stock into Common Stock) but otherwise
having identical terms as such voting security. If such
securities having the voting rights of Class B Stock are
so issued, appropriate adjustment shall be made in the
application of the provisions set forth in this Article
Fourth with respect to the rights and interests
thereafter of the Holders to the end that the provisions
set forth in this Article Fourth shall thereafter be
applicable, as nearly as reasonably may be, in relation
to any shares of stock or other securities or property
thereafter deliverable upon the conversion of shares of
Class B Stock.
D. Other Action Affecting Common Stock. If the
Corporation takes any action affecting its Common Stock
after the date hereof, other than an action described in
any of subsections A to C of this subparagraph,
inclusive, which would have an adverse effect upon the
rights of any Holder hereunder, then appropriate
provision shall be made, on a basis consistent with the
principles of this subparagraph(3), in such manner and
at such time as the Board of Directors of the
Corporation shall in good faith determine to be
equitable under the circumstances.
(4) The Corporation shall pay all reasonable
expenses in connection with, and any tax in respect of
the issue of stock certificates upon, conversion (either
through Voluntary Conversion or pursuant to Automatic
Conversion) of shares of Class B Stock. The Corporation
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 stock in a name other than that of
the holder of the shares converted or any affiliate
thereof, and the Corporation shall not be required to
issue or deliver any such stock certificate unless and
until the person or persons requesting the issuance
thereof shall have paid to the Corporation the amount of
any such tax or shall have established to the
satisfaction of the Corporation that such tax has been
paid.
(5) The Corporation shall at all times reserve and
keep available out of its authorized Common Stock the
full number of shares of Common Stock deliverable upon
the conversion (either through Voluntary Conversion or
pursuant to Automatic Conversion) of all shares of Class
B Stock at any time authorized to be issued, and shall
take all such action as may be required from time to
time in order that it may validly and legally issue
fully paid and nonassessable shares of Common Stock upon
conversion of the Class B Stock. All shares of Common
Stock which shall be so issuable, when issued upon such
conversion, shall be duly and validly issued and fully
paid and nonassessable. Before taking any action which
would result in an issuance of Class B Stock or Common
Stock issuable upon conversion thereof, the Corporation
shall use its best efforts to obtain all authorizations
or exceptions therefor, or consents thereto, as may be
necessary from any public regulatory body or bodies
having jurisdiction over the Corporation. The
Corporation will use its best efforts to, when such
shares are issued, list on each national securities
exchange on which the Common Stock is listed all shares
of Common Stock issuable on conversion of Class B Stock.
(6) Shares of Class B Stock converted (either
through Voluntary Conversion or pursuant to Automatic
Conversion) shall be retired and may not be reissued.
(7) For the purpose of this Paragraph (b):
A. "Automatic Conversion Date" shall mean
such date, not earlier than the date seven years
after the Effective Date as defined in the
Conversion and Exchange Agreement dated as of March
27, 1991 among the Company and the other parties
listed on the signature pages thereof, as the
Company shall by notice to the Holders specify as
the "Automatic Conversion Date."
B. "Holder" shall mean a holder of record of
any of the outstanding shares of Class B Stock.
C. "Business Day" shall mean any day on
which commercial banks are not authorized or
required to close in the Borough of Manhattan, the
City of New York, New York.]
(Existing Section 1 (relating to Class B Stock) of Article
Fourth is to be deleted in its entirety.)
Section [2]1. Dividends.
The Class A Stock shall be entitled to receive the
following dividends, but only as and when declared by the
Board of Directors, out of the funds of the Corporation at
the time lawfully available therefor, payable in cash at but
not exceeding the following rates:
(a) cumulative dividends, at the rate of thirty cents
($.30) per share per fiscal year of the
Corporation, which shall be cumulative, and shall
accrue from day to day from the date of issue or
from such other date as may be fixed by the Board
of Directors prior to the issue thereof, whether or
not earned or declared, and shall be payable
quarterly on the last day of March, June, September
and December in each year, except that the first
dividend shall be payable on the quarterly dividend
payment date next succeeding the expiration of 35
days after the date any shares of Class A Stock are
issued; and
(b) non-cumulative dividends, at the rate of an addi-
tional fifty cents ($.50) per share per fiscal year
of the Corporation, which shall be non-cumulative,
and shall be payable only in any fiscal year of the
Corporation in which any dividend (other than a
dividend in shares of Common Stock of the
Corporation) is to be paid or declared on the
Common Stock of the Corporation.
So long as any shares of Class A Stock are outstanding,
in no event shall any dividend or distribution whatsoever
(other than dividends payable in Junior Shares) be paid or
declared upon or in respect of any Junior Shares, nor shall
any moneys be set aside for or applied to the purchase,
redemption or other acquisition or reduction of any Junior
Shares, unless all cumulative dividends on the Class A Stock
required to be paid for all past fiscal years shall have been
paid and both the full cumulative dividend and the full non-
cumulative dividend on the Class A Stock for the then current
fiscal year shall have been paid (or declared and a sum
sufficient for the payment thereof set apart).
If and so long as there are dividends in arrears on any
shares of Class A Stock, the Corporation shall not purchase
any shares of Class A Stock unless an offer to purchase on a
comparable basis is made in writing to the holders of all the
outstanding shares of Class A Stock.
Subject to the foregoing, the Board of Directors may
declare, out of the funds of the Corporation at the time
lawfully available therefor, dividends upon the then
outstanding Junior Shares and no holder of shares of Class A
Stock shall be entitled to share therein.
Arrears in the payment of cumulative dividends shall not
bear interest.
As used in this Article Fourth, the term "Junior Shares"
shall mean shares of Common Stock [and Class B Stock] and of
any other stock of the Corporation ranking junior with
respect to dividends or assets to the Class A Stock.
Section [3]2. Distribution on Dissolution.
Upon any liquidation, dissolution or winding up, of the
Corporation, whether voluntary or involuntary, the holders of
the Class A Stock shall be entitled to be paid in cash,
before any distribution shall be made on Junior Shares, an
amount per share equal to the aggregate of (i) $12, plus (ii)
the amount of all unpaid cumulative dividends accrued or in
arrears to the date of payment; but the holders of Class A
Stock shall be entitled to no further participation in any
such distribution, and after such payment to the holders of
Class A Stock, the remaining assets of the Corporation shall
be divided and distributed ratably among the holders of
Junior Shares in accordance with the respective amounts
payable with respect to each class of Junior Shares. If,
upon any such liquidation, dissolution or winding up, the
assets thus distributable among the holders of Class A Stock
shall be insufficient to permit the payment to the holders
thereof of the full preferential amount to which they are
entitled as aforesaid, then the entire assets so
distributable shall be distributed ratably among the holders
of Class A Stock. Neither a consolidation nor a merger of
the Corporation, nor the sale, transfer or lease of all or
substantially all its assets, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation
within the meaning of this Section [3]2; however, in the
event of a merger or consolidation of the Corporation, the
value of the Class A Stock of the Corporation (for all
purposes, including the requirement of payment of such value
as provided in the General Corporation Law of the State of
Delaware) shall be deemed to be (and each purchaser or holder
of Class A Stock by virtue of such purchase or holding shall
agree that such value shall be) not in excess of an amount
per share equal to the aggregate of (a) $12, plus (b) the
amount of all unpaid cumulative dividends accrued or in
arrears to the date on which the agreement of consolidation
or merger is recorded in the proper county in the State of
Delaware.
Section [4]3. Conversion of Class A Stock.
The holders of shares of Class A Stock shall have the
right, at their option, to convert such shares into shares of
Common Stock of the Corporation on the following terms and
conditions:
(a) Right of Conversion; Conversion Price. The shares
of Class A Stock shall be convertible, at any time, at the
office of the Corporation's Transfer Agent for the Class A
Stock in Tulsa, Oklahoma, into fullY paid and non-assessable
shares (calculated to the nearest 1/100th of a share, frac-
tions of less than 1/100th being disregarded) of Common Stock
of the Corporation, as such shares shall then be constituted,
at the conversion price in effect at the time of conversion
determined as hereinafter provided, each share of Class A
Stock being taken at $12 for the purpose of such conversion.
The price at which shares of Common Stock shall be delivered
upon conversion shall be $3.00 per share of Common Stock,
provided, however, that such conversion price shall be
subject to adjustment from time to time in certain instances
as hereinafter provided (the price at which shares of Common
Stock shall at any particular time be deliverable upon
conversion is hereinafter called the "conversion price" at
such time). The Corporation shall make no payment or
adjustment on account of dividends accrued, whether or not in
arrears, on the shares of Class A Stock surrendered for
conversion or on account of any dividends declared and
payable to the holders of the Common Stock of record on a
date prior to the date of surrender of the Class A Stock for
conversion.
(b) Termination of Conversion Right. In case of the
dissolution, liquidation, winding-up, merger or consolidation
of the Corporation, such right of conversion shall cease and
terminate at the close of business on the third full business
day preceding the date on which such dissolution,
liquidation, winding-up, merger or consolidation shall become
effective.
(c) Surrender and Delivery of Certificates; Effective
Date. Before any holder of shares of Class A Stock shall be
entitled to convert the same into Common Stock, he shall
surrender the certificate or certificates therefor, duly
endorsed, at the office of the Transfer Agent, and shall give
written notice to the Corporation at said office that he
elects to convert the same. The Corporation will, as soon as
practicable thereafter, issue and deliver at said office to
such holder of shares of Class A Stock, or to his nominee or
nominees, certificates for the number of full shares of
Common Stock to which he shall be entitled as aforesaid,
together with a cash payment, scrip certificate or other
evidence of a fractional interest in shares of Common Stock
in lieu of any fraction of a share as hereinafter provided.
Shares of Class A Stock shall be deemed to have been
converted as of the close of business on the date of
surrender of such shares for conversion as provided above,
and the person or persons in whose name or names any
certificate or certificates for Common Stock shall be
issuable upon such conversion shall be deemed to have become
as of the close of business on said date the holder or
holders of record for all purposes of the shares represented
thereby.
(d) Adjustment of Conversion Price on Issue or Sale of
Certain Stock. In case the Corporation shall at any time or
from time to time, issue or sell any shares of Participating
Stock (other than shares of Common Stock issued upon
conversion of shares of Class A Stock) for a consideration
per share less than the conversion price in effect immedi-
ately prior to the time of such issue or sale, said
conversion price shall be adjusted to a price (calculated to
the nearest cent) determined by dividing (i) an amount equal
to the sum of (x) the number of shares of Participating Stock
outstanding immediately prior to such issue or sale
multiplied by the then existing conversion price, plus (y)
the consideration, if any, received by the Corporation upon
such issue or sale by (ii) the total number of shares of
Participating Stock outstanding immediately after such issue
or sale. For the purposes of this Section 43 the number of
shares of Participating Stock outstanding at any given time
shall include shares in the treasury of the Corporation and
shares issuable in respect to scrip certificates or other
evidences of fractional interests in shares of Participating Stock.
For the purposes of this paragraph (d) the provisions
contained in the following subparagraphs (A) to (F), inclu-
sive, shall also be applicable:
(A) In case at any time the Corporation shall in
any manner grant any rights to subscribe for or to
purchase, or any options for the purchase of (i) Par-
ticipating Stock, or (ii) any stock (other than the
Class A Stock) or other securities convertible into or
exchangeable for Participating Stock (such convertible
or exchangeable stock or securities being hereinafter
called "Convertible Securities"), and the price per
share for which Participating Stock is issuable upon the
exercise of such rights or options or upon conversion or
exchange of such Convertible Securities (determined by
dividing (1) the total amount, if any, received or
receivable by the Corporation as consideration for the
granting of such rights or options, plus the minimum
aggregate amount of additional consideration payable to
the Corporation upon the exercise of such rights or
options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon
the conversion or exchange thereof, by (2) the total
maximum number of shares of Participating Stock issuable
upon the exercise of such rights or options or upon the
conversion or exchange of all such Convertible Securi-
ties issuable upon the exercise of such rights or
options) shall be less than the conversion price in
effect immediately prior to the time of the granting of
such rights or options, then the total maximum number of
shares of Participating Stock issuable upon the exercise
of such rights or options or upon conversion or exchange
of the total maximum amount of such Convertible
Securities issuable upon the exercise of such rights or
options shall (as of the date of granting of such rights
or options) be deemed to be outstanding and to have been
issued for said price per share; provided that (i) no
further adjustment of the conversion price shall be made
upon the actual issue of such Participating Stock or of
such Convertible Securities upon exercise of such rights
or options or upon the actual issue of such
Participating Stock upon conversion or exchange of such
Convertible Securities, (ii) upon the expiration of such
rights or options, if any thereof shall not have been
exercised, the number of shares of Participating Stock
theretofore deemed to be issued and outstanding in
accordance with the preceding provisions of this
subparagraph (A) shall be reduced by the number of
shares of Participating Stock as to which such rights or
options shall not have been exercised and by the number
of shares of Participating Stock issuable upon
conversion or exchange of the Convertible Securities as
to which such rights or options shall not have been
exercised, and the conversion price shall forthwith be
readjusted upwards accordingly, and (iii) upon the
termination of the right to convert or exchange for
Participating Stock any such Convertible Securities
issued upon exercise of such rights or options, the
number of shares of Participating Stock theretofore
deemed to be issued and outstanding in accordance with
the preceding provisions of this subparagraph (A) shall
be reduced by the number of shares of Participating
Stock as to which such right or conversion or exchange
shall not have been exercised, and the conversion price
shall forthwith be readjusted upwards accordingly.
(B) In case the Corporation shall in any manner
issue or sell any Convertible Securities, and the price
per share for which Participating Stock is issuable upon
conversion or exchange thereof (determined by dividing
(1) the total amount, if any, received or receivable by
the Corporation as consideration for the sale of such
Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to
the Corporation upon the conversion or exchange thereof,
by (2) the total maximum number of shares of
Participating Stock issuable upon the conversion or
exchange of all such Convertible Securities) shall be
less than the conversion price in effect immediately
prior to the time of such issue or sale, then the total
maximum number of shares of Participating Stock issuable
upon conversion or exchange of all such Convertible
Securities shall (as of the date of the issue or sale of
such Convertible Securities) be deemed to be outstanding
and to have been issued for said price per share;
provided, however, that (i) if any such issue or sale of
such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which an
adjustment of the conversion price has been or is to be
made pursuant to other provisions of this paragraph (d)
no further adjustment of the conversion price shall be
made by reason of such issue or sale or the issue of
such Participating Stock upon conversion or exchange of
such Convertible Securities, and (ii) upon termination
of the right to convert or to exchange such Convertible
Securities for Participating Stock, the number of shares
of Participating Stock theretofore deemed to be issued
and outstanding in accordance with the preceding
provisions of this subparagraph (B) shall be reduced by
the number of shares of Participating Stock as to which
such right of conversion or exchange shall not have been
exercised, and the conversion price shall forthwith be
readjusted upwards accordingly.
(C) In case the Corporation shall pay a dividend or
make any other distribution upon any stock of the
Corporation in Participating Stock or in Convertible
Securities, any Participating Stock or Convertible
Securities, as the case may be, issued in payment of
such dividend or distribution shall be deemed to have
been issued or sold without consideration.
(D) In case any shares of Participating Stock or
Convertible Securities or any rights or options to
purchase any such Stock or Securities shall be issued
for cash, the consideration received therefor shall be
deemed to be the amount received by the Corporation
therefor, without deduction therefrom or any expenses
incurred or any underwriting commissions or concessions
paid or allowed by the corporation in connection
therewith. In case any shares of Participating Stock or
Convertible Securities or any rights or options to
purchase any such Stock or Securities shall be issued
otherwise than for a consideration consisting solely of
cash, then, for the purposes of this paragraph (d), the
Board of Directors of the Corporation shall determine
the fair value of such consideration, and such
Participating Stock, Convertible Securities, rights or
options shall be deemed to have been issued for an
amount of cash equal to the value so determined by the
Board of Directors. In case any shares of Participating
Stock or Convertible Securities or any rights or options
to purchase any such Stock or Securities shall be issued
together with other stock or securities or other assets
of the Corporation for a consideration which is received
for both, the Board of Directors of the Corporation
shall determine what part of the consideration so
received is to be deemed to be the consideration for the
issue of such shares of Participating Stock, Convertible
Securities, rights or options.
(E) In case the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them (1) to receive a dividend or other
distribution payable other than in cash, or (2) to
subscribe for or purchase Participating Stock or Con-
vertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares
of Participating Stock deemed to have been issued or
sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting
of such right of subscription or purchase, as the case
may be.
(F) In case the Corporation shall issue or sell
any Participating Stock having voting power (other than
as a result of events of default) on the election of
directors greater than one vote per share (hereinafter
called "Special Voting Securities"), or grant any rights
for the purchase of any Special Voting Securities, or
issue or sell or grant any rights or options for the
purchase of any securities convertible into or
exchangeable for Special Voting Securities, then the
total number of such Special Voting Securities to be
issued or sold or thereafter outstanding shall be deemed
for the purposes of this paragraph (d) to be the number
computed by multiplying (i) the number of such
Securities so to be issued or sold or outstanding by
(ii) the number of votes per security (other than votes
given as a result of event of default) to which each
such security is or would upon issuance or sale be
entitled on the election of directors.
(e) Adjustment of Conversion Price on Declaration of
Property Dividends. In case the Corporation shall declare a
dividend upon the Participating Stock of the Corporation
payable otherwise than in cash, Participating Stock or
Convertible Securities, the conversion price in effect
immediately prior to the declaration of such dividend shall
be reduced by an amount equal to the fair value of the
dividend per share of the Participating Stock outstanding at
the time of such declaration as determined by the Board of
Directors of the Corporation. Such reduction shall take
effect as of the date a record is taken for the purposes of
such dividend, or, if a record is not taken, the date as of
which the holders of Participating Stock to be entitled to
such dividends are to be determined.
(f) Adjustment of Conversion Price on Reorganization,
etc. In the case of any capital reorganization, reclassifi-
cation, substitution, exchange or other alteration in the
terms of the Common Stock of the Corporation or in case of
the consolidation or merger of the Corporation or the
conveyance of all or substantially all of the assets of the
Corporation, each share of the Class A Stock shall thereafter
be convertible into the number of shares of stock or other
securities or property to which a holder of the number of
shares of Common Stock of the Corporation deliverable upon
conversion of such shares of the Class A Stock would have
been entitled upon such reorganization, reclassification,
substitution, change, alteration, consolidation, merger or
conveyance; and, in any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the
application of the provisions herein set forth with respect
to the rights and interests thereafter of the holders of the
Class A Stock, to the end that the provisions set forth
herein (including, provisions with respect to adjustments of
the conversion price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon
conversion of shares of Class A Stock.
(g) Exception for Minor Adjustments of Conversion
Price. Anything in this Section [4]3, to the contrary
notwithstanding, the Corporation shall not be required to
give effect to any adjustment in the conversion price unless
and until the net effect of one or more adjustments,
determined as above provided, shall have resulted in a change
of the conversion price by at least twenty-five cents ($.25),
but when the cumulative net effect of more than one
adjustment so determined shall be to change the conversion
price by at least ten cents ($.10), such change in the
conversion price shall thereupon be given effect.
(h) Computation and Notice of Adjustments of Conversion
Price. Whenever the conversion price is adjusted as herein
provided, the Treasurer of the Corporation shall compute the
adjusted conversion price in accordance with this Section
[4]3 and shall prepare a certificate setting forth such
adjusted conversion price and showing in detail the facts
upon which such adjustment is based, including a statement of
the consideration received or to be received by the
Corporation for any additional stock issued or sold or deemed
to have been issued or sold and of the number of shares of
Common Stock outstanding or deemed to be outstanding, and
such certificate shall forthwith be filed with the Transfer
Agent. At the same time the Corporation shall mail to each
holder of record of shares of Class A Stock a notice stating
the adjusted conversion price.
([j]i) Notice to Holders of Class A Stock in Certain
Events. In case:
(i) the Corporation shall authorize the granting
to the holders of its Common Stock of rights to sub-
scribe for or purchase any shares of stock of any class
or to receive any other rights; or
(ii) of any capital reorganization, reclassifica-
tion, reduction, or other alteration in the terms of the
Common Stock of the Corporation, or in case of the
consolidation or merger of the Corporation or the
conveyance or lease of all or substantially all the
assets of the Corporation; or
(iii) of the voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation, then, and in any such case, the Corporation
shall cause to be mailed to the Transfer Agent and to
the holders of record of the outstanding shares of Class
A Stock, at least sixty (60) days prior to the date
hereinafter specified, a notice stating (x) the record
date or other date as of which the holders of Common
Stock to be entitled to such rights are to be
determined, or (y) the estimated date on which such
reclassification, reorganization, reduction, alteration,
consolidation, merger, conveyance, lease, dissolution,
liquidation or winding-up is to become effective.
In case the Corporation shall declare a dividend
(or any other distribution) on the Common Stock, the
Corporation shall cause to be mailed to the Transfer
Agent and to the holders of record of the outstanding
shares of Class A Stock at least fourteen (14) days
prior to the record date or other date as of which the
holders of Common Stock to be entitled to such dividend
or distribution are to be determined a notice stating
such record or other date, the payment for such dividend
or distribution, and the amount thereof.
([k]j) Reservation of Shares of Common Stock for Issu-
ance on Conversion. The Corporation shall at all times
reserve and keep available, out of its authorized but unis-
sued Common Stock, as such Stock shall then be constituted,
solely for the purpose of effecting the conversion of shares
of Class A Stock, the full number of shares of such Common
Stock deliverable upon the conversion of all shares of Class
A Stock from time to time outstanding. The Corporation shall
from time to time, in accordance with the laws of the State
of Delaware, increase the authorized amount of its Common
Stock if at any time the number of authorized shares of
Common Stock remaining unissued shall not be sufficient to
permit the conversion of all the shares of Class A Stock at
the time outstanding.
([m]k) Provision in Lieu of Fractional Shares. No frac-
tional shares of Common Stock are to be issued upon conver-
sion, but in lieu thereof the Corporation shall:
(i) issue scrip certificates or other evidence of
such fractional interests, for any fraction of a share
which would otherwise be issuable, such certificates or
other evidence of fractional interests to be exchange-
able within such period (which shall end not less than
two years following the date of issue thereof) as the
Board of Directors of the Corporation shall determine,
together with other scrip certificates or other evidence
of fractional interests representing in the aggregate
one or more full shares, for stock certificates
representing such full share or shares, and upon the
expiration of such period to be exchangeable for cash
within such further period (which shall end not less
than six years following the date of issue thereof) and
upon such further terms as the Board of Directors of the
Corporation shall determine; and such scrip certificates
or other evidence of fractional interests to be in such
form and to contain such terms and provisions as shall
be fixed by the Board of Directors on or before the
issuance thereof, provided that they shall not entitle
the bearer or holder thereof to exercise any voting
right, or to receive dividends or to participate in the
assets of the Corporation in the event of liquidation,
dissolution or winding-up, nor to any rights whatever
except as therein expressly set forth; or
(ii)[ A]At its option, pay a cash adjustment in
respect of any fraction of a share which would otherwise
be issuable, in any amount equal to the same fraction of
the market price (determined as hereinafter provided)
per share of Common Stock on the day of conversion. For
the purposes of the foregoing, the term "market price"
shall mean the last sale price regular way, or, in case
no such sale takes place on such day, the average of the
closing bid and asked prices regular way, in either case
as officially quoted on a national securities exchange
if the Common Stock is at the time listed thereon, or if
the Common Stock is not at the time so listed, the
average of the closing bid and asked prices as furnished
by any recognized dealer in securities selected by the
Corporation for the purpose.
([n]l) Payment of Taxes. The Corporation will pay any
and all issue and other taxes that may be payable in respect
of any issue or delivery of shares of Common Stock on
conversion of shares of Class A Stock pursuant hereto. The
Corporation 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 the Class A 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 Corporation the amount of any such tax,
or has established, to the satisfaction of the Corporation,
that such tax has been paid.
([o]m) Limitation on Reduction of Conversion Price. The
Corporation shall not take any action which would, pursuant
to the provisions of this Section [4]3, reduce the conversion
price to an amount less than the par value per share, if any,
of the Common Stock into which shares of the Class A Stock
are at the time convertible.
([p]n) Definition of "Participating Stock". As used in
this Section [4,]3 the term "Participating Stock" means (i)
any common stock of the Corporation, (ii) any securities of
the Corporation with no fixed limit on dividends or assets,
including securities of any class which has the right to
share above a stated initial preference in such dividends or
assets, and (iii) any securities (other than the Class A
Stock initially authorized) of any class of the Corporation
having voting power (other than as a result of events of
default) on the election of directors.
([q]o) Retirement of Converted Shares. All shares of
Class A Stock converted into shares of Common Stock pursuant
to this Section [4]3 shall not be reissued, and the
Corporation shall cause all such shares to be cancelled and
retired, and (if appropriate) its capital reduced, in the
manner provided by law.
Section [5]4. Voting Rights.
(a) Number of Votes Per Share; Cumulative Voting.
Except as otherwise expressly provided in this Article Fourth
or by law, at every meeting of stockholders the Class A Stock
shall be entitled to four votes per share and the Common
Stock shall be entitled to one vote per share. In all
elections for directors each holder of Class A Stock shall
have as many votes as shall equal four times the number of
shares of Class A Stock held by such holder multiplied by the
number of directors to be elected, and any such holder may
cast all such votes for a single candidate or may distribute
them among the candidates as such holder may see fit.
In all elections for directors, commencing with the
Annual Meeting of Stockholders held in 1982, each holder of
Common Stock shall have the right to cast one vote for each
share of Common Stock held by such holder for each of such
number of candidates as there are directors to be elected,
but no such holder of Common Stock shall have any right to
cumulate his votes and cast them for one candidate or dis-
tribute them among two or more candidates.
(b) Class Vote Necessary in Certain Events. In addition
to the vote of the stockholders of the Corporation as
required by paragraph (a) of this Section [5]4, so long as
any shares of Class A Stock are outstanding the Corporation
shall not, without the affirmative vote at a meeting (at
which the Class A Stock shall vote as a class with one vote
per share, and the notice of which meeting shall state the
general character of the matters to be submitted thereat), or
the written consent with or without a meeting, of the holders
of at least two-thirds of the then outstanding shares of
Class A Stock:
(i) authorize or increase the authorized amount of
any additional class of stock ranking prior to the Class
A Stock as to dividends or assets; or authorize or
increase the authorized amount of any class of
securities or obligations convertible into or evidencing
the right to purchase any class of stock with such
priority; or
(ii) amend, alter or repeal of the provisions of
the RESTATED Certificates of Incorporation or reduce the
capital of the Corporation so as adversely to affect the
special rights, preferences or powers of the Class A
Stock or its holders; provided, however, that the
amendment of the RESTATED Certificate of Incorporation
so as to increase the authorized amount of Class A Stock
or to authorize or increase the authorized amount of any
stock which is on a parity with or ranks junior to the
Class A Stock with respect, to the payment of dividends
and the distribution of assets shall not be deemed to
affect adversely the special rights, preferences or
powers of the Class A Stock or its holders; or
(iii) merge or consolidate, unless the agreement of
merger or consolidation provides that each share of
Class A Stock outstanding at the time of the merger or
consolidation and in connection therewith shall be
redeemed and shall receive, in full payment in
redemption thereof, an amount of money in cash equal to
the sum of (x) $12, plus (y) the amount of all unpaid
cumulative dividends accrued or in arrears to the
effective date of the merger or consolidation.
For the purposes of determining whether the affirmative
vote at a meeting, or the written consent, required by
this paragraph (b) has been obtained, affirmative votes
at any meeting shall be deemed to be the equivalent of
written consents, and written consents with or without a
meeting shall be deemed to be the equivalent of
affirmative votes at any meeting.
Section [6]5. Issuance of COMMON Stock; Preemptive
Rights.
Shares of Class A Stock, AND Common Stock [and Class B
Stock] may be issued at any time and from time to time by the
Corporation, and authority is hereby expressly granted to and
vested in the Board of Directors, to the extent permitted by
law, (a) to issue shares of Class A Stock, AND Common Stock
[and Class B Stock] for such consideration (in the case of
Common Stock [and Class B Stock]at not less than par value),
and in such circumstances as may now or hereafter be
permitted by law, and (b) to determine that only a part of
the consideration so received shall be capital. No holder of
stock of any class of the Corporation shall have any
preemptive right to subscribe for or purchase any part of any
new or additional issue or sale or reservation of stock or
securities of any class or kind whatsoever.
Section [7]6. Statement of Preferences, Limitations,
andRelative Rights in Respect of Shares of Preferred Stock
and Authority of Board of Directors to fix Designations,
Powers, Preferences, Rights, Qualifications, Limitations and
Restrictions Thereof Not Fixed Hereby.
(a) Shares of Preferred Stock may be issued FROM time to
time in one or more series as may be determined from time to
time by the Board of Directors, each such series to be
distinctly designated. All shares of any one series of
Preferred Stock so designated by the Board of Directors shall
be alike in every particular. The voting rights, if any, of
each such series, dividend rates, and preferences and
relative, participating, optional and other special rights of
each such series and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any
and all other series at any time outstanding; and, subject to
the provisions of Paragraphs (d) through (h) of this Section
[7]6, the Board of Directors of the Corporation is hereby
expressly granted authority to fix, by resolutions duly
adopted prior to the issuance of any shares of a particular
series of Preferred Stock so designated by the Board of
Directors, the voting powers of stock of such series, if any,
and the designations, preferences and relative,
participating, optional and other special rights, and the
qualifications, limitations and restrictions of such series,
including, but without limiting the generality of the
foregoing, the following:
(i) The rate and times at which, and the terms and
conditions on which, dividends on Preferred Stock of
such series will be paid;
(ii) The right, if any, of the holders of Preferred
Stock of such series to convert the same into, or
exchange the same for, shares of other classes or series
of stock of the Corporation and the terms and conditions
of such conversion or exchange;
(iii) The redemption price or prices and the
time or times at which, and the terms and conditions on
which, Preferred Stock of such series may be redeemed;
(iv) The rights of the holders of Preferred Stock
of such series upon the voluntary or involuntary liqui-
dation, dissolution or winding-up, or merger,
consolidation, distribution or sale of assets, of the
Corporation;
(v) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the Pre-
ferred Stock of such series; and
(vi) Provisions, if any, for the vote or consent of
the holders of a stated percentage of the outstanding
shares of Preferred Stock of such series with respect to
changes in the rights, preferences or limitations of the
shares of such series, or the designation or issuance of
series of the Preferred Stock by the Board of Directors,
or the authorization or issuance of other classes or
series of preferred stock;
provided, however, that the holders of shares of Preferred
Stock shall rank on a parity with, or rank junior to, the
holders of Class A Stock with respect to the payment of
dividends and the distribution of assets of the Corporation
available for distribution to stockholders and shall have no
right to participate with the holders of Common Stock [and
Class B Stock] in any distribution or dividends in excess of
the preferential dividend fixed for such Preferred Stock or
in the assets of the Corporation available for distribution
to stockholders in excess of the preferential amount fixed
for such Preferred Stock.
(b) Until the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with
the provisions of Paragraph (a) of this Section [7]6) and the
Class A Stock (fixed in Section [2]1 of this Article Fourth)
shall have been met and until the Corporation shall have
complied with all the requirements, if any, with respect to
the setting aside of sums as sinking funds or redemption or
purchase accounts with respect to the Preferred Stock (fixed
in accordance with the provisions of Paragraph (a) of this
Section [7]6), no dividend or distribution shall be paid or
declared upon or in respect of any Common Stock [or Class B
Stock].
(c) Until distribution in full of the preferential
amount to be distributed to the holders of Preferred Stock
(fixed in accordance with the provisions of Paragraph (a) of
this Section [7]6) and Class A Stock (fixed in Section [2]1
of this Article Fourth) in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of the
Corporation, no such distribution shall be made to the
holders of Common Stock [or Class B Stock].
(d) No holder of Preferred Stock of the Corporation
shall have any preemptive or preferential rights of
subscription to any shares of any stock of the Corporation of
any class, now or hereafter authorized, or to any obligations
convertible into stock of the Corporation, issued or sold,
nor any right of subscription to any thereof other than such,
if any, as the Board of Directors of the Corporation in its
discretion from time to time may determine, and at such price
as the Board of Directors from time to time may fix, pursuant
to the authority hereby conferred by the RESTATED Certificate
of Incorporation, and the Board of Directors may issue stock
of the Corporation, or obligations convertible into stock,
without offering such issue of stock or such obligations,
either in whole or in part, to the holders of Preferred Stock
of the Corporation.
(e) The powers and rights of the holders of Common Stock
[and Class B Stock] shall be subordinated to the powers,
preferences and rights of the holders of Preferred Stock.
The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and
rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors
pursuant to authority granted in the RESTATED Certificate of
Incorporation; provided, however, that except as may be
provided by law and except as set forth in Paragraph (f) and
Paragraph (g) of this Section [7]6, no holder of shares of
Preferred Stock of any series shall be entitled to more than
one vote in respect of each share of such stock held by him
on any matter voted on by stockholders other than elections
of directors, in which case the Board of Directors may accord
cumulative voting rights to holders of shares of any series
of Preferred Stock.
(f) Notwithstanding the provisions of Paragraph (e) of
this Section [7]6, the Board of Directors, acting pursuant to
authority granted in this RESTATED Certificate of
Incorporation in respect of any series of Preferred Stock,
may provide that if this Corporation shall have defaulted in
the payment of dividends on any such series of Preferred
Stock in any amount equivalent to or exceeding six full
quarterly dividends (whether or not consecutive) or the
Corporation shall have defaulted in making any two mandatory
sinking fund payments on any such series of Preferred Stock,
the holders of one or more or all of such series of Preferred
Stock in respect of which any such default shall have
occurred (voting as a single class together with the holders
of Class A Stock) shall be entitled to elect, in the
aggregate, not more than two directors.
(g) The issuance of shares of any series of Preferred
Stock by the Board of Directors of the Corporation shall be
subject to such limitations and restrictions as may be
provided for in the RESTATED Certificate of Incorporation or
by the Board of Directors, pursuant to authority granted in
the RESTATED Certificate of Incorporation, including
provision for the consent, by class vote, of the holders of a
stated percentage of the outstanding shares of any series of
Preferred Stock.
(h) Subject to the provisions of Paragraph (g) of this
Section [7]6, shares of any series of Preferred Stock may be
authorized or issued, in aggregate amounts not exceeding the
total number of shares of Preferred Stock authorized by the
RESTATED Certificate of Incorporation, from time to time as
the Board of Directors of the Corporation shall determine and
for such consideration as shall be fixed by the Board of
Directors.
(i) $1.625 Convertible Preferred Stock [($1.00 Par
Value)]:
1. Number Of Shares and Designation. 2,990,000
shares of the Preferred Stock, $1.00 par value per share, of
the Corporation are hereby constituted as a series of the
preferred stock designated as "$1.625 Convertible Preferred
Stock".
2. Definitions. For purposes of the $1.625
CONVERTIBLE Preferred Stock, the following terms shall have
the meanings indicated:
"Board of Directors" shall mean the Board of
Directors of the Corporation or any committee authorized
by such Board of Directors to perform any of its
responsibilities with respect to the $1.625 CONVERTIBLE
Preferred Stock.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions
in the City of New York are authorized or obligated by
law or executive order to close.
"Change of Control" shall have the meaning set
forth in paragraph (e)(i) of [Section]SUBSECTION 8
[hereof ]OF THIS PARAGRAPH (i).
["Class A Stock" shall have the meaning set forth
in paragraph (a) of Section 10 hereof.]
"Closing Price" with respect to a particular
security on any day shall mean on such day the
reported last sales price, regular way, for such
security or, in case no sale takes place on such
day, the average of the reported closing bid and
asked prices, regular way, for such security in
either case as reported on the New York Stock
Exchange, on the principal national securities
exchange on which such security is listed or
admitted to trading or, if not listed or admitted
to trading on any national securities exchange, on
the National Market System of the National
Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ National Market System")
or, if such security is not quoted on the NASDAQ
National Market System, the average of the closing
bid and asked prices for such security in the over-
the-counter market as reported by NASDAQ or, if bid
and asked prices for such security on each such
date shall not have been reported by NASDAQ, the
average of the bid and asked prices for such
security for such day as furnished by any New York
Stock Exchange member firm regularly making a
market in such security selected for such purpose
by the board of directors or similar governing body
of the issuer of such security or, if no such
quotations are available, the fair market value of
such security furnished by any New York Stock
Exchange member firm selected from time to time by
the board of directors or similar governing body of
the issuer of such security for that purpose.
["Common Stock" shall mean the Common Stock of the
Corporation, par value $.05 per share.]
"Conversion Price" shall mean the conversion price
per share of Common Stock into which the $1.625
CONVERTIBLE Preferred Stock is convertible, as such
Conversion Price may be adjusted pursuant to
[Section]SUBSECTION 7 [hereof ]OF THIS PARAGRAPH (i).
The initial Conversion Price will be $8.625 (equivalent
to the rate of 2.899 shares of Common Stock for each
share of $1.625 CONVERTIBLE Preferred Stock).
"Current Market Price" per share of Common Stock on
any date shall mean the average of the daily Closing
Prices for the 30 consecutive Trading Dates commencing
45 Trading Dates before the date of determination.
"Defaulted Preferred Stock" shall have the meaning
set forth in paragraph (a) of [Section]SUBSECTION 10
[hereof]OF THIS PARAGRAPH (i).
"dividend payment date" shall have the meaning set
forth in paragraph (a) of [Section]SUBSECTION 3 [hereof
]OF THIS PARAGRAPH (i).
"dividend payment record date" shall have the
meaning set forth in paragraph (a) of
[Section]SUBSECTION 3 [hereof]OF THIS PARAGRAPH (i).
"Dividend Periods" shall mean quarterly dividend
periods commencing on the first day of January, April,
July and October of each year and ending on and
including the day preceding the first day of the next
succeeding Dividend Period (other than the initial
Dividend Period which shall commence on the Issue Date
and end on and include September 30, 1993).
"Fundamental Change" shall have the meaning set
forth in paragraph (e)(ii) of [Section]SUBSECTION 8
[hereof ]OF THIS PARAGRAPH (i).
"Issue Date" shall mean the first date on which
shares of $1.625 CONVERTIBLE Preferred Stock are
issued.
"Person" shall mean any individual, firm,
partnership, corporation or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Redemption Price" shall have the meaning set forth
in paragraph (a) of [Section]SUBSECTION 5 [hereof]OF
THIS PARAGRAPH (i).
"Securities" shall have the meaning set forth in
paragraph (d)(iii) of [Section]SUBSECTION 7 [hereof]OF
THE PARAGRAPH (i)
"Trading Date" with respect to any security means
(i) if such security is listed or admitted for trading
on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock
Exchange or such other national securities exchange is
open for trading, (ii) if such security is quoted on the
NASDAQ National Market System, or any similar system of
automated dissemination of quotations of securities
prices, a day on which trades may be made on such
system, (iii) if not quoted as described in clause (ii),
days on which quotations are reported by the National
Quotation Bureau Incorporated or (iv) otherwise, any
Business Day.
"Transaction" shall have the meaning set forth in
paragraph (e) of [Section]SUBSECTION 7 [hereof]OF THIS
PARAGRAPH (i).
"Transfer Agent" means American Stock Transfer &
Trust Company, New York, New York or such other agent or
agents of the Corporation as may be designated by the
Board of Directors as the transfer agent or conversion
agent for the $1.625 CONVERTIBLE Preferred Stock.
3. Dividends. (a) The holders of shares of the
$1.625 CONVERTIBLE Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors
out of funds legally available therefor, cumulative cash
dividends at an annual rate of $1.625 per share of $1.625
CONVERTIBLE Preferred Stock. Such dividends shall be
cumulative from the Issue Date, whether or not in any
Dividend Period or Periods there shall be funds of the
Corporation legally available for the payment of such
dividends and whether or not such dividends are declared, and
shall be payable quarterly, when, as and if declared by the
Board of Directors, on March 31, June 30, September 30 and
December 31 in each year (each a "dividend payment date"),
commencing on September 30, 1993. If any dividend payment
date shall be on a day other than a Business Day, then the
dividend payment date shall be on the next succeeding
Business Day. Each such dividend shall be payable in arrears
to the holders of record of shares of the $1.625 CONVERTIBLE
Preferred Stock, as they appear on the stock records of the
Corporation at the close of business on those dates (each
such date, a "dividend payment record date"), not less than
10 days nor more than 60 days preceding the dividend payment
dates thereof, as shall be fixed by the Board of Directors.
Dividends on the $1.625 CONVERTIBLE Preferred Stock shall
accrue (whether or not declared) on a daily basis from the
Issue Date and accrued dividends for each Dividend Period
shall accumulate to the extent not paid on the dividend
payment date first following the Dividend Period for which
they accrue. As used herein, the term "accrued" with respect
to dividends includes both accrued and accumulated dividends.
Accrued and unpaid dividends for any past Dividend Periods
may be declared and paid at any time, without reference to
any regular dividend payment date, to holders of record on
such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable for each full
Dividend Period for the $1.625 CONVERTIBLE Preferred Stock
shall be computed by dividing the annual dividend amount by
four (rounded down to the nearest cent). The amount of
dividends payable for the initial Dividend Period on the
$1.625 CONVERTIBLE Preferred Stock and any other period
shorter or longer than a full Dividend Period on the $1.625
CONVERTIBLE Preferred Stock shall be computed on the basis of
a 360-day year consisting of twelve 30-day months. Holders
of shares of $1.625 CONVERTIBLE Preferred Stock called for
redemption on a redemption date falling between the close of
business on a dividend payment record date and the opening of
business on the corresponding dividend payment date shall, in
lieu of receiving such dividend on the dividend payment date
fixed therefor, receive such dividend payment together with
all other accrued and unpaid dividends on the date fixed for
redemption (unless such holder converts such shares in
accordance herewith). Holders of shares of $1.625
CONVERTIBLE Preferred Stock shall not be entitled to any
dividends, whether payable in cash, property or securities,
in excess of cumulative dividends, as herein provided, on the
$1.625 CONVERTIBLE Preferred Stock. No interest, or sum of
money in lieu of interest, shall be payable in respect of any
dividend payment or payments on the $1.625 CONVERTIBLE
Preferred Stock which are in arrears.
(c) So long as any shares of the $1.625
CONVERTIBLE Preferred Stock are outstanding, no dividends,
except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on any class or
series of stock of the Corporation ranking, as to dividends,
on a parity with the $1.625 CONVERTIBLE Preferred Stock, for
any period unless full cumulative dividends on all
outstanding shares of $1.625 CONVERTIBLE Preferred Stock have
been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for
such payment for all Dividend Periods terminating on or prior
to the date of payment, or setting apart for payment, of such
full cumulative dividends on such parity stock. When
dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, upon the shares of
the $1.625 CONVERTIBLE Preferred Stock and any other class or
series of stock ranking on a parity as to dividends with the
$1.625 CONVERTIBLE Preferred Stock, all dividends declared
upon shares of the $1.625 CONVERTIBLE Preferred Stock and all
dividends declared upon such other stock shall be declared
and paid pro rata so that the amounts of dividends per share
declared and paid on the $1.625 CONVERTIBLE Preferred Stock
and such other stock shall in all cases bear to each other
the same ratio that accrued and unpaid dividends per share on
the shares of the $1.625 CONVERTIBLE Preferred Stock and on
such other stock bear to each other.
(d) So long as any shares of the $1.625
CONVERTIBLE Preferred Stock are outstanding, no other stock
of the Corporation ranking on a parity with the $1.625
CONVERTIBLE Preferred Stock as to dividends or upon
liquidation, dissolution or winding up shall be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund or
otherwise for the purchase or redemption of any shares of
any such stock) by the Corporation (except by conversion into
or exchange for stock of the Corporation ranking junior to
the $1.625 CONVERTIBLE Preferred Stock as to dividends and
upon liquidation, dissolution or winding up) unless (i) the
full cumulative dividends, if any, accrued on all outstanding
shares of the $1.625 CONVERTIBLE Preferred Stock shall have
been paid or set apart for payment for all past Dividend
Periods and (ii) sufficient funds shall have been set apart
for the payment of the dividend for the current Dividend
Period with respect to the $1.625 CONVERTIBLE Preferred
Stock.
(e) So long as any shares of the $1.625
CONVERTIBLE Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of
Common Stock or other stock ranking junior to the $1.625
CONVERTIBLE Preferred Stock as to dividends and upon
liquidation, dissolution or winding up) shall be declared or
paid or set apart for payment and no other distribution shall
be declared or made or set apart for payment, in each case
upon the Common Stock or any other stock of the Corporation
ranking junior to the $1.625 CONVERTIBLE Preferred Stock as
to dividends or upon liquidation, dissolution or winding up,
nor shall any Common Stock nor any other such stock of the
Corporation ranking junior to the $1.625 CONVERTIBLE
Preferred Stock as to dividends or upon liquidation,
dissolution or winding up be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or
made available for a sinking fund or otherwise for the
purchase or redemption of any shares of any such stock) by
the Corporation (except by conversion into or exchange for
stock of the Corporation ranking junior to the $1.625
CONVERTIBLE Preferred Stock as to dividends and upon
liquidation, dissolution or winding up) unless, in each case
(i) the full cumulative dividends, if any, accrued on all
outstanding shares of the $1.625 CONVERTIBLE Preferred Stock
and any other stock of the Corporation ranking on a parity
with the $1.625 CONVERTIBLE Preferred Stock as to dividends
shall have been paid or set apart for payment for all past
Dividend Periods and all past dividend periods with respect
to such other stock and (ii) sufficient funds shall have been
set apart for the payment of the dividend for the current
Dividend Period with respect to the $1.625 CONVERTIBLE
Preferred Stock and for the current dividend period with
respect to any other stock of the Corporation ranking on a
parity with the $1.625 CONVERTIBLE Preferred Stock as to
dividends.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets
of the Corporation (whether capital or surplus) shall be made
to or set apart for the holders of Common Stock or any other
series or class or classes of stock of the Corporation
ranking junior to the $1.625 CONVERTIBLE Preferred Stock upon
liquidation, dissolution or winding up, the holders of the
shares of $1.625 CONVERTIBLE Preferred Stock shall be
entitled to receive $25.00 per share plus an amount per share
equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution
to such holders; but such holders shall not be entitled to
any further payment. No payment on account of any
liquidation, dissolution or winding up of the Corporation
shall be made to the holders of any class or series of stock
ranking on a parity with the $1.625 CONVERTIBLE Preferred
Stock in respect of the distribution of assets upon
dissolution, liquidation or winding up unless there shall
likewise be paid at the same time to the holders of the
$1.625 CONVERTIBLE Preferred Stock like proportionate amounts
determined ratably in proportion to the full amounts to which
the holders of all outstanding shares of $1.625 CONVERTIBLE
Preferred Stock and the holders of all outstanding shares of
such parity stock are respectively entitled with respect to
such distribution. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation,
or proceeds thereof, distributable among the holders of the
shares of $1.625 CONVERTIBLE Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid
and liquidating payments on any other shares of stock
ranking, as to liquidation, dissolution or winding up, on a
parity with the $1.625 CONVERTIBLE Preferred Stock, then such
assets, or the proceeds thereof, shall be distributed among
the holders of shares of $1.625 CONVERTIBLE Preferred Stock
and any such other stock ratably in accordance with the
respective amounts which would be payable on such shares of
$1.625 CONVERTIBLE Preferred Stock and any such other stock
if all amounts payable thereon were paid in full. For the
purposes of this [Section]SUBSECTION 4, neither a
consolidation or merger of the Corporation with one or more
corporations or other entities nor a sale, lease, exchange or
transfer of all or any part of the Corporation's assets for
cash, securities or other property shall be deemed to be a
liquidation, dissolution or winding up, voluntary or
involuntary.
(b) Subject to the rights of the holders of shares
of any series or class or classes of stock ranking on a
parity with or prior to the $1.625 CONVERTIBLE Preferred
Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of
$1.625 CONVERTIBLE Preferred Stock, as provided in this
[Section]SUBSECTION 4, any other series or class or classes
of stock ranking junior to the $1.625 CONVERTIBLE Preferred
Stock upon liquidation, dissolution or winding up shall,
subject to the respective terms and provisions (if any)
applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of
$1.625 CONVERTIBLE Preferred Stock shall not be entitled to
share therein.
(c) Written notice of any liquidation, dissolution
or winding up of the Corporation, stating the payment date
or dates when and the place or places where the amounts
distributable in such circumstances shall be payable, shall
be given by first class mail, postage prepaid, not less than
30 days prior to any payment date stated therein, to the
holders of record of the $1.625 CONVERTIBLE Preferred Stock
at their respective addresses as the same shall appear on the
stock records of the Corporation.
5. Redemption at the Option of the Corporation.
(a) $1.625 CONVERTIBLE Preferred Stock may not be
redeemed by the Corporation prior to September 30, 1996. On
or after such date the Corporation, at its option, may redeem
the shares of $1.625 CONVERTIBLE Preferred Stock, in whole or
in part, out of funds legally available therefor, at any time
or from time to time, subject to the notice provisions and
provisions for partial redemption described below, during the
twelve-month periods beginning on September 30 in each of the
following years at the following redemption prices per share
plus an amount equal to accrued and unpaid dividends, if any,
to (and including) the date fixed for redemption, whether or
not earned or declared (the "Redemption Price").
<TABLE>
<CAPTION>
Year Price per share
---- ---------------
<S> <C>
1996 26.1375
1997 25.9750
1998 25.8125
1999 25.6500
2000 25.4875
2001 25.3250
2002 25.1625
2003 and thereafter 25.0000
</TABLE>
(b) In the event the Corporation shall redeem
shares of $1.625 CONVERTIBLE Preferred Stock, notice of such
redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior
to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same
appears on the stock records of the Corporation. Each such
notice shall state: (i) the redemption date; (ii) the number
of shares of $1.625 CONVERTIBLE Preferred Stock to be
redeemed and, if less than all the shares held by such holder
are to be redeemed, the number of such shares to be redeemed
from such holder; (iii) the Redemption Price; (iv) the place
or places where certificates for such shares are to be
surrendered for payment of the redemption price; (v) the
then current Conversion Price; and (vi) that dividends on the
shares to be redeemed shall cease to accrue on such
redemption date. If, on the date fixed for redemption, funds
necessary for the redemption shall be available therefor and
shall have been irrevocably deposited or set aside, then,
notwithstanding that the certificates evidencing any shares
of $1.625 CONVERTIBLE Preferred Stock so called for
redemption shall not have been surrendered, the dividends
with respect to the shares so called shall cease to accrue
after the date fixed for redemption, such shares shall no
longer be deemed outstanding, all rights of the holders of
such shares as stockholders of the Company shall cease, and
all rights whatsoever with respect to the shares so called
for redemption (except the right of the holders to receive
the Redemption Price without interest upon surrender of their
certificates therefor) shall terminate.
Upon surrender in accordance with said notice of
the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the applicable
Redemption Price aforesaid. If fewer than all the
outstanding shares of $1.625 CONVERTIBLE Preferred Stock are
to be redeemed, shares to be redeemed shall be selected by
the Corporation from outstanding shares of $1.625 CONVERTIBLE
Preferred Stock not previously called for redemption by lot
or pro rata (as near as may be) or by any other method
determined by the Board of Directors of the Corporation in
its sole discretion to be equitable. If fewer than all the
shares represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.
In the event that the Corporation has failed to pay
accrued and unpaid dividends on the $1.625 CONVERTIBLE
Preferred Stock, it may not redeem less than all of the then
outstanding shares of the $1.625 CONVERTIBLE Preferred Stock
until all such accrued and unpaid dividends and the then
current quarterly dividends have been paid in full.
Notwithstanding the foregoing, if notice of
redemption has been given pursuant to this
[Section]SUBSECTION 5 and any holder of shares of $1.625
CONVERTIBLE Preferred Stock shall, prior to the close of
business on the redemption date, give written notice to the
Corporation pursuant to [Section]SUBSECTION 7(b) [hereof ]OF
THIS PARAGRAPH (i) of the conversion of any or all of the
shares to be redeemed held by such holder (accompanied by a
certificate or certificates for such shares, duly endorsed or
assigned to the Corporation), then (i) the Corporation shall
not have the right to redeem such shares, (ii) the conversion
of such shares to be redeemed shall become effective as
provided in [Section]SUBSECTION 7 OF THIS PARAGRAPH (i) and
(iii) any funds which shall have been deposited for the
payment of the Redemption Price for such shares shall be
returned to the Corporation immediately after such conversion
(subject to declared dividends payable to holders of shares
of $1.625 CONVERTIBLE Preferred Stock on the dividend payment
record date for such dividends being so payable, to the
extent set forth in [Section]SUBSECTION 7 [hereof ]OF THIS
PARAGRAPH (i), regardless of whether such shares are
converted subsequent to such dividend payment record date and
prior to the related dividend payment date).
6. Shares to be Retired. All shares of $1.625
CONVERTIBLE Preferred Stock purchased, redeemed, exchanged or
converted by the Corporation shall be retired and cancelled
and shall be restored to the status of authorized but
unissued shares of [p]Preferred [s]Stock, without designation
as to series, and may thereafter be reissued.
7. Conversion. Holders of shares of $1.625
CONVERTIBLE Preferred Stock shall have the right to convert
all or a portion of such shares into shares of Common Stock,
as follows:
(a) Subject to and upon compliance with the
provisions of this [Section]SUBSECTION 7, a holder of shares
of $1.625 CONVERTIBLE Preferred Stock shall have the right,
at such holder's option, at any time to convert all or any of
such shares into the number of fully paid and nonassessable
shares of Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) obtained by dividing the
aggregate liquidation preference of the shares to be
converted by the Conversion Price and by surrender of such
shares, such surrender to be made in the manner provided in
paragraph (b) of this [Section]SUBSECTION 7; provided,
however, that the right to convert shares called for
redemption pursuant to [Section]SUBSECTION 5 [hereof ]OF THIS
PARAGRAPH (i) shall terminate at the close of business on the
date fixed for such redemption. No share of $1.625
CONVERTIBLE Preferred Stock may be converted in part into
Common Stock.
(b) In order to exercise the conversion right, the
holder of each share of $1.625 CONVERTIBLE Preferred Stock to
be converted shall surrender the certificate representing
such share, duly endorsed or assigned to the Corporation or
in blank, at the office of the Transfer Agent in the Borough
of Manhattan, City of New York, accompanied by written notice
to the Corporation that the holder thereof elects to convert
such share of $1.625 CONVERTIBLE Preferred Stock. Unless the
shares issuable on conversion are to be issued in the same
name as the name in which such share of $1.625 CONVERTIBLE
Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the
holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid or are not
required to be paid).
Holders of shares of $1.625 CONVERTIBLE Preferred
Stock at the close of business on a dividend payment record
date shall be entitled to receive the dividend payable on
such shares on the corresponding dividend payment date
(except that holders of shares called for redemption on a
redemption date falling between the close of business on such
dividend payment record date and the opening of business on
the corresponding dividend payment date shall, in lieu of
receiving such dividend on the dividend payment date fixed
therefor, receive such dividend payment together with all
other accrued and unpaid dividends on the date fixed for
redemption, unless such holders convert such shares called
for redemption IN ACCORDANCE HEREWITH [pursuant to the
Certificate of Designations relating to the Preferred Stock]
) notwithstanding the conversion thereof following such
dividend payment record date and prior to such dividend
payment date. However, shares of $1.625 CONVERTIBLE
Preferred Stock surrendered for conversion during the period
between the close of business on any dividend payment record
date and the opening of business on the corresponding
dividend payment date (except shares of $1.625 CONVERTIBLE
Preferred Stock called for redemption on a redemption date
during such period) must be accompanied by payment of an
amount equal to the dividend payment with respect to such
shares of $1.625 CONVERTIBLE Preferred Stock presented for
conversion on such dividend payment date. A holder of shares
of $1.625 CONVERTIBLE Preferred Stock on a dividend payment
record date who (or whose transferee) surrenders any such
shares for conversion into shares of Common Stock on the
corresponding dividend payment date will receive the dividend
payable by the Corporation on such shares of $1.625
CONVERTIBLE Preferred Stock on such date and the converting
holder need not include payment in the amount of such
dividend upon surrender of shares of $1.625 CONVERTIBLE
Preferred Stock for conversion on the dividend payment date.
Except as provided in this paragraph, the Corporation shall
make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares of $1.625 CONVERTIBLE
Preferred Stock or for dividends on the shares of Common
Stock issued upon such conversion.
As promptly as practicable after the surrender of
certificates for shares of $1.625 CONVERTIBLE Preferred Stock
as aforesaid, the Corporation shall issue and shall deliver
at such office to such holder, or on such holder's written
order, a certificate or certificates for the number of shares
of Common Stock issuable upon the conversion of such shares
in accordance with the provisions of this [Section]SUBSECTION
7, and any fractional interest in respect of a share of
Common Stock arising upon such conversion shall be settled as
provided in paragraph (c) of this [Section]SUBSECTION 7.
Each conversion shall be deemed to have been
effected immediately prior to the close of business on the
date on which the certificates for shares of $1.625
CONVERTIBLE Preferred Stock shall have been surrendered and
such notice received by the Corporation as aforesaid, and the
person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the
holder or holders of record of the shares represented thereby
at such time on such date and such conversion shall be at the
Conversion Price in effect at such time on such date, unless
the stock transfer books of the Corporation shall be closed
on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the
close of business on the next succeeding day on which such
stock transfer books are open, but such conversion shall be
at the Conversion Price in effect on the date upon which such
shares shall have been surrendered and such notice received
by the Corporation. All shares of Common Stock delivered
upon conversion of the $1.625 CONVERTIBLE Preferred Stock
will upon delivery be duly and validly issued and fully paid
and nonassessable.
(c) In connection with the conversion of any
shares of $1.625 CONVERTIBLE Preferred Stock, no fractional
shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of the $1.625
CONVERTIBLE Preferred Stock. Instead of any fractional
interest in a share of Common Stock which would otherwise be
deliverable upon the conversion of a share of $1.625
CONVERTIBLE Preferred Stock, the Corporation shall pay to the
holder of such share an amount in cash (computed to the
nearest cent) equal to the Closing Price of Common Stock on
the Trading Date immediately preceding the date of conversion
multiplied by the fraction of a share of Common Stock
represented by such fractional interest. If more than one
share of $1.625 CONVERTIBLE Preferred Stock shall be
surrendered for conversion at one time by the same holder,
the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the
aggregate number of shares of $1.625 CONVERTIBLE Preferred
Stock so surrendered.
(d) The Conversion Price shall be adjusted from
time to time as follows:
(i) In case the Corporation shall after the
Issue Date (A) pay a dividend or make a
distribution on its Common Stock that is paid or
made (1) in shares of its Common Stock or (2) in
rights to purchase stock or other securities if
such rights are not separable from the Common Stock
except upon the occurrence of a contingency, (B)
subdivide or split its outstanding Common Stock
into a greater number of shares, (C) combine its
outstanding Common Stock into a smaller number of
shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the
Conversion Price in effect immediately prior
thereto shall be adjusted or (in the case of clause
(A)(2)) other provision shall be made so that the
holder of any share of $1.625 CONVERTIBLE Preferred
Stock thereafter surrendered for conversion shall
be entitled to receive the number of shares of
Common Stock of the Corporation and rights to
purchase stock or other securities which such
holder would have owned or have been entitled to
receive after the occurrence of any of the events
described above had such share been surrendered for
conversion immediately prior to the occurrence of
such event or the record date therefor, whichever
is earlier. In the event of the redemption of any
rights referred to clause (A), such holder shall
have the right to receive, in lieu of any such
rights, any cash, property or securities paid in
respect of such redemption; provided, however, that
if the value of such cash, property or securities
is less than $.10 per share of Common Stock, such
holder shall not be entitled to such cash, property
or securities. An adjustment made pursuant to this
subparagraph (i) shall become effective immediately
after the close of business on the record date for
determination of stockholders entitled to receive
such dividend or distribution in the case of a
dividend or distribution (except as provided in
paragraph (h) below) and shall become effective
immediately after the close of business on the
effective date in the case of a subdivision, split,
combination or reclassification. Any shares of
Common Stock issuable in payment of a dividend
shall be deemed to have been issued immediately
prior to the close of business on the record date
for such dividend for purposes of calculating the
number of outstanding shares of Common Stock under
clauses (ii) and (iii) below.
(ii) In case the Corporation shall issue after
the Issue Date rights or warrants to all holders of
Common Stock entitling them (for a period expiring
within 45 days after the issuance date) to
subscribe for or purchase Common Stock at a price
per share less than the Current Market Price per
share of Common Stock at the record date for the
determination of stockholders entitled to receive
such rights or warrants, then the Conversion Price
in effect immediately prior thereto shall be
adjusted to equal the price determined by
multiplying (A) the Conversion Price in effect
immediately prior to the date of issuance of such
rights or warrants by (B) a fraction, the numerator
of which shall be the sum of (1) the number of
shares of Common Stock outstanding on the date of
issuance of such rights or warrants (without giving
effect to any such issuance) and (2) the number of
shares which the aggregate proceeds from the
exercise of such rights or warrants for Common
Stock would purchase at such Current Market Price,
and the denominator of which shall be the sum of
(1) the number of shares of Common Stock
outstanding on the date of issuance of such rights
or warrants (without giving effect to any such
issuance) and (2) the number of additional shares
of Common Stock offered for subscription or
purchase. Such adjustment shall be made
successively whenever any such rights or warrants
are issued, and shall become effective immediately
after such record date. In determining whether any
rights or warrants entitle the holders of Common
Stock to subscribe for or purchase shares of Common
Stock at less than such Current Market Price, there
shall be taken into account any consideration
received by the Corporation upon issuance and upon
exercise of such rights or warrants, the value of
such consideration, if other than cash, to be
determined by the Board of Directors (whose
determination shall, if made in good faith, be
conclusive).
(iii) In case the Corporation shall pay a
dividend or make a distribution to all holders of
its Common Stock after the Issue Date of any shares
of capital stock of the Corporation or its
subsidiaries (other than Common Stock) or evidences
of its indebtedness or assets, including securities
(any of the foregoing being hereinafter in this
subparagraph (iii) called the "Securities"), but
excluding rights, warrants, dividends and
distributions referred to in subparagraphs (i) and
(ii) above, regular periodic cash dividends payable
out of the Corporation's surplus that may from time
to time be fixed by the Board of Directors and
dividends and distributions in connection with the
liquidation, dissolution or winding up of the
Corporation, then in each such case, the Conversion
Price shall be adjusted so that it shall equal the
price determined by multiplying (A) the Conversion
Price in effect on the record date mentioned below
by (B) a fraction, the numerator of which shall be
the Current Market Price per share of the Common
Stock on the record date mentioned below less the
then fair market value as determined by the Board
of Directors (whose determination shall, if made in
good faith, be conclusive) as of such record date
of the portion of the Securities applicable to one
share of Common Stock, and the denominator of which
shall be the Current Market Price per share of the
Common Stock on such record date; provided,
however, that in the event the then fair market
value (as so determined) of the portion of
Securities so distributed applicable to one share
of Common Stock is equal to or greater than the
Current Market Price per share of Common Stock on
the record date mentioned above, in lieu of the
foregoing adjustment, adequate provision shall be
made so that each holder of shares of $1.625
CONVERTIBLE Preferred Stock shall have the right to
receive the amount and kind of Securities such
holder would have received had such holder
converted each such share of $1.625 CONVERTIBLE
Preferred Stock immediately prior to the record
date for the distribution of the Securities.
Except as provided in paragraph (h) below, such
adjustment shall become effective immediately after
the record date for the determination of
stockholders entitled to receive such distribution.
(iv) Notwithstanding anything in subparagraph
(ii) above, if such rights or warrants shall by
their terms provide for an increase or increases
with the passage of time or otherwise in the price
payable to the Corporation upon the exercise
thereof, the Conversion Price upon any such
increase becoming effective shall forthwith be
readjusted (but to no greater extent than
originally adjusted by reason of such issuance or
sale) to reflect the same. Upon the expiration or
termination of such rights or warrants, if any such
rights or warrants shall not have been exercised,
then the Conversion Price shall forthwith be
readjusted and thereafter be the rate which it
would have been had an adjustment been made on the
basis that (A) the only rights or warrants so
issued or sold were those so exercised and they
were issued or sold for the consideration actually
received by the Corporation upon such exercise plus
the consideration, if any, actually received by the
Corporation for the granting of all such rights or
warrants whether or not exercised and (B) the
Corporation issued and sold a number of shares of
Common Stock equal to those actually issued upon
exercise of such rights or warrants, and such
shares were issued and sold for a consideration
equal to the aggregate exercise price in effect
under the rights or warrants actually exercised at
the respective dates of their exercise. For
purposes of subparagraph (ii), the aggregate
consideration received by the Corporation in
connection with the issuance of shares of Common
Stock or of rights or warrants shall be deemed to
be equal to the sum of the aggregate offering price
(before deduction of underwriting discounts or
commissions and expenses payable to third parties)
of all such securities plus the minimum aggregate
amount, if any, payable upon the exercise of such
rights or warrants into shares of Common Stock.
(v) No adjustment in the Conversion Price shall
be required unless such adjustment would require an
increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by
reason of this subparagraph (v) are not required to
be made shall be carried forward and taken into
account in any subsequent adjustment; and provided,
however, that any adjustment shall be required and
shall be made in accordance with the provisions of
this [Section]SUBSECTION 7 (other than this
subparagraph (v)) not later than such time as may
be required in order to preserve the tax-free
nature of a distribution to the holder of shares of
Common Stock. All calculations under this
[Section]SUBSECTION 7 shall be made to the nearest
cent (with $.005 being rounded upward) or to the
nearest 1/100th of a share (with .005 of a share
being rounded upward), as the case may be.
Anything in this paragraph (d) to the contrary
notwithstanding, the Corporation shall be entitled,
to the extent permitted by law, to make such
reductions in the Conversion Price, in addition to
those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order
that any stock dividend, subdivision of shares,
distribution of rights or warrants to purchase
stock or securities, or a distribution of other
assets or any other transaction which could be
treated as any of the foregoing transactions
pursuant to Section 305 of the Internal Revenue
Code of 1986, as amended, hereafter made by the
Corporation to its stockholders shall not be
taxable to such stockholders.
(e) In case the Corporation shall be a party to
any transaction (including without limitation a merger,
consolidation, statutory share exchange, sale of all or
substantially all of the Corporation's assets or
recapitalization of the Common Stock (each of the foregoing
being referred to as a "Transaction"), in each case as a
result of which shares of Common Stock shall be converted
into the right to receive stock, securities or other property
(including cash or any combination thereof), then the $1.625
CONVERTIBLE Preferred Stock remaining outstanding will
thereafter no longer be subject to conversion into Common
Stock pursuant to THIS [Section]SUBSECTION 7, but instead
shall be convertible into the kind and amount of shares of
stock and other securities and property receivable (including
cash) upon the consummation of such Transaction by a holder
of that number of shares or fraction thereof of Common Stock
into which one share of $1.625 CONVERTIBLE Preferred Stock
was convertible immediately prior to such Transaction. The
Corporation shall not be a party to any Transaction unless
the terms of such Transaction are consistent with the
provisions of this paragraph (e) and it shall not consent or
agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor
or purchasing entity, as the case may be, for the benefit of
the holders of the $1.625 CONVERTIBLE Preferred Stock which
will contain provisions enabling the holders of the $1.625
CONVERTIBLE Preferred Stock which remains outstanding after
such Transaction to convert into the consideration received
by holders of Common Stock at the Conversion Price
immediately after such Transaction. In the event that at any
time, as a result of an adjustment made pursuant to this
[Section]SUBSECTION 7, the $1.625 CONVERTIBLE Preferred Stock
shall become subject to conversion into any securities other
than shares of Common Stock, thereafter the number of such
other securities so issuable upon conversion of the shares of
$1.625 CONVERTIBLE Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the shares of $1.625 CONVERTIBLE Preferred Stock
contained in this [Section]SUBSECTION 7. The provisions of
this paragraph (e) shall similarly apply to successive
Transactions.
(f) If:
(i) the Corporation shall declare a dividend
(or any other distribution) on the Common Stock
that would cause an adjustment to the Conversion
Price of the $1.625 CONVERTIBLE Preferred Stock
pursuant to the terms of any of the paragraphs
above (including such an adjustment that would
occur but for the terms of the first sentence of
subparagraph (d)(v) above);
(ii) the Corporation shall authorize the
granting to the holders of the Common Stock of
rights or warrants to subscribe for or purchase any
shares of any class or any other rights or
warrants;
(iii) there shall be any reclassification or
change of the Common Stock (other than an event to
which paragraph (d)(i) of this [Section]SUBSECTION
7 applies) or any consolidation, merger or
statutory share exchange to which the Corporation
is a party and for which approval of any
stockholders of the Corporation is required, or the
sale or transfer of all or substantially all of the
assets of the Corporation or any Fundamental Change
or Change of Control (each as defined in
[Section]SUBSECTION 8 OF THIS PARAGRAPH (i) below);
or
(iv) there shall be a voluntary or
involuntary dissolution, liquidation or winding up
of the Corporation;
then, in addition to actions otherwise required to be taken
pursuant to [Section]SUBSECTION 8 OF THIS PARAGRAPH (i), the
Corporation shall cause to be filed with the Transfer Agent
and shall cause to be mailed to the holders of shares of the
$1.625 CONVERTIBLE Preferred Stock at their addresses as
shown on the stock records of the Corporation, as promptly as
possible, but at least 30 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which
a record is to be taken for the purpose of such dividend,
distribution or granting of rights or warrants, or, if a
record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend,
distribution or rights or warrants are to be determined or
(B) the date on which such reclassification, change,
consolidation, merger, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up is expected
to become effective or occur, 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, change, consolidation, merger, statutory
share exchange, sale, transfer, dissolution, liquidation or
winding up. Failure to give such notice or any defect
therein shall not affect the legality or validity of the
proceedings described in this [Section]SUBSECTION 7.
(g) Whenever the Conversion Price is adjusted as
herein provided, the Corporation shall promptly file with the
Transfer Agent an officers' certificate signed by the
President or a Vice President and the Chief Financial Officer
or the Secretary of the Corporation setting forth the
Conversion Price after such adjustment, the method of
calculation thereof and setting forth a brief statement of
the facts requiring such adjustment and upon which such
adjustment is based. If the calculation of the adjustment
requires a determination by the Board of Directors pursuant
to paragraph (d)(iii) of this [Section]SUBSECTION 7 or any
similar provision, such certificate shall include a copy of
the resolution of the Board of Directors relating to such
determination. Promptly after delivery of such certificate,
the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion
Price, the facts requiring such adjustment and upon which
such adjustment is based and the date on which such
adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price to the holder of each
share of $1.625 CONVERTIBLE Preferred Stock at such holder's
last address as shown on the stock records of the
Corporation.
(h) In any case in which paragraph (d) of this
[Section]SUBSECTION 7 provides that an adjustment shall
become effective immediately after a record date for an event
and the date fixed for conversion pursuant to THIS
[Section]SUBSECTION 7 occurs after such record date but
before the occurrence of such event, the Corporation may
defer until the actual occurrence of such event (i) issuing
to the holder of any share of $1.625 CONVERTIBLE Preferred
Stock surrendered for conversion the additional shares of
Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to
such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (c) of
this [Section]SUBSECTION 7.
(i) For purposes of this [Section]SUBSECTION 7,
the number of shares of Common Stock at any time outstanding
shall not include any shares of Common Stock then owned or
held by or for the account of the Corporation or any
corporation controlled by the Corporation.
(j) If any single action would require adjustment
pursuant to more than one paragraph of this
[Section]SUBSECTION 7, only one adjustment shall be made and
such adjustment shall be the amount of adjustment which has
the highest absolute value to the holders of the $1.625
CONVERTIBLE Preferred Stock.
(k) In case the Corporation shall take any action
affecting the Common Stock, other than action described in
this [Section]SUBSECTION 7, which in the opinion of the Board
of Directors would materially adversely affect the conversion
rights of the holders of the shares of $1.625 CONVERTIBLE
Preferred Stock, the Conversion Price for the $1.625
CONVERTIBLE Preferred Stock may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time,
as the Board of Directors may determine to be equitable in
the circumstances. Subject to the foregoing, there shall be
no adjustment of the Conversion Price in case of the issuance
of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as
specifically set forth in this [Section]SUBSECTION 7.
(l) The Corporation covenants that it will at all
times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued
shares of Common Stock or its issued shares of Common Stock
held in its treasury, or both, for the purpose of effecting
conversion of the $1.625 CONVERTIBLE Preferred Stock, the
full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of $1.625 CONVERTIBLE
Preferred Stock not theretofore converted. For purposes of
this paragraph (l), the number of shares of Common Stock
which shall be deliverable upon the conversion of all
outstanding shares of $1.625 CONVERTIBLE Preferred Stock
shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock deliverable upon
conversion of the $1.625 CONVERTIBLE Preferred Stock, the
Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted
Conversion Price.
The Corporation will endeavor to make the shares of
Common Stock required to be delivered upon conversion of the
$1.625 CONVERTIBLE Preferred Stock eligible for trading upon
the NASDAQ National Market System or upon any national
securities exchange upon which the Common Stock shall then be
traded, prior to such delivery.
Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon conversion of
the $1.625 CONVERTIBLE Preferred Stock, the Corporation will
endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the
delivery thereof by, any governmental authority.
(m) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes payable
in respect of the issue or delivery of the shares of $1.625
CONVERTIBLE Preferred Stock (or any other securities issued
on account of the $1.625 CONVERTIBLE Preferred Stock pursuant
hereto) or shares of Common Stock on conversion of the $1.625
CONVERTIBLE Preferred Stock pursuant hereto; provided,
however, that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of $1.625
CONVERTIBLE Preferred Stock (or any other securities issued
on account of the $1.625 CONVERTIBLE Preferred Stock pursuant
hereto) or shares of Common Stock in a name other than the
name in which the shares of $1.625 CONVERTIBLE Preferred
Stock with respect to which such Common Stock shares are
issued were registered and the Corporation shall not be
required to make any issue or delivery unless and until the
person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established, to
the reasonable satisfaction of the Corporation, that such tax
has been paid or is not required to be paid.
(n) The Corporation shall not take any action
which results in an adjustment of the number of shares of
Common Stock issuable upon conversion of a share of $1.625
CONVERTIBLE Preferred Stock if the total number of shares of
Common Stock issuable after such action upon conversion of
the $1.625 CONVERTIBLE Preferred Stock then outstanding,
together with the total number of shares of Common Stock then
outstanding, would exceed the total number of shares of
Common Stock then authorized under the RESTATED Certificate
of Incorporation. Subject to the foregoing, the Corporation
shall take all such actions as it may deem reasonable under
the circumstances to provide for the issuance of such number
of shares of Common Stock as would be necessary to allow for
the conversion from time to time, and taking into account
adjustments as herein provided, of outstanding shares of the
$1.625 CONVERTIBLE Preferred Stock in accordance with the
terms and provisions of the RESTATED Certificate of
Incorporation.
8. Special Conversion Rights.
(a) Upon the occurrence of a Change of Control
with respect to the Corporation, each holder of $1.625
CONVERTIBLE Preferred Stock shall have the right, at the
holder's option, for a period of 30 days after the mailing of
a notice by the Corporation to the holders of the $1.625
CONVERTIBLE Preferred Stock pursuant to [Section]SUBSECTION
12 [hereof ]OF THIS PARAGRAPH (I) that a Change of Control
has occurred, to convert all, but not less than all, of such
holder's $1.625 CONVERTIBLE Preferred Stock into Common Stock
of the Corporation at an adjusted Conversion Price per share
equal to the Special Conversion Price (as defined in
paragraph (e) below). The Corporation may, at its option, in
lieu of providing Common Stock upon any such special
conversion, pay to the holder cash equal to the Market Value
(as defined in paragraph (e) below) of the Common Stock
multiplied by the number of shares of Common Stock into which
such shares of $1.625 CONVERTIBLE Preferred Stock would have
been convertible immediately prior to such Change of Control
at an adjusted Conversion Price equal to the Special
Conversion Price. The special conversion right arising upon
a Change of Control shall only be applicable with respect to
the first Change of Control that occurs after the Issue Date
of any shares of $1.625 CONVERTIBLE Preferred Stock. $1.625
CONVERTIBLE Preferred Stock which becomes convertible
pursuant to a special conversion right shall, unless so
converted, remain convertible into the number of shares of
Common Stock that the holders of the $1.625 CONVERTIBLE
Preferred Stock would have owned immediately after the Change
of Control if the holders had converted the $1.625
CONVERTIBLE Preferred Stock immediately before the effective
date of the Change of Control, subject to adjustment as
provided in [Section]SUBSECTION 7 [hereof ]OF THIS PARAGRAPH
(I).
(b) Upon the occurrence of a Fundamental Change
with respect to the Corporation, each holder of $1.625
CONVERTIBLE Preferred Stock shall have a special conversion
right, at the holder's option, for a period of 30 days after
the mailing of a notice by the Corporation to the holders of
the $1.625 CONVERTIBLE Preferred Stock pursuant to
[Section]SUBSECTION 12 [hereof] OF THIS PARAGRAPH (I)that a
Fundamental Change has occurred, to convert all, but not less
than all, of such holder's $1.625 CONVERTIBLE Preferred Stock
into the kind and amount of cash, securities, property or
other assets receivable upon such Fundamental Change by a
holder of the number of shares of Common Stock into which
such shares of $1.625 CONVERTIBLE Preferred Stock would have
been convertible immediately prior to such Fundamental Change
at an adjusted Conversion Price equal to the Special
Conversion Price. The [Company]Corporation or a successor
corporation, as the case may be, may, at its option and in
lieu of providing the consideration as required above upon
such conversion, pay to the holder cash equal to the Market
Value of the Common Stock multiplied by the number of shares
of Common Stock into which such shares of $1.625 CONVERTIBLE
Preferred Stock would have been convertible immediately prior
to such Fundamental Change at an adjusted Conversion Price
equal to the Special Conversion Price. $1.625 CONVERTIBLE
Preferred Stock which becomes convertible pursuant to a
special conversion right shall, unless so converted, remain
convertible into the kind and amount of cash, securities,
property or other assets that the holders of the $1.625
CONVERTIBLE Preferred Stock would have owned immediately
after the Fundamental Change if the holders had converted the
$1.625 CONVERTIBLE Preferred Stock immediately before the
effective date of the Fundamental Change, subject to
adjustment as provided in [Section]SUBSECTION 7 [hereof] OF
THIS PARAGRAPH (I).
(c) Upon the occurrence of a Change of Control or
a Fundamental Change with respect to the Corporation, within
30 days after such occurrence, the Corporation shall mail to
each registered holder of $1.625 CONVERTIBLE Preferred Stock
a notice of such occurrence (the "Special Conversion Notice")
setting forth the following:
(i) the event constituting the Change of
Control or Fundamental Change;
(ii) the conversion date upon exercise of the
applicable special conversion right;
(iii) the Special Conversion Price;
(iv) the conversion rate (and related conversion
price) then in effect under [Section]SUBSECTION 7 and
the continuing conversion rights, if any, under
[Section]SUBSECTION 7 OF THIS PARAGRAPH (I);
(v) the name and address of the paying agent
and conversion agent;
(vi) that holders who want to convert shares of
$1.625 CONVERTIBLE Preferred Stock must satisfy the
requirements of [Section]SUBSECTION 7(b) OF THIS
PARAGRAPH (I) (specifying such requirements) and must
exercise such conversion right within the 30-day period
after the mailing of such notice by the Corporation;
(vii) that exercise of such conversion right
shall be irrevocable and no dividends on shares of
$1.625 CONVERTIBLE Preferred Stock (or portions thereof)
tendered for conversion shall accrue from and after the
conversion date; and
(viii) that the Corporation (or a successor
corporation, if applicable) may, at its option, elect to
pay cash (specifying the amount thereof per share) for
all shares of $1.625 CONVERTIBLE Preferred Stock
tendered for conversion.
(d) A holder of $1.625 CONVERTIBLE Preferred Stock
must exercise the special conversion right within the 30-day
period after the mailing of the Special Conversion Notice or
such special conversion right shall expire. Such right must
be exercised in accordance with [Section]SUBSECTION 7(b) OF
THIS PARAGRAPH (I) to the extent the procedures in
[Section]SUBSECTION 7(b) OF THIS PARAGRAPH (I) are consistent
with the special provisions of this [Section]SUBSECTION 8.
Exercise of such conversion right shall be irrevocable, to
the extent permitted by applicable law, and dividends on
$1.625 CONVERTIBLE Preferred Stock tendered for conversion
shall cease to accrue from and after the conversion date.
The conversion date with respect to the exercise of a special
conversion right arising upon a Change of Control or
Fundamental Change shall be the 30th day after the mailing of
the Special Conversion Notice. In taking any action in
connection with any Change of Control or Fundamental Change
or related special conversion right, the Company will comply
with all applicable federal securities laws and regulations.
(e) The following definitions shall apply to terms
used in this [Section]SUBSECTION 8:
(i) a "Change of Control" with respect to the
Corporation shall be deemed to have occurred at such
time as any person (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), including a
group (within the meaning of Rule 13d-5 under the
Exchange Act and any successor rule), together with any
of its Affiliates or Associates (as defined below),
files or becomes obligated to file a report (or any
amendment or supplement thereto) on Schedule 13D or 14D-
1 pursuant to the Exchange Act disclosing that such
person has become the beneficial owner of either (i)
66-2/3% or more of the shares of Common Stock of the
Corporation then outstanding or (ii) securities
representing 66-2/3% or more of the combined voting
power of the Voting Stock (as defined below) of the
Corporation then outstanding; provided, however, that a
Change of Control shall not be deemed to have occurred
with respect to any transaction that constitutes a
Fundamental Change. An "Affiliate" of a specified
person is a person that directly or indirectly controls,
or is controlled by, or is under common control with,
the person specified. An "Associate" of a person means
(1) any corporation or organization, other than the
Corporation or any subsidiary of the Corporation, of
which the person is an officer or partner or is,
directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities; (2) any trust or
estate in which the person has a substantial beneficial
interest or as to which the person serves as trustee or
in a similar fiduciary capacity; and (3) any relative or
spouse of the person, or any relative of the spouse, who
has the same home as the person or who is a director or
officer of the person or any of its parents or
subsidiaries. As used herein, a person shall be deemed
to have "beneficial ownership" with respect to, and
shall be deemed to "beneficially own," any securities of
the Corporation in accordance with Section 13 of the
Exchange Act and the rules and regulations (including
Rule 13d-3, Rule 13d-5 and any successor rules)
promulgated by the Securities and Exchange Commission
thereunder; provided, however, that a person shall be
deemed to have beneficial ownership of all securities
that any such person has a right to acquire whether such
right is exercisable immediately or only after the
passage of time and without regard to the 60-day
limitation referred to in Rule 13d-3.
(ii) a "Fundamental Change" with respect to
the Corporation means (i) the occurrence of any
transaction or event in connection with which 66-2/3% or
more of the outstanding Common Stock of the Corporation
shall be exchanged for, converted into, acquired for or
constitute solely the right to receive cash, securities,
property or other assets (whether by means of an
exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification,
recapitalization or otherwise) or (ii) the conveyance,
sale, lease, assignment, transfer or other disposal of
all or substantially all of the Corporation's property,
business or assets; provided, however that a Fundamental
Change shall not be deemed to have occurred with respect
to either of the following transactions or events: (a)
any transaction or event in which more than 50% (by
value as determined in good faith by the Board of
Directors of the Corporation) of the consideration
received by holders of Common Stock consists of
Marketable Stock (as defined below); or (b) any
consolidation or merger of the Corporation in which the
holders of Common Stock of the Corporation immediately
prior to such transaction own, directly or indirectly,
(1) 50% or more of the common stock of the sole
surviving corporation (or of the ultimate parent of such
sole surviving corporation) outstanding at the time
immediately after such consolidation or merger and (2)
securities representing 50% or more of the combined
voting power of the surviving corporation's Voting Stock
(as defined below) (or of the Voting Stock of the
ultimate parent of such surviving corporation)
outstanding at such time.
(iii) "Voting Stock" means, with respect to any
person, capital stock of such person having general
voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or
trustees of such person (irrespective of whether or not
at the time capital stock of any other class or classes
shall have or might have voting power by reason of the
happening of any contingency).
(iv) the "Special Conversion Price" shall mean
(i) the higher of (a) the Market Value of the Common
Stock or (b) $5.50 per share (which amount will, each
time the Conversion Price is adjusted as provided
elsewhere herein, be adjusted so that the ratio of such
dollar amount to the Conversion Price, after giving
effect to any such adjustment, shall always be the same
as the ratio of $5.50 to the initial Conversion Price,
without giving effect to any such adjustment) multiplied
by (ii) a ratio the numerator of which is $25.00 and the
denominator of which is the Redemption Price (or, if
prior to the date on which the Company may begin to
redeem the $1.625 CONVERTIBLE Preferred Stock, the
Redemption Price applicable commencing on such date).
(v) the "Market Value" of the Common Stock or
any other Marketable Stock shall be the average of the
Closing Price of the Common Stock or such other
Marketable Stock, as the case may be, for the five
Trading Dates ending on the last Trading Date preceding
the date of the Change of Control or Fundamental Change;
provided, however, that if the Marketable Stock is not
traded on any national securities exchange or similar
quotation system as described in the definition of
"Marketable Stock" during such period, then the Market
Value of such Marketable Stock shall be the average of
the Closing Price of such Marketable Stock during the
first five Trading Dates commencing with the first day
after the date on which such Marketable Stock was first
distributed to the general public and traded on the New
York Stock Exchange, the American Stock Exchange, the
NASDAQ National Market System or any similar system of
automated dissemination of quotations of securities
prices in the United States.
(vi) "Marketable Stock" shall mean Common
Stock or common stock of any corporation that is the
successor to all or substantially all of the business or
assets of the Corporation as a result of a Fundamental
Change (or of the ultimate parent of such successor),
which is (or will, upon distribution thereof, be) listed
or quoted on the New York Stock Exchange, the American
Stock Exchange, the NASDAQ National Market System or any
similar system of automated dissemination of quotations
of securities prices in the United States.
9. Ranking. (a) Any class or classes of stock of
the Corporation shall be deemed to rank:
(i) prior to the $1.625 CONVERTIBLE Preferred
Stock, as to dividends or as to the distribution of
assets upon liquidation, dissolution or winding up, if
the holders of such class shall be entitled to the
receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may
be, in preference or priority to the holders of $1.625
CONVERTIBLE Preferred Stock;
(ii) on a parity with the $1.625 CONVERTIBLE
Preferred Stock, as to dividends or as to the
distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per
share thereof be different from those of the $1.625
CONVERTIBLE Preferred Stock, if the holders of such
class of stock and the $1.625 CONVERTIBLE Preferred
Stock shall be entitled to the receipt of dividends or
of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in proportion to
their respective amounts of accrued and unpaid dividends
per share or liquidation prices, without preference or
priority of one over the other; and
(iii) junior to the $1.625 CONVERTIBLE Preferred
Stock, as to dividends or as to the distribution of
assets upon liquidation, dissolution or winding up, if
such stock shall be Common Stock or if the holders of
$1.625 CONVERTIBLE Preferred Stock shall be entitled to
receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may
be, in preference or priority to the holders of shares
of such stock.
(b) The Preferred Stock shall rank on a parity
with the Class A Stock, as to dividends and as to the
distribution of assets upon liquidation, dissolution or
winding up, as the case may be, in proportion to their
respective amounts of accrued and unpaid dividends per share
or liquidation prices per share.
10. Voting. (a) Except as herein provided or as
otherwise from time to time required by law, holders of
$1.625 CONVERTIBLE Preferred Stock shall have no voting
rights. Whenever, at any time or times, dividends payable on
the shares of $1.625 CONVERTIBLE Preferred Stock at the time
outstanding have not been paid in an aggregate amount equal
to at least six quarterly dividends on such shares (whether
or not consecutive), the holders of $1.625 CONVERTIBLE
Preferred Stock shall have the right, voting separately as a
class with holders of the [Corporation's] Class A [(Cumulative
Convertible) Capital Stock, no par value (the "Class A
Stock")] and the holders of shares of any one or more other
series of stock ranking on a parity as to dividends with the
$1.625 CONVERTIBLE Preferred Stock upon which like voting
rights have been conferred and are exercisable (the $1.625
CONVERTIBLE Preferred Stock, the Class A Stock, and any such
other stock, collectively for purposes hereof, the "Defaulted
Preferred Stock"), to elect two directors of the Corporation
at the Corporation's next annual meeting of stockholders and
at each subsequent annual meeting of stockholders; provided,
however, that if such voting rights shall become vested more
than 90 days or less than 20 days before the date prescribed
for the annual meeting of stockholders, thereupon the holders
of the shares of Defaulted Preferred Stock shall be entitled
to exercise their voting rights at a special meeting of the
holders of shares of Defaulted Preferred Stock as set forth
herein. At elections for such directors, each holder of
Preferred Stock shall be entitled to one vote for each share
held (the holders of shares of any other series of Defaulted
Preferred Stock ranking on such a parity being entitled to
such number of votes, if any, for each share of stock held as
may be granted to them). Upon the vesting of such right of
the holders of Defaulted Preferred Stock, the then authorized
number of members of the Board of Directors shall
automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of outstanding
Defaulted Preferred Stock as hereinafter set forth. The
right of holders of Defaulted 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 Defaulted Preferred Stock shall have
been paid, or declared and funds set aside for payment in
full, at which time such right shall terminate, except as
herein or by law expressly provided, subject to revesting in
the event of each and every subsequent default of the
character above mentioned. As long as any shares of $1.625
CONVERTIBLE Preferred Stock shall remain outstanding, the
number of directors of the Corporation (excluding any
directors elected by vote of the holders of shares of
Defaulted Preferred Stock) elected at any meeting of
stockholders of the Corporation at which directors are to be
elected shall not be such as would cause the number of
directors in office after such meeting (excluding any
directors elected by vote of the holders of shares of
Defaulted Preferred Stock) to exceed the number which is two
less than the maximum number of directors permitted by the
RESTATED Certificate of Incorporation.
(b) Whenever such voting right shall have vested,
such right may be exercised initially either at a special
meeting of the holders of shares of Defaulted Preferred Stock
called as hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at such meetings, or by the written consent of
such holders pursuant to Section 228 of the General
Corporation Law of the State of Delaware.
(c) At any time when such voting right shall have
vested in the holders of shares of Defaulted Preferred Stock
entitled to vote thereon, and if such right shall not already
have been initially exercised, an officer of the Corporation
shall, upon the written request of 10% of the holders of
record of shares of such Defaulted Preferred Stock then
outstanding, addressed to the Secretary of the Corporation,
call a special meeting of holders of shares of such Defaulted
Preferred Stock. Such meeting shall be held at the earliest
practicable date upon the notice to holders of Defaulted
Preferred Stock given as required for annual meetings of
stockholders at the place for holding annual meetings of
stockholders of the corporation or, if none, at a place
designated by the Secretary of the Corporation. If such
meeting shall not be called by the proper officers of the
Corporation within 30 days after the personal service of such
written request upon the Secretary of the Corporation, or
within 30 days after mailing the same within the United
States, by registered mail, addressed to the Secretary of the
Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal
authorities), then the holders of record of 10% of the shares
of Defaulted Preferred Stock then outstanding may designate
in writing any person to call such meeting at the expense of
the Corporation, and such meeting may be called by such
person so designated upon the notice to holders of Defaulted
Preferred Stock given as required for annual meetings of
stockholders and shall be held at the same place as is
elsewhere provided in this paragraph. Any holder of shares
of Defaulted Preferred Stock then outstanding that would be
entitled to vote at such meeting shall have access to the
stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to the
provisions of this paragraph. Notwithstanding the provisions
of this paragraph, however, no such special meeting shall be
called or held during a period within 45 days immediately
preceding the date fixed for the next annual meeting of
stockholders.
(d) The directors elected as provided herein shall
serve until the next annual meeting or until their respective
successors shall be elected and shall qualify; any director
elected by the holders of Defaulted Preferred Stock may be
removed without cause by, and shall not be removed without
cause otherwise than by, the vote of the holders of a
majority of the outstanding shares of the Defaulted Preferred
Stock who are entitled to participate in such election of
directors, voting separately as a class, at a meeting called
for such purpose or by written consent as permitted by law
and the RESTATED Certificate of Incorporation and By-laws of
the Corporation. If the office of any director elected by
the holders of Defaulted Preferred Stock, voting separately
as a class, becomes vacant by reason of death, resignation,
retirement, disqualification or removal from office or
otherwise, the remaining director elected by the holders of
Defaulted Preferred Stock, voting separately as a class, may
choose a successor who shall hold office for the unexpired
term in respect of which such vacancy occurred. Upon any
termination of the right of the holders of Defaulted
Preferred Stock to vote for directors as herein provided, the
term of office of all directors then in office elected by the
holders of Defaulted Preferred Stock, voting separately as a
class, shall terminate immediately. Whenever the terms of
office of the directors elected by the holders of Defaulted
Preferred Stock, voting separately as a class, shall so
terminate and the special voting powers vested in the holders
of Defaulted Preferred Stock shall have expired, the number
of directors shall be reduced by the number of directors
whose term of office shall have terminated as provided
hereinabove.
(e) So long as any shares of the $1.625
CONVERTIBLE Preferred Stock remain outstanding, the
affirmative vote or consent of the holders of at least 66-
2/3% of the shares of $1.625 CONVERTIBLE Preferred Stock
outstanding at the time given either by written consent or in
person or by proxy at any special or annual meeting, shall be
necessary to permit, effect or validate any one or more of
the following:
(i) the authorization, creation or issuance, or
any increase in the authorized or issued amount, of any
class or series of stock, or any security convertible
into stock of such class or series, ranking prior to the
$1.625 CONVERTIBLE Preferred Stock as to dividends or
the distribution of assets upon liquidation, dissolution
or winding up;
(ii) the amendment, alteration or repeal, whether
by merger, consolidation or otherwise, of any of the
provisions of the RESTATED Certificate of Incorporation
[(including the Certificate of Designations relating to
the Preferred Stock)] which would adversely affect any
right, preference, privilege or voting power of the
$1.625 CONVERTIBLE Preferred Stock or of the holders
thereof; provided, however, that any increase in the
amount of authorized preferred stock or the creation and
issuance of other series of preferred stock, or any
increase in the amount of authorized shares of any such
other series of preferred stock, in each case ranking on
a parity with or junior to the $1.625 CONVERTIBLE
Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to
adversely affect such rights, preferences, privileges or
voting powers; or
(iii) the authorization of any reclassification of
the $1.625 CONVERTIBLE Preferred Stock.
The foregoing voting provisions shall not apply if,
at or prior to the time when the act with respect to which
such vote would otherwise be required shall be effected, all
outstanding shares of $1.625 CONVERTIBLE Preferred Stock
shall have been redeemed.
11. Record Holders. The Corporation and the
Transfer Agent may deem and treat the record holder of any
shares of $1.625 CONVERTIBLE Preferred Stock as the true and
lawful owner thereof for all purposes, and neither the
Corporation nor the Transfer Agent shall be affected by any
notice to the contrary.
12. Notice. Except as may otherwise be provided
by law or provided for herein, all notices referred to herein
shall be in writing, and all notices hereunder shall be
deemed to have been given upon receipt, in the case of a
notice of conversion given to the Corporation as contemplated
in [Section]SUBSECTION 7(b) [hereof] OF THIS PARAGRAPH (I),
or, in all other cases, upon the earlier of receipt of such
notice or three Business Days after the mailing of such
notice if sent by registered mail (unless first-class mail
shall be specifically permitted for such notice under the
terms hereof) with postage prepaid, addressed: if to the
Corporation, to its offices at 901 Threadneedle, Suite 200,
Houston, Texas 77079-2902 (Attention: Corporate Secretary)
or other agent of the Corporation designated as permitted
hereby; or, if to any holder of the $1.625 CONVERTIBLE
Preferred Stock, to such holder at the address of such holder
of the $1.625 CONVERTIBLE Preferred Stock as listed in the
stock record books of the Corporation (which shall include
the records of the Transfer Agent), or to such other address
as the Corporation or holder, as the case may be, shall have
designated by notice similarly given.
[Fifth. The minimum amount of capital with which the
corporation will commence business is One Thousand Dollars
($1,000.00).
Sixth. The names and places of residence of each of the
incorporators are as follows:
<TABLE>
<CAPTION>
Name Place of Residence
------------ --------------------
<S> <C>
A. D. Atwell Wilmington, Delaware
H. C. Broadt Wilmington, Delaware
H. E. Prange Wilmington, Delaware
</TABLE>
Seventh. The Corporation is to have perpetual existence.
Eighth. The private property of the stockholders shall not
be subject to the payment of corporate debts to any extent
whatsoever.
Ninth]FIFTH.
Section l.
(a) The number of directors which constitute the whole
board shall not be less than three persons nor more
than eighteen persons. The exact number of
directors shall be determined from time to time by
the Board of Directors pursuant to a resolution
adopted by a majority of the entire Board of
Directors.
(b) Commencing at the Annual Meeting of Stockholders
held in 1982, the Board of Directors shall be
divided into three classes, Class I, Class II and
Class III, with respect to their terms of office.
All classes shall be as nearly equal in number as
possible. Subject to such limitations, when the
number of directors is changing, any newly-created
directorships or any decrease in directorships
shall be apportioned among the classes by action of
the Board of Directors or the stockholders.
(c) The terms of office of the directors initially
classified shall be as follows: that of Class I
shall expire at the Annual Meeting of Stockholders
to be held in 1983; that of Class II shall expire
at the Annual Meeting of Stockholders to be held in
1984; and that of Class III shall expire at the
Annual Meetings of Stockholders to be held in 1985.
At each Annual Meeting of Stockholders after such
initial classification, directors to replace those
whose terms expire at such Annual Meeting shall be
elected to hold office until the third succeeding
Annual Meeting.
(d) Vacancies in the Board of Directors and newly
created directorships resulting from any increase
in the authorized number of directors may be filled
for the full term or any remainder of a full term
by a majority of the directors then in office,
although less than a quorum, or by a sole remaining
director.
(e) Notwithstanding anything contained in this RESTATED
Certificate of Incorporation or the By-laws of the
Corporation to the contrary (and notwithstanding
the fact that a lesser percentage may be specified
by law, this RESTATED Certificate of Incorporation
or the By-laws of the Corporation), the affirmative
vote of the holders of at least eighty percent
(80%) of the outstanding shares of capital stock
entitled to vote for the election of directors,
voting together as a single class, shall be
required to amend, modify or repeal the provisions
set forth in Section l of this Article
[Ninth]FIFTH.
Section 2. All Corporate powers shall be exercised by the
Board of Directors except as otherwise provided by statute or
by this RESTATED Certificate of Incorporation.
In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
(a) To fix, determine and vary from time to time the amount
to be maintained as surplus and the amount or amounts to
be set apart as working capital or for any other lawful
purposes.
(b) To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any
proper purposes or to abolish any such reserve in the
manner in which it was created.
(c) To make, amend, alter, change, add to or repeal by-laws
for the Corporation, without any action on the part of
the stockholders, but subject to the power of the
holders of stock having voting power to alter, amend or
repeal the by-laws made by the Board of Directors.
(d) To authorize and cause to be executed mortgages and
liens, without limit as to amount, upon the real and
personal property of the Corporation, including the
securities of other corporations owned by the Corpora-
tion, without any action or consent of stockholders.
(e) To authorize the payment of fees for attendance at
meetings of the Board of Directors, of the Executive
Committee and of other committees, and to determine the
amount of such fees.
(f) To designate by resolution passed by a majority of the
total number of directors at the time provided for, one
or more committees, each committee to consist of two or
more of the directors of the Corporation, which to the
extent provided in the resolution or in the by-laws of
the Corporation shall have and may exercise the powers
of the Board of Directors in the management of the
business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to
all papers which may require it.
[Tenth]SIXTH. A director of the Corporation shall not be
disqualified by his office from dealing or contracting with
the Corporation either as a vendor, purchaser or otherwise,
nor shall any transaction or contract of the Corporation be
void or voidable by reason of the fact that any director or
any firm of which any director is a member or any corporation
of which any director is a shareholder, officer or director,
is in any way interested in such transaction or contract,
provided that such transaction or contract is or shall be
authorized, ratified or approved either (1) by a vote of a
majority of a quorum of the Board of Directors, without
counting in such majority or quorum any director so
interested or member of a firm so interested, or a
stockholder, officer or director of a corporation so
interested, or (2) by the written consent, or by the vote at
any stockholders"' meeting, of the holders of record of a
majority of all the outstanding shares of stock of the
Corporation entitled to vote; nor shall any director be
liable to account to this [c]Corporation for any profits
realized by or from or through any such transaction or
contract of the Corporation authorized, ratified or approved
as aforesaid by reason of the fact that he, or any firm of
which he is a member, or any corporation of which he is a
shareholder, officer or director, was interested in such
transaction or contract. Nothing herein contained shall
create liability in the events above described or prevent the
authorization, ratification or approval of such transactions
or contracts in any other manner permitted by law.
[Eleventh]SEVENTH. Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any
class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the
application in a summary way of this Corporation or of any
creditor or stockholder thereof, or on the application of any
receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware
Code, or on the application of trustees in dissolution or of
any receiver or receivers appointed for this corporation
under the provision of section 279 of Title 8 of the Delaware
Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree
to any compromise or arrangement and to any reorganization of
this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the
creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation,
as the case may be, and also on this Corporation.
[Twelfth]EIGHTH. Elections of directors need not be by
ballot unless the By-laws of the Corporation shall so
provide.
[Thirteenth]NINTH. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in
this RESTATED Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this
reservation.
[Fourteenth]TENTH.
Section l. Elimination of Certain Liability of
Directors. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an
improper personal benefit.
Section 2. Indemnification and Insurance.
(a) Right to Indemnification. Each person who was or
is made a party or is threatened to be made a party
to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative
or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of
whom he or she is the legal representative, is or
was a director or officer, of the Corporation or
is, or was serving at the request of the
Corporation 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,
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 indemnified and held harmless by
the Corporation to the fullest extent authorized by
the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that
such amendment permits the Corporation to provide
broader indemnification rights than said law
permitted the Corporation to provide prior to such
amendment), against all expense (including
attorneys' fees), judgments, fines and amounts paid
or to be paid in settlement), actually and
reasonably incurred or suffered by such person in
connection therewith and such indemnification shall
continue as to a person who has ceased to be a
director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors
and administrators; provided however, that, except
as provided in paragraph (b) hereof, the
corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or
part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the
board of directors of the Corporation. The right
to indemnification conferred in this Section shall
be a contract right and shall include the right to
be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its
final disposition; provided, however, that, if the
Delaware General Corporation Law requires, the
payment of such expenses incurred by a director or
officer in his or her capacity as a director or
officer (and not in any other capacity in which
service was or is rendered by such person while a
director or officer, including, without limitation,
service to an employee benefit plan) in advance of
the final disposition of a proceeding, shall be
made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it
shall ultimately be determined that such director
or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by
action of its Board of Directors, provide
indemnification to employees and agents of the
Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under
paragraph (a) of this Section is not paid in full
by the Corporation within thirty days after a
written claim has been received by the Corporation,
the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or
in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It
shall be a defense to any such action (other than
an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of
its final disposition where the required
undertaking, if any is required, has been tendered
to the Corporation) that the claimant has not met
the standards of conduct which make it permissible
under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the
failure of the Corporation (including its board of
directors, independent legal counsel, or its
stockholders) to have made a determination prior to
the commencement of such action that
indemnification of the claimant is proper in the
circumstances because he or she has met the
applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual
determination by the Corporation (including its
board of directors, independent legal counsel, or
its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a
defense to the action or create a presumption that
the claimant has not met the applicable standard of
conduct.
(c) Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses
incurred in defending a proceeding in advance of
its final disposition conferred in this Article
[Fourteenth]TENTH shall not be exclusive of any
other right which any person may have or hereafter
acquired under any statute, provision of the
RESTATED Certificate of Incorporation, By-Law,
agreement, vote of stockholders or disinterested
directors or otherwise.
(d) Insurance. The Corporation may maintain insurance,
at its expense, to protect itself and any director,
officer, employee or agent of the Corporation or
another corporation, partnership, joint venture,
trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation
would have the power to indemnify such person
against such expense, liability or loss under the
Delaware General Corporation Law.
[Fifteenth]ELEVENTH.
Section 1. Vote Required for Certain Business
Combinations.
A. Higher vote for Certain Business Combinations. In
addition to any affirmative vote required by law or
this RESTATED Certificate of Incorporation, and
except as otherwise expressly provided in Section 2
of this Article [Fifteenth]ELEVENTH:
(i) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (a)
any Interested Stockholder (as hereinafter defined)
or (b) any other corporation (whether or not itself
an Interested Stockholder) which is, or after such
merger or consolidation would be, an[d] Affiliate
(as hereinafter defined) of an Interested
Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction
or a series of transactions) to or with any
Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate
Fair Market Value (as hereinafter defined) of
$10,000,000 or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series
of transactions) of any securities of the
Corporation or any Subsidiary to any
Interested Stockholder or any Affiliate of any
Interested Stockholder in exchange for cash,
securities or other property (or a combination
thereof) having an aggregate Fair Market Value
of $10,000,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested Stock-
holder or any Affiliate of any Interested Stock-
holder; or
(v) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or
otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of
increasing the proportionate share of the
outstanding shares of any class of equity or
convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate of any
Interested Stockholder;
shall require the affirmative vote of the holders of at
least 80% of the voting power of the then outstanding
shares of capital stock of the Corporation entitled to
vote generally in the election of directors, excluding
any Preferred Stock issued after May 10, 1983 which the
Board of Directors determines to exclude from the
operation of this Article (the "Voting Stock"), voting
together as a single class (it being understood that for
purposes of this Article [Fifteenth]ELEVENTH, each share
of Voting Stock shall have the number of votes granted
to it pursuant to Article Fourth of this RESTATED
Certificate of Incorporation). Such affirmative vote
shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be
specified, by law or in any agreement with any national
securities exchange or otherwise.
B. Definition of "Business Combination." The term
"Business Combination" as used in this Article
[Fifteenth]ELEVENTH shall mean any transaction which is
referred to in any one or more of clauses (i) through
(v) of paragraph A of this Section 1.
Section 2. When Higher Vote is Not Required.
The provisions of Section 1 of this Article
[Fifteenth]ELEVENTH shall not be applicable to any particular
Business Combination, and such Business Combination shall
require only such affirmative vote as is required by law and
any other provision of this RESTATED Certificate of
Incorporation, if all of the conditions specified in either
of the following paragraphs A or B are met.
A. Approval by Continuing Directors. The Business Combi-
nation shall have been approved by a majority of the
Continuing Directors (as hereinafter defined).
B. Price, Form of Consideration and Procedure Requirements:
All of the following conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the
date of the consummation of the Business
Combination (the "Consummation Date") of the
consideration other than cash to be received per
share by holders of Common Stock in such Business
Combination shall be an amount at least equal to
the higher of the following (it being intended that
the requirements of this paragraph B(i) shall be
required to be met with respect to all shares of
Common Stock outstanding, whether or not the
Interested Stockholder has previously acquired any
shares of the Common Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer
taxes and soliciting dealers["]' fees) paid by
the Interested Stockholder for any shares of
Common Stock acquired by it (1) within the
two-year period immediately prior to the first
public announcement of the proposal of the
Business Combination (the "Announcement Date")
or (2) in the transaction in which it became
an Interested Stockholder, whichever is
higher, plus interest compounded annually from
the date on which the Interested Stockholder
became an Interested Stockholder (the
"Determination Date") through the Consummation
Date at the prime rate of interest of The
Chase Manhattan Bank, N.A. (or other major
bank headquartered in New York City selected
by a majority of the Continuing Directors)
from time to time in effect in New York City,
less the aggregate amount of any cash
dividends paid, and the Fair Market Value of
any dividends paid in other than cash, on each
share of Common Stock from the Determination
Date through the Consummation Date in an
amount up to but not exceeding the amount of
such interest payable per share of Common
Stock; or
(b) the Fair Market Value per share of Common
Stock on the first trading day after the
Announcement Date.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the Consummation Date of the
consideration other than cash to be received per
share by holders of shares of any class of
outstanding Voting Stock, other than the Common
Stock, in such Business Combination shall be an
amount at least equal to the higher of the
following (it being intended that the requirements
of this paragraph B(ii) shall be required to be met
with respect to every such other class of
outstanding Voting Stock (excluding anY[d]
Preferred Stock issued after May 10, 1983 which the
Board of Directors determines to exclude from the
operation of this Article), whether or not the
Interested Stockholder has previously acquired any
shares of a particular class of Voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer
taxes and soliciting dealers"' fees) paid by
the Interested Stockholder for any shares of
such class of Voting Stock acquired by it (1)
within the two-year period immediately prior
to the Announcement Date or (2) in the
transaction in which it became an Interested
Stockholder, whichever is higher, plus
interest compounded annually from the Deter-
mination Date through the Consummation Date at
the prime rate of interest of The Chase
Manhattan Bank, N.A. (or other major bank
headquartered in New York City selected by a
majority of the Continuing Directors) from
time to time in effect in New York City, less
the aggregate amount of any cash dividends
paid, and the Fair Market Value of any
dividends paid in other than cash, on each
share of such class of Voting Stock from the
Determination Date through the Consummation
Date in an amount up to but not exceeding the
amount of such interest payable per share of
such class of Voting Stock; or
(b) The Fair Market Value per share of such class
of Voting Stock on the first trading day after
the Announcement Date; or
(c) (if applicable) the highest preferential
amount per share to which the holders of
shares of such class of Voting Stock are
entitled in the event of any voluntary or
involuntary liquidation, dissolution or
winding up of the Corporation, whichever is
higher.
(iii) The consideration to be received by holders of a
particular class of outstanding Voting Stock shall
be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such
class of Voting Stock. If the Interested
Stockholder has paid for shares of any class of
Voting Stock with varying forms of consideration,
the form of consideration for such class of Voting
Stock shall be either cash or the form used to
acquire the largest number of shares of such class
of Voting Stock previously acquired by it.
(iv) After such Interested Stockholder has become an
Interested Stockholder and prior to the consumma-
tion of such Business Combination: (a) except as
approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay
at the regular date therefor any full quarterly
dividends (whether or not cumulative) on the
outstanding Preferred Stock; (b) there shall have
been (l) no reduction in the annual rate of
dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common
Stock), except as approved by a majority of the
Continuing Directors, and (2) an increase in such
annual rate of dividends as necessary to reflect
any reclassification (including any reverse stock
split), recapitalization, reorganization or any
similar transaction which has the effect of
reducing the number of outstanding shares of the
Common Stock, unless the failure so to increase
such annual rate is approved by a majority of the
Continuing Directors; and (c) such Interested
Stockholder shall have not become the beneficial
owner of any additional shares of Voting Stock
except as part of the transaction which results in
such Interested Stockholder becoming an Interested
Stockholder.
(v) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder
shall not have received the benefit, directly or
indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax
credits or other tax advantages provided by the
Corporation, whether in anticipation of or in
connection with such Business Combination or
otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with
the requirements of the Securities Exchange Act of
1934 and the rules and regulations thereunder (or
any subsequent provisions replacing such Act, rules
or regulations) shall be mailed to public
stockholders of the Corporation at least 30 days
prior to the consummation of such Business Combi-
nation (whether or not such proxy or information
statement is required to be mailed pursuant to such
Act or subsequent provisions).
Section 3. Certain Definitions.
For the purposes of this Article [Fifteenth]ELEVENTH:
A. A "person" shall mean any individual, firm, corporation
or other entity.
B. "Interested Stockholder" shall mean any person (other
than the Corporation or any Subsidiary (as hereinafter
defined) and other than any profit sharing, thrift,
employee stock ownership, retirement or other employee
benefit plan of the Company or any Subsidiary or any
trustee of, or the fiduciary with respect to any such
plan when acting in such capacity) who or which:
(i) is the beneficial owner (as hereinafter defined),
directly or indirectly, or more than 10 percent
(10%) of the Voting Stock; or
(ii) is an Affiliate (as hereinafter defined) of the
Corporation and at any time within the two-year
period immediately prior to the date in question
was the beneficial owner, directly or indirectly,
of ten percent (10%) or more of the Voting Stock;
or
(iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time
within the two-year period immediately prior to the
date in question beneficially owned by any
Interested Stockholder, if such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving
a public offering within the meaning of the
Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially
owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether
such right is exercisable immediately or only after
the passage o[r]F time), pursuant to any agreement,
arrangement or understanding or upon the exercise
of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote
pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which such
person or any of its Affiliates or Associates has
any agreement, arrangement or understanding of the
purpose of acquiring, holding, voting or disposing
of any shares of Voting Stock.
D. For the purposes of determining whether a person is an
Interested Stockholder pursuant to paragraph B of this
Section 3, the number of shares of Voting Stock deemed
to be outstanding shall include shares deemed owned
through application of paragraph C of this Section 3 but
shall not include any other shares of Voting Stock which
may be issuable pursuant to any agreement, arrangement
or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on March l, 1983.
F. "Subsidiary" means any corporation of which a majority
of any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that
for the purposes of the definition of Interested
Stockholder set forth in paragraph B of this Section 3,
the term "Subsidiary" shall mean only a corporation of
which a majority of each class of equity security is
owned, directly or indirectly, by the Corporation.
G. "Continuing Director" means any member of the Board of
Directors of the Corporation (the "Board") who is
unaffiliated with the Interested Stockholder and was a
member of the Board prior to the time that the
Interested Stockholder became an Interested Stockholder,
and any successor of a Continuing Director who is
unaffiliated with the Interested Stockholder and is
recommended or elected to succeed a Continuing Director
by a majority of Continuing Directors then on the Board.
H. "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period
immediately preceding the date in question of a share of
such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted
on the Composite tape, on the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on the
principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which such
stock is listed, or, if such stock is not listed on any
such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day
period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no
such quotations are available, the fair market value on
the date in question of a share of such stock as
determined by the Board in good faith: and (ii) in the
case of property other than cash or stock, the fair
market value of such property on the date in question as
determined by a majority of the Continuing Directors in
good faith.
I. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other
than cash to be received" as used in paragraphs B(i) and
(ii) of Section 2 of this Article [Fifteenth]ELEVENTH
shall include the shares of Common Stock and/or the
shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
Section [5]4. Certain Determinations.
The Continuing Directors of the Corporation shall have the
power and duty to determine for the purposes of this Article
[Fifteenth]ELEVENTH, on the basis of information known to
them after reasonable inquiry, (A) whether a person is an
Interested Stockholder, (B) the number of shares of Voting
Stock beneficially owned by any person, (C) whether a person
is an Affiliate or Associate of another, and (D) whether the
assets which are the subject of any Business Combination
have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary
in any Business Combination has, an aggregate Fair Market
Value of $10,000,000 or more.
Section [6]5. No Effect on Fiduciary Obligations of
Interested Stockholders.
Nothing contained in this Article [Fifteenth]ELEVENTH shall
be construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Section [7]6. Amendment, Repeal, etc.
Notwithstanding any other provisions of this RESTATED
Certificate of Incorporation or the By-Laws of the
Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this RESTATED Certificate
of Incorporation or the By-Laws of the Corporation), the
affirmative vote of the holders of eighty percent (80%) or
more of the voting power of the shares of the then
outstanding Voting Stock, voting together as a single class,
shall be required to amend, modify or repeal this Article
[Fifteenth]ELEVENTH of this RESTATED Certificate of
Incorporation.
[Sixteenth]TWELFTH. Notwithstanding any other provisions of
this RESTATED Certificate of Incorporation or the By-laws of
the Corporation to the contrary, no action required to be
taken or which may be taken at any annual or special meeting
of stockholders of the Corporation may be taken by written
consent without a meeting except (1) any action which may be
taken solely upon the vote or consent of holders of the Class
A [Capital] Stock or any series of Preferred Stock, or (2)
any action taken upon the signing of a consent in writing,
setting forth the action so taken, by all the stockholders of
the Corporation entitled to vote thereon.
Notwithstanding any other provisions of this RESTATED
Certificate of Incorporation or the By-laws of the
Corporation to the contrary (and notwithstanding the fact
that a lesser percentage may be specified by law, this
RESTATED Certificate of Incorporation or the By-laws of the
Corporation), the affirmative vote of the holders of eighty
percent (80%) or more of the outstanding shares of capital
stock entitled to vote for the election of directors, voting
together as a single class, shall be required to amend,
modify or repeal this Article [Sixteenth]TWELFTH.
[We, the undersigned, being each of the incorporators
hereinbefore named, for the purpose of forming a corporation
pursuant to the General Corporation Law of the State of
Delaware, do make this certificate, hereby declaring and
certifying that the facts herein stated are true, and
accordingly have hereunto set our hands and seal this 19th
day of October, A.D., 1955.]
[A. D. Atwell (Seal)]
[H. C. Broadt (Seal)]
[H. E. Prange (Seal)]
[State Of Delaware )
) ss.
County Of New Castle )
Be it remembered that on this 19th day of October, A.D.,
1955, personally came before me, a Notary Public for the
State of Delaware, A. C. Atwell, H. C. Broadt and H. E.
Prange, all of the parties to the foregoing certificate of
incorporation, known to me personally to be such, and
severally acknowledged the said certificate to be the act and
deed of the signers respectively and that the facts therein
are truly set forth.
Given under my hand and seal of office the day and year
aforesaid.]
[M. Ruth Mannering
Notary Public]
[M. Ruth Mannering
Notary Public
Appointed Feb. 12, 1955
Term Two Years
State Of Delaware]
IN WITNESS WHEREOF, THIS RESTATED CERTIFICATE OF
INCORPORATION, WHICH RESTATES, INTEGRATES AND FURTHER AMENDS
THE PROVISIONS OF THE CORPORATION'S CERTIFICATE OF
INCORPORATION, ORIGINALLY FILED ON OCTOBER 19, 1955 IN THE
OFFICE OF THE SECRETARY OF STATE OF DELAWARE, HAVING BEEN
DULY ADOPTED BY THE BOARD OF DIRECTORS AND THE STOCKHOLDERS
OF THE CORPORATION IN ACCORDANCE WITH THE PROVISIONS OF
SECTIONS 242 AND 245 OF THE GENERAL CORPORATION LAW OF
DELAWARE, HAS BEEN EXECUTED THIS 10TH DAY OF MAY 1994.
READING & BATES CORPORATION
BY:___________________________
PAUL B. LOYD, JR.,
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
SEAL
ATTEST: ____________________________
SECRETARY OF THE CORPORATION
