Exhibit 3 (i) .2
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF SERIES B
ESOP CONVERTIBLE PREFERRED STOCK
of
MOBIL CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned, duly authorized officers of Mobil
Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance
with the provisions of Section 103 thereof, DO HEREBY CERTIFY
that pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the
said Corporation, the said Board of Directors and the Executive
Committee of the said Board of Directors "hereunto duly
authorized adopted a resolution, attached hereto and made a
part hereof as Exhibit A, creating a series of 191,062 shares
of Preferred Stock of the par value of $1.00 per share
designated as Series B ESOP Convertible Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this 22nd day of November, 1989.
/s/ Allen E. Murray
Allen E. Murray,
Chairman of the Board of Directors,
President and Chief Executive Officer
ATTEST:
/s/ Dede T. Bartlett
Dede T. Bartlett,
Secretary
EXHIBIT A
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the
provisions of its Restated Certificate of Incorporation, a
series of Preferred Stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the
preferences and relative, optional and other special rights of
the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
SERIES B ESOP CONVERTIBLE PREFERRED STOCK
1. Designation and Issuance
(A) The shares of such series shall be designated SERIES B
ESOP CONVERTIBLE PREFERRED STOCK (hereinafter referred to as
"Series B Preferred Stock") and the number of shares
constituting such series shall be 191,062. Such number of
shares may be increased or decreased by resolution of the Board
of Directors, but no such decrease shall reduce the number of
shares of Series B Preferred Stock to a number less than that
of the shares then outstanding plus the number of shares
issuable upon exercise of any rights, options or warrants or
upon conversion of outstanding securities issued by the
Corporation. All shares of Series B Preferred Stock redeemed or
purchased by the Corporation shall be retired and shall be
restored to the status of authorized but
unissued shares of preferred stock.
(B) Shares of Series B Preferred Stock shall be issued
only to a trustee or trustees acting on behalf of an employee
stock ownership trust or plan or other employee benefit plan
("Plan") of the Corporation or its wholly owned subsidiary
Mobil Oil Corporation ("Mobil Oil"). In the event of any sale,
transfer or other disposition (hereinafter a "transfer") of
shares of Series B Preferred Stock to any person other than (x)
any trustee or trustees of the Plan and (y) any pledgee of such
shares acquiring such shares as security for any loan or loans
made to the Plan or to any trustee or trustees acting on behalf
of the Plan, the shares of Series B Preferred Stock so
transferred, upon such transfer and without any further action
by the Corporation or the holder, shall be automatically
converted into shares of Common Stock at the Conversion Price
(as hereinafter defined) and on the terms otherwise provided
for the conversion of shares of Series B Preferred Stock into
shares of Common Stock pursuant to Section 5 hereof and no such
transferee shall have any of the voting powers, preferences and
relative, participating, optional or special rights ascribed to
shares of Series B Preferred Stock hereunder but, rather, only
the powers and rights pertaining to the Common Stock into which
such shares of Series B Preferred Stock shall be so converted,
provided, however, that in the event of a foreclosure or other
realization upon shares of Series B Preferred Stock pledged as
security for any loan or loans made to the Plan or to the
trustee or the trustees acting on behalf of the Plan, the
pledged shares so foreclosed or otherwise realized upon shall
(subject to the holder's right of redemption set forth in
paragraph 7(B) hereof) be automatically converted into shares
of Common Stock at the Conversion Price and on the terms
otherwise provided for conversions of shares of Series B
Preferred Stock into shares of Common Stock pursuant to Section
5 hereof. In the event of such a conversion, such transferee
shall be treated for all purposes as the record holder of the
shares of Common Stock into which the Series B Preferred Stock
shall have been converted as of the date of such conversion.
Certificates representing shares of Series B Preferred Stock
shall be legended to reflect such restrictions on transfer.
Notwithstanding the foregoing provisions of this Section 1,
shares of Series B Preferred Stock(I) may be converted into
shares of Common Stock as provided by Section 5 hereof and the
shares of Common Stock issued upon such conversion may be
transferred by the holder thereof as permitted by law and (ii)
shall be redeemable by the Corporation upon the terms and
conditions provided by Sections 6, 7 and 8 hereof.
2. Dividends and Distributions.
(A)(1) Subject to the provisions for adjustment
hereinafter set forth, the holders of shares of Series B
Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally
available therefor, cash dividends ("Regular Preferred
Dividends") in an amount per share initially equal to $600. per
share per annum, subject to adjustment from time to time as
hereinafter provided, and no more, except as provided in
paragraph (A)(2) of this Section 2 (such amount, as adjusted
from time to time, being hereinafter referred to as the
"Regular Preferred Dividend Rate"), payable semiannually in
arrears, one-half on the last day of February, and one-half on
the last day of August of each year (each a "Dividend Payment
Date") commencing on February 28, 1990, to holders of record at
the start of business on such Dividend Payment Date. Regular
Preferred Dividends shall begin to accrue on outstanding shares
of Series B Preferred Stock from the date of issuance of such
shares of Series B Preferred Stock. Regular Preferred Dividends
shall accrue on a daily basis, based on the Regular Preferred
Dividend Rate in effect on such date, whether or not the
Corporation shall have earnings or surplus at the time,
computed on the basis of a 360-day year of 30-day months in
case of any period less than a full semiannual period. Accrued
but unpaid Regular Preferred Dividends shall cumulate as of the
Dividend Payment Date on which they first become payable, but
no interest shall accrue on accumulated but unpaid Regular
Preferred Dividends.
(2) In the event that for any period of six (6) months
preceding any Dividend Payment Date the aggregate fair value
(as determined by the Board of Directors) of all dividends and
other distributions declared per share of Common Stock during
such six month period multiplied by the number of shares of
Common Stock into which a share of Series B Preferred Stock was
convertible on the appropriate dividend payment date for the
Common Stock shall exceed the amount of the Regular Preferred
Dividends accrued on a share of Series B Preferred Stock during
such six month period, the holders of shares of the Series B
Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally
available therefor, cash dividends (the "Supplemental Preferred
Dividends") in an amount per share (with appropriate
adjustments to reflect any stock split or combination of shares
or other adjustment provided for in paragraph 9) equal to the
amount of such excess up to but not exceeding (x) the product
of twelve and one-half per cent (12.5) times the average of the
Fair MarketValues of the number of shares of Common Stock into
which a share of Series B Preferred Stock was convertible on
the day next preceding the ax-dividend date for each such
dividend and the distribution date for each such distribution
on the Common Stock of the Corporation minus (y) such amount of
accrued Regular Preferred Dividends. The calculation of each
Supplemental Preferred Dividend shall be subject to adjustment
corresponding to the adjustments provided in Section 9 hereof.
Supplemental Preferred Dividends shall accrue and cumulate as
of the close of each relevant six month period and shall be
payable on the Dividend Payment Date next following the close
of any such six month period, but no interest shall accrue on
accumulated but unpaid Supplemental Preferred Dividends and no
Supplemental Preferred Dividends shall accrue in respect of any
period of less than six months.
(B)(1) No full dividends shall be declared or paid or set
apart for payment on any shares ranking, as to dividends, on a
parity with or junior to the Series B Preferred Stock, for any
period unless full cumulative dividends (which for all purposes
of this resolution shall include Regular Preferred Dividends
and Supplemental Preferred Dividends) have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment
on the Series B Preferred Stock for all Dividend Payment Dates
occurring on or prior to the date of payment of such full
dividends. When dividends are not paid in full, as aforesaid,
upon the shares of Series B Preferred Stock and any other
shares ranking, as to dividends, on a parity with Series B
Preferred Stock, all dividends declared upon shares of Series B
Preferred Stock shall be declared pro rata so that the amount
of dividends declared per share on Series B Preferred Stock and
such other parity shares shall in all cases bear to each other
the same ratio that accumulated dividends per share on the
shares of Series B Preferred Stock and such other parity shares
bear to each other. Except as otherwise provided herein,
holders of shares of Series B Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or
shares, in excess of full cumulative dividends, as herein
provided, on Series B Preferred Stock.
(B)(2) So long as any shares of Series B Preferred Stock
are outstanding, no dividend (other than dividends or
distributions paid in shares of, or options, warrants or rights
to subscribe for or purchase shares of, Common Stock or other
shares ranking junior to Series B Preferred Stock as to
dividends and upon liquidation and other than as provided in
paragraph (B) (1) of this Section 2) shall be declared or paid
or set aside for payment or other distribution declared or made
upon the Common Stock or upon any other shares ranking junior
to or on a parity with Series B Preferred Stock as to dividends
or upon liquidation, nor shall any Common Stock or any other
shares of the Company ranking junior to or on a parity with
Series B Preferred Stock as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund
for the redemption of any such shares) by the Corporation
(except by conversion into or exchange for shares of the
Corporation ranking junior to Series B Preferred Stock as to
dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of Series B
Preferred Stock shall have been paid. In no event shall the
foregoing requirement regarding the payment of full cumulative
dividends on all outstanding shares of Series B Preferred Stock
apply to (x) any redemption of rights pursuant to the Rights
Agreement (as hereinafter defined) or any successor rights
agreement to the Rights Agreement which is designated as such
by the Board of Directors and (y) any issuance to the holders
of such rights of any rights in addition thereto or in
substitution or exchange therefor.
(3) Any dividend payment made on shares of Series B
Preferred Stock shall first be credited against the earliest
accumulated but unpaid dividend due with respect to shares of
Series B Preferred Stock.
3. Liquidation Preference
(A) In the event of any dissolution or liquidation of the
Corporation, whether voluntary or involuntary, before any payment
or distribution of the assets of the Corporation (whether capital
or surplus) shall be made to or set apart for the holders of any
series or class or classes of stock of the Corporation ranking
junior to Series B Preferred Stock upon dissolution or
liquidation, the holders of Series B Preferred Stock shall be
entitled to receive the Liquidation Price (as hereinafter
defined) per share in effect at the time of dissolution or
liquidation plus an amount equal to all dividends accrued
(whether or not accumulated) and unpaid thereon to the date of
final distribution to such holders; but such holders shall not be
entitled to any further payments. The Liquidation Price per share
which holders of Series B Preferred Stock shall receive upon
dissolution or liquidation shall be $7,775 , subject to
adjustment as hereinafter provided. If, upon any dissolution or
liquidation of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of Series B
Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any
other shares ranking as to dissolution or liquidation, on a
parity with Series B Preferred Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of
Series B Preferred Stock and any such other shares ratably in
accordance with the respective amounts which would be payable on
such shares of Series B Preferred Stock and any such other shares
if all amounts payable thereon were paid in full. For the
purposes of this Section 3, a consolidation or merger of the
Corporation with one or more corporations shall not be deemed to
be a dissolution or liquidation, voluntary or involuntary.
(B) Subject to the rights of the holders of shares of any
series or class or classes of stock ranking on a parity with or
prior to Series B Preferred Stock upon dissolution or
liquidation, upon any dissolution or liquidation of the
Corporation, after payment shall have been made in full to the
holders of Series B Preferred Stock as provided in this Section
3, but not prior thereto, any other series or class or classes of
stock ranking junior to Series B Preferred Stock upon dissolution
or liquidation shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any
and all assets remaining to be paid or distributed, and the
holders of Series B Preferred Stock shall not be entitled to
share therein.
4. Ranking and Voting of Shares.
(A) Any shares of the Corporation shall be deemed to rank:
(1) prior to Series B Preferred Stock as to dividends or
as to distribution of assets upon dissolution or liquidation,
if the holders of such class shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution or
liquidation, as the case may be, in preference or priority to
the holders of Series B Preferred Stock; (2) on a parity with
Series B Preferred Stock as to dividends or as to distribution
of assets upon dissolution or liquidation, whether or not the
dividend rates, dividend payment dates, or redemption or
liquidation prices per share thereof be different from those of
Series B Preferred Stock, if the holders of such class of stock
and Series B Preferred Stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution or
liquidation, as the case may be, in proportion to their
respective dividend or liquidation amounts, as the case may be,
without preference or priority one over the other, and
(3) junior to Series B Preferred Stock as to dividends or
as to the distribution of assets upon dissolution or
liquidation, if such shares shall be Common Stock or if the
holders of Series B Preferred Stock shall be entitled to
receipt of dividends or of amounts distributable upon
dissolution or liquidation, as the case may be, in preference
or priority to the holders of such shares. The Series A Junior
Participating Preferred Stock created by resolution of the
Board of Directors on April 25, 1986 is and shall be junior to
Series B Preferred Stock as to dividends and the distribution
of assets upon dissolution or liquidation. Unless otherwise
provided in the Restated Certificate of Incorporation of the
Corporation, as the same may be amended, or in a Certificate of
Designation, Preferences and Rights relating to any subsequent
series of preferred stock, the Series B Preferred Stock shall
rank junior to all series of the Corporation's preferred stock,
other than the Series A Junior Participating Preferred Stock
referred to above, as to dividends and the distribution of
assets upon dissolution or liquidation.
(B) The holders of shares of Series B Preferred Stock
shall have the following voting rights:
(1) The holders of Series B Preferred Stock shall be
entitled to vote on all matters submitted to a vote of the
stockholders of the Corporation, voting together with the
holders of Common Stock as one class. The holder of each share
of Series B Preferred Stock shall be entitled to a number of
votes equal to the number of shares of Common Stock into which
such Series B Preferred Stock could be converted on the record
date for determining the stockholders entitled to vote; it
being understood that whenever the "Conversion Price" (as
defined in Section 5 hereof) is adjusted as provided in Section
9 hereof, the number of votes of the Series B Preferred Stock
shall also be correspondingly adjusted.
(2) Except as otherwise required by law or set forth
herein, holders of Series B Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for the taking of any
corporate action, including the issuance of any preferred stock
now or hereafter authorized; provided, however, that the vote
of at least 66-2/3% of the outstanding shares of Series B
Preferred Stock, voting separately as a series, shall be
necessary to approve any alteration, amendment or repeal of any
provision of the Restated Certificate of Incorporation or any
alteration, amendment or repeal of any provision of the
resolutions relating to the designation, preferences and rights
of Series B Preferred Stock (including any such alteration,
amendment or repeal effected by any merger or consolidation in
which the Corporation is the surviving or resulting
corporation), if such amendment, alteration or repeal would
alter or change the powers, preferences, or special rights of
the Series B Preferred Stock so as to affect them adversely.
5. Conversion into Common Stock.
(A) A holder of shares of Series B Preferred Stock shall
be entitled, at any time prior to the close of business on the
date fixed for redemption of such shares pursuant to Sections
6, 7, or 8 hereof, to cause any or all of such shares to be
converted into shares of Common Stock. The number of shares of
Common Stock into which each share of the Series B Preferred
Stock may be converted shall be determined by dividing the
Liquidation Price in effect at the time of conversion by the
Conversion Price (as hereinafter defined) in effect at the time
of conversion. The Conversion Price per share at which shares
of Common Stock shall be initially issuable upon conversion of
any shares of Series B Preferred Stock shall be $77.75 subject
to adjustment as hereinafter provided; that is, a conversion
rate initially equivalent to 100 shares of Common Stock for
each share of Series B Preferred Stock, which is subject to
adjustment as hereinafter provided.
(B) Any holder of shares of Series B Preferred Stock
desiring to convert such shares into shares of Common Stock
shall surrender, if certificated, the certificate or
certificates representing the shares of Series B Preferred
Stock being converted, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock
powers relating thereto), or if uncertificated, a duly executed
stock power relating thereto, at the principal executive office
of the Corporation or the offices of the transfer agent for the
Series B Preferred Stock or such office or offices in the
continental United States of an agent for conversion as may
from time to time be designated by notice to the holders of the
Series B Preferred Stock by the Corporation or the transfer
agent for the Series B Preferred Stock, accompanied by written
notice of conversion. Such notice of conversion shall specify
(I) the number of shares of Series B Preferred Stock to be
converted and the name or names in which such holder wishes the
Common Stock and any shares of Series B Preferred Stock not to
be so converted to be issued, and (ii) the address to which
such holder wishes delivery to be made of a confirmation of
such conversion, if uncertificated, or any new certificates
which may be issued upon such conversion if certificated.
(C) Upon surrender, if certificated, of a certificate
representing a share or shares of Series B Preferred Stock for
conversion, or if uncertificated, of a duly executed stock
power relating thereto, the Corporation shall issue and send by
hand delivery (with receipt to be acknowledged) or by first
class mail, postage prepaid, to the holder thereof or to such
holder's designee, at the address designated by such holder, if
certificated, a certificate or certificates for, or if
uncertificated, confirmation of, the number of shares of Common
Stock to which such holder shall be entitled upon conversion.
In the event that there shall have been surrendered shares of
Series B Preferred Stock, only part of which are to be
converted, the Corporation shall issue and deliver to such
holder or such holder's designee, if certificated, a new
certificate or certificates representing the number of shares
of Series B Preferred Stock which shall not have been
converted, or if uncertificated, confirmation of the number of
shares of Series B Preferred Stock which shall not have been
converted.
(D) The issuance by the Corporation of shares of Common
Stock upon a conversion of shares of Series B Preferred Stock
into shares of Common Stock made at the option of the holder
thereof shall be effective as of the earlier of (I) the
delivery to such holder or such holder's designee of the
certificates representing the shares of Common Stock issued
upon conversion thereof if certificated or confirmation if
uncertificated or (ii) the commencement of business on the
second business day after the surrender of the certificate or
certificates, if certificated, or a duly executed stock power,
if uncertificated, for the shares of Series B Preferred Stock
to be converted. On and after the effective date of conversion,
the person or persons entitled to receive Common Stock issuable
upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock, but no
allowance or adjustment shall be made in respect of dividends
payable to holders of Common Stock of record on any date prior
to such effective date. The Corporation shall not be obligated
to pay any dividends which shall have been declared and shall
be payable to holders of shares of Series B Preferred Stock on
a Dividend Payment Date if such Dividend Payment Date for such
dividend shall be on or subsequent to the effective date of
conversion of such shares.
(E) The Corporation shall not be obligated to deliver to
holders of Series B Preferred Stock any fractional share or
shares of Common Stock issuable upon any conversion of such
shares of Series B Preferred Stock, but in lieu thereof may
make a cash payment in respect thereof in any manner permitted
by law.
(F) The Corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock or
treasury Common Stock, solely for issuance upon the conversion
of shares of Series B Preferred Stock as herein provided, such
number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of Series B
Preferred Stock then outstanding.
(G) Whenever the Corporation shall issue shares of Common
Stock upon any conversion of shares of Series B Preferred Stock
as contemplated by this Section 5, the Corporation shall issue
together with each such share of Common Stock such number of
rights to purchase Series A Junior Preferred Stock of the
Corporation (or other securities in lieu thereof) pursuant to
the Rights Agreement, dated as of April 25, 1986, between the
Corporation and The Chase Manhattan Bank, N.A., as Rights
Agent, as such agreement may from time to time be amended (the
"Rights Agreement.), as may be provided for in the Rights
Agreement, or any rights issued to holders of Common Stock of
the Corporation in addition thereto or in replacement therefor,
whether or not such rights shall be exercisable or tradeable
separately from the Common Stock at such time, but only if such
rights are outstanding and held by other holders of Common
Stock of the Corporation at such time and have not expired or
been redeemed.
6. Redemption at the Option of the Corporation.
(A) The Series B Preferred Stock shall be redeemable, in
whole or in part, at the option of the Corporation at any time
after November 22, 1999 (or on or before
November 22, 1999 if permitted by paragraph (C) or (D) of this
Section 6), out of funds legally available therefor, at the
following redemption prices per share (or if pursuant to
paragraph (C) of this Section 6, at the redemption price set
forth therein):
During
the
Twelve
Month
Period
Begin-
ning
Novem- Price Per
ber 22, Share
1989 107.75% of Liquidation Price in effect on date fixed for redemption
1990 106.975% " "
1991 106.2% " "
1992 105.425% " "
1993 104.65% " "
1994 103.875% " "
1995 103.1% " "
1996 102.325% " "
1997 101.55% " "
1998 100.775% " "
and thereafter at 100% of the Liquidation Price per share in
effect on the date fixed for redemption, plus, in each case
(including in the case of redemptions pursuant to paragraph (C)
or (D) of this Section 6), an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon to
the date fixed for redemption. Payment of the redemption price
shall be made by the Corporation in cash or shares of Common
Stock, or a combination thereof, as permitted by paragraph (E)
of this Section 6. From and after the date fixed for
redemption, dividends on shares of Series B Preferred Stock
called for redemption will cease to accrue, such shares will no
longer be deemed to be outstanding and
all rights in respect of such shares of the Corporation shall
cease, except the right to receive the redemption price. If
less than all of the outstanding shares of Series B Preferred
Stock are to be redeemed, the Corporation shall either redeem a
portion of the shares of each holder determined pro rata based
on the number of shares held by each holder or shall select the
shares to be redeemed by lot, as may be determined by the Board
of Directors of
the Corporation.
(B) Unless otherwise required by law, notice of redemption
will be sent to the holders of Series B Preferred Stock at the
address shown on the books of the Corporation or any transfer
agent for Series B Preferred Stock by first class mail, postage
prepaid, mailed not less than twenty (20) days nor more than
sixty (60) days prior to the redemption date. Each notice shall
state: (I) the redemption date; (ii) the total number of shares
of the Series B Preferred Stock to be redeemed and, if fewer
than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (iii)
the redemption price; (iv) the place or places where
certificates, if certificated, for such shares are to be
surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on
such redemption date; (vi) the conversion rights of the shares
to be redeemed, the period within which conversion rights may
be exercised, and the Conversion Price and number of shares of
Common Stock issuable upon conversion of a share of Series B
Preferred Stock at the time. Upon surrender of the
certificates, if certificated, for any shares so called for
redemption, or upon the date fixed for redemption if
uncertificated such shares if not previously converted shall be
redeemed by the Corporation on the date fixed for redemption
and at the redemption price set forth in this Section 6.
(C) In the event (i) of a change in the federal tax law or
regulations of the United States of America or of an
interpretation or application of such law or regulations or of
a determination by a court of competent jurisdiction, which in
any case has the effect of precluding the Corporation from
claiming (other than for purposes of calculating any
alternative minimum tax) any of the tax deductions for
dividends paid on the Series B Preferred Stock when such
dividends are used as provided under Section 404(k)(2) of the
Internal Revenue Code of 1986, as amended (the "Code") as in
effect on the date shares of Series B Preferred Stock are
initially issued, or (ii) that the Corporation certifies to the
holders of the Series B Preferred Stock that the Corporation
has determined in good faith that the plan either is not
qualified within the meaning of Section 401(a) of the Code or
is not an "employee stock ownership plan" within the meaning of
4975(e)(7) of the Code, the Corporation may, in its sole
discretion and notwithstanding anything to the contrary in
para-graph (A) of this Section 6, at any time within one year
of the occurrence of such event, elect either to (a) redeem any
or all of such Series B Preferred Stock for cash or, if the
Corporation so elects, in shares of Common Stock, or a
combination of such shares of Common Stock and cash, as
permitted by Paragraph (E} of this Section 6, at a redemption
price equal to the higher of (x) the Liquidation Price per
share on the date fixed for redemption or (y) the Fair Market
Value (as defined in paragraph 9(G)(2)) of the number of shares
of Common Stock into which each share of Series B Preferred
Stock is convertible at the time the notice of such redemption
is given, plus in either case an amount equal to accrued
(whether or not accumulated) and unpaid dividends thereon to
the date fixed for redemption, or (b) exchange any or all of
such shares of Series B Preferred Stock for securities of
comparable value (as determined by an independent appraiser)
that constitute "qualifying employer securities" with respect
to a holder of Series B Preferred Stock within the meaning of
Section 409(1, of the Code and Section 407(d)(5) of the
Employment Retirement Income Security Act of 1974, as amended
("ERISA") or any successor provisions of law.
(D) Notwithstanding anything to the contrary in paragraph
(A) of this Section 6, in the event that the Employees Savings
Plan of Mobil Oil is terminated or the Employee Stock Ownership
Plan incorporated therein is terminated or eliminated from such
Plan, the Corporation may, in its sole discretion, call for
redemption of any or all of the then outstanding Series B
Preferred Stock at a redemption price calculated on the basis
of the redemption prices provided in paragraph (A) of this
Section 6, increased, in each such case, by 50% of the amount
thereof in excess of 100%.
(E) The Corporation, at its option, may make payment of
the redemption price required upon redemption of shares of
Series B Preferred Stock in cash or in shares of Common Stock,
or in a combination of such shares and cash, any such shares of
Common Stock to be valued for such purpose at their Fair Market
Value as defined in paragraph 9(G)(2)); provided, however, that
in calculating their Fair Market Value the Adjustment Period
shall be deemed to be the five (5) consecutive trading days
preceding the date of redemption.
7. Redemption at the Option of the Holder.
(A) Unless otherwise provided by law, shares of Series B
Preferred Stock shall be redeemed by the Corporation out of
funds legally available therefor for cash or, if the
Corporation so elects, in shares of Common Stock, or a
combination of such shares and cash, any such shares of Common
Stock to be valued for such purpose as provided by paragraph
(E) of Section 6, at a redemption price equal to the higher of
(x) the Liquidation Price per share in effect on the date fixed
for redemption or (y) the Fair Market Value of the number of
shares of Common Stock into which each share of Series B
Preferred Stock is convertible at the time the notice of such
redemption is given plus in either case an amount equal to
accrued (whether or not accumulated) and unpaid dividends
thereon to the date fixed for redemption, at the option of the
holder, at any time and from time to time upon notice to the
Corporation given not less than five (5) business days prior to
the date fixed by the holder in such notice of redemption, when
and to the extent necessary for such holder to provide for
distributions required to be made under, or to satisfy an
investment election provided to participants in accordance
with, the Employee Stock Ownership Plan incorporated in the
Employee Savings Plan of Mobil Oil, or any successor plan or
when the holder elects to redeem shares of Series B Preferred
Stock in respect of any Regular or Supplemental Preferred
Dividend (a "Dividend Redemption"). In the case of any Dividend
Redemption, such holder shall give the notice specified above
within five (5) business days after the related Dividend
Payment Date and such redemption shall be effective as to such
number of shares of Series B Preferred Stock as shall equal (x)
the aggregate amount of such Regular or Supplemental Preferred
Dividend with respect to shares of Series B Preferred Stock
allocated or credited to the accounts of participants in the
Employee Stock Ownership Plan incorporated in the Employees
Savings Plan of Mobil Oil, or any successor plan divided by (y)
the redemption price specified above.
(B) Shares of Series B Preferred Stock shall be redeemed
by the Corporation out of funds legally available there for
cash or, if the Corporation so elects, in shares of Common
Stock, or a combination of such shares of Common Stock and
cash, any such shares of Common Stock to be valued for such
purpose as provided by paragraph (E) of Section 6, at a
redemption price equal to the Liquidation Price plus an amount
equal to accrued and unpaid dividends thereon to the date fixed
for redemption, at the option of the holder, at any time and
from time to time upon notice to the Corporation given not less
than five (5) business days prior to the date fixed by the
holder in such notice for such redemption, upon certification
by such holder to the Corporation of the following events: (i)
when and to the extent necessary for such holder to make any
payments of principal, interest or premium due and payable
(whether as scheduled, upon acceleration or otherwise) upon any
obligations of the trust established under the Employee Stock
Ownership Plan incorporated in the Employee Savings Plan of
Mobil Oil in connection with the acquisition of Series B
Preferred Stock or any indebtedness, expenses or costs incurred
by the holder for the benefit of the Plan; or (ii) when and if
it shall be established to the satisfaction of the holder that
the Plan has not initially been determined by the Internal
Revenue Service to be qualified as a stock bonus plan and an
employee stock ownership plan within the meaning of Sections
401(a) or 4975(e)(7) of the Code, respectively.
8. Consolidation, Merger, etc.
(A) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named,
pursuant to which the outstanding shares of Common Stock are by
operation of law exchanged solely for or changed, reclassified
or converted solely into shares of any successor or resulting
company (including the Corporation) that constitute "qualifying
employer securities" that are common stock with respect to a
holder of Series B Preferred Stock within the meanings of
Section 409(1) of the Code and Section 407(d)(5) of ERISA, or
any successor provision of law, and, if applicable, for a cash
payment in lieu of fractional shares, if any, then, in such
event, the terms of such consolidation or merger or similar
transaction shall provide that the shares of Series B Preferred
Stock of such holder shall be converted into or exchanged for
and shall become preferred shares of such successor or
resulting company, having in respect of such company insofar as
possible the same powers, preferences and relative,
participating, optional or other special rights (including the
redemption rights provided by Sections 6, 7, and 8 hereof), and
the qualifications, limitations or restrictions thereon,that
the Series B Preferred Stock had immediately prior to such
transaction; provided, however, that after such transaction
each share of stock into which the Series B Preferred Stock is
so converted or for which it is exchanged shall be convertible,
pursuant to the terms and conditions provided by Section 5
hereof, into the number and kind of qualifying employer
securities receivable by a holder of the number of shares of
Common Stock into which such shares of Series B Preferred Stock
could have been converted pursuant to Section 5 hereof
immediately prior to such transaction and provided, further,
that if by virtue of the structure of such transaction, a
holder of Common Stock is required to make an election with
respect to the nature and kind of consideration to be received
in such transaction, which election cannot practicably be made
by the holders of the Series B Preferred Stock, then such
election shall be deemed to be solely for"qualifying employer
securities" (together, if applicable, with a cash payment in
lieu of fractional shares) with the effect provided above on
the basis of the number and kind of qualifying employer
securities receivable by a holder of the number of shares of
Common Stock into which the shares of Series B Preferred Stock
could have been converted pursuant to Section 5 hereof
immediately prior to such transaction (it being understood that
if the kind or amount of qualifying employer securities
receivable in respect of each share of Common Stock upon such
transaction is not the same for each such share, then the kind
and amount of qualifying employer securities deemed to be
receivable in respect of each share of Common Stock for
purposes of this proviso shall be the kind and amount so
receivable per share of Common Stock by a plurality of such
shares). The rights of the Series B Preferred Stock as
preferred shares of such successor resulting company shall
successively be subject to adjustments pursuant to Section 9
hereof after any such transaction as nearly equivalent to the
adjustments provided for by such Section prior to such
transaction. The Corporation shall not consummate any such
merger, consolidation or similar transaction unless all the
terms of this paragraph 8(A) are complied with.
(B) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named,
pursuant to which the outstanding shares of Common Stock are by
operation of law exchanged for or changed, reclassified or
converted into other shares or securities or cash or any other
property, or any combination thereof, other than any such
consideration which is constituted solely of qualifying
employer securities that are common stock (as referred to in
paragraph (A) of this Section 8) and cash payments, if
applicable, in lieu of fractional shares, outstanding shares of
Series B Preferred Stock shall, without any action on the part
of the Corporation or any holder thereof (but subject to
paragraph (C) of this Section 8), be automatically converted
immediately prior to the consummation of such merger,
consolidation or similar transaction into shares of Common
Stock at the conversion rate then in effect so that each share
of Series B Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of
Common Stock, be converted into or exchanged for the aggregate
amount of shares, securities, cash or other property (payable
in like kind) receivable by a holder of the number of shares of
Common Stock into which such shares of Series B Preferred Stock
could have been converted immediately prior to such transaction
if such holder of Common Stock failed to exercise any rights of
election as to the kind or amount of shares, securities, cash
or other property receivable upon such transaction (provided
that, if the kind or amount of shares, securities, cash or
other property receivable upon such transaction is not the same
for each non-electing share, then the kind and amount of
shares, securities, cash or other property receivable upon such
transaction for each non-electing share shall be the kind and
amount so receivable per share by a plurality of non-electing
shares).
(C) In the event the Corporation shall enter into any
agreement providing for any consolidation or merger or similar
transaction described in paragraph (B) of this Section 8, then
the Corporation shall as soon as practicable thereafter (and in
any event at least ten (10) business days before consummation
of such transaction) give notice of such agreement and the
material terms thereof to each holder of Series B Preferred
Stock and each such holder shall have the right to elect, by
written notice to the Corporation, to receive, upon
consummation of such transaction (if and when such transaction
is consummated), out of funds legally available therefor, from
the Corporation or the successor of the Corporation, in
redemption and retirement of such Series B Preferred Stock, in
lieu of any cash or other securities which such holder would
otherwise be entitled to receive under Section 8(B) hereof, a
cash payment equal to the redemption price specified in
paragraph (A) of Section 6 in effect on the date of the
consummation of such transaction plus an amount equal to all
accrued (whether or not accumulated) and unpaid dividends. No
such notice of redemption shall be effective unless given to
the Corporation prior to the close of business of the fifth
business day prior to consummation of such transaction, unless
the Corporation or the successor of the Corporation shall waive
such prior notice, but any notice or redemption so given prior
to such time may be withdrawn by notice of withdrawal given to
the Corporation prior to the close of business on the fifth
business day prior to consummation of such transaction.
9. Anti-dilution Adjustments.
(A)(1) Subject to the provisions of paragraph 9(E), in the
event the Corporation shall, at any time or from time to time
while any of the shares of the Series B Preferred Stock are
outstanding, (i) pay a dividend or make a distribution in
respect of the Common Stock in shares of Common Stock or (ii)
subdivide the outstanding shares of Common Stock into a greater
number of shares, in each case whether by reclassification of
shares, recapitalization of the Corporation (excluding a
recapitalization or reclassification effected by a merger or
consolidation to which Section 8 hereof applies) or otherwise,
then, in such event, the Board of Directors shall, to the
extent legally permissible, declare a dividend in respect of
the Series B Preferred Stock in shares of Series B Preferred
Stock (a "Special Dividend") in such a manner that a holder of
Series B Preferred Stock will become a holder of that number of
shares of Series B Preferred Stock equal to the product of the
number of such shares held prior to such event times a fraction
(the "Sec. 9(A) Non-Dilutive Share Fraction"), the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock outstanding immediately
before such event. A Special Dividend declared pursuant to this
Section 9(A)(1) shall be effective, upon payment of such
dividend or distribution in respect of the Common Stock, as of
the record date for the determination of stockholders entitled
to receive such dividend or distribution (on a retroactive
basis), and in the case of a subdivision shall become effective
immediately as of the effective date thereof. Concurrently with
the declaration of the Special Dividend pursuant to this
paragraph 9(A)(1), the Conversion Price, the Liquidation Price
and the Regular Preferred Dividend Rate of all shares of Series
B Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Regular Preferred Dividend
Rate, respectively, in effect immediately before such event by
the Sec. 9(A) Non-Dilutive Share Fraction.
(2) The Corporation and the Board of Directors shall each
use its best efforts to take all necessary steps or to take all
actions as are reasonably necessary or appropriate for
declaration of the Special Dividend provided in paragraph
9(A)(1) but shall not be required to call a special meeting of
stockholders in order to implement the provisions thereof. If
for any reason the Board of Directors is precluded from giving
full effect to the Special Dividend provided in paragraph
9(A)(1), then no such Special Dividend shall be declared, but
instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately before the
event by the Sec. 9(A) Non-Dilutive Share Fraction and the
Liquidation Price and the Regular Preferred Dividend Rate will
not be adjusted. An adjustment to the Conversion Price made
pursuant to this paragraph 9(A)(2) shall be given effect, upon
payment of such a dividend or distribution, as of the record
date for the determination of holders entitled to receive such
dividend or distribution (on a retroactive basis), and in the
case of a subdivision shall become effective immediately as of
the effective date thereof. If subsequently the Board of
Directors is able to give full effect to the Special Dividend
as provided in paragraph 9(A)(1), then such Special Dividend
will be declared and other adjustments will be made in
accordance with the provisions of paragraph 9(A)(1) and the
adjustment in the Conversion Price as provided in this
paragraph 9(A)(2) will automatically be reversed and nullified
prospectively.
(3) Subject to the provisions of Section 9(E) hereof, in
the event the Corporation shall, at any time or from time to
time while any of the shares of the Series B Preferred Stock
are outstanding, combine the outstanding shares of Common Stock
into a lesser number of shares, whether by reclassification of
shares, recapitalization of the Corporation (excluding a
recapitalization or reclassification effected by a merger,
consolidation or other transaction to which Section 8 hereof
applies) or otherwise, then, in such event, the Conversion
Price shall automatically be adjusted by dividing the
Conversion Price in effect immediately before such event by the
Sec. 9(A) Non-Dilutive Share Fraction and the Liquidation Price
and the Regular Preferred Dividend Rate will not be adjusted.
An adjustment to the Conversion Price made pursuant to this
paragraph 9(A)(3) shall be given effect immediately as of the
effective date of such combination.
(B)(1) Subject to the provisions of paragraph 9(E), in the
event the Corporation shall, at any time or from time to time
while any of the shares of Series B Preferred Stock are
outstanding, issue to holders of shares of Common Stock as a
dividend or distribution, including by way of a
reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common
Stock (but not including as a right or warrant for this purpose
any security convertible into or exchangeable for shares of
Common Stock) for a consideration having a Fair Market Value
(as hereinafter defined) per share less than the Fair Market
Value of a share of Common Stock on the date of issuance of
such right or warrant, then, in such event, the Board of
Directors shall, to the extent legally permissible, declare a
dividend in respect of the Series B Preferred Stock in shares
of Series B Preferred Stock (a "Special Dividend") in such a
manner that a holder of Series B Preferred Stock will become a
holder of that number of shares of Series B Preferred Stock
equal to the product of the number of such shares held prior to
such event times a fraction (the "Sec. 9(B) Non-Dilutive Share
Fraction"), the numerator of which is the number of shares of
Common Stock outstanding immediately before such issuance of
rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such
rights and warrants and the denominator of which is the number
of shares of Common Stock outstanding immediately before such
issuance of warrants or rights plus the number of shares of
Common Stock which could be purchased at the Fair Market Value
of a share of Common Stock at the time of such issuance for the
maximum aggregate consideration payable upon exercise in full
of all such rights and warrants. A Special Dividend declared
pursuant to this Section 9(B)(It shall be effective upon such
issuance of rights or warrants. Concurrently with the
declaration of the Special Dividend pursuant to this paragraph
9(B)(1), the Conversion Price, the Liquidation Price and the
Regular Preferred Dividend Rate of all shares of Series B
Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Regular Preferred Dividend
Rate, respectively, in effect immediately before such event by
the Sec. 9(B) Non-Dilutive Share Fraction.
(2) The Corporation and the Board of Directors shall each
use its best efforts to take all necessary steps or to take all
actions as are reasonably necessary or appropriate for
declaration of the Special Dividend provided in paragraph
9(B)(1) but shall not be required to call a special meeting of
stockholders in order to implement the provisions thereof. If
for any reason the Board of Directors is precluded from giving
full effect to the Special Dividend provided in paragraph
9(B)(1), then no such Special Dividend shall be declared, but
instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately before the
event by the Sec. 9(B) Non-Dilutive Share Fraction and the
Liquidation Price and the Preferred Dividend Rate will not be
adjusted. An adjustment to the Conversion Price made pursuant
to this paragraph 9(B)(2) shall be given effect upon such
issuance of rights or warrants. If subsequently the Board of
Directors is able to give full effect to the Special Dividend
as provided in paragraph 9(B)(1), then such Special Dividend
will be declared and other adjustments will be made in
accordance with the provisions of paragraph 9(B)(1) and the
adjustment in the Conversion Price as provided in this
paragraph (9(B)(2) will automatically be reversed and nullified
prospectively.
(C)(1)(i) Subject to the provisions of paragraph 9(E), in
the event the Corporation shall, at any time or from time to
time while any of the shares of Series B Preferred Stock are
outstanding, issue, sell or exchange shares of Common Stock
(other than pursuant to (x) any right or warrant to purchase or
acquire shares of Common Stock (including as such a right or
warrant any security convertible into or exchangeable for
shares of Common Stock), (y) the Rights Agreement or any
successor rights agreement to the Rights Agreement which is
designated as such by the Board of Directors, or (z) any
employee or director incentive, compensation or benefit plan or
arrangement of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) at a purchase
price per share less than the Fair Market Value of a share of
Common Stock on the date of such issuance, sale or exchange,
then, in such event, the Board of Directors shall, to the
extent legally permissible, declare a dividend in respect of
the Series B Preferred Stock in shares of Series B Preferred
Stock (a "Special Dividend") in such a manner that a holder of
Series B Preferred Stock will become the holder of that number
of shares of Series B Preferred Stock equal to the product of
the number of such shares held prior to such event times a
fraction (the "Sec. 9(C)(l)(i) Non-Dilutive Share Fraction"),
the numerator of which is the number of shares of Common Stock
outstanding immediately before such issuance, sale or exchange
plus the number of shares of Common Stock so issued, sold or
exchanged and the denominator of which is the number of shares
of Common Stock outstanding immediately before such issuance,
sale or exchange plus the number of shares of Common Stock
which could be purchased at the Fair
Market Value of a share of Common Stock at the time of such
issuance, sale or exchange for the maximum aggregate
consideration paid therefor.
(ii) In the event that the Corporation shall, at any time
or from time to time while any Series B Preferred Stock is
outstanding, issue, sell or exchange any right or warrant to
purchase or acquire shares of Common Stock (including as such a
right or warrant any security convertible into or exchangeable
for shares of Common Stock other than pursuant to (x) the
Rights Agreement or any successor rights agreement to the
Rights Agreement which is designated as such by the Board of
Directors, (y) any employee or director incentive, compensation
or benefit plan or arrangement of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted
and (z) any dividend or distribution on shares of Common Stock
contemplated in Section 9(A)(1)) for a consideration having a
Fair Market Value, on the date of such issuance, sale or
exchange, less than the Non-Dilutive Amount (as hereinafter
defined), then, in such event, the Board of Directors shall, to
the extent legally permissible, declare a dividend in respect
of the Series B Preferred Stock in shares of Series B Preferred
Stock (a "Special Dividend") in such a manner that a holder of
Series B Preferred Stock will become the holder of that number
of shares of Series B Preferred Stock equal to the product of
the number of such shares held prior to such event times a
fraction (the "Sec. 9(C)(l)(ii) Non-Dilutive Share Fraction"),
the numerator of which is the number of shares of Common Stock
outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock that
could be acquired upon exercise in full of all such rights and
warrants and the denominator of which is the number of shares
of Common Stock outstanding immediately before such issuance of
rights or warrants plus the number of shares of Common Stock
which could be purchased at the Fair Market Value of a share of
Common Stock at the time of such issuance for the total of (x)
the maximum aggregate consideration payable at the time of the
issuance, sale or exchange of such right or warrant and (y) the
maximum aggregate consideration payable upon exercise in full
of all such rights or warrants.
(iii) A Special Dividend declared pursuant to this section
9(C)(1) shall be effective upon the effective date of such
issuance, sale or exchange. Concurrently with the declaration
of the Special Dividend pursuant to this paragraph 9(C)(1), the
Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate of all shares of Series B Preferred
Stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Regular Preferred Dividend Rate,
respectively, in effect immediately before such event by the
Sec. 9(C)(l)(i) or Sec. 9(C) (l)(ii) Non-Dilutive Share
Fraction, as the case may be.
(2) The Corporation and the Board of Directors shall each
use its best efforts to take all necessary steps or to take all
actions as are reasonably necessary or appropriate for
declaration of the Special Dividend provided in paragraph
9(C)(l)(i) or (ii) but shall not be required to call a special
meeting of stockholders in order to implement the provisions
thereof. If for any reason the Board of Directors is precluded
from giving full effect to any Special Dividend provided in
paragraph 9(C)(1), then no such Special Dividend shall be
declared, but instead the Conversion Price shall automatically
be adjusted by dividing the Conversion Price in effect
immediately before the event by the Sec. 9(C)(l)(i) or Sec.
9(C)(l)(ii) Non-Dilutive Share Fraction, as the case may be,
and the Liquidation Price and the Regular Preferred Dividend
Rate will not be adjusted. An adjustment to the Conversion
Price made pursuant to this paragraph 9(C)(2) shall be given
effect upon the effective date of such issuance, sale or
exchange. If subsequently the Board of Directors is able to
give full effect to the Special Dividend as provided in
paragraph 9(C)(1), then such Special Dividend will be declared
and other adjustments will be made in accordance with the
provisions of paragraph 9(C)(1) and the adjustment in the
Conversion Price as provided in this paragraph 9(C)(2) will
automatically be reversed and nullified prospectively.
(D)(1) Subject to the provisions of paragraph 9(E), in the
event the Corporation shall, at any time or from time to time
while any of the shares of Series B Preferred Stock are
outstanding, make an Extraordinary Distribution (as hereinafter
defined) in respect of the Common Stock, whether by dividend,
distribution, reclassification of shares or recapitalization of
the Corporation (including capitalization or reclassification
effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata Repurchase (as hereinafter
defined) of Common Stock, then, in such event, the Board of
Directors shall, to the extent legally permissible, declare a
dividend of Series B Preferred Stock (a "Special Dividend") in
such a manner that a holder of Series B Preferred Stock will
become a holder of that number of shares of Series B Preferred
Stock equal to the product of the number of such shares held
prior to such event times a fraction (the "Sec.9(D) Non-Dilutive
Share Fraction"), the numerator of which is the
product of (a) the number of shares of Common Stock outstanding
immediately before such Extraordinary Distribution or Pro Rata
Repurchase minus, in the case of a Pro Rata Repurchase, the
number of shares of Common Stock repurchased by the Corporation
multiplied by (b) the Fair Market Value of a share of Common
Stock on the day before the ax-dividend date with respect to an
Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution
which is paid other than in cash, or on the applicable
expiration date (including all extensions thereof) of any
tender offer which is a Pro Rata Repurchase or on the date of
purchase with respect to any Pro Rata Repurchase which is not a
tender offer, as the case may be, and the denominator of which
is (i) the product of (x) the number of shares of Common Stock
outstanding immediately before such Extraordinary Distribution
or Pro Rata Repurchase multiplied by (y) the Fair Market Value
of a share of Common Stock on the day before the ex-dividend
date with respect to an Extraordinary Distribution which is
paid in cash and on the distribution date with respect to an
Extraordinary Distribution which is paid other than in cash, or
on the applicable expiration date "including all extensions
thereof) of any tender offer which is a Pro Rata Repurchase, or
on the date of purchase with respect to any Pro Rata Repurchase
which is not a tender offer, as the case may be, minus (ii) the
Fair Market Value of the Extraordinary Distribution or the
aggregate purchase price of the Pro Rate Repurchase, as the
case may be. The Corporation shall send each holder of Series B
Preferred Stock (i) notice of its intent to make any
Extraordinary Distribution and (ii) notice of any offer by the
Corporation to make a Pro Rata Repurchase, in each case at the
same time as, or as soon as practicable after, such offer is
first communicated to holders of Common Stock or, in the case
of an Extraordinary Distribution, the announcement of a record
date in accordance with the rules of any stock exchange on
which the Common Stock is listed or admitted to trading. Such
notice shall indicate the intended record date and the amount
and nature of such dividend or distribution, or the number of
shares subject to such offer for a Pro Rata Repurchase and the
purchase price payable by the Corporation pursuant to such
offer, as well as the Conversion Price and the number of shares
of Common Stock into which a share of Series B Preferred Stock
may be converted at such time. Concurrently with the Special
Dividend paid pursuant to this paragraph 9(D)(1), the
Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate of all shares of Series B Preferred
stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Regular Preferred Dividend Rate,
respectively, in effect immediately before such Extraordinary
Distribution or Pro Rata Repurchase by the Sec. 9(D) Non-Dilutive
Share Fraction determined pursuant to this paragraph
9(D)(1).
(2) The Corporation and the Board of Directors shall each
use its best efforts to take all necessary steps or to take all
actions as are reasonably necessary or appropriate for
declaration of the Special Dividend provided in paragraph
9(D)(1) but shall not be required to call a special meeting of
stockholders in order to implement the provisions thereof. If
for any reason the Board of Directors is precluded from giving
full effect to the Special Dividend provided in paragraph
9(D)(1), then no such Special Dividend shall be declared, but
instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately before the
event by the Sec. 9(D) Non-Dilutive Share Fraction, and the
Liquidation Price and the Regular Preferred Dividend Rate will
not be adjusted. If subsequently the Board of Directors is able
to give full effect to the Special Dividend as provided in
paragraph 9(D)(1), then such Special Dividend will be declared
and other adjustments will be made in accordance with the
provisions of paragraph 9(D)(1) and the adjustment in the
Conversion Price as provided in this paragraph 9(D)(2) will
automatically be reversed and nullified prospectively.
(E) Notwithstanding any other provision of this Section 9,
the Corporation shall not be required to make (i) any Special
Dividend or any adjustment of the Conversion Price, the
Liquidation Price or the Regular Preferred Dividend Rate unless
such adjustment would require an increase or decrease of at
least one percent (1%) in the number of shares of Series B
Preferred Stock outstanding, or, (ii) if no additional shares
of Series B Preferred Stock are issued, any adjustment of the
Conversion Price unless such adjustment would require an
increase or decrease of at least one percent (1%) in the
Conversion Price. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and
together with, the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at lease one percent (1%)
of the number of Series B Preferred Shares outstanding or, if
no additional shares of Series B Preferred Stock are being
issued, an increase or decrease of at least one percent (1%) of
the Conversion Price, whichever the case may be.
(F) If the Corporation shall make any dividend or
distribution on the Common Stock or issue any Common Stock,
other capital stock or other security of the Corporation or any
rights or warrants to purchase or acquire any such security,
which transaction does not result in an adjustment to the
number of shares of Series B Preferred Stock outstanding or the
Conversion Price pursuant to the foregoing provisions of this
Section 9, the Board of Directors of the Corporation may, in
its sole discretion, consider whether such action is of such a
nature that some type of equitable adjustment should be made in
respect of such transaction. If in such case the Board of
Directors of the Corporation determines that some type of
adjustment should be made, an adjustment shall be made
effective as of such date as determined by the Board of
Directors of the Corporation. The determination of the Board of
Directors of the Corporation as to whether some type of
adjustment should be made pursuant to the foregoing provisions
of this paragraph 9(F), and, if so, as to what adjustment
should be made and when, shall be final and binding on the
Corporation and all shareholders of the Corporation. The
Corporation shall be entitled to make such additional
adjustments, in addition to those required by the foregoing
provisions of this Section 9, as shall be necessary in order
that any dividend or distribution in shares of capital stock of
the Corporation, subdivision, reclassification or combination
of shares of the Corporation or any recapitalization of the
Corporation shall not be taxable to holders of the Common
Stock.
(G) For purposes hereof, the following definitions shall
apply:
(1) "Extraordinary Distribution" shall mean any dividend
or other distribution to holders of Common Stock (effected
while any of the shares of Series B Preferred Stock are
outstanding) of (i) cash or (ii) any shares of capital stock of
the Corporation (other than shares of Common Stock), other
securities of the Corporation (other than securities of the
type referred to in paragraph (B) of this Section 9), evidences
of indebtedness of the Corporation or any other person or any
other property (including shares of any subsidiary of the
Corporation), or any combination thereof, where the aggregate
amount of such cash dividend or other distribution together
with the amount of all cash dividends and other distributions
made during the preceding period of twelve (12) months, when
combined with the aggregate amount of all Pro Rata Repurchases
(for this purpose, including only that portion of the aggregate
purchase price of such Pro Rata Repurchase which is in excess
of the Fair Market Value of the Common Stock repurchased as
determined on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer which
is a Pro Rata Repurchase, or the date of purchase with respect
to any other Pro Rata Repurchase which is not a tender offer or
exchange offer) made during such period, exceeds twelve and
one-half percent (12.5) of the aggregate Fair Market Value of
all shares of Common Stock outstanding on the day before the
ax-dividend date with respect to such Extraordinary
Distribution which is paid in cash and on the distribution date
with respect to an Extraordinary Distribution which is paid
other than in cash. The Fair Market Value of an Extraordinary
Distribution for purposes of paragraph (D) of this Section 9
shall be the sum of the Fair Market Value of such Extraordinary
Distribution plus the aggregate amount of any cash dividends or
other distributions which are not Extraordinary Distributions
made during such twelve month period and not previously
included in the calculation of an adjustment pursuant to
paragraph (D) of this Section 9, but shall exclude the
aggregate amount of regular quarterly dividends declared by the
Board of Directors and paid by the Corporation in such twelve
month period.
(2) "Fair Market Value" shall mean, as to shares of Common
Stock or any other class of capital stock or securities of the
Corporation or any other issuer which are publicly traded, the
average of the Current Market Prices (as hereinafter defined)
of such shares or securities for each day of the Adjustment
Period (as hereinafter defined). "Current Market Price" of
publicly traded shares of Common Stock or any other class of
capital stock or other security of the Corporation or any other
issuer for a day shall mean the last reported sales price,
regular way, or , in case no sale takes place on such day, the
average of the reported closing bid and asked prices, regular
way, in either case as reported on the New York Stock Exchange
Composite Tape or, if such security is not listed or admitted
to trading on the New York Stock Exchange, on the principal
national securities exchange on which such security is listed
or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the NASDAQ National
Market System or, if such security is not quoted on such
National Market System, the average of the closing bid and
asked prices on each such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such
security on each such day shall not have been reported through
NASDAQ, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm regularly
making a market in such security selected for such purpose by
the board of Directors of the Corporation on each trading day
during the Adjustment Period. "Adjustment Period" shall mean
the period of five consecutive trading days, selected by the
Board of Directors of the Corporation, during the twenty (20)
trading days preceding, and including, the date as of which the
Fair Market Value of a security is to be determined. The "Fair
Market Value" of any security which is not publicly traded or
of any other property shall mean the fair value thereof as
determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or
property selected in good faith by the Board of Directors of
the Corporation, or, if no such investment banking or appraisal
firm is in the good faith judgment of the Board of Directors
available to make such determination, as determined in good
faith by the Board of Directors of the Corporation.
(3) "Non-Dilutive Amount" in respect of an issuance, sale
or exchange by the Corporation of any right or warrant to
purchase or acquire shares of Common Stock (including any
security convertible into or exchangeable for shares of Common
Stock) shall mean the difference between (i) the product of the
Fair Market Value of a share of Common Stock on the day
preceding the first public announcement of such issuance, sale
or exchange multiplied by the maximum number of shares of
Common Stock which could be acquired on such date upon the
exercise in full of such rights or warrants (including upon the
conversion or exchange of all such convertible or exchangeable
securities). whether or not exercisable (or convertible or
exchangeable) at such date, and (ii) the aggregate amount
payable pursuant to such right or warrant to purchase or
acquire such maximum number of shares of Common Stock;
provided, however, that in no event shall the Non-Dilutive
Amount be less than zero. For purposes of the foregoing
sentence, in the case of a security convertible into or
exchangeable for shares of Common Stock, the amount payable
pursuant to a right or warrant to purchase or acquire shares of
Common Stock shall be the Fair Market Value of such security on
the date of the issuance, sale or exchange of such security by
the Corporation.
(4) "Pro Rata Repurchase" shall mean any purchase of
shares of Common Stock by the Corporation or any subsidiary
thereof, whether for cash, shares of capital stock of the
Corporation, other securities of the Corporation, evidences of
indebtedness of the Corporation or any other person or any
other property (including shares of a subsidiary of the
Corporation), or any combination thereof, effected while any of
the shares of Series B Preferred Stock are outstanding,
pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any successor provision of
law, or pursuant to any other offer available to substantially
all holders of Common Stock, provided, however, that no
purchase of shares by the Corporation or any subsidiary thereof
made in open market transactions shall be deemed a Pro Rata
Repurchase. For purposes of this paragraph 9(G), shares shall
be deemed to have been purchased by the Corporation or any
subsidiary thereof "in open market transactions" if they have
been purchased substantially in accordance with the
requirements of Rule
lOb-18 as in effect under the Exchange Act on the date shares
of Series B Preferred Stock are initially issued by the
Corporation or on such other terms and conditions as the Board
of Directors of the Corporation shall have determined are
reasonably designed to prevent such purchases from having a
material effect on the trading market for the Common Stock.
(H) Whenever an adjustment increasing the number of shares
of Series B Preferred Stock outstanding is required pursuant
hereto, the Board of Directors shall take action as is
necessary so that a sufficient number of shares of Series B
Preferred Stock are designated with respect to such increase
resulting from such adjustment. Whenever an adjustment to the
Conversion Price, the Liquidation Price or the Regular
Preferred Dividend Rate of the Series B Preferred Stock is
required pursuant hereto, the Corporation shall forthwith place
on file with the transfer agent for the Common Stock and the
Series B Preferred Stock, if there be one, and with the
Treasurer of the Corporation, a statement signed by the
Treasurer or any Assistant Treasurer of the Corporation stating
the adjusted Conversion Price, Liquidation Price and Regular
Preferred Dividend Rate determined as provided herein. Such
statement shall set forth in reasonable detail such facts as
shall be necessary to show the reason and the manner of
computing such adjustment, including any determination of Fair
Market Value involved in such computation. Promptly after each
adjustment to the number of shares of Series B Preferred Stock
outstanding, the Conversion Price, the Liquidation Price or the
Regular Preferred Dividend Rate, the Corporation shall mail a
notice thereof and of the then prevailing number of shares of
Series B Preferred Stock outstanding, the Conversion Price the
Liquidation Price and the Regular Preferred Dividend Rate to
each holder of shares of Series B Preferred Stock.
10. Miscellaneous.
(A) All notices referred to herein shall be in writing,
and all notices hereunder shall be deemed to have been given
upon the earlier of receipt thereof or three (3) business days
after the mailing thereof if sent by registered mail (unless
first-class mail shall be specifically permitted for such
notice under the terms hereof) with postage prepaid, addressed:
(i) if to the Corporation, to its office at 150 East 42nd
Street, New York, New York New York 10017 (Attention:
Treasurer) or to the transfer agent for the Series B Preferred
Stock, or other agent of the Corporation designated as
permitted hereby or (ii) if to any holder of the Series B
Preferred Stock or Common Stock, as the case may be, to such
holder at the address of such holder as listed in the stock
record books of the Corporation (which may include the records
of any transfer agent for the Series B Preferred Stock or
Common Stock, as the case may be) or (iii) to such other
address as the Corporation or any such holder, as the case may
be, shall have designated by notice similarly given.
(B) The term "Common Stock" as used herein means the
Corporation's Common Stock, par value $2.00 per share, as the
same exists at the date of filing of the Certificate of
Designation, Preferences and Rights of Series B Convertible
Preferred Stock pursuant to Section 151 of the General
Corporation Law of the State of Delaware, or any other class of
stock resulting from successive changes or reclassifications of
such Common Stock consisting solely of changes in par value, or
from par value to without par value, or from without par value
to par value. In the event that, at any time as a result of an
adjustment made pursuant to Section 9 hereof, the holder of any
shares of the Series B Preferred Stock upon thereafter
surrendering such shares for conversion shall become entitled
to receive any shares or other securities of the Corporation
other than shares of Common Stock, the anti-dilution provisions
contained in Section 9 hereof shall apply in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to Common Stock, and the provisions of Sections l
through 8 and 10 hereof with respect to the Common Stock shall
apply on like or similar terms to any such other shares or
securities.
(C) The Corporation shall pay any and all stock transfer
and documentary stamp taxes that may be payable in respect of
any issuance or delivery of shares of Series B Preferred Stock
or shares of Common Stock or other securities issued on account
of Series B Preferred Stock pursuant thereto or certificates
representing such shares or securities. The Corporation shall
not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issuance or
delivery of shares of Series B Preferred Stock or Common Stock
or other securities in a name other than that in which the
shares of Series B Preferred Stock with respect to which such
shares or other securities are issued or delivered were
registered, or in respect of any payment to any person with
respect to any such shares or securities other than a payment
to the registered holder thereof, and shall not be required to
make any such issuance, delivery or payment unless and until
the person otherwise entitled to such issuance, delivery or
payment 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 or is not payable.
(D) In the event that a holder of shares of Series B
Preferred Stock shall not by written notice designate the name
in which shares of Common Stock to be issued upon conversion of
such shares should be registered or to whom payment upon
redemption of shares of Series B Preferred Stock should be made
or the address to which the certificate or certificates
representing such shares, or such payment, should be sent, the
Corporation shall be entitled to register such shares, and make
such payment, in the name of the holder of such Series B
Preferred Stock as shown on the records of the Corporation and
to send the certificate or certificates or other documentation
representing such shares, or such payment, to the address of
such holder shown on the records of the Corporation.
(E) The Corporation may appoint, and from time to time
discharge and change, a transfer agent for the Series B
Preferred Stock. Upon any such appointment or discharge of a
transfer agent, the Corporation shall send notice thereof by
first-class mail, postage prepaid, to each holder of record of
Series B Preferred Stock.