SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1995
Commission File Number: 1-9916
Freeport-McMoRan Copper & Gold Inc.
Incorporated in Delaware 74-2480931
(IRS Employer Identification No.)
First Interstate Bank Building, One East First Street, Suite 1600,
Reno, Nevada 89501
Registrant's telephone number, including area code: (702) 688-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
On June 30, 1995, there were issued and outstanding 83,132,408 shares of the
registrant's Class A Common Stock, par value $0.10 per share, and 120,309,323
shares of its Class B Common Stock, par value $0.10 per share.
FREEPORT-McMoRan COPPER & GOLD INC.
TABLE OF CONTENTS
Page
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Income 4
Statements of Cash Flow 5
Notes to Financial Statements 6
Remarks 6
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 7
Part II. Other Information 12
Signature 13
Exhibit Index E-1
FREEPORT-McMoRan COPPER & GOLD INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
---------------------
FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED BALANCE SHEETS (Unaudited)
June 30, December 31,
1995 1994
---------- ------------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 31,154 $ 44,252
Accounts receivable 252,913 234,224
Inventories 340,301 314,022
Prepaid expenses and other 12,157 10,896
---------- ----------
Total current assets 636,525 603,394
Property, plant and equipment, net 2,672,547 2,360,489
Other assets 79,654 76,314
---------- ----------
Total assets $3,388,726 $3,040,197
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 443,615 $ 407,478
Current portion of long-term debt and
short-term borrowings 44,671 24,098
---------- ----------
Total current liabilities 488,286 431,576
Long-term debt, less current portion 831,139 525,612
Accrued postretirement benefits and other
liabilities 177,690 213,043
Deferred income taxes 320,984 292,580
Minority interests 93,657 82,404
Mandatory redeemable preferred stock 500,007 500,007
Stockholders' equity 976,963 994,975
---------- ----------
Total liabilities and stockholders' equity $3,388,726 $3,040,197
========== ==========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ---------------------
1995 1994 1995 1994
-------- -------- -------- --------
(In Thousands, Except Per Share Amounts)
Revenues $421,469 $281,452 $830,275 $547,605
Cost of sales:
Production and delivery 221,534 172,695 445,736 337,138
Depreciation and amortization 28,211 18,319 50,108 35,440
-------- ------- -------- --------
Total cost of sales 249,745 191,014 495,844 372,578
Exploration expenses 11,654 11,564 19,610 19,584
General and administrative
expenses 29,354 26,361 62,204 49,441
-------- -------- -------- --------
Total costs and expenses 290,753 228,939 577,658 441,603
-------- -------- -------- --------
Operating income 130,716 52,513 252,617 106,002
Interest expense, net (11,799) - (11,799) -
Other expense, net (920) (427) (1,638) (901)
-------- -------- -------- --------
Income before income taxes
and minority interests 117,997 52,086 239,180 105,101
Provision for income taxes (50,528) (24,359) (101,923) (47,501)
Minority interests in net
income of consolidated
subsidiaries (13,285) (5,426) (25,677) (9,435)
-------- -------- -------- --------
Net income 54,184 22,301 111,580 48,165
Preferred dividends (13,559) (12,583) (26,962) (24,888)
-------- -------- -------- --------
Net income applicable to
common stock $ 40,625 $ 9,718 $ 84,618 $ 23,277
======== ======== ======== ========
Net income per share of
common stock $.20 $.05 $.41 $.11
==== ==== ==== ====
Average common shares
outstanding 205,157 205,933 205,555 205,572
======= ======= ======= =======
Dividends per common share $.15 $.15 $.30 $.30
==== ==== ==== ====
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF CASH FLOW (Unaudited)
Six Months Ended
June 30,
----------------------
1995 1994
-------- --------
(In Thousands)
Cash flow from operating activities:
Net income $111,580 $ 48,165
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 50,108 35,440
Deferred income taxes 28,404 16,234
Recognition of unearned revenue (36,207) -
Minority interests' share of net income 25,677 9,435
(Increase) decrease in working capital:
Accounts receivable (7,537) 23,773
Inventories (30,817) (43,563)
Prepaid expenses and other (1,229) (9,065)
Accounts payable and accrued liabilities 503 22,394
Other (1,893) (6,887)
-------- --------
Net cash provided by operating activities 138,589 95,926
-------- --------
Cash flow from investing activities:
Capital expenditures:
PT-FI (240,245) (312,273)
RTM, including acquisition cost (67,854) (19,436)
Other - 2,047
-------- --------
Net cash used in investing activities (308,099) (329,662)
-------- --------
Cash flow from financing activities:
Net proceeds from sale of:
Gold-denominated preferred stock - 158,476
9 3/4% senior notes - 116,276
Proceeds from debt, net 81,339 63,220
Proceeds from infrastructure financing, net 228,899 -
Cash dividends paid:
Common stock (61,774) (61,723)
Preferred stock (25,124) (22,221)
Minority interests (15,461) (12,107)
Purchase of FCX common shares (52,841) -
Other 1,374 -
-------- --------
Net cash provided by financing activities 156,412 241,921
-------- --------
Net increase (decrease) in cash and
short-term investments (13,098) 8,185
Cash and short-term investments at
beginning of year 44,252 13,798
-------- --------
Cash and short-term investments at
end of period $ 31,154 $ 21,983
======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
NOTES TO FINANCIAL STATEMENTS
1. OWNERSHIP OF FCX COMMON STOCK
In May 1994, Freeport-McMoRan Inc. (FTX) announced that it was taking steps to
effect the tax-free distribution to its common stockholders of all the Class B
common stock of Freeport-McMoRan Copper & Gold Inc. (FCX) which FTX owned.
FTX recently completed the final steps of its restructuring and, on July 5,
1995, the FTX Board of Directors declared a distribution of all shares of FCX
Class B common stock to FTX common stockholders of record on July 17, 1995.
As a result of this distribution, FTX no longer owns any interest in FCX.
As part of FTX's restructuring, the RTZ Corporation PLC (RTZ) purchased
23.9 million shares of FCX Class A common stock (approximately 12 percent of
the outstanding common stock of FCX) from FTX. Additionally, FCX and RTZ have
agreed in principle to establish joint ventures whereby RTZ is to become a 40
percent joint venture partner in FCX's future production expansions and
exploration and development activities in Indonesia. Subject to completing
the contractual arrangements, RTZ has agreed to pay the next $100 million of
exploration expenses (including $6 million expensed by FCX during the second
quarter of 1995) with expenditures beyond $100 million shared 60 percent by
FCX and 40 percent by RTZ. In FCX's Block A, RTZ will fund up to $750 million
of the costs of future expansion projects and receive 100 percent of
incremental cash flow until RTZ recoups its costs with interest, after which
the cash flow would be shared 60 percent by PT-FI and 40 percent by RTZ. RTZ
is also expected to acquire a 25 percent interest in both the Rio Tinto
Minera, S.A. smelter and mineral exploration program.
2. CREDIT FACILITIES
In July 1995, the FTX credit agreement in which P.T. Freeport Indonesia
Company (PT-FI) participated was modified to become a separate $550 million
facility for PT-FI ($530 million available at July 31, 1995) and a new $200
million facility was arranged for FCX and PT-FI ($79 million available at
July 31, 1995). FCX repaid an intercompany loan from FTX ($97.7 million at
June 30, 1995) by borrowing funds under the new facility. The new variable
rate facilities mature in December 1999 and have covenants and security
requirements which are similar to the previous FTX credit agreement. As part
of FTX's restructuring, FCX assumed the guarantee of $90 million of FM
Properties Inc. debt previously guaranteed by FTX and will receive an annual 3
percent fee from FTX on the amount guaranteed.
3. INTEREST COSTS
Interest expense excludes capitalized interest of $11.2 million and $6.9
million in the second quarter of 1995 and 1994, respectively, and $29.1
million and $12.8 million in the first six months of 1995 and 1994,
respectively.
4. RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the first six months of 1995 and
1994 was 6 to 1 and 7.4 to 1, respectively. For this calculation, earnings
are income from continuing operations before income taxes, minority interests
and fixed charges. Fixed charges include interest and that portion of rent
deemed representative of interest.
----------------------
Remarks
The information furnished herein should be read in conjunction with FCX's
financial statements contained in its 1994 Annual Report to stockholders and
incorporated by reference in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
periods. All such adjustments are, in the opinion of management, of a normal
recurring nature.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
Freeport-McMoRan Copper & Gold Inc. (FCX) operates through its majority-owned
subsidiaries, P.T. Freeport Indonesia Company (PT-FI), Rio Tinto Minera, S.A.
(RTM) and P.T. Irja Eastern Minerals Corporation (Eastern Mining). PT-FI's
operations involve the exploration for and development, mining and milling of
ore containing copper, gold and silver in Irian Jaya, Indonesia. RTM is
engaged in the smelting and refining of copper concentrates in Spain. Eastern
Mining conducts exploration activities in Irian Jaya.
Second Quarter Six Months
----------------- -----------------
1995 1994 1995 1994
------ ------ ------ ------
(In Millions, Except Per Share Amounts)
Revenues $421.5 $281.5 $830.3 $547.6
Operating income 130.7 a 52.5 252.6 a 106.0
Net income to common stock 40.6 a 9.7 84.6 a 23.3
Net income per share .20 a .05 .41 a .11
Operating income (loss) by subsidiary:
PT-FI $146.3 a $ 63.3 $276.3 a $114.1
RTM (7.2) 1.0 (9.8) 2.7
Eastern Mining (3.0) (1.5) (6.1) (1.5)
Intercompany eliminations and
other (5.4) (10.3) (7.8) (9.3)
------ ------ ------ ------
$130.7 $ 52.5 $252.6 $106.0
====== ====== ====== ======
a. Includes a $12.5 million charge ($7 million to net income or $0.03 per
share) for a materials and supplies inventory reserve adjustment in
connection with the completion of PT-FI's expansion program.
FCX's second-quarter and six-month 1995 revenues rose significantly
compared to the 1994 periods reflecting higher copper realizations, record
copper production levels and improved gold grades. Mill throughput averaged
113,100 metric tons of ore per day (MTPD) for the 1995 quarter and 119,200
MTPD for the month of June 1995, as PT-FI substantially completed its
expansion to 118,000 MTPD. PT-FI expects to sustain production levels of at
least 118,000 MTPD for the remainder of 1995 and is likely to exceed this
level of output. Treatment charges, royalties and other increased because of
the higher copper sales volumes. A reconciliation of revenues between the
periods follows (in millions):
Second Six
Quarter Months
------- ------
Revenues - 1994 $281.5 * $547.6 *
Increases (decreases):
RTM revenues, net of eliminations 16.0 36.5
PT-FI revenues:
Price realizations:
Copper 53.7 116.2
Gold 1.2 (.1)
Volumes:
Copper 51.6 90.8
Gold 31.8 58.4
Treatment charges, royalties and other (14.3) (19.1)
------ ------
Revenues - 1995 $421.5 * $830.3 *
====== ======
* Includes net reductions totaling $1.7 million and $5 million for the
second quarter and six-month period of 1994, respectively, and $19.9
million and $32.3 million for the second quarter and six-month period of
1995, respectively, recognized under PT-FI's copper price protection
program and RTM's gold hedging program.
PT-FI OPERATIONS
Second Quarter Six Months
------------------ -------------------
1995 1994 1995 1994
------- ------- ------- -------
Ore milled (MTPD) 113,100 71,300 99,100 72,300
Copper grade (%) 1.26 1.39 1.31 1.38
Gold grade (grams per MT) 1.28 1.13 1.35 1.24
Recovery rate (%)
Copper 86.0 84.0 84.1 83.7
Gold 72.7 73.0 72.7 70.9
Copper (000s of recoverable pounds)
Production 237,200 161,000 420,100 321,500
Sales 219,300 168,800 415,600 324,500
Average realized price a $1.27 $1.02 $1.28 $1.00
Gold (recoverable ounces)
Production 295,800 165,700 545,300 356,500
Sales 269,500 185,400 540,500 386,700
Average realized price $382.41 $378.00 $379.39 $379.53
Gross profit per pound of copper (cents):
Average realized price a 126.7 102.2 127.6 99.6
----- ----- ----- -----
Production costs:
Site production and delivery 54.3 b 61.4 58.4 b 60.4
Gold and silver credits (47.9) (42.5) (50.3) (45.6)
Treatment charges 19.9 24.2 19.7 23.7
Royalty on metals 4.1 2.0 4.3 1.7
----- ----- ----- -----
Cash production costs 30.4 45.1 32.1 40.2
Depreciation and amortization 11.0 7.5 9.6 7.5
----- ----- ----- -----
Total production costs 41.4 52.6 41.7 47.7
----- ----- ----- -----
Revenue adjustments c 1.1 5.2 (1.4) (0.3)
----- ----- ----- -----
Gross profit per pound of copper 86.4 54.8 84.5 51.6
===== ===== ===== =====
a. Excluding amounts recognized under PT-FI's copper price protection
program, realizations would have been $1.36 and $0.99 per pound for the
second quarter of 1995 and 1994, respectively, and $1.35 and $0.98 per
pound for the six-month periods of 1995 and 1994, respectively.
b. Excludes the materials and supplies inventory reserve adjustment
discussed earlier (5.7 cents and 3 cents per pound for the second-quarter
and six-month 1995 periods, respectively).
c. Reflects adjustments primarily for prior period concentrate sales and
amortization of the cost of the copper price protection program.
With the expansion completed, PT-FI is focusing on maximizing
efficiencies and, as expected, unit site production and delivery costs have
declined. PT-FI intends to continue to fine-tune its operations to achieve
cost efficiencies and maximum cash flows from its expanded operations.
Gold and silver credits increased primarily because of a rise in
comparative gold grades. Per pound treatment charges declined because of
reduced rates negotiated at the end of 1994 resulting from the overall
tightness in the copper concentrates market, somewhat offset by higher price
participation payments. Unit royalties rose because of increased copper
prices, as PT-FI's copper royalty rate varies from 1.5 percent to 3.5 percent
depending on the price of copper.
The second-quarter 1995 depreciation rate of 11 cents per pound includes
the additional capital expenditures to support current operating levels of
118,000 MTPD. Future changes to the depreciation rate will depend on future
capital costs, together with consideration of any changes in ore reserve
estimates.
PT-FI has commitments from various parties to purchase virtually all of
its estimated 1995 production of approximately 900 million pounds of copper
and 1.2 million ounces of gold, at market prices. With the completion of the
118,000 MTPD expansion, management's present intention is to provide a floor
price for its future sales, when attainable at an acceptable cost, to protect
operating cash flow from the impact of potentially significant declines in
copper prices while providing for full participation in potentially higher
prices. During the second half of 1995, PT-FI will realize $1.15 per pound on
241.4 million pounds of copper sales and has established a minimum average
price of $0.83 per pound on the remaining second half copper sales with full
participation in prices above that amount. For 1996 and the first quarter of
1997, PT-FI has established a minimum average price of $0.90 per pound on 1.2
billion pounds of copper sales, with full participation in prices above that
amount. As conditions warrant, PT-FI may modify or extend its existing
programs. At June 30, 1995, the unrecognized cost to unwind its hedging
positions (including $36 million of cost included in inventory) was
approximately $40 million. At June 30, 1995, copper sales totaling 290.2
million pounds remained to be contractually priced in 1995. As a result of
PT-FI's hedging activities, 124.4 million of those pounds, which are currently
recorded at $1.37 per pound, are subject to changes in the price of copper.
During the first quarter of 1995, PT-FI implemented a gold pricing
strategy designed to take advantage of the premium which exists between the
spot and futures gold price. As of June 30, 1995, PT-FI will earn an
additional $2.7 million on 585,000 ounces of gold sales in September 1995
through February 1996.
RTM OPERATIONS
Second Quarter Six Months
------------------- ------------------
1995 1994 1995 1994
------ ------- ------- -------
Concentrate treated (MT) 55,900 126,400 174,300 244,400
Anode production (000s of
pounds) 39,200 91,900 123,100 175,500
Cathode production (000s
of pounds) 55,100 77,800 130,500 154,100
RTM's 1995 results were adversely affected by significantly lower
treatment charge rates somewhat offset by higher price participation. Second
quarter smelter operations were negatively affected by the shutdown of RTM's
smelter for approximately half of the quarter to tie-in expansion equipment
and for maintenance turnarounds. In late July 1995, RTM's smelter was
shutdown for approximately one week because of a labor strike at an adjacent
facility which resulted in the temporary curtailment of cooling water at RTM's
facilities. Also in July 1995 RTM completed the sale of its mining operations
to a group of its employees. This sale, which involves certain payments by
RTM as discussed below, is not expected to result in significant gain or
loss being recognized by FCX. RTM's results for the six-month 1995 period
were also negatively impacted by the strengthening of the Spanish peseta
against the U.S. dollar which, at current operating levels, has an
approximately $1 million impact on RTM's annual earnings and cash flow for
each one peseta change in the exchange rate.
OTHER FINANCIAL RESULTS
FCX's exploration costs totaled $11.7 million for the 1995 quarter and $11.6
million for the 1994 quarter while the six-month periods both totaled $19.6
million. FCX and RTZ Corporation PLC (RTZ) are in the process of completing
agreements to establish exploration joint ventures whereby RTZ would be a 40
percent joint venture partner and will pay for approved exploration
expenditures until it has paid an aggregate $100 million, including $6 million
charged to expense in the second quarter of 1995 (Note 1). FCX (60 percent)
and RTZ (40 percent) will then pay ratably for any additional exploration
costs and costs to develop projects within PT-FI's Block B Contract of Work
(COW) area and Eastern Mining's COW area.
FCX's general and administrative expenses were $62.2 million for the six
months ended June 30, 1995 compared with $49.4 million in the 1994 period.
The increase results from the additional personnel and administrative efforts
required to manage the expanded operations. Third quarter general and
administrative expenses may increase because of the impact of the higher share
price of FCX Class B common stock on FCX's established management incentive
compensation program. If the price of FCX Class B shares were to remain at
$24.75 per share, the price on August 10, 1995, third quarter general and
administrative expense would increase by approximately $15 million.
FCX's total interest cost (before capitalization) rose to $40.9 million
for the six-month 1995 period from $12.8 million in the 1994 period primarily
caused by higher average debt levels. Because of the significant expansion
projects at PT-FI and RTM, all interest was capitalized through the first
quarter of 1995. As expansion activities are completed, interest costs are
charged as expense prospectively. The 118,000 MTPD expansion was completed
during the second quarter of 1995. Standard & Poor's has recently upgraded
FCX's senior debt to the investment grade rating of BBB- as a result of the
RTZ joint venture and the elimination of uncertainties regarding future
financial needs for exploration and expansion related activities. This debt
rating upgrade will reduce future interest costs for FCX and PT-FI.
FCX's effective tax rate was 43 percent for the six-month period of 1995
and 1994. PT-FI's COW provides a 35 percent income tax rate and a 15 percent
withholding on dividends paid to FCX by PT-FI and on interest for debt
incurred after the signing of the COW. No income tax provision or benefit is
recorded at RTM, which is subject to taxation in Spain, because it has not
generated taxable income in recent years and has significant tax benefit
carryforwards.
CAPITAL RESOURCES AND LIQUIDITY
Net cash provided by operating activities rose to $138.6 million for the first
six months of 1995, compared with $95.9 million for the 1994 period, primarily
because of higher net income. Cash flow used in investing activities reflects
a decrease in PT-FI expenditures to $240.2 million, compared with $312.3
million in the 1994 period, with the completion of the 118,000 MTPD expansion
during the second quarter, 1995. RTM expenditures increased to $67.9 million
for the six-month 1995 period because of the smelter expansion, compared with
$19.4 million in the 1994 period. Cash flow provided by financing activities
totaled $156.4 million in 1995 compared with $241.9 million in 1994. During
the second quarter of 1995, FCX acquired 2.5 million of its shares for an
aggregate $52.8 million under its program to acquire shares when warranted by
market conditions. In July 1995, FCX acquired another 0.9 million of its
shares for an aggregate $17.6 million. The 1995 period included $228.9
million of proceeds from infrastructure financing and the 1994 period included
$274.8 million from issuances of public securities.
PT-FI's capital expenditures for the remainder of 1995 are expected to
approximate $200 million for completion of the expansion and infrastructure
assets. Expenditures will be funded by operating cash flow, further sales of
infrastructure assets, the bank credit facility (Note 2) and other financing
sources. PT-FI and RTZ are undertaking feasibility studies for an expansion
of PT-FI's current milling capacity to 175,000-200,000 MTPD. For further
expansion projects in the current Block A mining area, beyond the current
118,000 MTPD expansion, RTZ will provide up to $750 million to develop such
projects. RTZ will receive the incremental cash flow attributed to PT-FI's
interest in the expansion projects until it has received an amount equal to
the funds it had provided with respect to PT-FI's interest plus interest based
on RTZ's cost of borrowing. Subsequently, incremental cash flow will be
shared by FCX (60 percent) and RTZ (40 percent).
In March 1995, PT-FI sold certain of its port, marine, logistics and
construction equipment and facilities for $100 million. In June 1995, PT-FI
sold $100 million of its power-related assets and $48 million of its aviation
assets bringing the total sales of infrastructure assets to $542.9 million
through June 30, 1995 and leaving approximately $115 million for the remainder
of 1995. PT-FI has guaranteed certain minimum rates of return in each of the
above transactions.
RTM has a turnkey contract to expand its smelter capacity to 270,000
metric tons of metal per year by early 1996 and has obtained $290 million of
project financing, nonrecourse to FCX, including a working capital line.
During June 1995, RTM entered into interest rate swaps, maturing in five
years, on $80 million of its project financing at an average fixed rate of 6.1
percent. The expansion project continues on schedule and within budget and is
approximately 75 percent complete. As discussed earlier, RTM sold its mining
operations during the third quarter and, in exchange for assuming certain RTM
liabilities, RTM will make cash payments to the buyers. RTM has arranged a
loan to cover the initial payment of $19.5 million. The remaining
approximately $19 million, which is payable over the next 2 1/2 years, may be
funded by operating cash flow, bank loans or funding from FCX. RTM's future
operating cash flow will be determined by the supply and demand for copper
smelter capacity, smelter and refining production rates and the exchange rate
between the U.S. dollar and Spanish peseta. PT-FI has a long-term contract to
provide the smelter with a significant portion of its copper concentrate
requirements.
In January 1995, FCX agreed in principle to form a joint venture, 20
percent owned by FCX, to develop a 200,000 metric tons of metal per year
copper smelter in Gresik, Indonesia. A feasibility study is expected to be
completed this year and alternatives for financing the estimated $550 million
aggregate project cost, plus approximately $100 million of working capital,
are being reviewed. Upon completion of RTM's smelter expansion and the
proposed Gresik smelter, FCX anticipates that approximately 70 percent of PT-
FI's expanded annual concentrate production will be sold to affiliates at
market prices.
On July 5, 1995, the FCX Board of Directors declared a cash dividend of
$0.15 per share on FCX's Class A common stock and Class B common stock,
payable August 1, 1995. The declaration and amount of future dividends, if
any, will depend upon appropriate action of the Board of Directors and
economic and market factors which cannot be predicted.
--------------------
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
FREEPORT-McMoRan COPPER & GOLD INC.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
(a) The annual meeting of the security holders (the "Annual
Meeting") of the registrant, for which proxies were
solicited pursuant to Regulation 14A under the Securities
Exchange Act of 1934, was held on May 4, 1995. Matters
voted upon were (i) the election of directors (there was no
solicitation in opposition to management's nominees, all of
whom were elected) and (ii) the ratification of the
appointment of independent auditors.
(c) The first matter voted upon at the Annual Meeting was the
election of Leland O. Erdahl, Ronald Grossman, Rene L.
Latiolais, George A. Mealey, James R. Moffett, Wolfgang F.
Siegel, Elwin E. Smith and Eiji Umene as directors, each to
serve for one year and until his successor is elected and
qualified. The numbers of votes cast for or withheld from
each nominee were as follows:
FOR WITHHELD
--- --------
Mr. Erdahl 194,441,852 389,383
Mr. Grossman 194,448,528 382,707
Mr. Latiolais 194,449,809 381,426
Mr. Mealey 194,452,336 378,899
Mr. Moffett 194,443,615 387,620
Mr. Siegel 194,306,225 525,010
Mr. Smith 194,430,817 400,418
Mr. Umene 194,297,447 533,788
The second matter voted upon at the Annual Meeting was the
ratification of the appointment of Arthur Andersen LLP to
act as the independent auditor of the registrant for 1995.
The numbers of votes cast for or against and the number of
abstentions as to such matter were as follows:
FOR AGAINST ABSTENTIONS
--- ------- -----------
194,503,508 86,024 241,703
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The exhibits to this report are listed in the Exhibit Index
appearing on Page E-1 hereof.
(b) No reports on Form 8-K were filed by the registrant during
the quarter for which this report is filed.
FREEPORT-McMoRan COPPER & GOLD INC.
SIGNATURE
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ John T. Eads
--------------------------------
John T. Eads
Controller - Financial Reporting
(authorized signatory and
Principal Accounting Officer)
Date: August 11, 1995
FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
--------------
Sequentially
Numbered
Number Description Page
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2.1 AGREEMENT, dated as of May 2, 1995, by and between
Freeport-McMoRan Inc.("FTX") and Freeport-McMoRan
Copper & Gold Inc. ("FCX") on the one hand, and The
RTZ Corporation PLC, a company organized under the
laws of England ("RTZ"), RTZ Indonesia Limited, a
company organized under the laws of England and a
subsidiary of RTZ, and RTZ America, Inc., a Delaware
corporation and a subsidiary of RTZ, on the other hand
(the "Agreement"). Incorporated by reference to
Exhibit 2.1 to the Current Report on Form 8-K of FTX
dated as of May 26, 1995.
2.2 Amendment dated May 31, 1995 to the Agreement.
Incorporated by reference to Exhibit 2.1 to the
Quarterly Report on Form 10-Q of FTX for the quarter
ended June 30, 1995.
3.1 Certificate of Incorporation of FCX, as amended.
3.2 By-Laws of FCX, as amended.
4.1 Certificate of Designations of the 7% Convertible
Exchangeable Preferred Stock.
4.2 Certificate of Designations of the Step-Up Convertible
Preferred Stock, as amended.
4.3 Certificate of Designations of the Gold-Denominated
Preferred Stock, as amended.
4.4 Certificate of Designations of the Gold-Denominated
Preferred Stock, Series II, as amended.
4.5 Certificate of Designations of the Silver-Denominated
Preferred Stock, as amended.
27.1 Financial Data Schedule
Exhibit 3.1
FREEPORT-McMoRan COPPER & GOLD INC.
CERTIFICATE OF INCORPORATION
FIRST: The name of the corporation is Freeport-McMoRan
Copper & Gold Inc.
SECOND: The address of the registered office of the
corporation in the State of Delaware is 1209 Orange Street, in
the City of Wilmington, County of New Castle, and the name of
its registered agent at such address is The Corporation Trust
Company.
THIRD: The nature of the business or purposes to be
conducted or promoted are:
(a) To enter into, maintain, operate and carry on the
business of mining in all its branches in the United States of
America and in any other part of the world, and to quarry, mine,
pump, extract, remove and otherwise produce, and to grind, treat,
concentrate, smelt, refine, dress and otherwise prepare, produce,
buy, sell and in every way deal in and with minerals, ores,
concentrates and other mineral and chemical substances of all
kinds, metallic and nonmetallic, including, but without in any
way limiting the generality of the foregoing, antimony, barite,
chromium, coal, cobalt, copper, gas, gold, iron, lead,
molybdenum, nickel, oil, potash, salt, silica, sand, silver,
sulphur, tantalum, tin, titanium, tungsten, uranium, zinc, and
ores and concentrates thereof.
(b) To purchase, locate, denounce or otherwise acquire,
take, hold and own, and to assign, transfer, lease, exchange,
mortgage, pledge, sell or otherwise dispose of and in any manner
deal with and contract with reference to, mines, wells, mining
claims, mining rights, mineral lands, mineral leases, mineral
rights, royalty rights, water rights, timber lands, timber and
timber rights, and real and personal property of every kind, and
any interest therein, in the United States of America or in any
other country, to prospect, explore, work, exercise, develop,
manage, operate and turn the same to account, and to engage in
mining, geological, economic, feasibility, development, and other
studies in the United States of America or in any other country.
(c) To make, manufacture, treat, process, produce, buy,
sell and in every way deal in and with minerals, ores,
concentrates and chemicals of every description, organic or
inorganic, natural or synthetic, in the form of raw materials,
intermediate or finished products and any other related products
and substances whatsoever related thereto or of a like or similar
nature or which may enter into the manufacture of any of the
foregoing or be used in connection therewith, and derivatives and
by-products derived from the manufacture thereof and products to
be made therefrom and generally without limitation by reference
of the foregoing, all other products and substances of every
kind, character and description.
(d) To engage in any lawful act or activity, whether or not
related to the foregoing, for which corporations may be organized
under the General Corporation Law of Delaware.
FOURTH: (a) Authorized Stock. The total number of shares of
capital stock that the corporation shall have authority to issue
is 473,600,000 shares, consisting of 50,000,000 shares of
Preferred Stock, par value $0.10 per share, 211,800,000 shares of
Class A Common Stock, par value $0.10 per share, and 211,800,000
shares of Class B Common Stock, par value $0.10 per share. The
Class A Common Stock and the Class B Common Stock are
collectively referred to herein as the "Common Stock". Of the
authorized number of shares of Preferred Stock, 447,800 of such
shares shall be a series of Preferred Stock designated as "7%
Convertible Exchangeable Preferred Stock"; 700,000 of such shares
shall be a series of Preferred Stock designated as "Step-Up
Convertible Preferred Stock"; 300,000 of such shares shall be a
series of Preferred Stock designated as "Gold-Denominated
Preferred Stock"; 215,279 of such shares shall be a series of
Preferred Stock designated as "Gold-Denominated Preferred Stock,
Series II"; and 119,000 of such shares shall be a series of
Preferred Stock designated as "Silver-Denominated Preferred
Stock" (collectively referred to herein as the "Existing
Preferred Stock").
(b) Common Stock. The Class A Common Stock and the
Class B Common Stock shall be identical in all respects, except
as otherwise expressly provided herein, and the relative powers,
preferences, rights, qualifications, limitations and restrictions
of the shares of Class A Common Stock and Class B Common Stock
shall be as follows:
(1) Cash or Property Dividends. Subject to the rights
and preferences of the Preferred Stock as set forth in any
resolution or resolutions of the Board of Directors
providing for the issuance of such stock pursuant to Section
(c) of this Article FOURTH, and except as otherwise provided
for herein, the holders of Class A Common Stock and Class B
Common Stock are entitled to receive dividends out of assets
legally available therefor at such times and in such equal
per share amounts as the Board of Directors may from time to
time determine.
(2) Stock Dividends. If at any time a dividend is to
be paid in shares of Class A Common Stock or shares of Class
B Common Stock (a "stock dividend"), such stock dividend may
be declared and paid only as follows: only Class A Common
Stock may be paid to holders of Class A Common Stock and
only Class B Common Stock may be paid to holders of Class B
Common Stock, and whenever a stock dividend is paid, the
same rate or ratio of shares shall be paid in respect of
each outstanding share of Class A Common Stock and Class B
Common Stock.
(3) Stock Subdivisions and Combinations. The
corporation shall not subdivide, reclassify or combine stock
of either class of Common Stock without at the same time
making a proportionate subdivision or combination of the
other class.
(4) Voting. Voting power shall be divided between the
classes and series of stock as follows:
(A) Subject to Section (b)(4)(B) of this Article
FOURTH, with respect to the election of directors, holders
of Class A Common Stock and holders of Voting Preferred
Stock (as defined below), voting together, shall be entitled
to elect that number of directors which constitutes 20% of
the authorized number of members of the Board of Directors
(or, if such 20% is not a whole number, then the nearest
lower whole number of directors that is closest to 20% of
such membership). Each share of Class A Common Stock and
each share of Voting Preferred Stock shall have one vote in
the election of such directors. Subject to Section
(b)(4)(B) of this Article FOURTH, holders of Class B Common
Stock shall be entitled to elect the remaining directors.
Each share of Class B Common Stock shall have one vote in
the election of such directors. For purposes of this
Section (b)(4) and Section (b)(5) of this Article FOURTH,
references to the authorized number of members of the Board
of Directors (or the remaining directors) shall not include
any directors which the holders of any shares of Preferred
Stock have the exclusive right to elect as granted in
accordance with Section (c)(6) of this Article FOURTH. For
purposes of this Section (b)(4), "Special Voting Rights"
means the different voting rights of the holders of Class A
Common Stock, holders of Class B Common Stock and holders of
Voting Preferred Stock with respect to the election of the
applicable percentage of the authorized number of members of
the Board of Directors as described in this Section
(b)(4)(A). The "Voting Preferred Stock" means (i) each
series of the Existing Preferred Stock, in each case so long
as such series remains outstanding and (ii) any other series
of Preferred Stock upon which the right to vote for
directors pursuant to this Section (b)(4) has been conferred
in accordance with Section (c)(6) of this Article FOURTH.
(B) In the event that a majority of the shares of
Class A Common Stock and Class B Common Stock present and
voting at any annual or special meeting of stockholders of
the corporation are voted to eliminate the Special Voting
Rights, then Section (b)(4)(A) of this Article FOURTH shall
have no further force or effect, and thereafter holders of
Common Stock and holders of Voting Preferred Stock, voting
together, shall be entitled to elect all members of the
Board of Directors.
(C) Any director may be removed, with cause, by a
vote of the holders of Class A Common Stock, holders of
Class B Common Stock, and holders of Voting Preferred Stock,
voting together.
(D) Except as otherwise specified herein, the
holders of Class A Common Stock and holders of Class B
Common Stock (i) shall in all matters not otherwise
specified in this Section (b)(4) or Section (b)(5) of this
Article FOURTH vote together (including, without limitation,
with respect to increases or decreases in the authorized
number of shares of any class of Common Stock), with each
share of Class A Common Stock and Class B Common Stock
having one vote, and (ii) shall be entitled to vote as
separate classes only when required by law to do so under
mandatory statutory provisions that may not be excluded or
overridden by a provision in the certificate of
incorporation or as provided herein.
(E) Except as set forth in this Section (b)(4) or
Section (b)(5) of this Article FOURTH, the holders of Class
A Common Stock shall have exclusive voting power (except for
any voting powers of any Preferred Stock) on all matters at
any time when no Class B Common Stock is issued and
outstanding, and the holders of Class B Common Stock shall
have exclusive voting power (except for any voting powers of
any Preferred Stock) on all matters at any time when no
Class A Common Stock is issued and outstanding.
(5) Vacancies; Increases or Decreases in Size of the
Board of Directors. Any vacancy in the office of a director
created by the death, resignation or removal of a director
elected by (or appointed on behalf of) the holders of a
class or classes of stock may be filled by a vote of holders
of such class of stock, or if applicable, classes of stock,
voting together, unless the Special Voting Rights have been
eliminated in accordance with Section (b)(4)(B) of this
Article FOURTH. Notwithstanding anything in this Section
(b)(5) or Section (b)(4) of this Article FOURTH to the
contrary, any vacancy in the office of a director may also
be filled by the vote of the majority of the directors (or
the sole remaining director) elected by (or appointed on
behalf of) the same class or classes of stock that elected
that director (or on behalf of which that director was
appointed) whose death, resignation or removal created the
vacancy, unless there are no such directors or the Special
Voting Rights have been eliminated in accordance with
Section (b)(4)(B) of this Article FOURTH, in which case such
vacancy may be filled by the vote of the majority of the
directors or by the sole remaining director, regardless, in
each instance, of any quorum requirements set out in the by-
laws. Any director elected by some or all of the directors
or by the stockholders to fill a vacancy shall hold office
for the remainder of the full term of the director whose
vacancy is being filled and until such director's successor
shall have been elected and qualified unless removed and
replaced pursuant to Section (b)(4)(C) of this Article
FOURTH and this Section (b)(5). The Board may increase the
number of directors and any newly-created directorship so
created may be filled by the Board, provided that (unless
the Special Voting Rights have been eliminated in accordance
with Section (b)(4)(B) of this Article FOURTH) the Board may
be so enlarged by the Board only to the extent that 20% (or,
if such 20% is not a whole number, then the nearest lower
whole number of directors that is closest to 20%) of the
authorized number of members of the enlarged Board consists
of directors elected by (or appointed on behalf of) the
holders of Class A Common Stock and Voting Preferred Stock.
Any director elected (or appointed) in accordance with the
preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new
directorship was created and until such director's successor
shall have been elected and qualified unless removed and
replaced pursuant to Section (b)(4)(C) of this Article
FOURTH and this Section (b)(5). No decrease in the number
of directors constituting the Board of Directors shall
shorten the term of any incumbent director. If the number
of directors is changed, any increase or decrease shall be
apportioned among the classes of directors established
pursuant to Article FIFTH so as to maintain the number of
directors in each class as nearly equal as possible.
(6) Merger or Reorganization. In case of any
reorganization or any consolidation of the corporation with
one or more other corporations or a merger of the
corporation with another corporation, each holder of a share
of Class A Common Stock shall be entitled to receive with
respect to such share the same kind and amount of shares of
stock and other securities and property (including cash)
receivable upon such reorganization, consolidation or merger
by a holder of a share of Class B Common Stock, and each
holder of a share of Class B Common Stock shall be entitled
to receive with respect to such share the same kind and
amount of shares of stock and other securities and property
(including cash) receivable upon such reorganization,
consolidation or merger by a holder of a share of Class A
Common Stock; provided that, in any such transaction, the
holders of shares of Class A Common Stock and the holders of
shares of Class B Common Stock may receive different kinds
of shares of stock if the only difference in such shares is
the inclusion of voting rights which continue the Special
Voting Rights.
(7) Liquidation. In the event of any liquidation,
dissolution or winding up of the corporation, the holders of the
Class A Common Stock and Class B Common Stock shall participate
equally per share in any distribution to stockholders, without
distinction between classes.
(c) Preferred Stock. The Preferred Stock may be
divided into and issued in series. The Board of Directors is
hereby expressly authorized, at any time or from time to time, to
divide any or all of the shares of the Preferred Stock into
series, and in the resolution or resolutions establishing a
particular series, before issuance of any of the shares thereof,
to fix and determine the powers, designations, preferences and
relative, participating, optional or other rights, and any
qualifications, limitations or restrictions, of the series so
established, to the fullest extent now or hereafter permitted by
the laws of the State of Delaware, including, but not limited to,
the variations between the different series in the following
respects:
(1) The distinctive serial designation of such series;
(2) The annual dividend rate for such series, and the
date or dates from which dividends shall commence to accrue;
(3) The redemption price or prices, if any, for shares
of such series and the terms and conditions on which such
shares may be redeemed;
(4) The sinking fund provisions, if any, for the
redemption or purchase of shares of such series;
(5) The preferential amount or amounts payable upon
shares of such series in the event of the voluntary or
involuntary liquidation of the corporation;
(6) The voting rights of shares of such series;
(7) The terms and conditions, if any, upon which
shares of such series may be converted and the class or
classes or series of shares of the corporation into which
such shares may be converted; and
(8) Such other terms, limitations and relative rights
and preferences, if any, of shares of such series as the
Board of Directors may, at the time of such resolutions,
lawfully fix and determine under the laws of the State of
Delaware.
All shares of the Preferred Stock shall be of equal
rank with each other, regardless of series.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the 7%
Convertible Exchangeable Preferred Stock shall be as set forth in
Exhibit A attached hereto.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the Step-
Up Convertible Preferred Stock shall be as set forth in Exhibit B
attached hereto.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the Gold-
Denominated Preferred Stock shall be as set forth in Exhibit C
attached hereto.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the Gold-
Denominated Preferred Stock, Series II shall be as set forth in
Exhibit D attached hereto.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
Silver-Denominated Preferred Stock shall be as set forth in
Exhibit E attached hereto.
(d) General. (1) Except as otherwise required by law
and except for such voting powers with respect to the election of
directors as are provided for herein for the Existing Preferred
Stock or as may be stated in the resolution or resolutions of the
Board of Directors providing for the issue of any series of
Preferred Stock, the holders of any such series of Preferred
Stock shall have no voting power whatsoever. Subject to such
restrictions as may be stated in the resolution or resolutions of
the Board of Directors providing for the issue of any series of
Preferred Stock, any amendment to the Certificate of
Incorporation which shall increase or decrease the authorized
stock of any class or classes may be adopted by the affirmative
vote of the holders of a majority of the outstanding shares of
the Common Stock of the corporation irrespective of the
provisions of Section 242(b)(2) of Delaware General Corporation
Law.
(2) No holder of stock of any series or class of stock
of the corporation shall as such holder have under this
Certificate of Incorporation any preemptive or preferential right
of subscription to any stock of any series or class of stock of
the corporation or to any obligations convertible into stock of
the corporation, issued or sold, or to any right of subscription
to, or to any warrant or option for the purchase of any thereof.
(3) Except as otherwise stated in this Certificate of
Incorporation, the corporation may from time to time issue and
dispose of any of the authorized and unissued shares of Common
Stock or of Preferred Stock for such consideration, not less than
its par value, as may be fixed from time to time by the Board of
Directors, without action by the stockholders. The Board of
Directors may provide for payment therefor to be received by the
corporation in cash, property or services rendered. Any and all
such shares of Common Stock or Preferred Stock the issuance of
which has been so authorized, and for which consideration so
fixed by the Board of Director has been paid or delivered, shall
be deemed fully paid stock and shall not be liable to any further
call or assessment thereon.
FIFTH: (a) Subject to such rights to elect additional
directors under specified circumstances as may be granted to
holders of any shares of the Preferred Stock pursuant to the
provisions of Article FOURTH, the number of directors of the
corporation shall be fixed from time to time by the Board of
Directors but shall not be less than five. The directors, other
than those who may be elected solely by the holders of any class
or series of Preferred Stock, if any, shall be classified, with
respect to the time for which they severally hold office, into
three classes, as nearly equal in number as possible, as
determined by the Board of Directors, one class ("Class I") to
hold office initially for a term expiring at the first annual
meeting of stockholders to be held after the date this
Certificate of Incorporation is initially filed with the Delaware
Secretary of State (the "Initial Filing Date"), another class
("Class II") to hold office initially for a term expiring at the
second annual meeting of stockholders to be held after the
Initial Filing Date, and another class ("Class III") to hold
office initially for a term expiring at the third annual meeting
of stockholders to be held after the Initial Filing Date, with
the members of each class to hold office until their successors
are elected and qualified. Directors elected by a class of
stock, or if applicable, classes of stock voting together, shall
be divided as evenly as possible, as determined by the Board of
Directors, among Class I, Class II and Class III.
Notwithstanding the foregoing, each Director initially appointed
on behalf of the Class A Common Stock and Existing Preferred
Stock, shall hold office initially for a term expiring at the
first annual meeting of stockholders to be held after the Initial
Filing Date. Subject to the immediately preceding sentence, at
each annual meeting of stockholders, the successors of the class
of directors whose term expires at that meeting shall be elected
to hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their
election.
(b) Notwithstanding any other provision of this
certificate of incorporation or any provision of law which might
otherwise permit a lesser vote or no vote, the affirmative vote
of the holders of 66 2/3% or more of the outstanding shares of
Common Stock shall be required to amend, alter, change or repeal
this Article FIFTH.
SIXTH: In furtherance and not in limitation of the powers
conferred by law, (a) the Board of Directors is expressly
authorized to adopt, amend or repeal the by-laws of the
corporation in any manner not inconsistent with the laws of the
State of Delaware or the certificate of incorporation of the
corporation, subject to the power of the stockholders to adopt,
amend or repeal the by-laws or to limit or restrict the power of
the Board of Directors to adopt, amend or repeal the by-laws, and
(b) the corporation may in its by-laws confer powers and
authorities upon its Board of Directors in addition to those
conferred upon it by statute.
SEVENTH: The affirmative vote of the holders of not less
than 66 2/3% of the outstanding shares of Common Stock shall be
required for the approval or authorization of any Business
Combination; provided, however, that the 66 2/3% voting
requirement shall not be applicable if
(a) the Board of Directors of the corporation by
affirmative vote which shall include not less than a
majority of the entire number of Continuing Directors
(1) has approved in advance the acquisition of those
outstanding shares of Common Stock which caused the
Interested Party to become an Interested Party or (2)
has approved the Business Combination;
(b) the Business Combination is solely between
the corporation and one or more other corporations all
of the common stock of each of which other corporations
is owned directly or indirectly by the corporation or
between two or more of such other corporations; or
(c) the Business Combination is a merger or
consolidation and the cash and/or fair market value of
the property, securities or other consideration to be
received per share by holders of Common Stock in the
Business Combination is at least equal to the highest
price per share (after giving effect to appropriate
adjustments for any recapitalizations and for any stock
splits, stock dividends and like distributions) paid by
the Interested Party in acquiring any shares of Common
Stock on the date when last acquired or during a period
of two years prior thereto.
(d) For purposes of this Article SEVENTH:
(1) The terms "affiliate" and "associate" shall
have the respective meanings assigned to those terms in
Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule was in effect on the Initial Filing Date.
(2) A person shall be deemed to be a "beneficial
owner" of any Common Stock
(A) which such person or any of its
affiliates or associates beneficially owns,
directly or indirectly; or
(B) which such person or any of its
affiliates or associates has the right to
acquire (whether such right is exercisable
immediately or only after the passage of
time), pursuant to any agreement, arrangement
or understanding or upon the exercise of
conversion rights, exchange rights, warrants
or options, or otherwise, or has the right to
vote pursuant to any agreement, arrangement
or understanding; or
(C) 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 for the purpose
of acquiring, holding, voting or disposing of any
shares of Common Stock.
(3) The term "Business Combination" shall mean
(A) any merger or consolidation of the corporation or a
subsidiary of the corporation with or into an
Interested Party, (B) any merger or consolidation of an
Interested Party with or into the corporation or a
subsidiary, (C) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one
transaction or a series of transactions) of all or any
Substantial Part of the assets either of the
corporation (including without limitation any voting
securities of a subsidiary) or of a subsidiary, in
which an Interested Party is involved, (D) the adoption
of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf
of any Interested Party, (E) the issuance or transfer
(in one transaction or a series of transactions) by the
corporation or a subsidiary of the corporation to an
Interested Party of any securities of the corporation
or such subsidiary, which securities have a fair market
value of $10,000,000 or more, or (F) any
recapitalization, reclassification, merger or
consolidation involving the corporation or a subsidiary
of the corporation that would have the effect of
increasing, directly or indirectly, the Interested
Party's voting power in the corporation or such
subsidiary.
(4) The term "Interested Party" shall mean and
include (A) any individual, corporation, partnership,
trust or other person or entity which, together with
its affiliates and associates, is (or with respect to a
Business Combination was within two years prior
thereto) a beneficial owner of shares aggregating 20%
or more of the outstanding Common Stock or any class
thereof, and (B) any affiliate or associate of any such
individual, corporation, partnership, trust or other
person or entity. For the purposes of determining
whether a person is an Interested Party the number of
shares deemed to be outstanding shall include shares
deemed beneficially owned through application of
subclause (B) of the foregoing clause (2) but shall not
include any other shares of Common Stock which may be
issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
(5) The term "Substantial Part" shall mean more
than 10% of the fair market value of the total assets
of the particular corporation.
(6) The term "Continuing Director" shall mean a
director who is not an affiliate of an Interested Party and
who was a member of the Board of Directors of the
corporation immediately prior to the time that the
Interested Party involved in a Business Combination became
an Interested Party, and any successor to a Continuing
Director who is not such an affiliate and who is nominated
to succeed a Continuing Director by a majority of the
Continuing Directors in office at the time of such
nomination.
(7) For the purposes of Section (c) of this
Article SEVENTH, the term "other consideration to be
received" shall include without limitation Common Stock
retained by its existing public stockholders in the
event of a Business Combination in which the
corporation is the surviving corporation.
(e) The provisions of this Article SEVENTH shall
be construed liberally to the end that the
consideration paid to holders whose Common Stock is
acquired by an Interested Party in connection with a
Business Combination to which Section (c) of this
Article SEVENTH is applicable shall be not less
favorable than that paid to holders of such Common
Stock prior to such Business Combination. Nothing
contained in this Article SEVENTH shall be construed to
relieve any Interested Party from any fiduciary duties
or obligations imposed by law, nor shall anything
herein be deemed to supersede any vote of holders of
any series or class of stock other than Common Stock
that shall be required by law, by or pursuant to this
certificate of incorporation or by the by-laws of the
corporation.
(f) Notwithstanding any other provisions of this
certificate of incorporation or the by-laws of the
corporation and notwithstanding the fact that a lesser
percentage may be specified by law, this certificate of
incorporation or the by-laws of the corporation, the
affirmative vote of the holders of 66 2/3% or more of
the shares of the outstanding Common Stock shall be
required to amend or repeal, or adopt any provisions
inconsistent with, this Article SEVENTH.
EIGHTH: (a) A director of this corporation shall not be
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (1) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (2) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of the law, (3) under Section 174 of the
Delaware General Corporation Law, or (4) for any transaction from
which the director derived an improper personal benefit.
(b) The corporation shall indemnify any person who is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to the
fullest extent permitted by applicable law. The determination as
to whether such person has met the standard required for
indemnification shall be made in accordance with applicable law.
Expenses incurred by such a director, officer, employee
or agent in defending a civil or criminal action, suit or
proceeding shall be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such person to repay such
amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in
this Article EIGHTH.
(c) The provisions of this Article EIGHTH shall be deemed
to be a contract between the corporation and each person who
serves as such director, officer, employee or agent of the
corporation in any such capacity at any time while this Article
EIGHTH is in effect. No repeal or modification of the foregoing
provisions of this Article EIGHTH nor, to the fullest extent
permitted by law, any modification of law shall adversely affect
any right or protection of a director, officer, employee or agent
of the corporation existing at the time of such repeal or
modification.
The foregoing indemnification shall not be deemed
exclusive of any other rights to which those seeking
indemnification may be entitled under any applicable law, by-law,
agreement, vote of stockholders or disinterested directors or
otherwise.
NINTH: The name and mailing address of the incorporator
are:
Name Mailing Address
R. Blain Andrus 6110 Plumas Street
Reno, Nevada 89509
TENTH: The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of
incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
EXHIBITS TO THE CERTIFICATE OF INCORPORATION
EXHIBIT A - CERTIFICATE OF DESIGNATIONS OF THE 7% CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK
EXHIBIT B - CERTIFICATE OF DESIGNATIONS OF THE STEP-UP
CONVERTIBLE PREFERRED STOCK
EXHIBIT C - CERTIFICATE OF DESIGNATIONS OF THE GOLD-
DENOMINATED PREFERRED STOCK
EXHIBIT D - CERTIFICATE OF DESIGNATIONS OF THE GOLD-
DENOMINATED PREFERRED STOCK, SERIES II
EXHIBIT E - CERTIFICATE OF DESIGNATIONS OF THE SILVER-
DENOMINATED PREFERRED STOCK
Exhibit 3.2
FREEPORT-McMoRan COPPER & GOLD INC.
BY-LAWS
Article I
NAME
The name of the corporation is Freeport-McMoRan Copper
& Gold Inc.
Article II
OFFICES
1. The location of the registered office of the
corporation in the State of Delaware is 1209 Orange Street, in
the City of Wilmington, County of New Castle, and the name of its
registered agent at such address is The Corporation Trust
Company.
2. The corporation shall in addition to its registered
office in the State of Delaware establish and maintain an office
or offices at such place or places as the Board of Directors may
from time to time find necessary or desirable.
Article III
CORPORATE SEAL
The corporate seal of the corporation shall have
inscribed thereon the name of the corporation and the year of its
creation (1987) and the words "Corporate Seal Delaware". Such
seal may be used by causing it or a facsimile thereof to be
impressed, affixed, printed or otherwise reproduced.
Article IV
MEETING OF STOCKHOLDERS
1. Meetings of the stockholders shall be held at the
registered office of the corporation in the State of Delaware, or
at such other place as shall be determined, from time to time, by
the Board of Directors.
2. The annual meeting of stockholders shall be held on
the Monday immediately preceding the third Tuesday of April at
one o'clock in the afternoon, or on such other day or at such
other time as may be determined from time to time by resolution
of the Board of Directors. At each annual meeting of the
stockholders they shall elect by plurality vote, by written
ballot, and subject to the voting powers set forth in the
Certificate of Incorporation, the successors of the class of
directors whose term expires at such meeting, to hold office
until the annual meeting of the stockholders held in the third
year following the year of their election and their successors
are respectively elected and qualified or until their earlier
resignation or removal. Any other proper business may be
transacted at the annual meeting.
3. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings
of the stockholders for the transaction of business except as
otherwise provided by statute, by the Certificate of
Incorporation or by these By-Laws. If, however, such majority
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or by proxy, shall have power to adjourn the meeting
from time to time without notice other than announcement at the
meeting (except as otherwise provided by statute), until the
requisite amount of voting stock shall be present. At such
adjourned meeting at which the requisite amount of voting stock
shall be represented any business may be transacted which might
have been transacted at the meeting as originally notified.
4. At all meetings of the stockholders, each
stockholder having the right to vote shall be entitled to vote in
person, or by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than
six months prior to said meeting, unless such instrument provides
for a longer period. All proxies shall be filed with the
secretary of the meeting before being voted.
5. At each meeting of the stockholders each
stockholder shall have one vote for each share of stock having
voting power, registered in his name on the books of the
corporation at the record date fixed in accordance with these By-
Laws, or otherwise determined, with respect to such meeting.
Except as otherwise expressly provided by statute, by the
Certificate of Incorporation or by these By-Laws, all matters
coming before any meeting of the stockholders shall be decided by
the vote of a majority of the number of shares of stock present
in person or represented by proxy at such meeting and entitled to
vote thereat, a quorum being present.
6. Notice of each meeting of the stockholders shall be
given to each stockholder entitled to vote thereat not less than
10 nor more than 60 days before the date of the meeting. Such
notice shall state the place, date and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for
which the meeting is called.
7. Subject to such rights to call special meetings of
stockholders under specified circumstances as may be granted to
holders of any shares of Preferred Stock of the corporation
pursuant to the provisions of Section (c) of Article FOURTH of
the Certificate of Incorporation, special meetings of the
stockholders may be called only by the Chairman of the Board, the
Vice Chairman of the Board or the President of the corporation,
or at the request in writing or by vote of a majority of the
Board of Directors, and not by any other persons. Any request
for a special meeting made by the Board of Directors shall state
the purpose or purposes of the proposed meeting.
8. Business transacted at each special meeting shall
be confined to the purpose or purposes stated in the notice of
such meeting.
9. The order of business at each meeting of the
stockholders shall be determined by the chairman of such meeting.
10. At an annual meeting of the stockholders, only
business shall be conducted as shall have been brought before the
meeting (a) by or at the direction of the Board of Directors or
(b) by any stockholder of the corporation who complies with the
notice procedures set forth in this Section 10. For business to
be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing
to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received
at the principal executive offices of the corporation not less
than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days'
notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on
the 10th day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure was
made. A stockholder's notice to the Secretary shall set forth as
to each matter the stockholder proposes to bring before the
annual meeting (a) a brief description of the business desired to
be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and
address, as they appear on the corporation's books, of the
stockholder proposing such business, (c) the class and number of
shares of the corporation which are beneficially owned by the
stockholder and (d) any material interest of the stockholder in
such business. Notwithstanding anything in the By-Laws to the
contrary, no business shall be conducted at an annual meeting
except in accordance with the procedures set forth in this
Section 10. The chairman of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting and in accordance
with the provisions of the By-Laws, and if he should so
determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be
transacted. Notwithstanding the foregoing provisions of this
Section 10, a stockholder seeking to have a proposal included in
the corporation's proxy statement shall comply with the
requirements of Regulation 14A under the Securities Exchange Act
of 1934, as amended (including, but not limited to, Rule 14a-8 or
its successor provision).
11. Only persons who are nominated in accordance with
the procedures set forth in the By-Laws shall be eligible for
election as directors. Nominations of persons for election to
the Board of Directors of the corporation may be made at a
meeting of stockholders (a) by or at the direction of the Board
of Directors or (b) by any stockholder of the corporation
entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 11.
Such nominations, other than those made by or at the direction of
the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received
at the principal executive offices of the corporation not less
than 60 days nor more than 90 days prior to the meeting;
provided, however that in the event that less than 70 days'
notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business
on the 10th day following the day on which such notice of the
date of the meeting or such public disclosure was made. Such
stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or reelection
as a director all information relating to such person that is
required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended (including such person's written consent to being named
in the proxy statement as a nominee and to serving as a director
if elected); and (b) as to the stockholder giving the notice (i)
the name and address, as they appear on the corporation's books,
of such stockholder and (ii) the class and number of shares of
the corporation which are beneficially owned by such stockholder.
At the request of the Board of Directors any person nominated by
the Board of Directors for election as a director shall furnish
to the Secretary of the corporation that information required to
be set forth in a stockholder's notice of nomination which
pertains to the nominee. No person shall be eligible for
election as a director of the corporation unless nominated in
accordance with the procedures set forth in the By-Laws. The
chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the By-Laws, and if
he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
12. Any action required or permitted to be taken at
any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be
signed by stockholders having not less than a minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in
writing.
Article V
DIRECTORS
1. The business and affairs of the corporation shall
be managed by or under the direction of a Board of Directors
which may exercise all such powers and authority for and on
behalf of the corporation as shall be permitted by law, the
Certificate of Incorporation or these By-Laws.
2. The directors may hold their meeting and have one
or more offices, and, subject to the laws of the State of
Delaware, keep the stock ledger and other books and records of
the corporation outside of said State, at such place or places as
they may from time to time determine.
3. Any director may resign at any time by giving
written notice of his resignation to the Board of Directors, to
the Chairman of the Board, the Vice Chairman of the Board or the
President. Any such resignation shall take effect upon receipt
thereof by the Board, the Chairman of the Board, the Vice
Chairman of the Board or the President, as the case may be, or at
such later date as may be specified therein. Any such notice to
the Board shall be addressed to it in care of the Secretary.
Article VI
COMMITTEES OF DIRECTORS
1. By resolutions adopted by a majority of the whole
Board of Directors, the Board may designate an Executive
Committee, an Audit Committee, a Corporate Personnel Committee, a
Nominating Committee and a Public Policy Committee, and may
designate one or more other committees, each such committee to
consist of one or more directors of the corporation. The
Executive Committee shall have and may exercise all the powers of
the Board in the management of the business and affairs of the
corporation (except as otherwise expressly limited by statute),
including the power and authority to declare dividends and to
authorize the issuance of stock, and may authorize the seal of
the corporation to be affixed to all papers which may require it.
The Audit Committee, the Corporate Personnel Committee, the
Nominating Committee, the Public Policy Committee and each such
other committee shall have such of the powers and authority of
the Board as may be provided from time to time in resolutions
adopted by a majority of the whole Board. Each committee shall
report its proceedings to the Board when required.
2. The requirements with respect to the manner in
which the Executive Committee and each such other committee shall
hold meetings and take actions shall be set forth in the
resolutions of the Board of Directors designating the Executive
Committee or such other committee.
Article VII
COMPENSATION OF DIRECTORS
The directors shall receive such compensation for their
services as may be authorized by resolution of the Board of
Directors, which compensation may include an annual fee and a
fixed sum and expenses for attendance at regular or special
meetings of the Board or any committee thereof. Nothing herein
contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving
compensation therefor.
Article VIII
MEETINGS OF DIRECTORS; ACTION WITHOUT A MEETING
1. Regular meetings of the Board of Directors may be
held without notice at such time and place, either within or
without the State of Delaware, as may be determined from time to
time by resolution of the Board.
2. Special meetings of the Board of Directors may be
called by the Chairman of the Board, by the Vice Chairman of the
Board or by the President on at least 24 hours' notice to each
director, and shall be called by the President or the Secretary
on like notice on the request in writing of any director. Except
as may be otherwise specifically provided by statute, by the
Certificate of Incorporation or by these By-Laws, the purpose or
purposes of any such special meeting need not be stated in such
notice.
3. At all meetings of the Board of Directors the
presence in person of a majority of the total number of directors
shall be necessary and sufficient to constitute a quorum for the
transaction of business and, except as may be otherwise
specifically provided by statute, by the Certificate of
Incorporation or by these By-Laws, if a quorum shall be present
the act of a majority of the directors present at any meeting
shall be the act of the Board.
4. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be
taken without a meeting if all the members of the Board or such
committee, as the case may be, consent thereto in writing and the
writing or writings are filed with the minutes of proceedings of
the Board or committee. Any director may participate in a
meeting of the Board, or of any committee designated by the
Board, by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting pursuant to this sentence shall
constitute presence in person at such meeting.
Article IX
OFFICERS
1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a Chairman of the Board, a
President, one or more Vice Presidents, a Secretary, and a
Treasurer. The Board of Directors may also choose a Vice
Chairman of the Board, one or more Executive Vice Presidents, one
or more Senior Vice Presidents, a General Counsel, one or more
Assistant Vice Presidents, a Controller and one or more Assistant
Secretaries, Assistant Treasurers or Assistant Controllers, and
such other officers as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and
perform such duties as shall be prescribed from time to time by
the Board or by the Chairman of the Board. Any number of offices
may be held by the same person.
2. The Board of Directors, at its first meeting after
the annual meeting of stockholders shall choose a Chairman of the
Board from among the directors, and shall choose the remaining
officers who need not be members of the Board except in the event
they choose a Vice Chairman of the Board.
3. The salaries of all officers of the corporation
shall be fixed by the Board of Directors, or in such manner as
the Board may prescribe.
4. The officers of the corporation shall hold office
until their successors are respectively chosen and qualified,
except that any officer may at any time resign or be removed by
the Board of Directors. If the office of any officer becomes
vacant for any reason, the vacancy may be filled by the Board.
5. Any officer may resign at any time by giving
written notice of his resignation to the Board of Directors, the
Chairman of the Board, the Vice Chairman of the Board or the
President. Any such resignation shall take effect upon receipt
thereof by the Board, the Chairman of the Board, the Vice
Chairman of the Board or the President, as the case may be, or at
such later date as may be specified therein. Any such notice to
the Board shall be addressed to it in care of the Secretary.
Article X
CHAIRMAN OF THE BOARD
The Chairman of the Board shall be the Chief Executive
Officer of the corporation and shall preside at meetings of the
stockholders and of the Board of Directors. Subject to the
supervision and direction of the Board of Directors, he shall be
responsible for managing the affairs of the corporation. He
shall have general supervision and direction of all of the other
officers of the corporation and shall have powers and duties
usually and customarily associated with the office of Chairman of
the Board and the position of Chief Executive Officer.
Article XI
PRESIDENT
The President shall be the Chief Operating Officer of
the corporation, and he shall have the powers and duties usually
and customarily associated with the Office of the President and
the position of Chief Operating Officer. He shall have such
other powers and duties as may be delegated to him by the
Chairman of the Board.
Article XII
VICE CHAIRMAN OF THE BOARD,
EXECUTIVE VICE PRESIDENTS,
SENIOR VICE PRESIDENTS,
VICE PRESIDENTS AND
ASSISTANT VICE PRESIDENTS
The Vice Chairman of the Board, Executive Vice
Presidents, Senior Vice Presidents, Vice Presidents and Assistant
Vice Presidents shall have such powers and duties as may be
delegated to them by the Board of Directors or the Chairman of
the Board. The Vice Chairman of the Board shall, in the absence
of the Chairman of the Board, preside at meetings of the
stockholders and of the Board of Directors.
Article XIII
GENERAL COUNSEL, SECRETARY AND ASSISTANT SECRETARIES
1. The General Counsel shall have the powers and
duties usually and customarily associated with the position of
General Counsel. He shall have such other powers and duties as
may be delegated to him by the Board of Directors or the Chairman
of the Board.
2. The Secretary shall attend all meetings of the
Board of Directors and of the stockholders, and shall record the
minutes of all proceedings in a book to be kept for that purpose.
He shall perform like duties for the committees of the Board when
required.
3. The Secretary shall give, or cause to be given,
notice of meetings of the stockholders and of the Board of
Directors and of committees of the Board. He shall keep in safe
custody the seal of the corporation, and when authorized by the
Chairman of the Board, the Vice Chairman of the Board, the
President, an Executive Vice President, a Senior Vice President,
a Vice President or the General Counsel, shall affix the same to
any instrument requiring it, and when so affixed it shall be
attested by his signature or by the signature of an Assistant
Secretary. He shall have such other powers and duties as may be
delegated to him by the Board of Directors or the Chairman of the
Board.
4. The Assistant Secretaries shall, in case of the
absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary, and shall have such other
powers and duties as may be delegated to them by the Board of
Directors or the Chairman of the Board.
Article XIV
TREASURER AND ASSISTANT TREASURERS
1. The Treasurer shall have the custody of the
corporate funds and securities, and shall deposit or cause to be
deposited under his direction all moneys and other valuable
effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors or
pursuant to authority granted by it. He shall render to the
Chairman of the Board and the Board of Directors, whenever they
may require it, an account of all his transactions as Treasurer
and of the financial condition of the corporation. He shall have
such other powers and duties as may be delegated to him by the
Board of Directors or the Chairman of the Board.
2. The Assistant Treasurers shall, in case of the
absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer, and shall have such other
powers and duties as may be delegated to them by the Board of
Directors or the Chairman of the Board.
Article XV
CONTROLLER AND ASSISTANT CONTROLLERS
1. The Controller shall maintain adequate records of
all assets, liabilities and transactions of the corporation, and
shall see that adequate audits thereof are currently and
regularly made. He shall disburse the funds of the corporation
in payment of the just obligations of the corporation, or as may
be ordered by the Board of Directors, taking proper vouchers for
such disbursements. He shall have such other powers and duties
as may be delegated to him by the Board of Directors or the
Chairman of the Board.
2. The Assistant Controllers shall, in case of the
absence of the Controller, perform the duties and exercise the
powers of the Controller, and shall have such other powers and
duties as may be delegated to them by the Board of Directors or
the Chairman of the Board.
Article XVI
AGENTS AND REPRESENTATIVES
The Chairman of the Board, the Vice Chairman of the
Board, the President, any Executive Vice President, any Senior
Vice President or any Vice President, the General Counsel,
together with the Secretary or any Assistant Secretary, are
authorized and empowered in the name of and as the act and deed
of the corporation, to name and appoint general and special
agents, representatives, and attorneys to represent the
corporation in the United States or in any foreign country, and
to prescribe, limit and define the powers and duties of such
agents, representatives and attorneys, and to grant, substitute,
revoke, or cancel, in whole or in part, any power of attorney or
other authority conferred on any such agent, representative, or
attorney. All powers of attorney or other instruments which may
be executed pursuant to this provision shall be signed by the
Chairman of the Board, the Vice Chairman of the Board, the
President, any Executive Vice President, any Senior Vice
President, or any Vice President, the General Counsel, and by the
Secretary or an Assistant Secretary and the seal of the
corporation shall be affixed thereto. No further authorization
by the Board of Directors shall be necessary in connection with
the foregoing, it being intended that this By-Law shall
constitute full and complete authority by which the officers
above mentioned may act for the purposes aforesaid.
Article XVII
CERTIFICATES OF STOCK
The certificates for shares of stock of the corporation
shall be numbered and shall be entered on the books of the
corporation as they are issued. They shall exhibit the holder's
name and number of shares and shall be signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, an
Executive Vice President, a Senior Vice President or a Vice
President and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary. The signature of any of
such officers may be facsimile if such certificate is
countersigned by a transfer agent other than the corporation or
its employee or by a registrar other than the corporation or its
employee. In case any officer who has signed or whose facsimile
signature has been placed on any such certificate shall have
ceased to be such officer before such certificate is issued,
then, unless the Board of Directors shall otherwise determine and
cause notification thereof to be given to such transfer agent and
registrar, such certificate may be issued by the corporation (and
by its transfer agent) and registered by its registrar with the
same effect as if he were such officer at the date of issue.
ARTICLE XVIII
TRANSFERS OF STOCK
1. All transfers of shares of the stock of the
corporation shall be made on the books of the corporation by the
registered holders of such shares in person or by their attorneys
lawfully constituted in writing, or by their legal
representatives.
2. Certificates for shares of stock shall be
surrendered and canceled at the time of transfer.
ARTICLE XIX
FIXING RECORD DATE
In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may
fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by
the Board of Directors and which record date: (1) in the case of
determination of stockholders entitled to vote on any meeting of
stockholders or adjournment thereof, shall, unless otherwise
required by law, not be more than 60 nor less than 10 days before
the date of such meeting; (2) in the case of determination of
stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than 10 days from
the date upon which the resolution fixing the record date is
adopted by the Board of Directors; and (3) in the case of any
other action, shall not be more than 60 days prior to such other
action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the
day preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day preceding the day on
which the meeting is held; (2) the record date for determining
stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of
Directors is required by law, shall be the first date on which a
signed written consent setting forth the action taken or proposed
to be taken is delivered to the corporation in accordance with
applicable law, or, if prior action by the Board of Directors is
required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such
prior action; and (3) the record date for determining
stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of
record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
ARTICLE XX
REGISTERED STOCKHOLDERS
The corporation shall be entitled to treat the holder
of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or
other notice thereof, save as expressly provided by the laws of
the State of Delaware.
Article XXI
CHECKS
All checks, drafts and other orders for the payment of
money, and all promissory notes and other evidences of the
corporation shall be signed by such officer or officers or such
other person or persons as may be designated by the Board of
Directors or pursuant to authority granted by it.
Article XXII
FISCAL YEAR
The fiscal year shall begin the first day of January in
each year.
Article XXIII
NOTICES AND WAIVERS
1. Whenever by statute or by the Certificate of
Incorporation or by these By-Laws it is provided that notice
shall be given to any director or stockholder, such provision
shall not be construed to require personal notice, but such
notice may also be given in writing, by mail, by depositing the
same in the United States mail, postage prepaid, directed to such
stockholder or director at his address as it appears on the
records of the corporation, or in default of such address, to
such director or stockholder at the General Post Office in the
City of Wilmington, Delaware, and such notice shall be deemed to
be given at the time when the same shall be thus deposited.
Notice of special meetings of the Board of Directors may also be
given to any director by (i) telephone, (ii) telecopier, (iii)
telex or (iv) telegraph or cable, and in the latter event the
notice shall be deemed to be given at the time such notice,
addressed to such director at the address hereinbefore provided,
shall be transmitted or delivered to and accepted by an
authorized telegraph or cable office.
2. Whenever by statute or by the Certificate of
Incorporation or by these By-Laws a notice is required to be
given, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of any stockholder or
director at any meeting thereof shall constitute a waiver of
notice of such meeting by such stockholder or director, as the
case may be, except as otherwise provided by statute.
Article XXIV
ALTERATION OF BY-LAWS
These By-Laws may be altered, amended, changed or
repealed by vote of the stockholders or at any meeting of the
Board of Directors by the vote of a majority of the directors
present or as otherwise provided by statute.
Article XXV
INDEMNIFICATION OF CORPORATE PERSONNEL
The corporation shall indemnify any person who is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise as provided
in the Certificate of Incorporation. Expenses incurred by such a
director, officer, employee or agent in defending a civil or
criminal action, suit or proceeding shall be paid by the
corporation as provided in the Certificate of Incorporation. The
corporation shall have power to purchase and maintain insurance
on behalf of any such persons against any liability asserted
against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or
not the corporation would have the power to indemnify him or her
against such liability under the provisions of the Certificate of
Incorporation. The indemnification provisions of this Article
XXV and the Certificate of Incorporation shall not be deemed
exclusive of any other rights to which those seeking
indemnification may be entitled under any applicable law, by-law,
agreement, vote of stockholders or disinterested directors or
otherwise.
The provisions of this Article XXV and Article EIGHTH
of the Certificate of Incorporation shall be deemed to be a
contract between the corporation and each person who serves as
such director, officer, employee or agent of the corporation in
any such capacity at any time while this Article XXV and Article
EIGHTH of the Certificate of Incorporation are in effect. No
repeal or modification of the provisions of this Article XXV and
Article EIGHTH of the Certificate of Incorporation nor, to the
fullest extent permitted by law, any modification of law shall
adversely affect any right or protection of a director, officer,
employee or agent of the corporation then existing at the time of
such repeal or modification.
EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS
OF
7% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
corporation's 7% Convertible Exchangeable Preferred Stock are as
set forth below:
1. Designation. (a) 447,800 shares of Preferred Stock
of the corporation are hereby constituted as a series of
Preferred Stock designated as "7% Convertible Exchangeable
Preferred Stock" (hereinafter called "this Series"). Each share
of this Series shall be identical in all respects with the other
shares of this Series except as to the dates from and after which
dividends thereon shall be cumulative. The Board of Directors is
authorized to increase or decrease (but not below the number of
shares of this Series then outstanding) the number of shares of
this Series.
(b) Shares of this Series which have been redeemed,
converted into Class A Common Stock, exchanged into Debentures
(as hereinafter defined), as hereinafter provided, or purchased
by the corporation shall be canceled, and shall revert to
authorized but unissued Preferred Stock undesignated as to
series, and may be reissued as a part of this Series or may be
reclassified and reissued as part of a new or existing series of
Preferred Stock to be created by resolution or resolutions of the
Board of Directors, all subject to the conditions or restrictions
on issuance set forth in any resolution or resolutions adopted by
the Board of Directors providing for the issue of such series of
Preferred Stock.
2. Dividends. (a) The holders of shares of this Series
shall be entitled to receive, but only out of funds legally
available therefor, cash dividends as hereinafter provided. Such
dividends shall be paid when, as and if declared by the Board of
Directors on the first day of February, May, August and November
in each year (each such date being referred to herein as a
"Dividend Payment Date") to holders of record on the record date
determined by the Board of Directors in advance of the payment of
each particular dividend. Such dividends shall be cumulative
from the date of original issuance of the shares of this Series.
(b) So long as any shares of this Series shall be
outstanding, the corporation shall not, unless full cumulative
dividends for all past dividend periods shall have been paid or
declared and set apart for payment upon all outstanding shares of
this Series and the shares of any other class or series of
Preferred Stock (including the Gold-Denominated Preferred Stock,
the Gold-Denominated Preferred Stock, Series II, the Silver-
Denominated Preferred Stock and the Step-Up Convertible Preferred
Stock) and any other class or series of stock of the corporation
ranking, as to dividends, on a parity with the shares of this
Series (the shares of any other class or series of Preferred
Stock and any other class or series of stock of the corporation
ranking as to dividends, on a parity with the shares of this
Series being herein referred to as "Parity Dividend Stock"), (i)
declare, pay or set apart any amounts for dividends on, or make
any other distribution in cash or other property in respect of,
the Class A Common Stock of the corporation, the Class B Common
Stock of the corporation or any other stock of the corporation
ranking junior to this Series as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation (the Class A Common Stock, the Class B Common
Stock and any such other stock being herein referred to as
"Junior Stock"), other than a dividend payable solely in Junior
Stock, (ii) purchase, redeem or otherwise acquire for value any
shares of Junior Stock, directly or indirectly, other than as a
result of a reclassification, exchange or conversion of one
Junior Stock for or into another Junior Stock, or other than
through the use of proceeds of a substantially contemporaneous
sale of other Junior Stock, or (iii) make any payment on account
of, or set aside money for, a sinking or other like fund for the
purchase, redemption or other acquisition for value of any shares
of Junior Stock. For purposes of this Section 2, if any
depositary shares have been issued with respect to any series of
stock, actions with respect to such depositary shares, including
acquisition of and payments on or with respect to such depositary
shares, shall be regarded as actions with respect to such series
of stock.
(c) If the funds available for the payment of dividends
are insufficient to pay in full the dividends payable on all
outstanding shares of this Series and shares of Parity Dividend
Stock, the total available funds to be paid in partial dividends
on the shares of this Series and shares of Parity Dividend Stock
shall be divided among this Series and the Parity Dividend Stock
in proportion to the aggregate amounts of dividends accrued and
unpaid with respect to this Series and the Parity Dividend Stock.
Accruals of dividends shall not bear interest.
3. Dividend Rate. The Dividend Rate on the shares of
this Series for each Dividend Period shall be $35.00 per annum.
The term "Dividend Period", as used herein, means, with respect
to any Dividend Payment Date, the period commencing on the day
following the immediately preceding Dividend Payment Date to and
including such Dividend Payment Date.
4. Redemption. (a) The shares of this Series shall not
be redeemable prior to August 1, 1995. On and after that date,
the corporation may, at its option, redeem the shares of this
Series, in whole or in part, at any time or from time to time,
upon notice given as hereinafter specified, at the following
redemption prices per share if redeemed during the twelve month
period commencing on August 1 of the years indicated:
Year Price
1995 $524.50
1996 521.00
1997 517.50
1998 514.00
1999 510.50
2000 507.00
2001 503.50
and at $500.00 per share thereafter, plus, in each case, an
amount equal to all accrued and unpaid dividends on the shares
being redeemed to and including the date fixed for such
redemption. Notwithstanding any provision of this Section 4 to
the contrary, any accrued and unpaid dividends in respect of
shares of this Series to be redeemed shall be payable to the
holder of record of such shares, as determined on the relevant
record date.
(b) Notice of redemption shall be mailed by the
corporation by first class mail, postage prepaid, not less than
30 nor more than 60 days before the date fixed for redemption, to
each transfer agent for the shares of this Series to be redeemed
and to each holder of record of such shares addressed to such
holder at his address shown on the registry books of the
corporation. Such notice of redemption shall set forth the date
fixed for redemption, the number of shares of this Series to be
redeemed and, if less than all of the shares held by such holder
are to be redeemed, the number of shares to be redeemed from such
holder, the applicable redemption price and the place or places
(including a place in the Borough of Manhattan, The City of New
York) at which stockholders may obtain payment of such redemption
price plus accrued dividends upon the surrender of the
certificates representing their shares. Failure to mail such
notice, or any defect therein or in the mailing thereof, to any
particular holder shall not affect the validity of the proceeding
for the redemption of any shares so to be redeemed from any other
holder.
(c) If less than all the outstanding shares of this
Series are to be redeemed, the number of shares of this Series to
be redeemed and the method of effecting such redemption, whether
by lot or pro rata, shall be as determined by the Board of
Directors.
(d) At any time after a notice of redemption has been
given in the manner prescribed herein and prior to the date fixed
for redemption, the corporation may deposit in trust, with a bank
or trust company identified in the notice of redemption having
capital, surplus and undistributed profits aggregating at least
$50,000,000, an aggregate amount of funds sufficient for such
redemption (including dividends accrued on the shares of this
Series called for redemption to the date fixed for redemption)
for immediate payment in the appropriate amounts upon surrender
of certificates for such shares. Any interest accrued on such
funds shall be paid to the corporation from time to time. Such
deposit in trust shall be irrevocable, except that any funds
deposited by the corporation which shall not be required for the
redemption for which they were deposited because of the exercise
of rights of conversion subsequent to the date of deposit shall
be returned to the corporation forthwith, and any funds deposited
by the corporation which are unclaimed at the end of two years
from the date fixed for such redemption shall be paid over to the
corporation upon its request, and upon such repayment the holders
of the shares so called for redemption shall look only to the
corporation for payment of the appropriate amount.
(e) From and after the date fixed for redemption (unless
the corporation shall default in making payment of the amount
payable upon such redemption), whether or not certificates for
shares so called for redemption have been surrendered by the
holders thereof as described below, dividends on the shares of
this Series so called for redemption shall cease to accrue, and
from and after the date of the deposit of trust funds for the
redemption of shares of this Series in accordance with the
provisions of Section 4(d) hereof, such shares shall be deemed to
be no longer outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the right to receive
from the corporation the amount payable upon such redemption and,
up to the close of business on the date fixed for such
redemption, the right to convert such shares as set forth in
Section 7 hereof) shall cease and terminate. Upon surrender in
accordance with the notice of redemption of the certificates for
any shares of this Series so redeemed (properly endorsed or
assigned for transfer if the Board of Directors shall so require
and the notice shall so state), the holder thereof shall be
entitled to receive payment of the redemption price plus an
amount equal to all accrued and unpaid dividends as aforesaid.
If less than all of the shares represented by any such
surrendered certificate are redeemed, the corporation shall
execute and deliver to the holder thereof, or to his written
order, a certificate or certificates representing the unredeemed
shares.
(f) In no event shall the corporation redeem less than
all the outstanding shares of this Series and shares of any other
series of stock of the corporation ranking, as to dividends and
distribution of assets upon liquidation, dissolution or winding
up of the affairs of the corporation, on a parity with the shares
of this Series ("Parity Stock") pursuant to this Section 4 unless
full cumulative dividends for all past dividend periods shall
have been paid or declared and set apart for payment upon all
outstanding shares of this Series and the shares of such Parity
Stock.
(g) In connection with any redemption of shares of this
Series, the corporation may enter into an agreement with one or
more investment bankers or other purchasers for the purchase of
the shares to be redeemed from the holders thereof and the
conversion of such purchased shares into shares of Class A Common
Stock as provided in Section 7 hereof. Such agreement shall
provide that the amount to be paid by such purchasers to the
holders of the shares of this Series to be redeemed shall not be
less than the redemption price for such shares together with all
accrued and unpaid dividends thereon to and including the date
fixed for redemption and may provide further that such amount be
deposited in trust, on or before the close of business on the
date fixed for redemption, with a bank or trust company
designated by the corporation meeting the requirements set forth
in Section 4(d) hereof. Notwithstanding anything to the contrary
contained in this Section, the obligation of the corporation to
pay the redemption price of the shares of this Series to be
redeemed, together with accrued and unpaid dividends thereon to
the date fixed for redemption, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any shares of
this Series to be redeemed that have not been duly surrendered
for conversion by the holders thereof may, at the option of the
corporation, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in this
subsection (g) or in Section 7 hereof) surrendered by such
purchasers for conversion, all as of immediately prior to the
close of business on the date fixed for redemption, subject to
payment of the above amount as aforesaid.
(h) For purposes of this Section 4, "accrued and unpaid
dividends" in respect of any share of this Series shall mean an
amount computed at the Dividend Rate for this Series from the
date on which dividends on such share became cumulative to and
including the date to which such dividends are to be accrued,
less the aggregate amount of all dividends theretofore paid
thereon. The amount accrued subsequent to the most recent
Dividend Period shall be computed by dividing the quarterly
dividend payment by the actual number of days in the uncompleted
quarter, and thereafter multiplying this figure by the number of
days in such quarter up to and including the date to which
dividends are to be accrued.
5. Voting Rights. (a) Except for the voting rights
described below and except as otherwise required by law, the
holders of shares of this Series shall not be entitled to vote on
any matter or to receive notice of, or to participate in, any
meeting of the stockholders of the corporation.
(b) The shares of this Series shall be entitled to vote
with respect to the election of directors in accordance with
Sections (b)(4) and (b)(5) of Article FOURTH of the certificate
of incorporation.
(c) Whenever dividends payable on shares of this Series
shall be in default in an aggregate amount equal to or exceeding
six full quarterly dividends on all shares of this Series at the
time outstanding, the number of directors then constituting the
Board of Directors of the corporation shall be increased by two,
and holders of shares of this Series shall, in addition to any
other voting rights, have the right, voting separately as a class
together with holders of all other series of stock of the
corporation ranking on a parity with shares of this Series either
as to dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights have
been conferred and are exercisable (such other series of stock
being herein referred to as "Other Voting Stock"), to elect such
two additional directors. In such case, the Board of Directors
will be increased by two directors, and the holders of Preferred
Stock of such series (either alone or with the holders of Other
Voting Stock) will have the exclusive right as members of such
class, as described above, to elect two directors at the next
annual meeting of stockholders. Whenever such right of the
holders of shares of this Series shall have vested, such right
may be exercised initially either at a special meeting of such
holders as provided in Section 5(d) hereof or at any annual
meeting of stockholders held for the purpose of electing
directors, and thereafter at such annual meetings. The right of
the holders of shares of this Series to vote together as a class
with the holders of shares of any Other Voting Stock shall
continue until such time as all dividends accrued on outstanding
shares of this Series to the Dividend Payment Date next preceding
the date of any such determination shall have been paid in full,
or declared and set apart in trust for payment, at which time the
right of the holders of shares of this Series so to vote shall
terminate, except as herein or by law expressly provided, subject
to revesting upon the occurrence of a subsequent default of the
character mentioned above.
(d) At any time when the right of the holders of shares
of this Series to elect directors as provided in Section 5(c)
hereof shall have vested, and if such right shall not already
have been initially exercised, a proper officer of the
corporation, upon the written request of holders of record of at
least 10% of the aggregate number of shares of this Series and
shares of any Other Voting Stock at the time outstanding,
addressed to the Secretary of the corporation, shall call a
special meeting of the holders of shares of this Series and of
such Other Voting Stock for the purpose of electing directors.
Such meeting shall be held at the earliest practicable date upon
the same form of notice as is required for annual meetings of
stockholders at the place for the holding of annual meetings of
stockholders of the corporation (or such other suitable place as
is designated by such officer). If such meeting shall not be
called by a proper officer of the corporation within 20 days
after personal service of such written request upon the Secretary
of the corporation, or within 20 days after mailing the same
within the United States of America, 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 at least 10% of the
aggregate number of shares of this Series and shares of any Other
Voting Stock at the time outstanding may designate in writing one
of their number to call such a meeting at the expense of the
corporation, and such meeting may be called by such person so
designated upon the same form of notice as is required for annual
meetings of stockholders and shall be held at the place for the
holding of annual meetings of stockholders of the corporation (or
such other suitable place as is designated by such person). Any
holder of shares of this Series so designated shall have access
to the registry books of the corporation for the purpose of
causing a meeting of stockholders to be called pursuant to this
subsection 5(d). Notwithstanding anything to the contrary
contained in this subsection 5(d), no such special meeting shall
be called during the period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders of the
corporation.
(e) At any meeting held for the purpose of electing
directors at which holders of shares of this Series shall have
the right, voting together as a class with holders of shares of
any Other Voting Stock to elect directors as provided in Section
5(c) hereof, the presence, in person or by proxy, of the holders
of 33 1/3% of the aggregate number of shares of this Series and
shares of such Other Voting Stock at the time outstanding shall
be required and be sufficient to constitute a quorum of such
class for the election of directors pursuant to such Section
5(c). At any such meeting or adjournment thereof, (i) the
absence of a quorum of the shares of this Series and shares of
such Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section 5(c)
hereof and (ii) in the absence of a quorum, either of the shares
of this Series and shares of such Other Voting Stock or of any
other shares of stock of the corporation, or both, a majority of
the holders, present in person or by proxy, of the class or
classes of stock which lack a quorum shall have the power to
adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than
announcement at the meeting, until a quorum shall be present.
(f) During any period when the holders of shares of this
Series shall have the right to vote together as a class with the
holders of shares of any Other Voting Stock for directors as
provided in Section 5(c) hereof, (i) the directors so elected by
such holders shall continue in office until their successors
shall have been elected by such holders or until termination of
the rights of such holders to vote as a class for directors and
(ii) any vacancies in the Board of Directors shall be filled only
by a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the
class or classes of stock which elected the director whose office
shall have become vacant. Immediately upon termination of the
right of holders of this Series and any Other Voting Stock to
vote as a class for directors, (i) the term of office of the
directors so elected shall terminate and (ii) the number of
directors shall be such number as may be provided for in the
by-laws of the corporation irrespective of any increase pursuant
to the provisions of Section 5(c) hereof.
(g) In addition to any other vote required by law, the
corporation shall not change the preferences, rights or
limitations with respect to this Series, if such action would
materially adversely affect the interests of the holders thereof,
without the affirmative vote or consent of the holders of at
least two-thirds of the aggregate number of shares of this Series
at the time outstanding, voting as a separate class; provided,
that nothing herein contained shall require such a class vote in
connection with any increase in the total number of authorized
shares of Common Stock (or any series thereof) or Preferred Stock
(or any series thereof), or the creation, authorization or
issuance of any Junior Stock or any series of stock of the
corporation ranking, as to dividends or distribution of assets
upon liquidation, dissolution or winding up of the affairs of the
corporation, prior to or on a parity with the shares of this
Series; provided, further, that no such vote of the holders of
shares of this Series shall be required if, at or prior to the
time when the actions described in this subsection 5(g) shall
become effective, provision is made in accordance with Section 4
hereof for the redemption of all shares of this Series at the
time outstanding.
6. Preference upon Liquidation. (a) In the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the corporation, after payment or provision for
payment of the debts and other liabilities of the corporation and
of dividends and liquidation preferences in respect of any stock
of the corporation ranking senior to the shares of this Series as
to such payments, the holders of shares of this Series shall be
entitled to receive, out of the remaining net assets of the
corporation, the amount of $500.00 in cash for each share of this
Series, plus an amount equal to all dividends (whether or not
earned or declared) accrued and unpaid on each such share up to
the date fixed for distribution, before any distribution shall be
made to or set apart for the holders of any Junior Stock. If,
after payment or provision for payment of the debts and other
liabilities of the corporation and of dividends and liquidation
preferences in respect of any stock of the corporation ranking
senior to the shares of this Series as to such payments, the
remaining net assets of the corporation are not sufficient to pay
to the holders of shares of this Series the full amount of their
preference set forth above, then the remaining net assets of the
corporation shall be divided among and paid to the holders of
shares of this Series, holders of shares of any other class or
series of Preferred Stock and holders of shares of any stock of
the corporation on a parity with this Series as to dividends and
distribution of assets upon liquidation, dissolution or winding
up of the affairs of the corporation ratably per share in
proportion to the full per share amounts to which they
respectively are entitled. For purposes of this subsection (a)
and Section 6(b) hereof, a consolidation or merger of the
corporation with one or more other corporations or the sale of
all or substantially all of the assets of the corporation shall
not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation.
(b) Subject to the rights of the holders of shares of
any series or class of stock ranking prior to this Series and of
the holders of shares of any stock of the corporation ranking on
a parity as to dividends and distribution of assets upon
liquidation, dissolution or winding up of the affairs of the
corporation, after payment shall have been made in full to the
holders of this Series as provided in Section 6(a) hereof and
this subsection (b), the holders of any Junior Stock 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 shares of this Series shall not be
entitled to share therein.
7. Conversion Privilege. (a) Subject to and upon
compliance with the provisions of this Section 7, at the option
of the holder thereof, each share of this Series may, at any time
(unless shares of this Series shall be called for redemption,
then, with respect to shares of this Series so called, until and
including, but, if the corporation shall not default in making
payment of the amount payable on such redemption, not after, the
close of business on the date fixed for redemption), be converted
into a number of fully paid and nonassessable shares of Class A
Common Stock equal to the quotient obtained by dividing $500.00
by the Conversion Price (as hereinafter defined) in effect at the
Date of Conversion (as hereinafter defined).
(b) In order to exercise the conversion privilege, any
holder of shares of this Series to be converted shall surrender
such shares to the corporation at any time during usual business
hours at the place or places (including a place in the Borough of
Manhattan, The City of New York) maintained for such purpose,
accompanied by a fully executed written notice, in substantially
the form set forth on the reverse of the certificate representing
shares of this Series, that the holder elects to convert such
shares. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of
Class A Common Stock shall be issued. Shares of this Series
surrendered for conversion shall (if so required by the
corporation) be properly endorsed or assigned for transfer by the
holder or his attorney duly authorized in writing. The holders
of shares of this Series at the close of business on any record
date for the payment of dividends on such shares will be entitled
to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
conversion thereof or the corporation's default in the payment of
the dividend due on such Dividend Payment Date. Shares of this
Series surrendered for conversion during the period from the
close of business on any record date for the payment of dividends
on such shares to the opening of business on the corresponding
Dividend Payment Date (except shares called for redemption on a
redemption date during the period from such record date to and
including the Dividend Payment Date) must be accompanied by
payment of an amount equal to the dividend payable on such shares
on such Dividend Payment Date. A holder of shares of this Series
on a record date for the payment of dividends on such shares who
converts such shares on a Dividend Payment Date will receive the
dividend payable on such shares by the corporation on such date,
and the converting holder need not include a payment in the
amount of any such dividend upon surrender of such shares for
conversion. As promptly as practicable after the receipt of such
notice and the surrender of such shares of this Series as
aforesaid, the corporation shall, subject to the provisions of
Section 10 hereof, issue and deliver at such place or places
referred to in this subsection (b) to such holder, or on his
written order, a certificate or certificates for the number of
full shares of Class A Common Stock issuable on such conversion
of shares of this Series in accordance with the provisions of
this Section 7, and cash, as provided in Section 7(c) hereof, in
respect of any fraction of a share of Class A Common Stock
otherwise issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of
business on the date (herein called, the "Date of Conversion") on
which such notice shall have been received by the corporation and
such shares of this Series shall have been surrendered as
aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Class A Common Stock
shall be issuable upon such conversion shall be deemed to have
become on the Date of Conversion the holder or holders of record
of the shares of Class A Common Stock represented thereby;
provided, that any such surrender on any date when the registry
books of the corporation shall be closed shall constitute the
person or persons in whose name or names the certificate or
certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of
business on the next succeeding day on which such registry books
are open, but such conversion shall nevertheless be at the
Conversion Price in effect at the close of business on the date
when such shares of this Series shall have been so surrendered
with the conversion notice. In the case of conversion of a
portion, but less than all, of the shares of this Series
represented by a certificate surrendered for conversion, the
corporation shall execute, and deliver to the holder thereof, or
on his written order, a certificate or certificates representing
the shares of this Series which the holder has not elected to
convert into shares of Class A Common Stock. No payment or
adjustment shall be made for dividends accrued on the shares of
this Series converted as provided in this Section 7 or for
dividends or distributions accrued on any Class A Common Stock.
(c) No fractions of shares or scrip representing
fractions of shares shall be issued upon conversion of shares of
this Series. If more than one share of this Series shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Class A Common Stock which shall be
issuable upon conversion of such shares shall be computed on the
basis of the aggregate number of shares of this Series
surrendered for conversion. If any fraction of a share of Class
A Common Stock would, except for the provisions of this
subsection (c), be issuable on the conversion of any shares of
this Series, the corporation shall make payment in lieu thereof
in an amount of United States dollars equal to the value of such
fraction computed on the basis of the closing price of the Class
A Common Stock as reported on the Composite Tape for New York
Stock Exchange - Listed Stocks (or if the Class A Common Stock is
not listed or admitted to trading on such exchange on the Date of
Conversion, then on the principal national or regional securities
exchange on which the Class A Common Stock is then listed or
admitted to trading, or, if not listed or admitted to trading on
any national or regional securities exchange, then as reported by
the National Association of Securities Dealers, Inc. through
NASDAQ or a similar organization if NASDAQ is no longer reporting
information) on the last Trading Day (as hereinafter defined)
prior to the Date of Conversion or if no such sale takes place on
such day, the last sale price for such day shall be the average
of the closing bid and asked prices regular way on the New York
Stock Exchange (or if the Class A Common Stock is not listed or
admitted to trading on such exchange, on the principal national
securities exchange on which the Class A Common Stock is then
listed or admitted to trading, or, if not listed or admitted to
trading on any national securities exchange, the average of the
highest bid and lowest asked prices as reported by the National
Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting
information) (any such last sale price being herein referred to
as the "Last Sale Price"). If on such Trading Day the Class A
Common Stock is not quoted by any such organization, the fair
value of such Class A Common Stock on such day, as determined by
the Board of Directors, shall be used. For the purpose of this
subsection (c), the term "Trading Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are not traded on such exchange or in such
market.
(d) The Conversion Price per share of Class A Common
Stock issuable upon conversion of shares of this Series (herein
called the "Conversion Price") shall initially be $24.49 as of
the Initial Filing Date (as defined in the Certificate of
Incorporation). The Conversion Price shall be subject to
adjustment from time to time as follows:
(i) In case the corporation shall (1) pay a
dividend or make a distribution in shares of Class A
Common Stock, (2) subdivide its outstanding shares of
Class A Common Stock into a greater number of shares or
(3) combine its outstanding shares of Class A Common
Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such action shall be
adjusted so that the holder of any shares of this Series
thereafter surrendered for conversion shall be entitled
to receive the number of shares of Class A Common Stock
which he would have owned or have been entitled to
receive immediately following such action had such shares
been converted immediately prior thereto. An adjustment
made pursuant to this subsection (d)(i) shall become
effective immediately, except as provided in subsection
(d)(v) below, after the record date in the case of a
dividend or distribution and shall become effective
immediately after the effective date in the case of a
subdivision or combination.
(ii) In case the corporation shall issue rights,
warrants or options to all holders of Class A Common
Stock entitling them (for a period not exceeding 45 days
from the date of such issuance) to subscribe for or
purchase shares of Class A Common Stock at a price per
share less than the Recent Market Price per share (as
determined pursuant to subsection (d)(iv) below) of the
Class A Common Stock on the record date mentioned below,
the Conversion Price shall be adjusted to a price,
computed to the nearest cent, so that the same shall
equal the price determined by multiplying:
(1) the Conversion Price in effect immediately
prior to the date of issuance of such rights or
warrants by a fraction, of which
(2) the numerator shall be (A) the number of
shares of Class A Common Stock outstanding on the
date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of shares which the aggregate
offering price of the total number of shares so
offered for subscription or purchase would purchase
at such Recent Market Price (determined by
multiplying such total number of shares by the
exercise price of such rights, warrants or options
and dividing the product so obtained by such Recent
Market Price), and of which
(3) the denominator shall be (A) the number of
shares of Class A Common Stock outstanding on the
date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of additional shares of Class A
Common Stock which are so offered for subscription
or purchase.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after the record
date for the determination of holders entitled to receive such
rights, warrants or options.
(iii) In case the corporation shall distribute to
substantially all holders of Class A Common Stock
evidences of indebtedness, equity securities (including
equity interests in the corporation's Subsidiaries (as
hereinafter defined)) other than Class A Common Stock, or
other assets (other than cash dividends paid out of
earned surplus of the corporation or, if there shall be
no earned surplus, out of net profits for the fiscal year
in which the dividend is made and/or the preceding fiscal
year), or shall distribute to substantially all holders
of Class A Common Stock rights or warrants to subscribe
for securities (other than those referred to in
subsection (d)(ii) above), then in each such case the
Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying:
(1) the Conversion Price in effect immediately
prior to the date of such distribution by a
fraction, of which
(2) the numerator shall be the Recent Market
Price per share (as determined as provided in
subsection (d)(iv) below) of the Class A Common
Stock on the record date mentioned below less the
then fair market value (as determined by the Board
of Directors, whose determination shall be
conclusive evidence of such fair market value, and
described in a resolution of the Board of Directors
filed with the transfer agent for the shares of this
Series) of the portion of the assets, evidences of
indebtedness and equity securities so distributed or
of such subscription rights or warrants applicable
to one share of Class A Common Stock, and of which
(3) the denominator shall be such Recent
Market Price per share of the Class A Common Stock.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date for the determination of
stockholders entitled to receive such distribution.
As used herein, the term "Subsidiary" means (i) any
corporation or other entity of which securities or
other ownership interests having ordinary voting
power to elect a majority of the Board of Directors
or other persons performing similar functions are at
the time directly or indirectly owned by the
corporation or (ii) any partnership of which more
than 50% of the partnership interests are owned by
the corporation or any Subsidiary.
(iv) For purposes of any computation under
subsections (d)(ii) and (d)(iii) above, the Recent Market
Price per share of Class A Common Stock on any date shall
be deemed to be the average of the Last Sale Prices of a
share of Class A Common Stock for the five consecutive
Trading Days commencing not more than 20 Trading Days
before and ending not later than the earliest of the date
in question and the date before the "ex" date with
respect to the issuance or distribution requiring such
computation. If on any such Trading Day the Class A
Common Stock is not quoted by any organization referred
to in the definition of Last Sale Price in Section 7(c)
hereof, the fair value of the Class A Common Stock on
such day, as determined by the Board of Directors, shall
be used. For purposes of this paragraph, the term "'ex'
date", when used with respect to any issuance or
distribution, means the first date on which the Class A
Common Stock trades regular way on the principal national
securities exchange on which the Class A Common Stock is
listed or admitted to trading (or, if not so listed or
admitted, on NASDAQ or a similar organization if NASDAQ
is no longer reporting trading information) without the
right to receive such issuance or distribution.
(v) In any case in which this subsection (d) shall
require that an adjustment be made immediately following
a record date, the corporation may elect to defer the
effectiveness of such adjustment (but in no event until a
date later than the effective time of the event giving
rise to such adjustment), in which case the corporation
shall, with respect to any shares of this Series
converted after such record date and before such
adjustment shall have become effective (1) defer paying
any cash payment pursuant to Section 7(c) hereof or
issuing to the holder of shares of this Series the number
of shares of Class A Common Stock issuable upon
conversion in excess of the number of shares of Class A
Common Stock issuable thereupon only on the basis of the
Conversion Price prior to adjustment and (2) not later
than five business days after such adjustment shall have
become effective, pay to such holder the appropriate cash
payment pursuant to Section 7(c) hereof and issue to such
holder the additional shares of Class A Common Stock and
other capital stock of the corporation issuable on such
conversion.
(vi) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase
or decrease of at least 1% in the Conversion Price;
provided, that any adjustments which by reason of this
subsection (d)(vi) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 7 shall
be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
(vii) Whenever the Conversion Price is adjusted as
herein provided, the corporation shall promptly (1) file
with the transfer agent for the shares of this Series a
certificate of an officer of the corporation (an
"Officer's Certificate") setting forth the Conversion
Price after such adjustment and setting forth in
reasonable detail the facts requiring such adjustment and
the calculations on which the adjustment is based, which
certificate shall be conclusive evidence of the
correctness of such adjustment and (2) mail or cause to
be mailed a notice of such adjustment to each holder of
shares of this Series at his address as the same appears
on the registry books of the corporation.
Notwithstanding anything in this Section 7 to the contrary, the
corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this Section
7, as it in its discretion shall determine to be advisable in
order that any stock dividend, subdivision or combination of
shares, distribution of rights or warrants to purchase stock or
securities, distribution of securities convertible into or
exchangeable for stock, or distribution of assets (other than
cash dividends) hereafter made by the corporation to its
stockholders shall not be taxable.
(e) In case of any reclassification or change of
outstanding shares of Class A Common Stock (other than a change
in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the corporation
with, or merger of the corporation into, any other Person, or any
merger of another Person into the corporation (other than a
merger which does not result in any reclassification, change,
conversion, exchange or cancellation of outstanding shares of
Class A Common Stock) or any sale or transfer of all or
substantially all of the assets of the corporation, the
corporation, or the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the
case may be, shall make effective provision in the articles or
certificate of incorporation, providing that the holder of each
share of this Series then outstanding shall have the right
thereafter to convert such share only into the kind and amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or
transfer, by a holder of the number of shares of Class A Common
Stock into which such shares of this Series might have been
converted immediately prior to such reclassification, change,
consolidation, merger, sale or transfer, assuming such holder of
Class A Common Stock of the corporation (i) is not a Person with
which the corporation consolidated or into which the corporation
merged or which merged into the corporation or to which such sale
or transfer was made, as the case may be ("constituent Person"),
or an Affiliate (as hereinafter defined) of a constituent Person
and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or transfer
is not the same for each share of Class A Common Stock of the
corporation held immediately prior to such reclassification,
change, consolidation, merger, sale or transfer by others than a
constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this subsection
(e) the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such articles or
certificate of incorporation shall provide for adjustments which,
for events subsequent to the effective date of such articles or
certificate of incorporation, shall be as nearly equivalent as
may be practicable to the adjustments provided for herein. The
above provisions of this subsection (e) shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales or transfers.
For the purpose of this subsection (e), the term "Person"
means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or
political subdivision thereof, and the term "Affiliate" of any
specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of the
definition of "Affiliate", the term "control" when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
(f) The corporation shall reserve, free from preemptive
rights, out of its authorized but unissued shares, sufficient
shares of Class A Common Stock to provide for the conversion of
the shares of this Series from time to time outstanding as such
shares of this Series are presented for conversion.
(g) The corporation covenants that all shares of Class A
Common Stock which may be issued upon conversion of shares of
this Series will upon issue be duly and validly issued, fully
paid and nonassessable by the corporation and except as provided
in Section 10 hereof free from all taxes, liens and charges with
respect to the issue thereof.
8. Exchange. (a) The shares of this Series are
exchangeable in whole, but not in part, at the option only of the
corporation on any Dividend Payment Date for the corporation's 7%
Convertible Subordinated Debentures Due 2007 issued under the
Subordinated Indenture dated as of July 21, 1992, as amended (the
"Indenture"), between the corporation and Chemical Bank, as
trustee (the "Debentures"); provided that on or prior to the date
of exchange the corporation shall have paid to or declared and
set aside for payment to the holders of outstanding shares of
this Series all accrued and unpaid dividends on shares of this
Series through the Exchange Date (as hereinafter defined). The
holders of shares of this Series will be entitled to receive
$500.00 principal amount of Debentures in exchange for each share
of this Series held by them at the time of exchange. The
corporation will mail to each holder of record of the shares of
this Series written notice of its intention to exchange not less
than 30 nor more than 60 days prior to the date fixed for the
exchange (the "Exchange Date"). Each such notice shall state:
(i) the Exchange Date, (ii) the place or places where
certificates for shares of this Series are to be surrendered for
exchange into Debentures and (iii) that dividends on the shares
of this Series to be exchanged will cease to accrue on the
Exchange Date. Prior to giving notice of intention to exchange,
the corporation shall execute and deliver with a bank or trust
company selected by the corporation an Indenture in substantially
the form filed as an exhibit to the Registration Statement on
Form S-3 (Registration No. 33-45787) filed with the Securities
and Exchange Commission (the "Commission") on February 18, 1992,
as amended as declared effective by the Commission on June 26,
1992 referred to above with such changes as may be required by
law or usage. The corporation will cause the Debentures to be
authenticated on the Dividend Payment Date on which the exchange
is effective, and will pay interest on the Debentures at the rate
and on the dates specified in such Indenture from the Exchange
Date.
(b) The corporation will not give notice of its
intention to exchange under Section 8(a) hereof unless it shall
file at the place or places (including a place in the Borough of
Manhattan, The City of New York) maintained for such purpose an
opinion of counsel (who may be an employee of the corporation) to
the effect that (i) the Indenture has been duly authorized,
executed and delivered by the corporation, has been duly
qualified under the Trust Indenture Act of 1939 (or that such
qualification is not necessary) and constitutes a valid and
binding instrument enforceable against the corporation in
accordance with its terms (subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles, and subject to such other
qualifications as are then customarily contained in opinions of
counsel experienced in such matters), (ii) the Debentures have
been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered in
exchange for the shares of this Series, will constitute valid and
binding obligations of the corporation entitled to the benefits
of the Indenture (subject as aforesaid), (iii) neither the
execution nor delivery of the Indenture or the Debentures nor
compliance with the terms, conditions or provisions of such
instruments will result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or agreement or instrument,
known to such counsel to which the corporation or any of its
Subsidiaries is a party or by which it or any of them is bound,
or any decree, judgment, order, rule or regulation, known to such
counsel, of any court or governmental agency or body having
jurisdiction over the corporation and such Subsidiaries or any of
their properties, and (iv) the Debentures have been duly
registered for such exchange with the Securities and Exchange
Commission under a registration statement that has become
effective under the Securities Act of 1933 (the "Act") or that
the exchange of the Debentures for the shares of this Series is
exempt from registration under the Act.
(c) If notice has been mailed as aforesaid, from and
after the Exchange Date (unless the corporation shall default in
issuing Debentures in exchange for shares of this Series or in
making or providing for the payment of accrued and unpaid
dividends on the outstanding shares of this Series to the
Exchange Date) dividends on the shares of this Series shall cease
to accrue, and such shares shall be deemed to be no longer
outstanding, and all rights of the holders thereof as
stockholders of the corporation shall cease and terminate. Upon
surrender in accordance with said notice of the certificates for
shares of this Series so exchanged (properly endorsed or assigned
for transfer if the Board of Directors shall so require and the
notice shall so state), such shares shall be exchanged by the
corporation into Debentures as aforesaid.
9. Notice of Certain Events. In case:
(a) the corporation shall declare a dividend (or any
other distribution) payable to the holders of Class A Common
Stock (otherwise than cash dividends paid out of the earned
surplus of the corporation or, if there shall be no earned
surplus, out of net profits for the fiscal year in which the
dividend is made and/or the preceding fiscal year, and dividends
payable in Class A Common Stock); or
(b) the corporation shall authorize the granting to the
holders of Class A Common Stock of rights to subscribe for or
purchase any shares of stock of any class or of any other rights
or warrants; or
(c) the corporation shall authorize any reclassification
or change of the Class A Common Stock (other than a subdivision
or combination of its outstanding shares of Class A Common Stock
or a change in par value, or from par value to no par value, or
from no par value to par value), or any consolidation, merger or
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 conveyance of all or substantially all the property
or business of the corporation; or
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the corporation; then,
the corporation shall cause to be filed at the place or places
maintained for the purpose of conversion of shares of this Series
as provided in Section 7(b) hereof, and shall cause to be mailed
to each holder of shares of this Series, at his address as it
shall appear on the registry books of the corporation, as
promptly as possible but in any event at least 20 days before the
date hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one date is
specified), a notice stating the date on which (i) a record is
expected to be taken for the purpose of such dividend,
distribution, rights or warrants, or if a record is not to be
taken, the date as of which the holders of Class A Common Stock
of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or (ii) such reclassification,
change, consolidation, merger, share exchange, sale, transfer,
conveyance, dissolution, liquidation or winding-up is expected to
become effective and the date, if any is to be fixed, as of which
it is expected that holders of Class A Common Stock of record
shall be entitled to exchange their shares of Class A Common
Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, share exchange,
sale, transfer, conveyance, dissolution, liquidation or
winding-up.
10. Taxes. The corporation will pay any and all
documentary, stamp or similar taxes payable to the United States
of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of (a)
certificates for shares of this Series on redemption of less than
all of the shares represented by any certificate for such shares
surrendered for redemption or (b) certificates for shares of
Class A Common Stock on conversion of shares of this Series
pursuant to Section 7 hereof; provided, 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
certificates for shares of this Series or Class A Common Stock,
as the case may be, in a name other than that of the holder of
shares of this Series to be redeemed or converted and no such
issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the corporation the
amount of any such tax or has established, to the satisfaction of
the corporation, that such tax has been paid. The corporation
extends no protection with respect to any other taxes imposed in
connection with such redemption or conversion of shares of this
Series.
11. No Other Rights. The shares of this Series shall
not have any relative, participating, optional or other special
rights and powers other than as set forth herein and other than
any which may be provided by law.
12. Miscellaneous. Capitalized terms which are defined
in this Exhibit are defined only for the purposes of this
Exhibit, and not for the purposes of other Exhibits to the
certificate of incorporation. Unless otherwise indicated,
section references contained in this Exhibit refer to the
corresponding sections of this Exhibit.
EXHIBIT 4.2
CERTIFICATE OF DESIGNATIONS
OF
STEP-UP CONVERTIBLE PREFERRED STOCK
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
corporation's Step-Up Convertible Preferred Stock are as set
forth below:
1. Designation. (a) 700,000 shares of Preferred
Stock of the corporation are hereby constituted as a series of
Preferred Stock designated as "Step-Up Convertible Preferred
Stock" (hereinafter called "this Series"). Each share of this
Series shall be identical in all respects with the other shares
of this Series except as to the dates from and after which
dividends thereon shall be cumulative. The Board of Directors is
authorized to increase or decrease (but not below the number of
shares of this Series then outstanding) the number of shares of
this Series.
(b) Shares of this Series which have been converted
into Class A Common Stock of the corporation, redeemed for cash,
Class A Common Stock or a combination thereof, as hereinafter
provided, or purchased by the corporation shall be canceled, and
shall revert to authorized but unissued shares of Preferred Stock
undesignated as to series, and may be reissued as a part of this
Series or may be reclassified and reissued as part of a new or
existing series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, all subject to the
conditions or restrictions on issuance set forth in any
resolution or resolutions adopted by the Board of Directors
providing for the issue of such series of Preferred Stock.
2. Dividends. (a) The holders of shares of this
Series shall be entitled to receive, but only out of funds
legally available therefor, cash dividends as hereinafter
provided. Such dividends shall be paid when, as and if declared
by the Board of Directors on the first day of February, May,
August and November in each year (each such date being referred
to herein as a "Dividend Payment Date") to holders of record on
the record date determined by the Board of Directors in advance
of the payment of each particular dividend. Such dividends shall
be cumulative from the date of original issuance of the shares of
this Series.
(b) So long as any shares of this Series shall be
outstanding, the corporation shall not, unless full cumulative
dividends for all past dividend periods shall have been paid or
declared and set apart for payment upon all outstanding shares of
this Series and the shares of any other class or series of
Preferred Stock (including the Gold-Denominated Preferred Stock,
the Gold-Denominated Preferred Stock, Series II, the Silver-
Denominated Preferred Stock and the 7% Convertible Exchangeable
Preferred Stock) and any other class or series of stock of the
corporation ranking, as to dividends, on a parity with shares of
this Series (the shares of any other class or series of Preferred
Stock and any other class or series of stock of the corporation
ranking, as to dividends, on a parity with shares of this Series
being herein referred to as "Parity Dividend Stock"), (i)
declare, pay or set apart any amounts for dividends on, or make
any other distribution in cash or other property in respect of,
the Class A Common Stock of the corporation, Class B Common Stock
of the corporation or any other stock of the corporation ranking
junior to this Series as to dividends or distribution of assets
upon liquidation, dissolution or winding up of the affairs of the
corporation (the Class A Common Stock, the Class B Common Stock
and any such other stock being herein referred to as "Junior
Stock"), other than a dividend payable solely in Junior Stock,
(ii) purchase, redeem or otherwise acquire for value any shares
of Junior Stock, directly or indirectly, other than as a result
of a reclassification, exchange or conversion of one Junior Stock
for or into another Junior Stock, or other than through the use
of proceeds of a substantially contemporaneous sale of other
Junior Stock, or (iii) make any payment on account of, or set
aside money for, a sinking or other like fund for the purchase,
redemption or other acquisition for value of any shares of Junior
Stock. For purposes of this Section 2, if any depositary shares
have been issued with respect to any series of stock, actions
with respect to such depositary shares, including acquisition of
and payments on or with respect to such depositary shares, shall
be regarded as actions with respect to such series of stock.
(c) If the funds available for the payment of
dividends are insufficient to pay in full the dividends payable
on all outstanding shares of this Series and shares of Parity
Dividend Stock, the total available funds to be paid in partial
dividends on the shares of this Series and shares of Parity
Dividend Stock shall be divided among this Series and the Parity
Dividend Stock in proportion to the aggregate amounts of
dividends accrued and unpaid with respect to this Series and the
Parity Dividend Stock. Accruals of dividends shall not bear
interest.
3. Dividend Rate. The Dividend Rate on the shares of
this Series for the period from the date of original issue
thereof to and including August 1, 1996, shall be $25.00 per
annum per share and for each Dividend Period thereafter shall be
$35.00 per annum per share. The term "Dividend Period", as used
herein, means, with respect to any Dividend Payment Date, the
period commencing on the day following the immediately preceding
Dividend Payment Date to and including such Dividend Payment
Date.
4. Redemption. (a) The shares of this Series shall
not be redeemable prior to August 1, 1996. On and after that
date, the corporation may, at its option, redeem the shares of
this Series, in whole or in part, at any time or from time to
time, as set forth herein, subject to the provisions described
below.
(b)(i) The shares of this Series may be redeemed for
Class A Common Stock, at the option of the corporation, at any
time on or after August 1, 1996 and prior to August 1, 1999 only
if, for 20 Trading Days within any period of 30 consecutive
Trading Days, including the last Trading Day of such period, the
Current Market Price of the Class A Common Stock on each of such
20 Trading Days exceeds 125% of the Conversion Price in effect on
such Trading Day. In order to exercise this redemption option,
the corporation must issue a press release announcing the
redemption (the "Press Release") prior to the opening of business
on the third Trading Day after the condition in the preceding
sentence has been met but in no event prior to August 1, 1996.
The Press Release shall announce the redemption and set forth the
number of shares of this Series which the corporation intends to
redeem. The corporation may redeem shares of this Series
pursuant to this Section subsection (b) only if the Class A
Common Stock is listed or admitted to trading on a national or
regional securities exchange in the United States or reported by
the National Association of Securities Dealers Automated
Quotation System ("NASDAQ").
(ii) Upon redemption of shares of this Series by the
corporation in accordance with Section 4(b)(i) hereof on the date
specified in the notice to holders required under Section
4(b)(iii) hereof (the "Redemption Date"), each share of this
Series so redeemed shall be redeemed for a number of shares of
Class A Common Stock equal to $500.00 divided by the Conversion
Price as of the opening of business on the Redemption Date. The
Redemption Date shall be selected by the corporation, shall be
specified in the notice of redemption and shall be not less than
15 days or more than 60 days after the date on which the
corporation issues the Press Release.
Upon any redemption of this Series for Common Stock
pursuant to this subsection (b), the corporation shall pay any
accrued and unpaid dividends for any Dividend Period ending on or
prior to the Redemption Date. If a Redemption Date falls after a
dividend payment record date and prior to the corresponding
Dividend Payment Date, then each holder of shares of this Series
at the close of business on such dividend payment record date
shall be entitled to the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
redemption of such shares before such Dividend Payment Date. In
the case of any Redemption Date occurring prior to the record
date for the November 1, 1996 Dividend Payment Date, the holders
of the shares of this Series to be redeemed on such Redemption
Date shall be entitled to any accrued and unpaid dividends
through August 1, 1996 but not thereafter. Except as provided
above, the corporation shall make no payment or allowance for
unpaid dividends, whether or not in arrears, on shares of this
Series called for redemption under this subsection (b) for
Class A Common Stock or on the shares of Class A Common Stock
issued upon such redemption.
(iii) If the corporation elects to redeem shares of
this Series pursuant to Section 4(b)(i) hereof, notice of such
redemption shall be given not more than four Business Days after
the date on which the corporation issues the Press Release, to
each holder of record of the shares to be redeemed. Such notice
shall be provided by first class mail, postage prepaid, at such
holder's address as the same appears on the stock records of the
corporation, and shall state, as appropriate: (1) the Redemption
Date; (2) the number of shares of this Series (expressed in one-
twentieths of a share of this Series) to be redeemed and, if
fewer than all the shares held by such holder are to be redeemed,
the number of such shares (expressed in one-twentieths of a share
of this Series) to be redeemed from such holder; (3) the number
of shares of Class A Common Stock to be issued with respect to
each one-twentieth of a share of this Series; (4) the place or
places at which certificates for such shares are to be
surrendered for certificates representing shares of Class A
Common Stock; and (5) the date on which dividends on the shares
to be redeemed shall cease to accrue as provided herein. Failure
to mail such notice, or any defect therein or in the mailing
thereof, to any particular holder shall not affect the validity
of the proceeding for the redemption of any shares so to be
redeemed from any other holder.
At the close of business on the Redemption Date, each
holder of shares of this Series to be redeemed (unless the
corporation defaults in the delivery of the shares of Class A
Common Stock or cash payable on such Redemption Date) shall be
deemed to be the record holder of the number of shares of Class A
Common Stock into which such shares of this Series are to be
redeemed, regardless of whether such holder has surrendered the
certificates representing such holder's shares of this Series
that have been redeemed. As promptly as practicable after the
surrender in accordance with said notice of the certificates for
any such shares so redeemed (properly endorsed or assigned for
transfer, if the corporation shall so require and the notice
shall so state), such shares shall be exchanged for certificates
of shares of Class A Common Stock and any cash (without interest
thereon) for which such shares have been redeemed.
(c)(i) At any time on or after August 1, 1999, the
shares of this Series may be redeemed, in whole or in part, at
the option of the corporation at a redemption price of $ $500.00
per share, plus an amount equal to all accrued and unpaid
dividends to and including the date fixed for redemption. The
corporation may, except as provided below, pay the redemption
price in cash, Class A Common Stock or any combination thereof;
provided that the corporation may elect to pay the redemption
price in whole or in part in Class A Common Stock only if the
Class A Common Stock is listed or admitted to trading on a
national or regional securities exchange in the United States or
reported by NASDAQ; and provided, further that any accrued and
unpaid dividends must be paid in cash.
(ii) At least 15 days but no more than 60 days prior
to the date fixed for the redemption of the shares of this Series
in accordance with Section 4(c)(i) hereof (the "Call Date"), a
written notice will be mailed to each holder of record (and each
beneficial owner to the extent required by law) of shares of this
Series to be redeemed, notifying such holder of the corporation's
election to redeem such shares, stating the Call Date, stating
the corporation's election with respect to whether the payment of
the redemption price is to be made in cash, Class A Common Stock
or a combination thereof, and calling upon such holder to
surrender to the corporation on the Call Date at the place
designated in such notice the certificate or certificates
representing the shares called for redemption. On or after the
Call Date, each holder of shares of this Series to be redeemed
must present and surrender his certificate or certificates for
such shares to the corporation at the place designated in such
notice and thereupon the redemption price of such shares, in the
manner elected by the corporation, will be paid and/or delivered
to or on the order of the person whose name appears on such
certificate or certificates as the owner thereof and each
surrendered certificate will be canceled. Except as provided in
Section 4(c)(iv) hereof, the corporation may not change the form
of consideration (or components or percentages of components
thereof) to be paid by the corporation in respect of such
redemption once the corporation has given, or caused to be given,
the applicable redemption notice. At the close of business on
the Redemption Date, each holder of shares of this Series to be
redeemed (unless the corporation defaults in the delivery of the
shares of Class A Common Stock or cash payable on such Redemption
Date) shall be deemed to be the record holder of the number of
shares of Class A Common Stock into which such shares of this
Series are to be redeemed, regardless of whether such holder has
surrendered the certificates representing such holder's shares of
this Series that have been redeemed, dividends on the shares of
this Series so redeemed shall cease to accrue, such shares shall
be deemed to be no longer outstanding, and all rights of the
holders thereof as holders of shares of this Series shall cease
and terminate.
(iii) If the corporation elects to pay the redemption
price by the delivery of Class A Common Stock, in whole or in
part, the number of shares to be delivered in respect of the
specified percentage of the redemption price to be paid in
Class A Common Stock shall be equal to the dollar amount of such
specified percentage of the redemption price divided by the
Market Price of a share of Class A Common Stock.
(iv) If the Market Price of the Class A Common Stock
is less than 90 per cent of the Weighted Average Price of the
Class A Common Stock over the five Trading Days immediately prior
to the date of the notice of redemption provided for in Section
4(c)(ii) hereof, the corporation, at its option, may elect to pay
the entire redemption price on such Call Date in cash, rather
than in whole or in part with the shares of Class A Common Stock
specified in the notice of redemption; provided that, if the
corporation so elects to pay the entire redemption price in cash,
the payment thereof shall be deferred until as of the tenth
Business Day following publication of the notice of such election
(the "Adjourned Call Date"), and in such event the corporation
shall pay, in addition to the redemption price, all accrued and
unpaid dividends on the shares of this Series to be redeemed
through the Adjourned Call Date. Upon determination of the
actual number of shares of Class A Common Stock issuable in
accordance with the foregoing provisions, the corporation will
publish such determination (and, if it is entitled to and so
elects, notification of any exercise of the election provided for
in the preceding sentence, of the Adjourned Call Date) promptly
in The Wall Street Journal or another daily newspaper of national
circulation.
(d) No fractional shares or scrip representing
fractions of shares of Class A Common Stock shall be issued upon
redemption of this Series. Instead of any fractional interest in
a share of Class A Common Stock that would otherwise be
deliverable upon the redemption of a share of this Series, the
corporation shall pay to the holder of such share an amount in
cash (computed to the nearest cent) based upon the Market Price
of Class A Common Stock. If more than one share shall be
surrendered for redemption at one time by the same holder, the
number of full shares of Class A Common Stock issuable upon
redemption thereof shall be computed on the basis of the
aggregate number of shares of this Series so surrendered.
(e) The corporation covenants that any shares of
Class A Common Stock issued upon redemption of this Series shall
be duly and validly issued, fully paid and non-assessable, shall
be issued from its authorized but unissued shares and, except as
provided in Section 9 hereof, will be free from all taxes, liens
and charges with respect to the issue thereof. The corporation
shall endeavor to list the shares of Class A Common Stock
required to be delivered upon redemption of this Series, prior to
such redemption, upon each national securities exchange, if any,
upon which the outstanding Class A Common Stock is listed at the
time of such delivery. The corporation shall endeavor to take
any action necessary to ensure that any shares of Class A Common
Stock issued upon the redemption of this Series are freely
transferable and not subject to any resale restrictions under the
Securities Act of 1933, as amended (the "Act"), or any applicable
state securities or blue sky laws.
(f) If less than all the outstanding shares of this
Series are to be redeemed, the number of shares of this Series to
be redeemed and the method of effecting such redemption, whether
by lot or pro rata, shall be as determined by the Board of
Directors.
(g) At any time after a notice of redemption has been
given in the manner prescribed herein with respect to a
redemption in which the corporation has elected to pay the
redemption price in whole in cash, and prior to the date fixed
for redemption, the corporation may deposit in trust, with a bank
or trust company identified in the notice of redemption having
capital, surplus and undistributed profits aggregating at least
$50,000,000, an aggregate amount of funds sufficient for such
redemption (including dividends accrued on the shares of this
Series called for redemption to the date fixed for redemption)
for immediate payment in the appropriate amounts upon surrender
of certificates for such shares. Any interest accrued on such
funds shall be paid to the corporation from time to time. Such
deposit in trust shall be irrevocable, except that any funds
deposited by the corporation which shall not be required for the
redemption for which they were deposited because of the exercise
of rights of conversion subsequent to the date of deposit shall
be returned to the corporation forthwith, and any funds deposited
by the corporation which are unclaimed at the end of two years
from the date fixed for such redemption shall be paid over to the
corporation upon its request, and upon such repayment the holders
of the shares so called for redemption shall look only to the
corporation for payment of the appropriate amount.
(h) From and after the date fixed for redemption
(unless the corporation shall default in making payment of the
amount payable upon such redemption), whether or not certificates
for shares so called for redemption have been surrendered by the
holders thereof as described below, dividends on the shares of
this Series so called for redemption shall cease to accrue, and
from and after the date of the deposit of trust funds for the
redemption of shares of this Series in accordance with the
provisions of Section 4(g) hereof, such shares shall be deemed to
be no longer outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the right to receive
from the corporation the amount payable upon such redemption and,
up to the close of business on the date fixed for such
redemption, the right to convert such shares as set forth in
Section 7 hereof) shall cease and terminate. Upon surrender in
accordance with the notice of redemption of the certificates for
any shares of this Series so redeemed (properly endorsed or
assigned for transfer if the corporation shall so require and the
notice shall so state), the holder thereof shall be entitled to
receive payment of the redemption price plus an amount equal to
all accrued and unpaid dividends as aforesaid. If less than all
of the shares represented by any such surrendered certificate are
redeemed, the corporation shall execute and deliver to the holder
thereof, or to his written order, a certificate or certificates
representing the unredeemed shares.
(i) In no event shall the corporation redeem less than
all the outstanding shares of this Series and shares of any other
series of stock of the corporation ranking, as to dividends and
distribution of assets upon liquidation, dissolution or winding
up of the affairs of the corporation, on a parity with the shares
of this Series ("Parity Stock") pursuant to this Section 4 unless
full cumulative dividends for all past dividend periods shall
have been paid or declared and set apart for payment upon all
outstanding shares of this Series and the shares of such Parity
Stock.
(j) In connection with any redemption of shares of
this Series solely for cash, the corporation may enter into an
agreement with one or more investment bankers or other purchasers
for the purchase of the shares to be redeemed from the holders
thereof and the conversion of such purchased shares into shares
of Class A Common Stock as provided in Section 7 hereof. Such
agreement shall provide that the amount to be paid by such
purchasers to the holders of the shares of this Series to be
redeemed shall not be less than the redemption price for such
shares together with all accrued and unpaid dividends thereon to
and including the date fixed for redemption and may provide
further that such amount be deposited in trust, on or before the
close of business on the date fixed for redemption, with a bank
or trust company designated by the corporation meeting the
requirements set forth in Section 4(g) hereof. Notwithstanding
anything to the contrary contained in this Section 4, the
obligation of the corporation to pay the redemption price of the
shares of this Series to be redeemed, together with accrued and
unpaid dividends thereon to the date fixed for redemption, shall
be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is
entered into, any shares of this Series to be redeemed that have
not been duly surrendered for conversion by the holders thereof
may, at the option of the corporation, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such
holders and (notwithstanding anything to the contrary contained
in this subsection (j) or in Section 7 hereof) surrendered by
such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption, subject
to payment of the above amount as aforesaid.
(k) Definitions. For purposes of this Section 4, the
following terms shall have the meanings indicated:
(i) "accrued and unpaid dividends" in respect of
any share of this Series shall mean an amount computed
at the Dividend Rate for this Series from the date on
which dividends on such share became cumulative to and
including the date to which such dividends are to be
accrued, less the aggregate amount of all dividends
theretofore paid thereon. The amount accrued
subsequent to the most recent Dividend Period shall be
computed by dividing the quarterly dividend payment by
the actual number of days in the uncompleted quarter,
and thereafter multiplying this figure by the number of
days in such quarter up to and including the date to
which dividends are to be accrued.
(ii) "Business Day" shall mean any day other than
a Saturday or Sunday or a day on which state or
federally chartered banking institutions in New York,
New York are not required to be open.
(iii) "Conversion Price" shall have the meaning
set forth in, and shall be subject to adjustment from
time to time as provided in, Section 7(d) hereof.
(iv) "Current Market Price" in respect of the
Class A Common Stock means the last reported sales
price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing
bid and asked prices on such day, regular way, in
either case as reported in the composite transactions
for the New York Stock Exchange or, if such security is
not listed or admitted for trading on the New York
Stock Exchange, on the principal national or regional
securities exchange in the United States on which the
Class A Common Stock is listed or admitted to trading,
or if the Class A Common Stock is not listed or
admitted to trading on a national or regional
securities exchange in the United States, on the
National Market System of NASDAQ or, if the Class A
Common Stock is not quoted on such National Market
System, the average of the closing bid and asked prices
on such day in the over-the-counter market as reported
by NASDAQ, or if bid and asked prices for such security
on such day shall not have been reported through NASDAQ
or by the National Quotation Bureau Incorporated, the
average of the bid and asked prices on 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 of the
corporation.
(v) "Market Price" means the Weighted Average
Price of a share of Class A Common Stock over the five
Trading Day period ending on the third Business Day
prior to the applicable Redemption Date or Call Date
(or, if such third Business Day is not a Trading Day,
on the last Trading Day prior to such Business Day),
appropriately adjusted to take into account the
occurrence, during the period commencing on the first
of such Trading Days and ending on such Redemption Date
or Call Date, of any event described in Section 7(d)
hereof.
(vi) "Trading Day" shall mean any day on which
the securities in question are traded on the New York
Stock Exchange, or if such securities are not listed or
admitted for trading on the New York Stock Exchange, on
the principal national or regional securities exchange
on which such securities are listed or admitted, or if
not listed or admitted for trading on any national or
regional securities exchange, on the National Market
System of NASDAQ, or if such securities are not quoted
on such National Market System, in the applicable
securities market in which the securities are traded.
(vii) "Weighted Average Price" of a share of
Class A Common Stock on any Trading Day or over any
period of Trading Days means the weighted average per
share sale price for all sales of shares of Class A
Common Stock on such Trading Day or during such period,
as the case may be (or, if the information necessary to
calculate such weighted average per share sale price is
not reported, the average of the high and low sale
prices or, if no sales prices are reported, the average
of the bid and ask prices or, if more than one in
either case, the average of the average bid and average
ask prices) as reported in the composite transactions
for the New York Stock Exchange, or if the Class A
Common Stock is not listed or admitted to trading on
such Exchange, as reported in the composite
transactions for the principal national or regional
securities exchange in the United States on which the
Class A Common Stock is listed or admitted to trading,
or if the Class A Common Stock is not listed or
admitted to trading on a United States national or
regional securities exchange, as reported by NASDAQ or
by the National Quotation Bureau Incorporated; provided
that, in the absence of such quotations, the
corporation shall be entitled to determine the Weighted
Average Price on the basis of such quotations as it
considers appropriate.
5. Voting Rights. (a) Except for the voting rights
described below and except as otherwise required by law, the
holders of shares of this Series shall not be entitled to vote on
any matter or to receive notice of, or to participate in, any
meeting of the stockholders of the corporation. Each share of
Preferred Stock of this Series will be entitled to one vote on
matters which holders of such series are entitled to vote.
(b) The shares of this Series shall be entitled to
vote with respect to the election of directors in accordance with
Sections (b)(4) and (b)(5) of Article FOURTH of the certificate
of incorporation.
(c) Whenever dividends payable on shares of this
Series shall be in default in an aggregate amount equal to or
exceeding six full quarterly dividends on all shares of this
Series at the time outstanding, the number of directors then
constituting the Board of Directors of the corporation shall be
increased by two, and holders of shares of this Series shall, in
addition to any other voting rights, have the right, voting
separately as a class together with holders of all other series
of stock of the Company ranking on a parity with shares of this
Series either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting
rights have been conferred and are exercisable (such other series
of stock being herein referred to as "Other Voting Stock"), to
elect such two additional directors. In such case, the Board of
Directors will be increased by two directors, and the holders of
shares of this Series (either alone or with the holders of Other
Voting Stock) will have the exclusive right as members of such
class, as described above, to elect two directors at the next
annual meeting of stockholders. Whenever such right of the
holders of shares of this Series shall have vested, such right
may be exercised initially either at a special meeting of such
holders as provided in Section 5(d) hereof or at any annual
meeting of stockholders held for the purpose of electing
directors, and thereafter at such annual meetings. The right of
the holders of shares of this Series to vote together as a class
with the holders of shares of any Other Voting Stock shall
continue until such time as all dividends accrued on outstanding
shares of this Series to the Dividend Payment Date next preceding
the date of any such determination shall have been paid in full,
or declared and set apart in trust for payment, at which time the
right of the holders of shares of this Series so to vote shall
terminate, except as herein or by law expressly provided, subject
to revesting upon the occurrence of a subsequent default of the
character mentioned above.
(d) At any time when the right of the holders of
shares of this Series to elect directors as provided in Section
5(c) hereof shall have vested, and if such right shall not
already have been initially exercised, a proper officer of the
corporation, upon the written request of the holders of record of
at least 10% of the aggregate number of shares of this Series and
shares of any Other Voting Stock at the time outstanding,
addressed to the Secretary of the corporation, shall call a
special meeting of the holders of shares of this Series and of
such Other Voting Stock for the purpose of electing directors.
Such meeting shall be held at the earliest practicable date upon
the same form of notice as is required for annual meetings of
stockholders at the place for the holding of annual meetings of
stockholders of the corporation (or such other suitable place as
is designated by such officer). If such meeting shall not be
called by a proper officer of the corporation within 20 days
after personal service of such written request upon the Secretary
of the corporation, or within 20 days after mailing the same
within the United States of America, 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 at least 10% of the
aggregate number of shares of this Series and shares of any Other
Voting Stock at the time outstanding may designate in writing one
of their number to call such a meeting at the expense of the
corporation, and such meeting may be called by such person so
designated upon the same form of notice as is required for annual
meetings of stockholders and shall be held at the place for the
holding of annual meetings of stockholders of the corporation (or
such other suitable place as is designated by such person). Any
holder of shares of this Series so designated shall have access
to the registry books of the corporation for the purpose of
causing a meeting of stockholders to be called pursuant to this
subsection (d). Notwithstanding anything to the contrary
contained in this subsection (d), no such special meeting shall
be called during the period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders of the
corporation.
(e) At any meeting held for the purpose of electing
directors at which holders of shares of this Series shall have
the right, voting together as a class with holders of shares of
any Other Voting Stock to elect directors as provided in Section
5(c) hereof, the presence, in person or by proxy, of the holders
of 33 1/3% of the aggregate number of shares of this Series and
shares of such Other Voting Stock at the time outstanding shall
be required and be sufficient to constitute a quorum of such
class for the election of directors pursuant to such Section
5(c). At any such meeting or adjournment thereof, (i) the
absence of a quorum of the shares of this Series and shares of
such Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section 5(c)
hereof and (ii) in the absence of a quorum, either of the shares
of this Series and shares of such Other Voting Stock or of any
other shares of stock of the corporation, or both, a majority of
the holders, present in person or by proxy, of the class or
classes of stock which lack a quorum shall have the power to
adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than
announcement at the meeting, until a quorum shall be present.
(f) During any period when the holders of shares of
this Series shall have the right to vote together as a class with
the holders of shares of any Other Voting Stock for directors as
provided in Section 5(c) hereof, (i) the directors so elected by
such holders shall continue in office until their successors
shall have been elected by such holders or until termination of
the rights of such holders to vote as a class for directors and
(ii) any vacancies in the Board of Directors shall be filled only
by a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the
class or classes of stock which elected the director whose office
shall have become vacant. Immediately upon termination of the
right of holders of this Series and any Other Voting Stock to
vote as a class for directors, (i) the term of office of the
directors so elected shall terminate and (ii) the number of
directors shall be such number as may be provided for in the
by-laws of the corporation irrespective of any increase pursuant
to the provisions of Section 5(c) hereof.
(g) In addition to any other vote required by law, the
corporation shall not (i) amend, alter or repeal, whether by
merger, consolidation or otherwise, the provisions of the
certificate of incorporation (including the terms of this Series)
so as to materially and adversely affect any right, preference,
privilege or voting power of this Series or (ii) create,
authorize or issue any series or class of stock ranking prior,
either as to payment of dividends or distributions of assets upon
liquidation, dissolution or winding up, to this Series, without
the affirmative vote or consent of the holders of at least two-
thirds of the aggregate number of shares of this Series at the
time outstanding, voting as a separate class; provided, that any
increase in the total number of authorized shares of Common Stock
(or any series thereof) or Preferred Stock (or any series
thereof), or the creation, authorization or issuance of any
series of stock ranking, as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation, on a parity with the shares of this Series
will not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers; provided,
further, that no class vote of the holders of shares of this
Series shall be required if, at or prior to the time when the
actions described in clause (i) or (ii) of this subsection (g)
shall become effective, provision is made in accordance with
Section 4 hereof for the redemption of all shares of this Series
at the time outstanding.
6. Preference upon Liquidation. (a) In the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation, after payment or provision
for payment of the debts and other liabilities of the corporation
and of dividends and liquidation preferences in respect of any
other stock of the corporation ranking senior to the shares of
this Series as to such payments, the holders of shares of this
Series shall be entitled to receive, out of the remaining net
assets of the corporation, the amount of $500.00 in cash for each
share of this Series, plus an amount equal to all dividends
(whether or not earned or declared) accrued and unpaid on each
such share up to the date fixed for distribution, before any
distribution shall be made to or set apart for the holders of any
Junior Stock. If, after payment or provision for payment of the
debts and other liabilities of the corporation and of dividends
and liquidation preferences in respect of any other stock of the
corporation ranking senior to the shares of this Series as to
such payments, the remaining net assets of the corporation are
not sufficient to pay to the holders of shares of this Series the
full amount of their preference set forth above, then the
remaining net assets of the corporation shall be divided among
and paid to the holders of shares of this Series, holders of
shares of any other class or series of Preferred Stock and
holders of shares of any other stock of the corporation on a
parity with this Series as to dividends and distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation ratably per share in proportion to the full
per share amounts to which they respectively are entitled. For
purposes of this subsection (a) and Section 6(b) hereof, a
consolidation or merger of the corporation with one or more other
corporations or the sale of all or substantially all of the
assets of the corporation shall not be deemed to be a voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the corporation.
(b) Subject to the rights of the holders of shares of
any series or class of stock ranking prior to this Series and of
the holders of any stock of the corporation ranking on a parity
as to dividends and distribution of assets upon liquidation,
dissolution or winding up of the affairs of the corporation,
after payment shall have been made in full to the holders of this
Series as provided in Section 6(a) hereof and this subsection
(b), the holders of any Junior Stock 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 shares of this Series shall not be entitled to
share therein.
7. Conversion Privilege. (a) Subject to and upon
compliance with the provisions of this Section 7, at the option
of the holder thereof, each share of this Series may, at any time
(unless shares of this Series shall be called for redemption,
then, with respect to shares of this Series so called, until and
including, but, if the corporation shall not default in making
payment of the amount payable on such redemption, not after, the
close of business on the date fixed for redemption), be converted
into a number of fully paid and nonassessable shares of Class A
Common Stock equal to the quotient obtained by dividing $500.00
by the Conversion Price (as hereinafter defined) in effect at the
Date of Conversion (as hereinafter defined).
(b) In order to exercise the conversion privilege, any
holder of shares of this Series to be converted shall surrender
such shares to the corporation at any time during usual business
hours at the place or places (including a place in the Borough of
Manhattan, The City of New York) maintained for such purpose,
accompanied by a fully executed written notice, in substantially
the form set forth on the reverse of the certificate representing
shares of this Series, that the holder elects to convert such
shares. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of
Class A Common Stock shall be issued. Shares of this Series
surrendered for conversion shall (if so required by the
corporation) be properly endorsed or assigned for transfer by the
holder or his attorney duly authorized in writing. The holders
of shares of this Series at the close of business on any record
date for the payment of dividends on such shares will be entitled
to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
conversion thereof or the corporation's default in the payment of
the dividend due on such Dividend Payment Date. Shares of this
Series surrendered for conversion during the period from the
close of business on any record date for the payment of dividends
on such shares to the opening of business on the corresponding
Dividend Payment Date (except shares called for redemption on a
Redemption Date or Call Date during the period from such record
date to and including the Dividend Payment Date) must be
accompanied by payment of an amount equal to the dividend payable
on such shares on such Dividend Payment Date. A holder of shares
of this Series on a record date for the payment of dividends on
such shares who converts such shares on a Dividend Payment Date
will receive the dividend payable on such shares by the
corporation on such date, and the converting holder need not
include a payment in the amount of any such dividend upon
surrender of such shares for conversion. As promptly as
practicable after the receipt of such notice and the surrender of
such shares of this Series as aforesaid, the corporation shall,
subject to the provisions of Section 9 hereof, issue and deliver
at such place or places referred to in this subsection (b) to
such holder, or on his written order, a certificate or
certificates for the number of full shares of Class A Common
Stock issuable on such conversion of shares of this Series in
accordance with the provisions of this Section 7, and cash, as
provided in Section 7(c) hereof, in respect of any fraction of a
share of Class A Common Stock otherwise issuable upon such
conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the date
(herein called the "Date of Conversion") on which such notice
shall have been received by the corporation and such shares of
this Series shall have been surrendered as aforesaid, and the
person or persons in whose name or names any certificate or
certificates for shares of Class A Common Stock shall be issuable
upon such conversion shall be deemed to have become on the Date
of Conversion the holder or holders of record of the shares of
Class A Common Stock represented thereby; provided, that any such
surrender on any date when the registry books of the corporation
shall be closed shall constitute the person or persons in whose
name or names the certificate or certificates for such shares are
to be issued as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on
which such registry books are open, but such conversion shall
nevertheless be at the Conversion Price in effect at the close of
business on the date when such shares of this Series shall have
been so surrendered with the conversion notice. In the case of
conversion of a portion, but less than all, of the shares of this
Series represented by a certificate surrendered for conversion,
the corporation shall execute, and deliver to the holder thereof,
or on his written order, a certificate or certificates
representing the shares of this Series which the holder has not
elected to convert into shares of Class A Common Stock. No
payment or adjustment shall be made for dividends accrued on the
shares of this Series converted as provided in this Section 7 or
for dividends or distributions accrued on any Class A Common
Stock.
(c) No fractions of shares or scrip representing
fractions of shares shall be issued upon conversion of shares of
this Series. If more than one share of this Series shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Class A Common Stock which shall be
issuable upon conversion of such shares shall be computed on the
basis of the aggregate number of shares of this Series
surrendered for conversion. If any fraction of a share of Class
A Common Stock would, except for the provisions of this
subsection (c), be issuable on the conversion of any shares of
this Series, the corporation shall make payment in lieu thereof
in an amount of United States dollars equal to the value of such
fraction computed on the basis of the closing price of the Class
A Common Stock as reported on the Composite Tape for New York
Stock Exchange - Listed Stocks (or if the Class A Common Stock is
not listed or admitted to trading on such exchange on the Date of
Conversion, then on the principal national or regional securities
exchange on which the Class A Common Stock is then listed or
admitted to trading, or, if not listed or admitted to trading on
any national or regional securities exchange, then as reported by
the National Association of Securities Dealers, Inc. through
NASDAQ or a similar organization if NASDAQ is no longer reporting
information) on the last Trading Day (as hereinafter defined)
prior to the Date of Conversion or if no such sale takes place on
such day, the last sale price for such day shall be the average
of the closing bid and asked prices regular way on the New York
Stock Exchange (or if the Class A Common Stock is not listed or
admitted to trading on such exchange, on the principal national
securities exchange on which the Class A Common Stock is then
listed or admitted to trading, or, if not listed or admitted to
trading on any national securities exchange, the average of the
highest bid and lowest asked prices as reported by the National
Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting
information) (any such last sale price being herein referred to
as the "Last Sale Price"). If on such Trading Day the Class A
Common Stock is not quoted by any such organization, the fair
value of such Class A Common Stock on such day, as determined by
the Board of Directors, shall be used. For the purpose of this
subsection (c), the term "Trading Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are not traded on such exchange or in such
market.
(d) The Conversion Price per share of Class A Common
Stock issuable upon conversion of shares of this Series (herein
called the "Conversion Price") initially shall be $29.94 as of
the Initial Filing Date (as defined in the Certificate of
Incorporation). The Conversion Price shall be subject to
adjustment from time to time as follows:
(i) In case the corporation shall (1) pay a
dividend or make a distribution in shares of Class A
Common Stock, (2) subdivide its outstanding shares of
Class A Common Stock into a greater number of shares or
(3) combine its outstanding shares of Class A Common
Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such action shall
be adjusted so that the holder of any shares of this
Series thereafter surrendered for conversion shall be
entitled to receive the number of shares of Class A
Common Stock which he would have owned or have been
entitled to receive immediately following such action
had such shares been converted immediately prior
thereto. An adjustment made pursuant to this
subsection (d)(i) shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date in the case of a dividend or
distribution and shall become effective immediately
after the effective date in the case of a subdivision
or combination.
(ii) In case the corporation shall issue rights,
warrants or options to all holders of Class A Common
Stock entitling them (for a period not exceeding 45
days from the date of such issuance) to subscribe for
or purchase shares of Class A Common Stock at a price
per share less than the Recent Market Price per share
(as determined pursuant to subsection (d)(iv) below) of
the Class A Common Stock on the record date mentioned
below, the Conversion Price shall be adjusted to a
price, computed to the nearest cent, so that the same
shall equal the price determined by multiplying:
(1) the Conversion Price in effect
immediately prior to the date of issuance of such
rights or warrants by a fraction, of which
(2) the numerator shall be (A) the number of
shares of Class A Common Stock outstanding on the
date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of shares which the aggregate
offering price of the total number of shares so
offered for subscription or purchase would
purchase at such Recent Market Price, (determined
by multiplying such total number of shares by the
exercise price of such rights, warrants or options
and dividing the product so obtained by such
Recent Market Price), and of which
(3) the denominator shall be (A) the number
of shares of Class A Common Stock outstanding on
the date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of additional shares of Class A
Common Stock which are so offered for subscription
or purchase.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date for the determination of holders
entitled to receive such rights, warrants or options.
(iii) In case the corporation shall distribute to
all or substantially all holders of Class A Common
Stock evidences of indebtedness, equity securities
(including equity interests in the corporation's
Subsidiaries (as hereinafter defined)) other than Class
A Common Stock, or other assets (other than cash
dividends paid out of earned surplus of the corporation
or, if there shall be no earned surplus, out of net
profits for the fiscal year in which the dividend is
made and/or the preceding fiscal year), or shall
distribute to all or substantially all holders of Class
A Common Stock rights or warrants to subscribe for
securities (other than those referred to in subsection
(d)(ii) above), then in each such case the Conversion
Price shall be adjusted so that the same shall equal
the price determined by multiplying:
(1) the Conversion Price in effect
immediately prior to the date of such distribution
by a fraction, of which
(2) the numerator shall be the Recent Market
Price per share (as determined pursuant to
subsection (d)(iv) below) of the Class A Common
Stock on the record date mentioned below less the
then fair market value (as determined by the Board
of Directors, whose determination shall be
conclusive evidence of such fair market value, and
described in a resolution of the Board of
Directors filed with the transfer agent for the
shares of this Series) of the portion of the
assets, evidences of indebtedness and equity
securities so distributed or of such subscription
rights or warrants applicable to one share of
Class A Common Stock, and of which
(3) the denominator shall be such Recent
Market Price per share of the Class A Common
Stock.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date for the determination of stockholders
entitled to receive such distribution. As used herein,
the term "Subsidiary" means (i) any corporation or
other entity of which securities or other ownership
interests having ordinary voting power to elect a
majority of the Board of Directors or other persons
performing similar functions are at the time directly
or indirectly owned by the corporation or (ii) any
partnership of which more than 50% of the partnership
interests are owned by the corporation or any
Subsidiary.
(iv) For purposes of any computation under
subsections (d)(ii) and (d)(iii) above, the Recent
Market Price per share of Class A Common Stock on any
date shall be deemed to be the average of the Last Sale
Prices of a share of Class A Common Stock for the five
consecutive Trading Days selected by the corporation
commencing not more than 20 Trading Days before and
ending not later than the earliest of the date in
question and the date before the "ex" date with respect
to the issuance or distribution requiring such
computation. If on any such Trading Day the Class A
Common Stock is not quoted by any organization referred
to in the definition of Last Sale Price in Section 7(c)
hereof, the fair value of the Class A Common Stock on
such day, as determined by the Board of Directors,
shall be used. For purposes of this paragraph, the
term "'ex' date", when used with respect to any
issuance or distribution, means the first date on which
the Class A Common Stock trades regular way on the
principal national securities exchange on which the
Class A Common Stock is listed or admitted to trading
(or, if not so listed or admitted, on NASDAQ or a
similar organization if NASDAQ is no longer reporting
trading information) without the right to receive such
issuance or distribution.
(v) In any case in which this subsection (d)
shall require that an adjustment be made immediately
following a record date, the corporation may elect to
defer the effectiveness of such adjustment (but in no
event until a date later than the effective time of the
event giving rise to such adjustment), in which case
the corporation shall, with respect to any shares of
this Series converted after such record date and before
such adjustment shall have become effective (1) defer
paying any cash payment pursuant to Section 7(c) hereof
or issuing to the holder of shares of this Series the
number of shares of Class A Common Stock issuable upon
conversion in excess of the number of shares of Class A
Common Stock issuable thereupon only on the basis of
the Conversion Price prior to adjustment and (2) not
later than five business days after such adjustment
shall have become effective, pay to such holder the
appropriate cash payment pursuant to Section 7(c)
hereof and issue to such holder the additional shares
of Class A Common Stock issuable on such conversion.
(vi) No adjustment in the Conversion Price shall
be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion
Price; provided, that any adjustments which by reason
of this subsection (d)(vi) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 7 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(vii) Whenever the Conversion Price is adjusted
as herein provided, the corporation shall promptly (1)
file with the transfer agent for the shares of this
Series a certificate of an officer of the corporation
(an "Officer's Certificate") setting forth the
Conversion Price after such adjustment and setting
forth in reasonable detail the facts requiring such
adjustment and the calculations on which the adjustment
is based, which certificate shall be conclusive
evidence of the correctness of such adjustment and (2)
mail or cause to be mailed a notice of such adjustment
to each holder of shares of this Series at his address
as the same appears on the registry books of the
corporation.
Notwithstanding anything in this Section 7 to the contrary, the
corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this Section
7, as it in its discretion shall determine to be advisable in
order that any stock dividend, subdivision or combination of
shares, distribution of rights or warrants to purchase stock or
securities, distribution of securities convertible into or
exchangeable for stock, or distribution of assets (other than
cash dividends) hereafter made by the corporation to its
stockholders shall not be taxable.
(e) In case of any reclassification or change of
outstanding shares of Class A Common Stock (other than a change
in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the corporation
with, or merger of the corporation into, any other Person, or any
merger of another Person into the corporation (other than a
merger which does not result in any reclassification, change,
conversion, exchange or cancellation of outstanding shares of
Class A Common Stock) or any sale or transfer of all or
substantially all of the assets of the corporation, the
corporation, or the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the
case may be, shall make effective provision in the articles or
certificate of incorporation, providing that the holder of each
share of this Series then outstanding shall have the right
thereafter to convert such share only into the kind and amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or
transfer, by a holder of the number of shares of Class A Common
Stock into which such shares of this Series might have been
converted immediately prior to such reclassification, change,
consolidation, merger, sale or transfer, assuming such holder of
Class A Common Stock of the corporation (i) is not a Person with
which the corporation consolidated or into which the corporation
merged or which merged into the corporation or to which such sale
or transfer was made, as the case may be ("constituent Person"),
or an Affiliate (as hereinafter defined) of a constituent Person
and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or transfer
is not the same for each share of Class A Common Stock of the
corporation held immediately prior to such reclassification,
change, consolidation, merger, sale or transfer by others than a
constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this subsection
(e) the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such articles or
certificate of incorporation shall provide for adjustments which,
for events subsequent to the effective date of such articles or
certificate of incorporation, shall be as nearly equivalent as
may be practicable to the adjustments provided for herein. The
above provisions of this subsection (e) shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales or transfers.
For the purpose of this subsection (e), the term
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any
agency or political subdivision thereof, and the term "Affiliate"
of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the
purposes of the definition of "Affiliate", the term "control"
when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(f) The corporation shall reserve, free from
preemptive rights, out of its authorized but unissued shares,
sufficient shares of Class A Common Stock to provide for the
conversion of the shares of this Series from time to time
outstanding as such shares of this Series are presented for
conversion.
(g) The corporation covenants that all shares of Class
A Common Stock which may be issued upon conversion of shares of
this Series will upon issue be duly and validly issued, fully
paid and nonassessable by the corporation and except as provided
in Section 9 hereof free from all taxes, liens and charges with
respect to the issue thereof.
8. Notice of Certain Events. In case:
(a) the corporation shall declare a dividend (or any
other distribution) payable to the holders of Class A Common
Stock (otherwise than cash dividends paid out of the earned
surplus of the corporation or, if there shall be no earned
surplus, out of net profits for the fiscal year in which the
dividend is made and/or the preceding fiscal year, and dividends
payable in Class A Common Stock); or
(b) the corporation shall authorize the granting to
the holders of Class A Common Stock of rights to subscribe for or
purchase any shares of stock of any class or of any other rights
or warrants; or
(c) the corporation shall authorize any
reclassification or change of the Class A Common Stock (other
than a subdivision or combination of its outstanding shares of
Class A Common Stock or a change in par value, or from par value
to no par value, or from no par value to par value), or any
consolidation, merger or 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 conveyance of all or
substantially all the property or business of the corporation; or
(d) there shall be proposed any voluntary or
involuntary dissolution, liquidation or winding-up of the
corporation;
then, the corporation shall cause to be filed at the place or
places maintained for the purpose of conversion of shares of this
Series as provided in Section 7(b) hereof, and shall cause to be
mailed to each holder of shares of this Series, at his address as
it shall appear on the registry books of the corporation, as
promptly as possible but in any event at least 20 days before the
date hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one date is
specified), a notice stating the date on which (i) a record is
expected to be taken for the purpose of such dividend,
distribution, rights, or warrants, or if a record is not to be
taken, the date as of which the holders of Class A Common Stock
of record to be entitled to such dividend, distribution, rights,
or warrants are to be determined, or (ii) such reclassification,
change, consolidation, merger, share exchange, sale, transfer,
conveyance, dissolution, liquidation or winding-up is expected to
become effective and the date, if any is to be fixed, as of which
it is expected that holders of Class A Common Stock of record
shall be entitled to exchange their shares of Class A Common
Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, share exchange,
sale, transfer, conveyance, dissolution, liquidation or
winding-up.
9. Taxes. The corporation will pay any and all
documentary, stamp or similar taxes payable to the United States
of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of (a)
certificates for shares of this Series on redemption of less than
all of the shares represented by any certificate for such shares
surrendered for redemption or (b) certificates for shares of
Class A Common Stock on redemption or conversion of shares of
this Series pursuant to Section 4 or Section 7 hereof; provided,
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 certificates for shares of this Series or Class A
Common Stock, as the case may be, in a name other than that of
the holder of shares of this Series to be redeemed or converted
and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the
corporation the amount of any such tax or has established, to the
satisfaction of the corporation, that such tax has been paid.
The corporation extends no protection with respect to any other
taxes imposed in connection with such redemption or conversion of
shares of this Series.
10. No Other Rights. The shares of this Series shall
not have any relative, participating, optional or other special
rights and powers other than as set forth herein and other than
any which may be provided by law.
11. Miscellaneous. Capitalized terms which are
defined in this Exhibit are defined only for the purposes of this
Exhibit, and not for the purposes of other Exhibits to the
certificate of incorporation. Unless otherwise indicated,
section references contained in this Exhibit refer to the
corresponding sections of this Exhibit.
EXHIBIT 4.3
CERTIFICATE OF DESIGNATIONS
OF
GOLD-DENOMINATED PREFERRED STOCK
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
corporation's Gold-Denominated Preferred Stock are as set forth
below:
1. Designation. (a) 300,000 shares of Preferred Stock
of the corporation are hereby constituted as a series of
Preferred Stock designated as "Gold-Denominated Preferred Stock"
(hereinafter called "this Series"). Each share of this Series
shall be identical in all respects with the other shares of this
Series. The Board of Directors is authorized to increase or
decrease (but not below the number of shares of this Series then
outstanding) the number of shares of this Series.
(b) Shares of this Series which have been redeemed for
cash as hereinafter provided or purchased by the corporation
shall be canceled, and shall revert to authorized but unissued
shares of Preferred Stock undesignated as to series, and may be
reissued as a part of this Series or may be reclassified and
reissued as part of a new or existing series of Preferred Stock
to be created by resolution or resolutions of the Board of
Directors, all subject to the conditions or restrictions on
issuance set forth in any resolution or resolutions adopted by
the Board of Directors providing for the issue of such series of
Preferred Stock.
2. Dividends. (a) The holders of shares of this Series
shall be entitled to receive, but only out of funds legally
available therefor, cash dividends as hereinafter provided. Such
dividends shall be paid when, as and if declared by the Board of
Directors on the first day of February, May, August and November
in each year until and including August 1, 2003 (each such date
being referred to herein as a "Dividend Payment Date") to holders
of record on the record date determined by the Board of Directors
in advance of the payment of each particular dividend; provided
that dividends payable on August 1, 2003 (the "Mandatory
Redemption Date") shall be paid as provided in Section 4 hereof.
Such dividends shall be cumulative from the date of original
issuance of the shares of this Series.
(b) So long as any shares of this Series shall be
outstanding, the corporation shall not, unless full cumulative
dividends for all past dividend periods shall have been paid or
declared and set apart for payment upon all outstanding shares of
this Series and the shares of any other class or series of
Preferred Stock (including the Gold-Denominated Preferred Stock,
Series II, the Silver-Denominated Preferred Stock, the Step-Up
Convertible Preferred Stock and the 7% Convertible Exchangeable
Preferred Stock) and any other class or series of stock of the
corporation ranking, as to dividends, on a parity with shares of
this Series (the shares of any other class or series of Preferred
Stock and any other class or series of stock of the corporation
ranking, as to dividends, on a parity with shares of this Series
being herein referred to as "Parity Dividend Stock"), (i)
declare, pay or set apart any amounts for dividends on, or make
any other distribution in cash or other property in respect of,
the Class A Common Stock of the corporation, the Class B Common
Stock of the corporation or any other stock of the corporation
ranking junior to this Series as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation (the Class A Common Stock, the Class B Common
Stock and any such other stock being herein referred to as
"Junior Stock"), other than a dividend payable solely in Junior
Stock, (ii) purchase, redeem or otherwise acquire for value any
shares of Junior Stock, directly or indirectly, other than as a
result of a reclassification, exchange or conversion of one
Junior Stock for or into another Junior Stock, or other than
through the use of proceeds of a substantially contemporaneous
sale of other Junior Stock, or (iii) make any payment on account
of, or set aside money for, a sinking or other like fund for the
purchase, redemption or other acquisition for value of any shares
of Junior Stock. For purposes of this Section 2 and of Section
4(f) hereof, if any depositary shares have been issued with
respect to any series of stock, actions with respect to such
depositary shares, including acquisition of and payments on or
with respect to such depositary shares, shall be regarded as
actions with respect to such series of stock.
(c) If the funds available for the payment of dividends
are insufficient to pay in full the dividends payable on all
outstanding shares of this Series and shares of Parity Dividend
Stock, the total available funds to be paid in partial dividends
on the shares of this Series and shares of Parity Dividend Stock
shall be divided among this Series and the Parity Dividend Stock
in proportion to the aggregate amounts of dividends accrued and
unpaid with respect to this Series and the Parity Dividend Stock.
Accruals of dividends shall not bear interest.
3. Dividend Rate. (a) The Dividend Rate per quarter on
each share of this Series shall be an amount equal to the Dollar
Equivalent Value (as defined below) of 0.0175 ounces of gold.
"Dollar Equivalent Value" means the applicable Reference Gold
Price multiplied by the applicable number of ounces of gold.
"Reference Gold Price" means, when used to calculate the amount
of any dividend payable on any Dividend Payment Date (other than
the Mandatory Redemption Date, as to which the calculation shall
be made as provided in Section 4(k)(iv) hereof) the arithmetic
average of the London P.M. gold fixing price (or A.M. gold fixing
price if there is no P.M. gold fixing price on the applicable
trading date) for an ounce of gold in the London bullion market
on each of the five trading days ending on the second trading day
prior to the last day of the calendar quarter immediately
preceding such Dividend Payment Date, as published in The Wall
Street Journal (Eastern Edition) (or, if such prices are not
published in The Wall Street Journal, as published in the
Financial Times). If for any reason gold is not traded during
any relevant period in the London bullion market or is not quoted
in U.S. dollars in such market, gold will be valued during such
period or portion thereof, as the case may be, on the basis of
trading prices, quoted in U.S. dollars, in the then principal
international trading market for gold as determined by the
corporation's Board of Directors. On or before the fifth
business day preceding each record date for the payment of a
dividend in respect of the shares of this Series, the corporation
will cause to be published in The Wall Street Journal (Eastern
Edition) or, if such newspaper is not then published, in a
newspaper or other publication of national circulation, the
amount of (and if the shares of this Series are represented by
depositary shares, the amount so payable per depositary share)
the dividend payable in respect of each share of this Series on
the next succeeding Dividend Payment Date.
(b) Dividends shall be calculated on the basis of a year
of 360 days consisting of 12 30-day months. The term "Dividend
Period", as used herein, means, with respect to any Dividend
Payment Date, the period commencing on the day following the
immediately preceding Dividend Payment Date to and including such
Dividend Payment Date.
4. Redemption. (a) The shares of this Series shall be
subject to mandatory redemption by the corporation, out of funds
legally available therefor, on the Mandatory Redemption Date at
the Dollar Equivalent Value of 2.0 ounces of gold per share plus
accrued and unpaid dividends (as hereinafter defined) to the
Mandatory Redemption Date.
(b) The shares of this Series shall not be subject to
redemption at the option of the corporation except as described
in this subsection (b). If on any Dividend Payment Date the
total number of shares of this Series outstanding shall be less
than 15% of the total number of shares of this Series outstanding
on the 40th day following the date of original issuance of the
shares of this Series, the corporation shall have the option to
redeem the outstanding shares of this Series, in whole but not in
part, out of funds legally available therefor, at an amount equal
to the Dollar Equivalent Value of 2.0 ounces of gold per share
plus accrued and unpaid dividends (as hereinafter defined) to the
date fixed for redemption. For purposes of determining the
number of shares of this Series outstanding on any Dividend
Payment Date, the shares of this Series acquired by the
corporation on or prior to such Dividend Payment Date and not
theretofore canceled (or in the case of any shares of this Series
represented by depositary shares, the depositary shares
representing shares of this Series acquired by the corporation on
or prior to such Dividend Payment Date and not theretofore
delivered to the depositary for the depositary shares for
cancellation) shall be deemed to be outstanding. Notice of any
such redemption as described in this Section 4(b) shall be mailed
to holders of the shares of this Series within 30 days after such
Dividend Payment Date in accordance with the provisions of
Section 4(c) hereof.
(c) At least 30 days but no more than 60 days prior to
the date fixed for redemption of the shares of this Series in
accordance with Section 4(a) or (b) hereof (the "Call Date"), a
written notice will be mailed to each holder of record (and each
beneficial owner to the extent required by law) of shares of this
Series to be redeemed, notifying such holder of the corporation's
election to redeem such shares if such redemption is pursuant to
Section 4(b) hereof, setting forth the method for determining the
amount payable per share of this Series on the Call Date, stating
the Call Date and calling upon such holder to surrender to the
corporation on the Call Date at the place designated in such
notice the certificate or certificates representing the shares
called for redemption.
(d) At any time after a notice of redemption has been
given in the manner prescribed in Section 4(a) or (b) and the
amount payable on the date fixed for redemption can be determined
by the corporation, and prior to the date fixed for redemption,
the corporation may deposit in trust, with a bank or trust
company identified in the notice of redemption having capital,
surplus and undistributed profits aggregating at least
$50,000,000, an aggregate amount of funds sufficient for such
redemption (including dividends accrued on the shares of this
Series called for redemption to the date fixed for redemption)
for immediate payment in the appropriate amounts upon surrender
of certificates for such shares. Any interest accrued on such
funds shall be paid to the corporation from time to time. Such
deposit in trust shall be irrevocable, except that any funds
deposited by the corporation which are unclaimed at the end of
two years from the date fixed for such redemption shall be paid
over to the corporation upon its request, and upon such repayment
the holders of the shares so called for redemption shall look
only to the corporation for payment of the appropriate amount.
(e) From and after the date fixed for redemption (unless
the corporation shall default in making payment of the amount
payable upon such redemption), whether or not certificates for
shares so called for redemption have been surrendered by the
holders thereof as described below, dividends on the shares of
this Series so called for redemption shall cease to accrue, and
from and after the date of the deposit of trust funds for the
redemption of shares of this Series in accordance with the
provisions of Section 4(d) hereof, such shares shall be deemed to
be no longer outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the right to receive
from the corporation the amount payable upon such redemption)
shall cease and terminate. Upon surrender in accordance with the
notice of redemption of the certificates for any shares of this
Series so redeemed (properly endorsed or assigned for transfer if
the corporation shall so require and the notice shall so state),
the holder thereof shall be entitled to receive payment of the
redemption price plus an amount equal to all accrued and unpaid
dividends as aforesaid.
(f) If the corporation shall have failed to redeem all
outstanding shares of this Series on the Mandatory Redemption
Date then, until it shall have redeemed all outstanding Shares of
this Series, the corporation may not (i) declare, pay or set
apart any amounts for dividends on, or make any other
distribution in cash or other property in respect of, any Junior
Stock other than a dividend payable solely in Junior Stock, (ii)
purchase, redeem or otherwise acquire for value any shares of
Junior Stock, directly or indirectly, other than as a result of a
reclassification, exchange or conversion of one Junior Stock for
or into another Junior Stock, or other than through the use of
proceeds of a substantially contemporaneous sale of other Junior
Stock, (iii) make any payment on account of, or set aside money
for, a sinking or other like fund for the purchase, redemption or
other acquisition for value of any shares of Junior Stock or (iv)
purchase, redeem or otherwise acquire for value any shares of
stock of the corporation ranking on a parity with the shares of
this Series as to dividends or distribution of assets upon
liquidation, dissolution or winding up ("Parity Stock").
(g) (i) Within 90 days following each Calculation Date
(as defined below), the corporation shall be required to prepare
a certificate (a "Corporation Certificate") setting forth its
determination of the Reserve Coverage Ratio (as defined below) as
of such Calculation Date. If the Reserve Coverage Ratio, as
shown on the Corporation Certificate prepared with respect to any
Calculation Date is less than 5.0, the corporation will be
required to make an offer (a "Reserve Coverage Offer") to
purchase, out of funds legally available therefor, at a price
equal to the liquidation preference thereof as of the Purchase
Date (as hereinafter defined), plus accrued and unpaid dividends
(as defined below) to the Purchase Date, the smallest number of
shares of this Series (rounded to the nearest 500 shares) such
that, if all such shares had been repurchased on the relevant
Calculation Date, the Reserve Coverage Ratio on that date would
have been greater than or equal to 5.0. If the Corporation
Certificate prepared with respect to any Calculation Date shows
that the Reserve Coverage Ratio is less than 5.0, the corporation
shall include on such Corporation Certificate its calculation of
the number of shares of this Series for which it is required to
make an offer (the "Offer Amount").
(ii) If required to make a Reserve Coverage Offer, the
corporation will commence such offer not more than 60 days after
the date of the Corporation Certificate prepared with respect to
the applicable Calculation Date, by mailing a notice to all
holders of record of the shares of this Series setting forth (A)
that such notice is being given pursuant to a Reserve Coverage
Offer, (B) the Offer Amount, (C) the method for determining the
amount payable per share of this Series on the Purchase Date, (D)
the last date ("the Purchase Date"), which shall not be less than
30 nor more 60 days after the date of such notice, by which a
holder must elect whether to accept the Reserve Coverage Offer,
(E) the procedures that such holder must follow to exercise its
rights and (F) the procedures for withdrawing an election. The
corporation shall also cause a copy of such notice to be
published in The Wall Street Journal (Eastern Edition) or another
daily newspaper of national circulation.
(iii) Holders electing to have shares of this Series
purchased by the corporation pursuant to a Reserve Coverage Offer
will be required to surrender the certificates representing such
shares, with an appropriate form duly completed, to the
corporation prior to the Purchase Date. Holders will be entitled
to withdraw an election by a written notice of withdrawal
delivered to the corporation prior to the close of business on
the Purchase Date. The notice of withdrawal shall state the
number of shares of this Series and certificate numbers to which
the notice of withdrawal relates and the number of shares and
certificate numbers, if any, which remain subject to the
election. If the aggregate number of shares of this Series
tendered exceeds the Offer Amount, the corporation will select
the shares of this Series to be purchased on a pro rata basis as
nearly as practicable. The corporation shall, as promptly as
reasonably practicable after the Purchase Date, cause payment to
be mailed or delivered to each tendering holder in the amount of
the purchase price, and any unpurchased shares of this Series to
be returned to the holder thereof.
(h) If, at the time of the mandatory redemption on the
Mandatory Redemption Date or a Reserve Coverage Offer, the funds
of the corporation legally available for redemption or repurchase
of the shares of this Series are insufficient to redeem or
repurchase such shares, and all of the shares of any other series
of Parity Stock which the corporation is then obligated to
redeem) or repurchase, (i) the total legally available funds
shall be allocated among the shares of this Series and of such
other series in proportion to the aggregate dollar amount of
redemption or other repurchase obligations with respect to this
Series and such other series and (ii) the portion of such funds
allocated to this Series will be used to redeem or repurchase the
maximum possible number of shares, pro rata based upon the number
of shares to be redeemed or delivered for purchase, as the case
may be. At any time thereafter when additional funds of the
corporation become legally available for such purpose, after
giving effect to the foregoing allocation provisions, such funds
shall immediately be used to redeem or purchase, as the case may
be, any additional shares of this Series which the corporation is
obligated to redeem or purchase, as the case may be, but which it
has not so redeemed or purchased.
(i) The corporation shall not have the right to redeem
shares of this Series pursuant to Section 4(a) or (b) hereof
unless full cumulative dividends for all past dividend periods
shall have been paid or declared and set aside for payment upon
all outstanding shares of this Series and all outstanding shares
of other series of stock of the corporation ranking, as to
dividends, on a parity with the shares of this Series.
(j) The corporation will not consummate or permit any
subsidiary to consummate any transaction involving the
corporation which would cause the Reserve Coverage Ratio to fall
below 5.0 unless, immediately following consummation of such
transaction, the corporation will have sufficient legally
available funds immediately following consummation of such
transaction to complete any Reserve Coverage Offer required as a
result thereof.
(k) Definitions. For purposes of this Section 4, the
following terms shall have the meanings indicated:
(i) "accrued and unpaid dividends" per share of
this Series (A) upon redemption on the Mandatory
Redemption Date, (B) in the case of any Reserve Coverage
Offer, (C) in the case of any optional redemption and (D)
in the case of a liquidation event, shall be equal to the
sum of (x) the aggregate amount of any accrued and unpaid
dividends on such share through the next preceding
Dividend Payment Date (calculated as provided in Section
3 hereof) plus (y) a proportionate amount of the regular
quarterly dividend at the Dividend Rate for the period
from the day following the immediately preceding Dividend
Payment Date through the redemption date, Purchase Date
or date of liquidating distribution (calculated on the
basis of a year of 360 days consisting of twelve 30-day
months) multiplied by the Reference Gold Price used to
calculate the other amounts payable to holders of the
shares of this Series in connection with such redemption,
purchase or liquidation event. If a quarterly dividend
is not declared and paid as provided in Section 3 hereof,
the unpaid dividend that shall cumulate for such Dividend
Period will be the amount of the dividend that would have
been payable on the Dividend Payment Date if such
dividend had been timely paid.
(ii) "Calculation Date" means (i) December 31 of
each year and (ii) the date of the consummation of each
transaction undertaken by the corporation or any
subsidiary of the corporation which would either (a)
cause the Reserve Amount, as estimated by the
corporation, to decrease by 50% or more from the
preceding Calculation Date or (b) cause the Reserve
Coverage Ratio, as estimated by the corporation, to fall
below 5.0.
(iii) The "Gold Amount" as of any Calculation Date
means the product of (x) 2.0 ounces of gold and (y) the
number of shares of this Series issued and outstanding as
of such Calculation Date less the number of shares of
this Series acquired by the corporation on or prior to
the date of preparation of a Corporation Certificate with
respect to such Calculation Date.
(iv) The "Reference Gold Price," when used to
calculate any amount payable with respect to the shares
of this Series (other than dividends payable on any
Dividend Payment Date other than the Mandatory Redemption
Date) or to purchase any shares of this Series on any
date means the arithmetic average of the London P.M. gold
fixing price (or A.M. gold fixing price if there is no
P.M. gold fixing price on the applicable trading date)
for an ounce of gold in the London bullion market, as
published in The Wall Street Journal (Eastern Edition)
(or, if such prices are not published in The Wall Street
Journal (Eastern Edition), as published in the Financial
Times) on each of the twenty trading days ending on the
second trading day prior to (i) in the case of the
mandatory redemption of shares of this Series, the
Mandatory Redemption Date, (ii) in the case of any offer
to purchase shares of this Series due to a failure to
meet the minimum Reserve Coverage Ratio on any
Calculation Date, the date of commencement of such
Reserve Coverage Offer, (iii) in the case of any optional
redemption of shares of this Series, the date fixed for
such redemption and (iv) in the case of a liquidation
event, the date 30 days prior to the date fixed for the
liquidating distribution. If for any reason gold is not
traded during any relevant period in the London bullion
market or is not quoted in U.S. dollars in such market,
gold will be valued during such period or portion
thereof, as the case may be, on the basis of trading
prices, quoted in U.S. dollars, in the then principal
international trading market for gold as determined by
the corporation's Board of Directors.
(v) The "Reserve Amount" as of any Calculation Date
means the corporation's Proportionate Interest in the
estimated proved and probable gold reserves of the
corporation and of any entity in which the corporation
has a direct or indirect beneficial ownership interest.
The estimated proved and probable gold reserves shall be
determined based upon evaluation methods generally
applied by the mining industry. The corporation's
"Proportionate Interest" in any estimated proved and
probable gold reserves shall be the corporation's direct
or indirect beneficial ownership interest in such
reserves, giving effect to reductions required to reflect
any beneficial ownership interest of any person other
than the corporation in such reserves.
(vi) The "Reserve Coverage Ratio" shall be
determined as of each Calculation Date by dividing (i)
the Reserve Amount as of such Calculation Date by (ii)
the Gold Amount as of such date.
5. Voting Rights. (a) Except for the voting rights
described below and except as otherwise provided by law, the
holders of shares of this Series shall not be entitled to vote on
any matter or to receive notice of, or to participate in, any
meeting of the stockholders of the corporation. Each share of
Preferred Stock of this Series will be entitled to one vote on
matters which holders of such Series are entitled to vote.
(b) The shares of this Series shall be entitled to vote
with respect to the election of directors in accordance with
Sections (b)(4) and (b)(5) of Article FOURTH of the certificate
of incorporation.
(c) Whenever dividends payable on shares of this Series
shall be in default in an aggregate amount equal to or exceeding
six full quarterly dividends on all shares of this Series at the
time outstanding, the number of directors then constituting the
Board of Directors of the corporation shall be increased by two,
and holders of shares of this Series shall, in addition to any
other voting rights, have the right, voting separately as a class
together with holders of all other series of stock of the Company
ranking on a parity with shares of this Series either as to
dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights have
been conferred and are exercisable (such other series of stock
being herein referred to as "Other Voting Stock"), to elect such
two additional directors. In such case, the Board of Directors
will be increased by two directors, and the holders of shares of
this Series (either alone or with the holders of Other Voting
Stock) will have the exclusive right as members of such class, as
described above, to elect two directors at the next annual
meeting of stockholders. Whenever such right of the holders of
shares of this Series shall have vested, such right may be
exercised initially either at a special meeting of such holders
as provided in Section 5(d) hereof or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at such annual meetings. The right of the holders of
shares of this Series to vote together as a class with the
holders of shares of any Other Voting Stock shall continue until
such time as all dividends accrued on outstanding shares of this
Series to the Dividend Payment Date next preceding the date of
any such determination shall have been paid in full, or declared
and set apart in trust for payment, at which time the right of
the holders of shares of this Series so to vote shall terminate,
except as herein or by law expressly provided, subject to
revesting upon the occurrence of a subsequent default of the
character mentioned above.
(d) At any time when the right of the holders of shares
of this Series to elect directors as provided in Section 5(c)
hereof shall have vested, and if such right shall not already
have been initially exercised, a proper officer of the
corporation, upon the written request of the holders of record of
at least 10% of the aggregate number of shares of this Series and
shares of any Other Voting Stock at the time outstanding,
addressed to the Secretary of the corporation, shall call a
special meeting of the holders of shares of this Series and of
such Other Voting Stock for the purpose of electing directors.
Such meeting shall be held at the earliest practicable date upon
the same form of notice as is required for annual meetings of
stockholders at the place for the holding of annual meetings of
stockholders of the corporation (or such other suitable place as
is designated by such officer). If such meeting shall not be
called by a proper officer of the corporation within 20 days
after personal service of such written request upon the Secretary
of the corporation, or within 20 days after mailing the same
within the United States of America, 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 at least 10% of the
aggregate number of shares of this Series and shares of any Other
Voting Stock at the time outstanding may designate in writing one
of their number to call such a meeting at the expense of the
corporation, and such meeting may be called by such person so
designated upon the same form of notice as is required for annual
meetings of stockholders and shall be held at the place for the
holding of annual meetings of stockholders of the corporation (or
such other suitable place as is designated by such person). Any
holder of shares of this Series so designated shall have access
to the registry books of the corporation for the purpose of
causing a meeting of stockholders to be called pursuant to this
subsection (c). Notwithstanding anything to the contrary
contained in this subsection (d), no such special meeting shall
be called during the period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders of the
corporation.
(e) At any meeting held for the purpose of electing
directors at which holders of shares of this Series shall have
the right, voting together as a class with holders of shares of
any Other Voting Stock to elect directors as provided in Section
5(c) hereof, the presence, in person or by proxy, of the holders
of 33 1/3% of the aggregate number of shares of this Series and
shares of such Other Voting Stock at the time outstanding shall
be required and be sufficient to constitute a quorum of such
class for the election of directors pursuant to such Section
5(c). At any such meeting or adjournment thereof, (i) the
absence of a quorum of the shares of this Series and shares of
such Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section 5(c)
hereof and (ii) in the absence of a quorum, either of the shares
of this Series and shares of such Other Voting Stock or of any
other shares of stock of the corporation, or both, a majority of
the holders, present in person or by proxy, of the class or
classes of stock which lack a quorum shall have the power to
adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than
announcement at the meeting, until a quorum shall be present.
(f) During any period when the holders of shares of this
Series shall have the right to vote together as a class with the
holders of shares of any Other Voting Stock for directors as
provided in Section 5(c) hereof, (i) the directors so elected by
such holders shall continue in office until their successors
shall have been elected by such holders or until termination of
the rights of such holders to vote as a class for directors and
(ii) any vacancies in the Board of Directors shall be filled only
by a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the
class or classes of stock which elected the director whose office
shall have become vacant. Immediately upon termination of the
right of holders of this Series and any Other Voting Stock to
vote as a class for directors, (i) the term of office of the
directors so elected shall terminate and (ii) the number of
directors shall be such number as may be provided for in the
by-laws of the corporation irrespective of any increase pursuant
to the provisions of Section 5(c) hereof.
(g) In addition to any other vote required by law, the
corporation shall not (i) amend, alter or repeal, whether by
merger, consolidation or otherwise, the provisions of its
certificate of incorporation (including the terms of this Series)
so as to materially and adversely affect any right, preference,
privilege or voting power of this Series or (ii) create,
authorize or issue any series or class of stock ranking prior,
either as to payment of dividends or distributions of assets upon
liquidation, dissolution or winding up, to this Series, without
the affirmative vote or consent of the holders of at least two-
thirds of the aggregate number of shares of this Series at the
time outstanding, voting as a separate class; provided, that any
increase in the total number of authorized shares of Common Stock
(or any series thereof) or Preferred Stock (or any series
thereof), or the creation, authorization or issuance of any
series of stock ranking, as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation, on a parity with the shares of this Series
will not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers; provided,
further, that no class vote of the holders of shares of this
Series shall be required if, at or prior to the time when the
actions described in clause (i) or (ii) of this subsection (g)
shall become effective, provision is made in accordance with
Section 4 hereof for the redemption of all shares of this Series
at the time outstanding.
6. Preference upon Liquidation. (a) In the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation, after payment or provision
for payment of the debts and other liabilities of the corporation
and of dividends and liquidation preferences in respect of any
other stock of the corporation ranking senior to the shares of
this Series as to such payments, the holders of shares of this
Series shall be entitled to receive, out of the remaining net
assets of the corporation, the Dollar Equivalent Value of 2.0
ounces of gold in cash for each share of this Series, plus an
amount equal to all dividends (whether or not earned or declared)
accrued and unpaid on each such share up to the date fixed for
distribution, before any distribution shall be made to or set
apart for the holders of any Junior Stock. If, after payment or
provision for payment of the debts and other liabilities of the
corporation and of dividends and liquidation preferences in
respect of any other stock of the corporation ranking senior to
the shares of this Series as to such payments, the remaining net
assets of the corporation are not sufficient to pay to the
holders of shares of this Series the full amount of their
preference set forth above, then the remaining net assets of the
corporation shall be divided among and paid to the holders of
shares of this Series, holders of shares of any other class or
series of Preferred Stock, and holders of shares of any other
stock of the corporation on a parity with this Series as to
dividends and distribution of assets upon liquidation,
dissolution or winding up of the affairs of the corporation
ratably per share in proportion to the full per share amounts to
which they respectively are entitled. For purposes of this
subsection (a) and Section 6(b) hereof, a consolidation or merger
of the corporation with one or more other corporations or the
sale of all or substantially all of the assets of the corporation
shall not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation.
(b) Subject to the rights of the holders of shares of
any series or class of stock ranking prior to this Series and of
the holders of shares of any stock of the corporation ranking on
a parity as to dividends and distribution of assets upon
liquidation, dissolution or winding up of the affairs of the
corporation, after payment shall have been made in full to the
holders of this Series as provided in Section 6(a) hereof and
this subsection (b), the holders of any Junior Stock 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 shares of this Series shall not be
entitled to share therein.
7. Taxes. The corporation will pay any and all
documentary, stamp or similar taxes payable to the United States
of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of
certificates for shares of this Series on redemption of less than
all of the shares represented by any certificate for such shares
surrendered for redemption or pursuant to a Reserve Coverage
Offer; provided, 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 certificates for shares of
this Series in a name other than that of the holder of shares of
this Series to be redeemed or repurchased and no such issue or
delivery shall be made unless and until the person requesting
such issue or delivery has paid to the corporation the amount of
any such tax or has established, to the satisfaction of the
corporation, that such tax has been paid. The corporation
extends no protection with respect to any other taxes imposed in
connection with such redemption or repurchase of shares of this
Series.
8. No Other Rights. The shares of this Series shall not
have any relative, participating, optional or other special
rights and powers other than as set forth herein and other than
any which may be provided by law.
9. Miscellaneous. Capitalized terms which are defined
in this Exhibit are defined only for the purposes of this
Exhibit, and not for the purposes of other Exhibits to the
certificate of incorporation. Unless otherwise indicated,
section references contained in this Exhibit refer to the
corresponding sections of this Exhibit.
EXHIBIT 4.4
CERTIFICATE OF DESIGNATIONS
OF
GOLD-DENOMINATED PREFERRED STOCK, SERIES II
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
corporation's Gold-Denominated Preferred Stock, Series II are as
set forth below:
1. Designation. (a) 215,279 shares of Preferred Stock
of the corporation are hereby constituted as a series of
Preferred Stock designated as "Gold-Denominated Preferred Stock,
Series II" (hereinafter called "this Series"). Each share of
this Series shall be identical in all respects with the other
shares of this Series. The Board of Directors is authorized to
increase or decrease (but not below the number of shares of this
Series then outstanding) the number of shares of this Series.
(b) Shares of this Series which have been redeemed for
cash as hereinafter provided or purchased by the corporation
shall be canceled, and shall revert to authorized but unissued
shares of Preferred Stock undesignated as to series, and may be
reissued as a part of this Series or may be reclassified and
reissued as part of a new or existing series of Preferred Stock
to be created by resolution or resolutions of the Board of
Directors, all subject to the conditions or restrictions on
issuance set forth in any resolution or resolutions adopted by
the Board of Directors providing for the issue of such series of
Preferred Stock.
2. Dividends. (a) The holders of shares of this Series
shall be entitled to receive, but only out of funds legally
available therefor, cash dividends as hereinafter provided. Such
dividends shall be paid when, as and if declared by the Board of
Directors on the first day of February, May, August and November
in each year until and including February 1, 2006 (each such date
being referred to herein as a "Dividend Payment Date") to holders
of record on the record date determined by the Board of Directors
in advance of the payment of each particular dividend; provided
that dividends payable on February 1, 2006 (the "Mandatory
Redemption Date") shall be paid as provided in Section 4 hereof.
Such dividends shall be cumulative from the date of original
issuance of the shares of this Series.
(b) So long as any shares of this Series shall be
outstanding, the corporation shall not, unless full cumulative
dividends for all past dividend periods shall have been paid or
declared and set apart for payment upon all outstanding shares of
this Series and the shares of any other class or series of
Preferred Stock (including the Gold-Denominated Preferred Stock,
the Silver-Denominated Preferred Stock, the Step-Up Convertible
Preferred Stock and the 7% Convertible Exchangeable Preferred
Stock) and any other class or series of stock of the corporation
ranking, as to dividends, on a parity with shares of this Series
(the shares of any other class or series of Preferred Stock and
any other class or series of stock of the corporation ranking, as
to dividends, on a parity with shares of this Series being herein
referred to as "Parity Dividend Stock"), (i) declare, pay or set
apart any amounts for dividends on, or make any other
distribution in cash or other property in respect of, the Class A
Common Stock of the corporation, the Class B Common Stock of the
corporation or any other stock of the corporation ranking junior
to this Series as to dividends or distribution of assets upon
liquidation, dissolution or winding up of the affairs of the
corporation (the Class A Common Stock, the Class B Common Stock
and any such other stock being herein referred to as "Junior
Stock"), other than a dividend payable solely in Junior Stock,
(ii) purchase, redeem or otherwise acquire for value any shares
of Junior Stock, directly or indirectly, other than as a result
of a reclassification, exchange or conversion of one Junior Stock
for or into another Junior Stock, or other than through the use
of proceeds of a substantially contemporaneous sale of other
Junior Stock, or (iii) make any payment on account of, or set
aside money for, a sinking or other like fund for the purchase,
redemption or other acquisition for value of any shares of Junior
Stock. For purposes of this Section 2 and of Section 4(f)
hereof, if any depositary shares have been issued with respect to
any series of stock, actions with respect to such depositary
shares, including acquisition of and payments on or with respect
to such depositary shares, shall be regarded as actions with
respect to such series of stock.
(c) If the funds available for the payment of dividends
are insufficient to pay in full the dividends payable on all
outstanding shares of this Series and shares of Parity Dividend
Stock, the total available funds to be paid in partial dividends
on the shares of this Series and shares of Parity Dividend Stock
shall be divided among this Series and the Parity Dividend Stock
in proportion to the aggregate amounts of dividends accrued and
unpaid with respect to this Series and the Parity Dividend Stock.
Accruals of dividends shall not bear interest.
3. Dividend Rate. (a) The Dividend Rate per quarter on
each share of this Series shall be an amount equal to the Dollar
Equivalent Value (as defined below) of 0.01625 ounces of gold.
"Dollar Equivalent Value" means the applicable Reference Gold
Price multiplied by the applicable number of ounces of gold.
"Reference Gold Price" means, when used to calculate the amount
of any dividend payable on any Dividend Payment Date (other than
the Mandatory Redemption Date, as to which the calculation shall
be made as provided in Section 4(k)(v) hereof), the arithmetic
average of the London P.M. gold fixing price (or A.M. gold fixing
price if there is no P.M. gold fixing price on the applicable
trading date) for an ounce of gold in the London bullion market
on each of the five trading days ending on the second trading day
prior to the last day of the calendar quarter immediately
preceding such Dividend Payment Date, as published in The Wall
Street Journal (Eastern Edition) (or, if such prices are not
published in The Wall Street Journal, as published in the
Financial Times). If for any reason gold is not traded during
any relevant period in the London bullion market or is not quoted
in U.S. dollars in such market, gold will be valued during such
period or portion thereof, as the case may be, on the basis of
trading prices, quoted in U.S. dollars, in the then principal
international trading market for gold as determined by the
corporation's Board of Directors. On or before the fifth
business day preceding each record date for the payment of a
dividend in respect of the shares of this Series, the corporation
will cause to be published in The Wall Street Journal (Eastern
Edition) or, if such newspaper is not then published, in a
newspaper or other publication of national circulation, the
amount of the dividend payable in respect of each share of this
Series (and if the shares of this Series are represented by
depositary shares, the amount so payable per depositary share) on
the next succeeding Dividend Payment Date.
(b) Dividends shall be calculated on the basis of a year
of 360 days consisting of 12 30-day months. The term "Dividend
Period", as used herein, means, with respect to any Dividend
Payment Date, the period commencing on the day following the
immediately preceding Dividend Payment Date to and including such
Dividend Payment Date.
4. Redemption. (a) The shares of this Series shall be
subject to mandatory redemption by the corporation, out of funds
legally available therefor, on the Mandatory Redemption Date at
the Dollar Equivalent Value of 2.0 ounces of gold per share plus
accrued and unpaid dividends (as hereinafter defined) to the
Mandatory Redemption Date.
(b) The shares of this Series shall not be subject to
redemption at the option of the corporation except as described
in this subsection (b). If on any Dividend Payment Date the
total number of shares of this Series outstanding shall be less
than 15% of the total number of shares of this Series outstanding
on the 40th day following the date of original issuance of the
shares of this Series, the corporation shall have the option to
redeem the outstanding shares of this Series, in whole but not in
part, out of funds legally available therefor, at an amount equal
to the Dollar Equivalent Value of 2.0 ounces of gold per share
plus accrued and unpaid dividends (as hereinafter defined) to the
date fixed for redemption. For purposes of determining the
number of shares of this Series outstanding on any Dividend
Payment Date, the shares of this Series acquired by the
corporation on or prior to such Dividend Payment Date and not
theretofore canceled (or in the case of any shares of this Series
represented by depositary shares, the depositary shares
representing shares of this Series acquired by the corporation on
or prior to such Dividend Payment Date and not theretofore
delivered to the depositary for the depositary shares for
cancellation) shall be deemed to be outstanding. Notice of any
such redemption as described in this Section 4(b) shall be mailed
to holders of the shares of this Series within 30 days after such
Dividend Payment Date in accordance with the provisions of
Section 4(c) hereof.
(c) At least 30 days but no more than 60 days prior to
the date fixed for redemption of the shares of this Series in
accordance with Section 4(a) or (b) hereof (the "Call Date"), a
written notice will be mailed to each holder of record (and each
beneficial owner to the extent required by law) of shares of this
Series to be redeemed, notifying such holder of the corporation's
election to redeem such shares if such redemption is pursuant to
Section 4(b) hereof, setting forth the method for determining the
amount payable per share of this Series on the Call Date, stating
the Call Date and calling upon such holder to surrender to the
corporation on the Call Date at the place designated in such
notice the certificate or certificates representing the shares
called for redemption.
(d) At any time after a notice of redemption has been
given in the manner prescribed in Section 4(a) or (b) hereof and
the amount payable on the date fixed for redemption can be
determined by the corporation, and prior to the date fixed for
redemption, the corporation may deposit in trust, with a bank or
trust company identified in the notice of redemption having
capital, surplus and undistributed profits aggregating at least
$50,000,000, an aggregate amount of funds sufficient for such
redemption (including dividends accrued on the shares of this
Series called for redemption to the date fixed for redemption)
for immediate payment in the appropriate amounts upon surrender
of certificates for such shares. Any interest accrued on such
funds shall be paid to the corporation from time to time. Such
deposit in trust shall be irrevocable, except that any funds
deposited by the corporation which are unclaimed at the end of
two years from the date fixed for such redemption shall be paid
over to the corporation upon its request, and upon such repayment
the holders of the shares so called for redemption shall look
only to the corporation for payment of the appropriate amount.
(e) From and after the date fixed for redemption (unless
the corporation shall default in making payment of the amount
payable upon such redemption), whether or not certificates for
shares so called for redemption have been surrendered by the
holders thereof as described below, dividends on the shares of
this Series so called for redemption shall cease to accrue, and
from and after the date of the deposit of trust funds for the
redemption of shares of this Series in accordance with the
provisions of Section 4(d) hereof, such shares shall be deemed to
be no longer outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the right to receive
from the corporation the amount payable upon such redemption)
shall cease and terminate. Upon surrender in accordance with the
notice of redemption of the certificates for any shares of this
Series so redeemed (properly endorsed or assigned for transfer if
the corporation shall so require and the notice shall so state),
the holder thereof shall be entitled to receive payment of the
redemption price plus an amount equal to all accrued and unpaid
dividends as aforesaid.
(f) If the corporation shall have failed to redeem all
outstanding shares of this Series on the Mandatory Redemption
Date then, until it shall have redeemed all outstanding Shares of
this Series, the corporation may not (i) declare, pay or set
apart any amounts for dividends on, or make any other
distribution in cash or other property in respect of, any Junior
Stock other than a dividend payable solely in Junior Stock, (ii)
purchase, redeem or otherwise acquire for value any shares of
Junior Stock, directly or indirectly, other than as a result of a
reclassification, exchange or conversion of one Junior Stock for
or into another Junior Stock, or other than through the use of
proceeds of a substantially contemporaneous sale of other Junior
Stock, (iii) make any payment on account of, or set aside money
for, a sinking or other like fund for the purchase, redemption or
other acquisition for value of any shares of Junior Stock or (iv)
purchase, redeem or otherwise acquire for value any shares of
stock of the corporation ranking on a parity with the shares of
this Series as to dividends or distribution of assets upon
liquidation, dissolution or winding up ("Parity Stock").
(g) (i) Within 90 days following each Calculation Date
(as defined below), the corporation shall be required to prepare
a certificate (a "Corporation Certificate") setting forth its
determination of the Reserve Amount (as defined below) as of such
Calculation Date. If the Reserve Amount, as shown on the
Corporation Certificate prepared with respect to any Calculation
Date is less than the Aggregate Reserve Requirement (as defined
below) as of such Calculation Date, the corporation will be
required to make an offer (a "Reserve Coverage Offer") to
purchase, out of funds legally available therefor, at a price
equal to the liquidation preference thereof as of the Purchase
Date (as hereinafter defined), plus accrued and unpaid dividends
(as defined below) thereon to the Purchase Date, a sufficient
number of shares of this Series and of other Gold Parity Stock
(as defined below) (or the depositary shares, if any, issued with
respect thereto)
such that, if all such shares had been repurchased on the
relevant Calculation Date, the Reserve Amount on that date would
have been greater than or equal to the Aggregate Reserve
Requirement on such date. If the Corporation Certificate
prepared with respect to any Calculation Date shows that the
Reserve Amount is less than the Aggregate Reserve Requirement on
such date, the corporation shall include in such Corporation
Certificate its calculation of the number of shares of this
Series (or related depositary shares) and the number of shares of
other Parity Stock (or related depositary shares) it intends to
offer to purchase to satisfy the foregoing requirements (such
number with respect to any series being referred to as the "Offer
Amount" with respect to such series). The corporation, in its
sole discretion, may determine the number of shares, if any, of
this Series (or related depositary shares) and the number of
shares, if any, of each other series of Gold Parity Stock (or
related depositary shares) to which a Reserve Coverage Offer will
be made so long as such requirements are satisfied.
(ii) If required to make a Reserve Coverage Offer, the
corporation will commence such offer not more than 60 days after
the date of the Corporation Certificate prepared with respect to
the applicable Calculation Date, by mailing a notice to all
holders of record of the shares of each series included in such
Reserve Coverage Offer setting forth (A) that such notice is
being given pursuant to a Reserve Coverage Offer, (B) the Offer
Amount with respect to such series, (C) the method for
determining the amount payable per share of such series on the
Purchase Date, (D) the last date (the "Purchase Date"), which
shall not be less than 30 nor more 60 days after the date of such
notice, by which a holder must elect whether to accept the
Reserve Coverage Offer, (E) the procedures that such holder must
follow to exercise its rights and (F) the procedures for
withdrawing an election. The corporation shall also cause a copy
of such notice to be published in The Wall Street Journal
(Eastern Edition) or another daily newspaper of national
circulation.
(iii) Holders of shares of any series electing to have
shares of such series purchased by the corporation pursuant to a
Reserve Coverage Offer will be required to surrender the
certificates representing such shares, with an appropriate form
duly completed, to the corporation prior to the Purchase Date.
Holders will be entitled to withdraw an election by a written
notice of withdrawal delivered to the corporation prior to the
close of business on the Purchase Date. The notice of withdrawal
shall state the number of shares and certificate numbers to which
the notice of withdrawal relates and the number of shares and
certificate numbers, if any, which remain subject to the
election. If the aggregate number of shares of any series
tendered exceeds the Offer Amount with respect to such series,
the corporation will select the shares of such series to be
purchased on a pro rata basis as nearly as practicable. The
corporation shall, as promptly as reasonably practicable after
the Purchase Date, cause payment to be mailed or delivered to
each tendering holder in the amount of the purchase price, and
any unpurchased shares to be returned to the holder thereof.
(h) If, at the time of the mandatory redemption on the
Mandatory Redemption Date or of a Reserve Coverage Offer, the
funds of the corporation legally available for redemption or
repurchase of the shares of this Series are insufficient to
redeem or repurchase all of such shares and all of the shares of
any other series of Parity Stock which the corporation is then
obligated to redeem or repurchase, (i) the total legally
available funds shall be allocated among the shares of this
Series and of such other series in proportion to the aggregate
dollar amount of redemption or other repurchase obligations with
respect to this Series and such other series and (ii) the portion
of such funds allocated to this Series will be used to redeem or
repurchase the maximum possible number of shares of this Series,
pro rata based upon the number of shares to be redeemed or
delivered for repurchase, as the case may be. At any time
thereafter when additional funds of the corporation become
legally available for such purpose, after giving effect to the
foregoing allocation provisions, such funds shall immediately be
used to redeem or repurchase, as the case may be, any additional
shares of this Series which the corporation is obligated to
redeem or repurchase, as the case may be, but which it has not so
redeemed or repurchased.
(i) The corporation shall not have the right to redeem
shares of this Series pursuant to Section 4(a) or (b) hereof
unless full cumulative dividends for all past dividend periods
shall have been paid or declared and set aside for payment upon
all outstanding shares of this Series and all outstanding shares
of other series of stock of the corporation ranking, as to
dividends, on a parity with the shares of this Series.
(j) The corporation will not consummate or permit any
subsidiary to consummate any transaction involving the
corporation which would cause the Reserve Amount to fall below
the Aggregate Reserve Requirement immediately after consummation
of such transaction unless the corporation will have sufficient
legally available funds immediately following consummation of
such transaction to complete any Reserve Coverage Offer required
as a result thereof.
(k) Definitions. For purposes of this Section 4, the
following terms shall have the meanings indicated:
(i) "accrued and unpaid dividends" per share of
this Series (A) upon redemption on the Mandatory
Redemption Date, (B) in the case of any Reserve Coverage
Offer, (C) in the case of any optional redemption and (D)
in the case of a liquidation event, shall be equal to the
sum of (x) the aggregate amount of any accrued and unpaid
dividends on such share through the next preceding
Dividend Payment Date (calculated as provided in Section
3 hereof) plus (y) a proportionate amount of the regular
quarterly dividend at the Dividend Rate for the period
from the day following the immediately preceding Dividend
Payment Date through the redemption date, Purchase Date
or date of liquidating distribution (calculated on the
basis of a year of 360 days consisting of twelve 30-day
months) multiplied by the Reference Gold Price used to
calculate the other amounts payable to holders of the
shares of this Series in connection with such redemption,
purchase or liquidation event. If a quarterly dividend
is not declared and paid as provided in Section 3, the
unpaid dividend that shall cumulate for such Dividend
Period will be the amount of the dividend that would have
been payable on the Dividend Payment Date if such
dividend had been timely paid.
(ii) "Aggregate Reserve Requirement" as of any
Calculation Date means the sum of the individual Reserve
Coverage Requirements with respect to each series of Gold
Parity Stock, including this Series.
(iii) "Calculation Date" means (i) December 31 of
each year and (ii) the date of the consummation of each
transaction undertaken by the corporation or any
subsidiary of the corporation which would either (a)
cause the Reserve Amount, as estimated by the
corporation, to decrease by 50% or more from the
preceding Calculation Date or (b) cause the Reserve
Amount, as estimated by the corporation, to fall below
the Aggregate Reserve Requirement on such date.
(iv) "Gold Parity Stock" means any series of Parity
Stock the liquidation preference of which is based on
specified amounts of gold or the Dollar Equivalent Value
thereof.
(v) "Reference Gold Price", when used to calculate
any amount payable with respect to the shares of this
Series (other than dividends payable on any Dividend
Payment Date other than the Mandatory Redemption Date) or
to purchase any shares of this Series on any date means
the arithmetic average of the London P.M. gold fixing
price (or A.M. gold fixing price if there is no P.M. gold
fixing price on the applicable trading date) for an ounce
of gold in the London bullion market, as published in The
Wall Street Journal (Eastern Edition) (or, if such prices
are not published in The Wall Street Journal (Eastern
Edition), as published in the Financial Times) on each of
the twenty trading days ending on the second trading day
prior to (i) in the case of the mandatory redemption of
shares of this Series, the Mandatory Redemption Date,
(ii) in the case of any Reserve Coverage Offer, the date
of commencement thereof, (iii) in the case of any
optional redemption of shares of this Series, the date
fixed for such redemption and (iv) in the case of a
liquidation event, the date 30 days prior to the date
fixed for the liquidating distribution. If for any
reason gold is not traded during any relevant period in
the London bullion market or is not quoted in U.S.
dollars in such market, gold will be valued during such
period or portion thereof, as the case may be, on the
basis of trading prices, quoted in U.S. dollars, in the
then principal international trading market for gold as
determined by the corporation's Board of Directors.
(vi) "Required Coverage Multiplier" means (x) 5.0
with respect to this Series, (y) with respect to any
other series of Gold Parity Stock having the benefit of a
provision requiring an offer similar to the Reserve
Coverage Offer, the multiplier applicable thereto by the
terms of such other series, and (z) 1.0 with respect to
any other series of Gold Parity Stock.
(vii) "Reserve Amount" as of any Calculation Date
means the corporation's Proportionate Interest in the
estimated proved and probable gold reserves of the
corporation and of any entity in which the corporation
has a direct or indirect beneficial ownership interest.
The estimated proved and probable gold reserves shall be
determined based upon evaluation methods generally
applied by the mining industry. The corporation's
"Proportionate Interest" in any estimated proved and
probable gold reserves shall be the corporation's direct
or indirect beneficial ownership interest in such
reserves, giving effect to reductions required to reflect
any beneficial ownership interest of any person other
than the corporation in such reserves.
(viii) "Reserve Coverage Requirement" with respect
to any series of Gold Parity Stock shall mean the product
of (x) the aggregate liquidation preference of all
outstanding shares of such series (expressed in ounces of
gold) times (y) the Required Coverage Multiplier
applicable to such series. With respect to any series
with respect to which depositary shares have been issued,
the aggregate liquidation preference of such series shall
be determined on the basis of the number of such
depositary shares as are issued and outstanding as of the
applicable Calculation Date (excluding any depositary
shares which have been acquired by the corporation on or
prior to the date of the preparation of the corporation
Certificate with respect to such Calculation Date).
5. Voting Rights. (a) Except for the voting rights
described below and except as otherwise required by law, the
holders of shares of this Series shall not be entitled to vote on
any matter or to receive notice of, or to participate in, any
meeting of the stockholders of the corporation. Each share of
Preferred Stock of this Series will be entitled to one vote on
matters which holders of such Series are entitled to vote.
(b) The shares of this Series shall be entitled to vote
with respect to the election of directors in accordance with
Sections (b)(4) and (b)(5) of Article FOURTH of the certificate
of incorporation.
(c) Whenever dividends payable on shares of this Series
shall be in default in an aggregate amount equal to or exceeding
six full quarterly dividends on all shares of this Series at the
time outstanding, the number of directors then constituting the
Board of Directors of the corporation shall be increased by two,
and holders of shares of this Series shall, in addition to any
other voting rights, have the right, voting separately as a class
together with holders of all other series of stock of the Company
ranking on a parity with shares of this Series either as to
dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights have
been conferred and are exercisable (such other series of stock
being herein referred to as "Other Voting Stock"), to elect such
two additional directors. In such case, the Board of Directors
will be increased by two directors, and the holders of shares of
this Series (either alone or with the holders of Other Voting
Stock) will have the exclusive right as members of such class, as
described above, to elect two directors at the next annual
meeting of stockholders. Whenever such right of the holders of
shares of this Series shall have vested, such right may be
exercised initially either at a special meeting of such holders
as provided in Section 5(d) hereof or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at such annual meetings. The right of the holders of
shares of this Series to vote together as a class with the
holders of shares of any Other Voting Stock shall continue until
such time as all dividends accrued on outstanding shares of this
Series to the Dividend Payment Date next preceding the date of
any such determination shall have been paid in full, or declared
and set apart in trust for payment, at which time the right of
the holders of shares of this Series so to vote shall terminate,
except as herein or by law expressly provided, subject to
revesting upon the occurrence of a subsequent default of the
character mentioned above.
(d) At any time when the right of the holders of shares
of this Series to elect directors as provided in Section 5(c)
hereof shall have vested, and if such right shall not already
have been initially exercised, a proper officer of the
corporation, upon the written request of the holders of record of
at least 10% of the aggregate number of shares of this Series and
shares of any Other Voting Stock at the time outstanding,
addressed to the Secretary of the corporation, shall call a
special meeting of the holders of shares of this Series and of
such Other Voting Stock for the purpose of electing directors.
Such meeting shall be held at the earliest practicable date upon
the same form of notice as is required for annual meetings of
stockholders at the place for the holding of annual meetings of
stockholders of the corporation (or such other suitable place as
is designated by such officer). If such meeting shall not be
called by a proper officer of the corporation within 20 days
after personal service of such written request upon the Secretary
of the corporation, or within 20 days after mailing the same
within the United States of America, 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 at least 10% of the
aggregate number of shares of this Series and shares of any Other
Voting Stock at the time outstanding may designate in writing one
of their number to call such a meeting at the expense of the
corporation, and such meeting may be called by such person so
designated upon the same form of notice as is required for annual
meetings of stockholders and shall be held at the place for the
holding of annual meetings of stockholders of the corporation (or
such other suitable place as is designated by such person). Any
holder of shares of this Series so designated shall have access
to the registry books of the corporation for the purpose of
causing a meeting of stockholders to be called pursuant to this
subsection (d). Notwithstanding anything to the contrary
contained in this subsection (d), no such special meeting shall
be called during the period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders of the
corporation.
(e) At any meeting held for the purpose of electing
directors at which holders of shares of this Series shall have
the right, voting together as a class with holders of shares of
any Other Voting Stock to elect directors as provided in Section
5(c) hereof, the presence, in person or by proxy, of the holders
of 33 1/3% of the aggregate number of shares of this Series and
shares of such Other Voting Stock at the time outstanding shall
be required and be sufficient to constitute a quorum of such
class for the election of directors pursuant to such Section
5(c). At any such meeting or adjournment thereof, (i) the
absence of a quorum of the shares of this Series and shares of
such Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section 5(c)
hereof and (ii) in the absence of a quorum, either of the shares
of this Series and shares of such Other Voting Stock or of any
other shares of stock of the corporation, or both, a majority of
the holders, present in person or by proxy, of the class or
classes of stock which lack a quorum shall have the power to
adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than
announcement at the meeting, until a quorum shall be present.
(f) During any period when the holders of shares of this
Series shall have the right to vote together as a class with the
holders of shares of any Other Voting Stock for directors as
provided in Section 5(c) hereof, (i) the directors so elected by
such holders shall continue in office until their successors
shall have been elected by such holders or until termination of
the rights of such holders to vote as a class for directors and
(ii) any vacancies in the Board of Directors shall be filled only
by a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the
class or classes of stock which elected the director whose office
shall have become vacant. Immediately upon termination of the
right of holders of this Series and any Other Voting Stock to
vote as a class for directors, (i) the term of office of the
directors so elected shall terminate and (ii) the number of
directors shall be such number as may be provided for in the
by-laws of the corporation irrespective of any increase pursuant
to the provisions of Section 5(c) hereof.
(g) In addition to any other vote required by law, the
corporation shall not (i) amend, alter or repeal, whether by
merger, consolidation or otherwise, the provisions of its
certificate of incorporation (including the terms of this Series)
so as to materially and adversely affect any right, preference,
privilege or voting power of this Series or (ii) create,
authorize or issue any series or class of stock ranking prior,
either as to payment of dividends or distributions of assets upon
liquidation, dissolution or winding up, to this Series, without
the affirmative vote or consent of the holders of at least two-
thirds of the aggregate number of shares of this Series at the
time outstanding, voting as a separate class; provided, that any
increase in the total number of authorized shares of Common Stock
(or any series thereof) or Preferred Stock (or any series
thereof), or the creation, authorization or issuance of any
series of stock ranking, as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation, on a parity with the shares of this Series
will not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers; provided,
further, that no class vote of the holders of shares of this
Series shall be required if, at or prior to the time when the
actions described in clause (i) or (ii) of this subsection 5(g)
shall become effective, provision is made in accordance with
Section 4 hereof for the redemption of all shares of this Series
at the time outstanding.
6. Preference upon Liquidation. (a) In the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation, after payment or provision
for payment of the debts and other liabilities of the corporation
and of dividends and liquidation preferences in respect of any
other stock of the corporation ranking senior to the shares of
this Series as to such payments, the holders of shares of this
Series shall be entitled to receive, out of the remaining net
assets of the corporation, the Dollar Equivalent Value of 2.0
ounces of gold in cash for each share of this Series, plus an
amount equal to all dividends (whether or not earned or declared)
accrued and unpaid on each such share up to the date fixed for
distribution, before any distribution shall be made to or set
apart for the holders of any Junior Stock. If, after payment or
provision for payment of the debts and other liabilities of the
corporation and of dividends and liquidation preferences in
respect of any other stock of the corporation ranking senior to
the shares of this Series as to such payments, the remaining net
assets of the corporation are not sufficient to pay to the
holders of shares of this Series the full amount of their
preference set forth above, then the remaining net assets of the
corporation shall be divided among and paid to the holders of
shares of this Series, holders of shares of any other class or
series of Preferred Stock and holders of shares of any other
stock of the corporation on a parity with this Series as to
dividends and distribution of assets upon liquidation,
dissolution or winding up of the affairs of the corporation
ratably per share in proportion to the full per share amounts to
which they respectively are entitled. For purposes of this
subsection (a) and Section 6(b) hereof, a consolidation or merger
of the corporation with one or more other corporations or the
sale of all or substantially all of the assets of the corporation
shall not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation.
(b) Subject to the rights of the holders of shares of
any series or class of stock ranking prior to this Series and of
the holders of shares of any stock of the corporation ranking on
a parity as to dividends and distribution of assets upon
liquidation, dissolution or winding up of the affairs of the
corporation, after payment shall have been made in full to the
holders of this Series as provided in Section 6(a) hereof and
this subsection (b), the holders of any Junior Stock 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 shares of this Series shall not be
entitled to share therein.
7. Taxes. The corporation will pay any and all
documentary, stamp or similar taxes payable to the United States
of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of
certificates for shares of this Series on redemption of less than
all of the shares represented by any certificate for such shares
surrendered for redemption or pursuant to a Reserve Coverage
Offer; provided, 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 certificates for shares of
this Series in a name other than that of the holder of shares of
this Series to be redeemed or repurchased and no such issue or
delivery shall be made unless and until the person requesting
such issue or delivery has paid to the corporation the amount of
any such tax or has established, to the satisfaction of the
corporation, that such tax has been paid. The corporation
extends no protection with respect to any other taxes imposed in
connection with such redemption or repurchase of shares of this
Series.
8. No Other Rights. The shares of this Series shall not
have any relative, participating, optional or other special
rights and powers other than as set forth herein and other than
any which may be provided by law.
9. Miscellaneous. Capitalized terms which are defined
in this Exhibit are defined only for the purposes of this
Exhibit, and not for the purposes of other Exhibits to the
certificate of incorporation. Unless otherwise indicated,
section references contained in this Exhibit refer to the
corresponding sections of this Exhibit.
EXHIBIT 4.5
CERTIFICATE OF DESIGNATIONS
OF
SILVER-DENOMINATED PREFERRED STOCK
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
corporation's Silver-Denominated Preferred Stock are as set forth
below:
1. Designation. (a) 119,000 shares of Preferred Stock
of the corporation are hereby constituted as a series of
Preferred Stock designated as "Silver-Denominated Preferred
Stock" (hereinafter called "this Series"). Each share of this
Series shall be identical in all respects with the other shares
of this Series. The Board of Directors is authorized to increase
or decrease (but not below the number of shares of this Series
then outstanding) the number of shares of this Series.
(b) Shares of this Series which have been redeemed for
cash as hereinafter provided or purchased by the corporation
shall be canceled, and shall revert to authorized but unissued
shares of Preferred Stock undesignated as to series, and may be
reissued as a part of this Series or may be reclassified and
reissued as part of a new or existing series of Preferred Stock
to be created by resolution or resolutions of the Board of
Directors, all subject to the conditions or restrictions on
issuance set forth in any resolution or resolutions adopted by
the Board of Directors providing for the issue of such series of
Preferred Stock.
2. Dividends. (a) The holders of shares of this Series
shall be entitled to receive, but only out of funds legally
available therefor, cash dividends as hereinafter provided. Such
dividends shall be paid when, as and if declared by the Board of
Directors on the first day of February, May, August and November
in each year until and including August 1, 2006 (or, if any
shares of this Series remain outstanding after August 1, 2006,
the last such date thereafter on which any shares of this Series
remain outstanding) (each such date being referred to herein as a
"Dividend Payment Date") to holders of record on the record date
determined by the Board of Directors in advance of the payment of
each particular dividend. Such dividends shall be cumulative
from the date of original issuance of the shares of this Series.
(b) So long as any shares of this Series shall be
outstanding, the corporation shall not, unless full cumulative
dividends for all past dividend periods shall have been paid or
declared and set apart for payment upon all outstanding shares of
this Series and the shares of any other class or series of
Preferred Stock (including the Gold-Denominated Preferred Stock,
the Gold-Denominated Preferred Stock, Series II, the Step-Up
Convertible Preferred Stock and the 7% Convertible Exchangeable
Preferred Stock) and any other class or series of stock of the
corporation ranking, as to dividends, on a parity with shares of
this Series (the shares of any other class or series of Preferred
Stock and any other class or series of stock of the corporation
ranking, as to dividends, on a parity with shares of this Series
being herein referred to as "Parity Dividend Stock"), (i)
declare, pay or set apart any amounts for dividends on, or make
any other distribution in cash or other property in respect of,
the Class A Common Stock of the corporation, the Class B Common
Stock of the corporation or any other stock of the corporation
ranking junior to this Series as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation (the Class A Common Stock, the Class B Common
Stock and any such other stock being herein referred to as
"Junior Stock"), other than a dividend payable solely in Junior
Stock, (ii) purchase, redeem or otherwise acquire for value any
shares of Junior Stock, directly or indirectly, other than as a
result of a reclassification, exchange or conversion of one
Junior Stock for or into another Junior Stock, or other than
through the use of proceeds of a substantially contemporaneous
sale of other Junior Stock, or (iii) make any payment on account
of, or set aside money for, a sinking or other like fund for the
purchase, redemption or other acquisition for value of any shares
of Junior Stock. For purposes of this Section 2 and of Section
4(f) hereof, if any depositary shares have been issued with
respect to any series of stock, actions with respect to such
depositary shares, including acquisition of and payments on or
with respect to such depositary shares, shall be regarded as
actions with respect to such series of stock.
(c) If the funds available for the payment of dividends
are insufficient to pay in full the dividends payable on all
outstanding shares of this Series and shares of Parity Dividend
Stock, the total available funds to be paid in partial dividends
on the shares of this Series and shares of Parity Dividend Stock
shall be divided among this Series and the Parity Dividend Stock
in proportion to the aggregate amounts of dividends accrued and
unpaid with respect to this Series and the Parity Dividend Stock.
Accruals of dividends shall not bear interest.
3. Dividend Rate. (a) The Dividend Rate per quarter on
each share of this Series shall be an amount equal to the Dollar
Equivalent Value (as defined below) of 1.65 ounces of silver.
"Dollar Equivalent Value" means the applicable Reference Silver
Price multiplied by the applicable number of ounces of silver.
"Reference Silver Price" means, when used to calculate the amount
of any dividend payable on any Dividend Payment Date, the
arithmetic average of the London silver fixing spot price for an
ounce of silver in the London bullion market on each of the
twenty trading days ending on the second trading day prior to the
last day of the calendar quarter immediately preceding such
Dividend Payment Date, as published in The Wall Street Journal
(Eastern Edition) (or, if such prices are not published in The
Wall Street Journal, as published in the Financial Times). If
for any reason silver is not traded during any relevant period in
the London bullion market or is not quoted in U.S. dollars in
such market, silver will be valued during such period or portion
thereof, as the case may be, on the basis of trading prices,
quoted in U.S. dollars, in the then principal international
trading market for silver as determined by the corporation's
Board of Directors. On or before the fifth business day
preceding each record date for the payment of a dividend in
respect of the shares of this Series, the corporation will cause
to be published in The Wall Street Journal (Eastern Edition) or,
if such newspaper is not then published, in a newspaper or other
publication of national circulation, the amount of the dividend
payable in respect of each share of this Series (and, if the
shares of this Series are represented by depositary shares, the
amount so payable per depositary share) on the next succeeding
Dividend Payment Date.
(b) Dividends shall be calculated on the basis of a year
of 360 days consisting of 12 30-day months. The term "Dividend
Period", as used herein, means, with respect to any Dividend
Payment Date, the period commencing on the day following the
immediately preceding Dividend Payment Date to and including such
Dividend Payment Date.
4. Redemption. (a) The Company will redeem annually on
August 1 beginning in 1999, out of funds legally available
therefor, a number of shares of this Series equal to one eighth
of the total number of shares of this Series outstanding
immediately after the date of original issuance of the shares of
this Series (including any shares issued pursuant to
underwriters' over-allotment options) (the "Original Shares"), at
the Dollar Equivalent Value per share of 160 ounces of silver.
(b) The shares of this Series shall not be subject to
redemption at the option of the corporation except as described
in this subsection (b). If at any time the total number of
outstanding depositary shares representing shares of this Series
(the "Depositary Shares") shall be less than 15% of the total
number of Depositary Shares representing shares of this Series
outstanding immediately after the date of original issuance of
the shares of this Series, the corporation shall have the option
to redeem the outstanding shares of this Series, in whole but not
in part, on any subsequent Dividend Payment Date out of funds
legally available therefor, at an amount equal to the Dollar
Equivalent Value of 160 ounces of silver per share plus accrued
and unpaid dividends (as hereinafter defined) to the date fixed
for redemption. For purposes of determining the number of shares
of this Series outstanding on any Dividend Payment Date, the
shares of this Series acquired by the corporation on or prior to
such Dividend Payment Date and not theretofore canceled (or in
the case of any shares of this Series represented by depositary
shares, the depositary shares representing shares of this Series
acquired by the corporation on or prior to such Dividend Payment
Date and not theretofore delivered to the depositary for the
depositary shares for cancellation) shall be deemed to be
outstanding. Notice of any such redemption as described in this
subsection (b) shall be mailed to holders of the shares of this
Series within 30 days after such Dividend Payment Date in
accordance with the provisions of Section 4(c) hereof. In
connection with any redemption pursuant to this subsection (b),
the corporation shall instruct the depositary in respect of any
Depositary Shares representing shares of this Series to redeem
such Depositary Shares on the same date as the redemption of
shares of this Series.
(c) At least 30 days but no more than 60 days prior to
the date fixed for redemption of the shares of this Series in
accordance with Section 4(a) hereof or this subsection (b) (the
"Call Date"), a written notice will be mailed to each holder of
record (and each beneficial owner to the extent required by law)
of shares of this Series to be redeemed, notifying such holder of
the corporation's election to redeem such shares if such
redemption is pursuant to Section 4(b) hereof, setting forth the
method for determining the amount payable per share of this
Series on the Call Date, stating the Call Date and calling upon
such holder to surrender to the corporation on the Call Date at
the place designated in such notice the certificate or
certificates representing the shares called for redemption.
(d) At any time after a notice of redemption has been
given in the manner prescribed in Section 4(a) or (b) hereof and
the amount payable on the date fixed for redemption can be
determined by the corporation, and prior to the date fixed for
redemption, the corporation may deposit in trust, with a bank or
trust company identified in the notice of redemption having
capital, surplus and undistributed profits aggregating at least
$50,000,000, an aggregate amount of funds sufficient for such
redemption (including dividends accrued on the shares of this
Series called for redemption to the date fixed for redemption)
for immediate payment in the appropriate amounts upon surrender
of certificates for such shares. Any interest accrued on such
funds shall be paid to the corporation from time to time. Such
deposit in trust shall be irrevocable, except that any funds
deposited by the corporation which are unclaimed at the end of
two years from the date fixed for such redemption shall be paid
over to the corporation upon its request, and upon such repayment
the holders of the shares so called for redemption shall look
only to the corporation for payment of the appropriate amount.
(e) From and after the date fixed for redemption (unless
the corporation shall default in making payment of the amount
payable upon such redemption), whether or not certificates for
shares so called for redemption have been surrendered by the
holders thereof as described below, dividends on the shares of
this Series so called for redemption shall cease to accrue, and,
from and after the date of the deposit of trust funds for the
redemption of shares of this Series in accordance with the
provisions of Section 4(d) hereof, such shares shall be deemed to
be no longer outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the right to receive
from the corporation the amount payable upon such redemption)
shall cease and terminate. Upon surrender in accordance with the
notice of redemption of the certificates for any shares of this
Series so redeemed (properly endorsed or assigned for transfer if
the corporation shall so require and the notice shall so state),
the holder thereof shall be entitled to receive payment of the
redemption price plus an amount equal to all accrued and unpaid
dividends as aforesaid.
(f) If the corporation shall have failed to make any
required annual redemption then, until it shall have redeemed all
outstanding shares of this Series then required to be redeemed,
the corporation may not (i) declare, pay or set apart any amounts
for dividends on, or make any other distribution in cash or other
property in respect of, any Junior Stock other than a dividend
payable solely in Junior Stock, (ii) purchase, redeem or
otherwise acquire for value any shares of Junior Stock, directly
or indirectly, other than as a result of a reclassification,
exchange or conversion of one Junior Stock for or into another
Junior Stock, or other than through the use of proceeds of a
substantially contemporaneous sale of other Junior Stock, (iii)
make any payment on account of, or set aside money for, a sinking
or other like fund for the purchase, redemption or other acquisi-
tion for value of any shares of Junior Stock or (iv) purchase,
redeem or otherwise acquire for value any shares of stock of the
corporation ranking on a parity with the shares of this Series as
to dividends or distribution of assets upon liquidation,
dissolution or winding up ("Parity Stock").
(g) (i) Within 90 days following each Calculation Date
(as defined below), the corporation shall be required to prepare
a certificate (a "Corporation Certificate") setting forth its
determination of the Reserve Amount (as defined below) as of such
Calculation Date. If the Reserve Amount, as shown on the
Corporation Certificate prepared with respect to any Calculation
Date is less than the Aggregate Reserve Requirement (as defined
below) as of such Calculation Date, the corporation will be
required to make an offer (a "Reserve Coverage Offer") to
purchase, out of funds legally available therefor, at a price
equal to the liquidation preference thereof as of the Purchase
Date (as hereinafter defined), plus accrued and unpaid dividends
(as defined below) thereon to the Purchase Date, a sufficient
number of shares of this Series and of other Silver Parity Stock
(as defined below) (or the depositary shares, if any, issued with
respect thereto) such that, if all such shares had been
repurchased on the relevant Calculation Date, the Reserve Amount
on that date would have been greater than or equal to the
Aggregate Reserve Requirement on such date. If the Corporation
Certificate prepared with respect to any Calculation Date shows
that the Reserve Amount is less than the Aggregate Reserve
Requirement on such date, the corporation shall include in such
Corporation Certificate its calculation of the number of shares
of this Series (or related depositary shares) and the number of
shares of other Parity Stock (or related depositary shares) it
intends to offer to purchase to satisfy the foregoing
requirements (such number with respect to any series being
referred to as the "Offer Amount" with respect to such series).
The corporation, in its sole discretion, may determine the number
of shares, if any, of this Series (or related depositary shares)
and the number of shares, if any, of each other series of Silver
Parity Stock (or related depositary shares) to which a Reserve
Coverage Offer will be made so long as such requirements are
satisfied.
(ii) If required to make a Reserve Coverage Offer, the
corporation will commence such offer not more than 60 days after
the date of the Corporation Certificate prepared with respect to
the applicable Calculation Date, by mailing a notice to all
holders of record of the shares of each series included in such
Reserve Coverage Offer setting forth (A) that such notice is
being given pursuant to a Reserve Coverage Offer, (B) the Offer
Amount with respect to such series, (C) the method for
determining the amount payable per share of such series on the
Purchase Date, (D) the last date (the "Purchase Date"), which
shall not be less than 30 nor more 60 days after the date of such
notice, by which a holder must elect whether to accept the
Reserve Coverage Offer, (E) the procedures that such holder must
follow to exercise its rights and (F) the procedures for
withdrawing an election. The corporation shall also cause a copy
of such notice to be published in The Wall Street Journal
(Eastern Edition) or another daily newspaper of national
circulation.
(iii) Holders of shares of any series electing to have
shares of such series purchased by the corporation pursuant to a
Reserve Coverage Offer will be required to surrender the
certificates representing such shares, with an appropriate form
duly completed, to the corporation prior to the Purchase Date.
Holders will be entitled to withdraw an election by a written
notice of withdrawal delivered to the corporation prior to the
close of business on the Purchase Date. The notice of withdrawal
shall state the number of shares and certificate numbers to which
the notice of withdrawal relates and the number of shares and
certificate numbers, if any, which remain subject to the
election. If the aggregate number of shares of any series
tendered exceeds the Offer Amount with respect to such series,
the corporation will select the shares of such series to be
purchased on a pro rata basis as nearly as practicable. The
corporation shall, as promptly as reasonably practicable after
the Purchase Date, cause payment to be mailed or delivered to
each tendering holder in the amount of the purchase price, and
any unpurchased shares to be returned to the holder thereof.
(h) If, at the time of any annual redemption or of a
Reserve Coverage Offer, the funds of the corporation legally
available for redemption or repurchase of the shares of this
Series are insufficient to redeem or repurchase all of such
shares and all of the shares of any other series of Parity Stock
which the corporation is then obligated to redeem or repurchase,
(i) the total legally available funds shall be allocated among
the shares of this Series and of such other series in proportion
to the aggregate dollar amount of redemption or other repurchase
obligations with respect to this Series and such other series and
(ii) the portion of such funds allocated to this Series will be
used to redeem or repurchase the maximum possible number of
shares of this Series, pro rata based upon the number of shares
to be redeemed or delivered for repurchase, as the case may be.
At any time thereafter when additional funds of the corporation
become legally available for such purpose, after giving effect to
the foregoing allocation provisions, such funds shall immediately
be used to redeem or repurchase, as the case may be, any
additional shares of this Series which the corporation is
obligated to redeem or repurchase, as the case may be, but which
it has not so redeemed or repurchased.
(i) The corporation shall not have the right to redeem
shares of this Series pursuant to Section 4(a) or (b) hereof
unless full cumulative dividends for all past dividend periods
shall have been paid or declared and set aside for payment upon
all outstanding shares of this Series and all outstanding shares
of other series of stock of the corporation ranking, as to
dividends, on a parity with the shares of this Series.
(j) The corporation will not consummate or permit any
subsidiary to consummate any transaction involving the
corporation which would cause the Reserve Amount to fall below
the Aggregate Reserve Requirement immediately after consummation
of such transaction unless the corporation will have sufficient
legally available funds immediately following consummation of
such transaction to complete any Reserve Coverage Offer required
as a result thereof.
(k) Definitions. For purposes of this Section 4, the
following terms shall have the meanings indicated:
(i) "accrued and unpaid dividends" per share of
this Series (A) in the case of any Reserve Coverage
Offer, (B) in the case of any annual or optional
redemption and (C) in the case of a liquidation event,
shall be equal to the sum of (x) the aggregate amount of
any accrued and unpaid dividends on such share through
the next preceding Dividend Payment Date (calculated as
provided in Section 3 hereof) plus (y) a proportionate
amount of the regular quarterly dividend at the Dividend
Rate for the period from the day following the
immediately preceding Dividend Payment Date through the
redemption date, Purchase Date or date of liquidating
distribution (calculated on the basis of a year of 360
days consisting of twelve 30-day months) multiplied by
the Reference Silver Price used to calculate the other
amounts payable to holders of the shares of this Series
in connection with such redemption, purchase or
liquidation event. If a quarterly dividend is not
declared and paid as provided in Section 3 hereof, the
unpaid dividend that shall cumulate for such Dividend
Period will be the amount of the dividend that would have
been payable on the Dividend Payment Date if such
dividend had been timely paid.
(ii) "Aggregate Reserve Requirement" as of any
Calculation Date means the sum of the individual Reserve
Coverage Requirements with respect to each series of
Silver Parity Stock, including this Series.
(iii) "Calculation Date" means (i) December 31 of
each year and (ii) the date of the consummation of each
transaction undertaken by the corporation or any
subsidiary of the corporation which would either (a)
cause the Reserve Amount, as estimated by the
corporation, to decrease by 50% or more from the
preceding Calculation Date or (b) cause the Reserve
Amount, as estimated by the corporation, to fall below
the Aggregate Reserve Requirement on such date.
(iv) "Silver Parity Stock" means this Series and
any other series of Parity Stock the liquidation
preference of which is based on specified amounts of
silver or the Dollar Equivalent Value thereof.
(v) "Reference Silver Price", when used to
calculate the amount of any dividend payable on any
Dividend Payment Date or of any annual or optional
redemption payment with respect to the shares of this
Series means the arithmetic average of the London silver
fixing spot price for an ounce of silver in the London
bullion market on each of the twenty trading days ending
on the second trading day prior to the last day of the
calendar quarter immediately preceding such quarterly
date, as published in The Wall Street Journal (Eastern
Edition) (or, if such prices are not published in The
Wall Street Journal (Eastern Edition), as published in
the Financial Times). When used to calculate any other
amount payable with respect to the shares of this Series
or to purchase any shares of this Series on any date, the
"Reference Silver Price" means the arithmetic average of
the London silver fixing spot price for an ounce of
silver on the London bullion market on each of the twenty
trading days ending on the second trading day prior to
(i) in the case of any Reserve Coverage Offer, the date
of commencement thereof and (ii) in the case of a
liquidation event, the date 30 days prior to the date
fixed for the liquidating distribution. If for any
reason silver is not traded during any relevant period in
the London bullion market or is not quoted in U.S.
dollars in such market, silver will be valued during such
period or portion thereof, as the case may be, on the
basis of trading prices, quoted in U.S. dollars, in the
then principal international trading market for silver as
determined by the corporation's Board of Directors.
(vi) "Required Coverage Multiplier" means (x) 2.0
with respect to this Series, (y) with respect to any
other series of Silver Parity Stock having the benefit of
a provision requiring an offer similar to the Reserve
Coverage Offer, the multiplier applicable thereto by the
terms of such other series, and (z) 1.0 with respect to
any other series of Silver Parity Stock.
(vii) "Reserve Amount" as of any Calculation Date
means the corporation's Proportionate Interest in the
estimated proved and probable silver reserves of the
corporation and of any entity in which the corporation
has a direct or indirect beneficial ownership interest.
The estimated proved and probable silver reserves shall
be determined based upon evaluation methods generally
applied by the mining industry. The corporation's
"Proportionate Interest" in any estimated proved and
probable silver reserves shall be the corporation's
direct or indirect beneficial ownership interest in such
reserves, giving effect to reductions required to reflect
any beneficial ownership interest of any person other
than the corporation in such reserves.
(viii) "Reserve Coverage Requirement" with respect
to any series of Silver Parity Stock shall mean the
product of (x) the aggregate liquidation preference of
all outstanding shares of such series (expressed in
ounces of silver) times (y) the Required Coverage
Multiplier applicable to such series. With respect to
any series with respect to which depositary shares have
been issued, the aggregate liquidation preference of such
series shall be determined on the basis of the number of
such depositary shares as are issued and outstanding as
of the applicable Calculation Date (excluding any
depositary shares which have been acquired by the
corporation on or prior to the date of the preparation of
the Corporation Certificate with respect to such
Calculation Date).
5. Voting Rights. (a) Except for the voting rights
described below and except as otherwise required by law, the
holders of shares of this Series shall not be entitled to vote on
any matter or to receive notice of, or to participate in, any
meeting of the stockholders of the corporation. Each share of
Preferred Stock of this Series will be entitled to one vote on
matters which holders of such Series are entitled to vote.
(b) The shares of this Series shall be entitled to vote
with respect to the election of directors in accordance with
Sections (b)(4) and (b)(5) of Article FOURTH of the certificate
of incorporation.
(c) Whenever dividends payable on shares of this Series
shall be in default in an aggregate amount equal to or exceeding
six full quarterly dividends on all shares of this Series at the
time outstanding, the number of directors then constituting the
Board of Directors of the corporation shall be increased by two,
and holders of shares of this Series shall, in addition to any
other voting rights, have the right, voting separately as a class
together with holders of all other series of stock of the Company
ranking on a parity with shares of this Series either as to
dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights have
been conferred and are exercisable (such other series of stock
being herein referred to as "Other Voting Stock"), to elect such
two additional directors. In such case, the Board of Directors
will be increased by two directors, and the holders of shares of
this Series (either alone or with the holders of Other Voting
Stock) will have the exclusive right as members of such class, as
described above, to elect two directors at the next annual
meeting of stockholders. Whenever such right of the holders of
shares of this Series shall have vested, such right may be
exercised initially either at a special meeting of such holders
as provided in Section 5(d) hereof or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at such annual meetings. The right of the holders of
shares of this Series to vote together as a class with the
holders of shares of any Other Voting Stock shall continue until
such time as all dividends accrued on outstanding shares of this
Series to the Dividend Payment Date next preceding the date of
any such determination shall have been paid in full, or declared
and set apart in trust for payment, at which time the right of
the holders of shares of this Series so to vote shall terminate,
except as herein or by law expressly provided, subject to
revesting upon the occurrence of a subsequent default of the
character mentioned above.
(d) At any time when the right of the holders of shares
of this Series to elect directors as provided in Section 5(c)
hereof shall have vested, and if such right shall not already
have been initially exercised, a proper officer of the
corporation, upon the written request of the holders of record of
at least 10% of the aggregate number of shares of this Series and
shares of any Other Voting Stock at the time outstanding,
addressed to the Secretary of the corporation, shall call a
special meeting of the holders of shares of this Series and of
such Other Voting Stock for the purpose of electing directors.
Such meeting shall be held at the earliest practicable date upon
the same form of notice as is required for annual meetings of
stockholders at the place for the holding of annual meetings of
stockholders of the corporation (or such other suitable place as
is designated by such officer). If such meeting shall not be
called by a proper officer of the corporation within 20 days
after personal service of such written request upon the Secretary
of the corporation, or within 20 days after mailing the same
within the United States of America, 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 at least 10% of the
aggregate number of shares of this Series and shares of any Other
Voting Stock at the time outstanding may designate in writing one
of their number to call such a meeting at the expense of the
corporation, and such meeting may be called by such person so
designated upon the same form of notice as is required for annual
meetings of stockholders and shall be held at the place for the
holding of annual meetings of stockholders of the corporation (or
such other suitable place as is designated by such person). Any
holder of shares of this Series so designated shall have access
to the registry books of the corporation for the purpose of
causing a meeting of stockholders to be called pursuant to this
subsection (d). Notwithstanding anything to the contrary
contained in this subsection (d), no such special meeting shall
be called during the period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders of the
corporation.
(e) At any meeting held for the purpose of electing
directors at which holders of shares of this Series shall have
the right, voting together as a class with holders of shares of
any Other Voting Stock to elect directors as provided in Section
5(c) hereof, the presence, in person or by proxy, of the holders
of 33 1/3% of the aggregate number of shares of this Series and
shares of such Other Voting Stock at the time outstanding shall
be required and be sufficient to constitute a quorum of such
class for the election of directors pursuant to such Section
5(c). At any such meeting or adjournment thereof, (i) the
absence of a quorum of the shares of this Series and shares of
such Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section 5(c)
hereof and (ii) in the absence of a quorum, either of the shares
of this Series and shares of such Other Voting Stock or of any
other shares of stock of the corporation, or both, a majority of
the holders, present in person or by proxy, of the class or
classes of stock which lack a quorum shall have the power to
adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than
announcement at the meeting, until a quorum shall be present.
(f) During any period when the holders of shares of this
Series shall have the right to vote together as a class with the
holders of shares of any Other Voting Stock for directors as
provided in Section 5(c) hereof, (i) the directors so elected by
such holders shall continue in office until their successors
shall have been elected by such holders or until termination of
the rights of such holders to vote as a class for directors and
(ii) any vacancies in the Board of Directors shall be filled only
by a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the
class or classes of stock which elected the director whose office
shall have become vacant. Immediately upon termination of the
right of holders of this Series and any Other Voting Stock to
vote as a class for directors, (i) the term of office of the
directors so elected shall terminate and (ii) the number of
directors shall be such number as may be provided for in the
by-laws of the corporation irrespective of any increase pursuant
to the provisions of Section 5(c) hereof.
(g) In addition to any other vote required by law, the
corporation shall not (i) amend, alter or repeal, whether by
merger, consolidation or otherwise, the provisions of its
certificate of incorporation (including the terms of this Series)
so as to materially and adversely affect any right, preference,
privilege or voting power of this Series or (ii) create,
authorize or issue any series or class of stock ranking prior,
either as to payment of dividends or distributions of assets upon
liquidation, dissolution or winding up, to this Series, without
the affirmative vote or consent of the holders of at least two-
thirds of the aggregate number of shares of this Series at the
time outstanding, voting as a separate class; provided, that any
increase in the total number of authorized shares of Common Stock
(or any series thereof) or Preferred Stock (or any series
thereof), or the creation, authorization or issuance of any
series of stock ranking, as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation, on a parity with the shares of this Series
will not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers; provided,
further, that no class vote of the holders of shares of this
Series shall be required if, at or prior to the time when the
actions described in clause (i) or (ii) of this Section 5(g)
shall become effective, provision is made in accordance with
Section 4 hereof for the redemption of all shares of this Series
at the time outstanding.
6. Preference upon Liquidation. (a) In the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation, after payment or provision
for payment of the debts and other liabilities of the corporation
and of dividends and liquidation preferences in respect of any
other stock of the corporation ranking senior to the shares of
this Series as to such payments, the holders of shares of this
Series shall be entitled to receive, out of the remaining net
assets of the corporation, the Dollar Equivalent Value of 160
ounces of silver in cash for each share of this Series, plus an
amount equal to all dividends (whether or not earned or declared)
accrued and unpaid on each such share up to the date fixed for
distribution, before any distribution shall be made to or set
apart for the holders of any Junior Stock. If, after payment or
provision for payment of the debts and other liabilities of the
corporation and of dividends and liquidation preferences in
respect of any other stock of the corporation ranking senior to
the shares of this Series as to such payments, the remaining net
assets of the corporation are not sufficient to pay to the
holders of shares of this Series the full amount of their
preference set forth above, then the remaining net assets of the
corporation shall be divided among and paid to the holders of
shares of this Series, holders of shares of any other class or
series of Preferred Stock and holders of shares of any other
stock of the corporation on a parity with this Series as to
dividends and distribution of assets upon liquidation,
dissolution or winding up of the affairs of the corporation
ratably per share in proportion to the full per share amounts to
which they respectively are entitled. For purposes of this
subsection (a) and Section 6(b) hereof, a consolidation or merger
of the corporation with one or more other corporations or the
sale of all or substantially all of the assets of the corporation
shall not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation.
(b) Subject to the rights of the holders of shares of
any series or class of stock ranking prior to this Series and of
the holders of shares any stock of the corporation ranking on a
parity as to dividends and distribution of assets upon
liquidation, dissolution or winding up of the affairs of the
corporation, after payment shall have been made in full to the
holders of this Series as provided in Section 6(a) hereof and
this subsection (b), the holders of any Junior Stock 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 shares of this Series shall not be
entitled to share therein.
7. Taxes. The corporation will pay any and all
documentary, stamp or similar taxes payable to the United States
of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of
certificates for shares of this Series on redemption of less than
all of the shares represented by any certificate for such shares
surrendered for redemption or pursuant to a Reserve Coverage
Offer; provided, 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 certificates for shares of
this Series in a name other than that of the holder of shares of
this Series to be redeemed or repurchased and no such issue or
delivery shall be made unless and until the person requesting
such issue or delivery has paid to the corporation the amount of
any such tax or has established, to the satisfaction of the
corporation, that such tax has been paid. The corporation
extends no protection with respect to any other taxes imposed in
connection with such redemption or repurchase of shares of this
Series.
8. No Other Rights. The shares of this Series shall not
have any relative, participating, optional or other special
rights and powers other than as set forth herein and other than
any which may be provided by law.
9. Miscellaneous. Capitalized terms which are defined
in this Exhibit are defined only for the purposes of this
Exhibit, and not for the purposes of other Exhibits to the
certificate of incorporation. Unless otherwise indicated,
section references contained in this Exhibit refer to the
corresponding sections of this Exhibit.
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
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500,007
573,900
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