Exhibit 3.4.11
BY-LAWS
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Adopted
February 11, 1937
Amended
February 18, 1942
January 13, 1943
October 19, 1945
January 15, 1947
August 18, 1948
November 17, 1954
February 26, 1960
September 9, 1960
February 27, 1962
July 8, 1964
May 19, 1966
December 5, 1967
June 3, 1970
August 2, 1971
October 13, 1971
October 20, 1975
December 16, 1981
March 1, 1982
April 12, 1983
December 15, 1983
(effective
November 13, 1986)
February 11, 1987
February 24, 1988
WESTERN MASSACHUSETTS ELECTRIC COMPANY
BY-LAWS
ARTICLE I
STOCKHOLDERS' MEETINGS
The annual meeting of the stockholders shall be held on the first
Wednesday of March in each year, and special meetings of the stockholders
shall be held whenever the Chairman of the Board, the President, or two
Directors shall so order, or whenever called in any other manner as
provided by law.
Each meeting of the stockholders, annual or special, shall be held at
such hour of the day, and at such place in Boston or in such other place in
Massachusetts, as may be designated by the Board of Directors, by the
Chairman of the Board or by the President. Notice of the time and place of
every such meeting shall be given by the Clerk by mailing a notice to each
stockholder of record at his address as shown on the books of the
corporation not less than seven (7) days before the day named for the
meeting. No business shall be in order at a special meeting except such as
shall have been indicated in the notice of such meeting.
In the event of any failure to call and hold the annual meeting as
herein provided, a special meeting may be called and held in lieu of and
for the purposes of such annual meeting. Any election had or business done
at such substitute meeting shall be as valid and effectual as if had or
done at a meeting called as an annual meeting and duly held on said date.
A majority in interest of all the shares of stock of the corporation
outstanding present in person or by proxy shall constitute a quorum for the
transaction of business but less than a quorum may adjourn either sine die
or to a date certain.
No meeting of the stockholders shall be deemed to be invalid for want
of notice provided every stockholder waives notice thereof by a writing
filed either before or after such meeting with the records thereof.
ARTICLE II
OFFICERS
The officers of the corporation shall be a Chairman of the Board of
Directors, a President, an Executive Vice-president, one or more Vice-
presidents, a Treasurer, a Clerk, a Board of not less than five (5) nor
more than twenty-five (25) Directors, such other officers as the Board of
Directors may appoint, including, if the Directors see fit, a Secretary and
one or more Assistant Treasurers. The officers need not be stockholders.
No two of the following offices may be held by the same person: Chairman
of the Board of Directors, President, Executive Vice-president, and Vice-
president, and the Treasurer shall not be an Assistant Treasurer.
The business, property and affairs of the Company shall be managed by
a Board of not less than three nor more than sixteen Directors. Within
these limits, the number of positions on the Board of Directors for any
year shall be the number fixed by resolution of the shareholders or of the
Board of Directors, or, in the absence of such a resolution, shall be the
number of Directors elected at the preceding Annual Meeting of
Shareholders. The Directors so elected shall continue in office until
their successors have been elected and qualified.
ARTICLE III
ELECTION OF OFFICERS
The Directors, the clerk, and the Treasurer shall be elected by
ballot each year at the annual meeting of the stockholders. The Chairman
of the Board, the President, the Executive Vice-president, and each Vice-
president shall be elected annually by, and the Chairman of the Board and
the President shall be elected from, The Board of Directors. All such
other officers as the Directors may appoint, as provided in Article II,
shall be elected annually by the Board of Directors.
Any vacancy in the office of Chairman of the Board, President,
Executive Vice-president, Vice-president, Directors, Treasurer, Assistant
Treasurer, or Clerk arising from non-election, resignation, declination,
death, or any other cause, may be filled by the Board of Directors, except
that whenever the number of Directors shall be increased at any special
meeting of the stockholders the additional Directors so provided for shall
be elected by ballot by the stockholders at the same meeting. Said Board
may also elect an officer pro tempore to serve during the disability or
absence of any officer. Officers chosen to fill vacancies shall hold their
offices until new officers are duly chosen by the stockholders or
Directors, as the case may be.
ARTICLE IV
DIRECTORS
Meetings of the Board of Directors may be held at any time and place
at the call of the Chairman of the Board, the President, or any two
Directors. Notice of each meeting shall be given to each Director either
by notice mailed to him at least forty-eight (48) hours before the time of
such meeting, or by a telephone or telegraphic message sent to his place of
business or residence, or other form of notice actually given to him
twenty-four (24) hours before the time of such meetings. However, any
meeting of the Board and all business transacted thereat shall be legal and
valid without such notice if each member of the Board is present in person
or waives notice thereof by writing filed with the records of the meeting
or assents in writing to the recorded proceedings of the meeting.
One-third of the directors then in office shall constitute a quorum,
except that no quorum shall consist of less than two Directors. A number
less than a quorum may adjourn from time to time until a quorum is present.
In the event of such an adjournment, notice of the adjourned meeting shall
be given to all Directors.
The Board of Directors may at any time elect by ballot not less than
five (5) of their members who shall constitute an Executive committee of
the Board, and if such an Executive Committee is elected the Board of
Directors shall make regulations defining the powers and duties of such
Executive Committee and may delegate to it any or all of their powers in
management of the property, business and affairs of the corporation except
so far as is incompatible with these By-laws or with the laws of the
Commonwealth. A majority of the Executive Committee shall constitute a
quorum.
Such Executive Committee shall elect a Chairman and Secretary and
shall keep a record of its doings which at all reasonable times shall be
open to inspection by each member of the Board of Directors. The Chairman
of the Executive Committee shall submit its records to the Board of
Directors at each regular or special meeting of the Board for such action
as said Board may deem proper.
The Directors as a Board shall have the management of the property,
business and affairs of the corporation and they are hereby invested in
such management with all the powers which the corporation itself possesses
so far as such investing is not incompatible with the provisions of these
By-laws or the laws of the Commonwealth. However, so long as the holders
of the outstanding shares of the corporation's preferred stock voting as a
class have not exercised their right to elect a majority of the Board of
Directors of the corporation on the happening of any of the events of
default specified in the preferred stock provisions of these By-laws, any
right of the corporation to terminate, amend, rescind, waive, discharge, or
in any other way alter or change the obligations of the corporation under
any contract with Northeast Nuclear Energy Company covering the maintaining
of an inventory of nuclear core elements for Unit Nos. 1, 2 or 3 of the
Millstone Nuclear Power Station, including, without limitation, the Fuel
Supply Contract dated as of December 1, 1972, (as it is to be amended by a
Contract of Amendment to be dated as of October 1, 1975), by and among the
corporation, The Hartford Electric Light Company, and the Connecticut Light
and Power Company and Northeast Nuclear Energy Company, shall be reserved
to the common stockholders of the corporation.
They may appoint and remove at pleasure such subordinate officers and
employees as may see to them wise.
They may assign such powers and duties to any officers or subordinate
officers or employees as may not be inconsistent with Laws or these
By-laws.
They shall have access to the books, vouchers and funds of the
corporation in the custody of the Treasurer, shall determine upon the form
of the corporate seal and of the certificates of stock, shall fix the
salaries of the officers, and shall declare dividends from time to time as
they may deem for the best interests of the corporation.
They may make contributions to corporations, trusts, funds or
foundations organized and operated exclusively for charitable, scientific
or educational purposes, no part of the earnings of which inures to the
benefit of any private shareholder or individual, in such amounts as they
may deem reasonable up to but not exceeding in any fiscal year in the
aggregate one-half of one percent of the capital and surplus of the
corporation as at the close of the fiscal year last preceding the making of
any such contribution.
The Company shall indemnify each of its Directors and officers
(including persons who serve at its request as Directors, officers, or in
any other similar capacity of another organization in which it has any
interest as a shareholder, creditor or otherwise) against all liabilities
and expenses, including amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees, reasonably incurred
by him in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which he may be involved or
with which he may be threatened, while in office or thereafter, by reason
of his being or having been such a Director or officer, except with respect
to any matter as to which he shall have been adjudicated in such action,
suit or proceeding not to have acted in good faith in the reasonable belief
that his action was in the best interests of the corporation; provided,
however, that as to any matter disposed of by a compromise payment by such
Director or officer pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless such compromise shall be approved as in the best interests
of the corporation, after notice that it involves such indemnification, (a)
by a disinterested majority of the Directors then in office; or (b) by a
majority of the disinterested Directors then in office, provided that there
has been obtained an opinion in writing of independent legal counsel to the
effect that such Director or officer appears to have acted in good faith in
the reasonable belief that his action was in the best interests of the
corporation; or (c) by the holders of majority of the outstanding stock at
the time entitled to vote for Directors, voting as a single class,
exclusive of any stock owned by an interested Director or officer. In
discharging his duty any such Director or officer, when acting in good
faith, may rely upon the books of account of the corporation or of such
other organization, reports made to the corporation or to such other
organization by any of its officers or employees or by counsel,
accountants, appraisers or other experts selected with reasonable care by
the Board of Directors or officers, or upon other records of the
corporation or of such other organization. Expenses incurred with respect
to any such action, suit or proceeding may be advanced by the corporation
prior to the final disposition of such action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the recipient to repay such
amount unless it is ultimately determined that he is entitled to
indemnification. The right of indemnification hereby provided shall not be
exclusive of or affect any other right to which any Director or officer may
be entitled. As used in this paragraph, the terms "Director" and "officer"
include their respective heirs, executors and administrators, and an
"interested" Director or officer is one against whom in such capacity the
proceedings in question or another proceeding on the same or similar
grounds is then pending. Nothing contained in this Article shall be found,
in any action, suit or proceeding to be invalid or ineffective, the
validity and the effect of the remaining parts shall not be affected.
ARTICLE V
CHAIRMAN OF THE BOARD OF DIRECTORS
The Chairman of the Board of Directors shall preside at the meetings
of the Board and shall act in a general advisory capacity to the Board in
regard to all activities of the corporation, and shall have such other
powers and perform such other duties as may from time to time be determined
by the Board.
ARTICLE VI
THE PRESIDENT
The President shall preside at all meetings of the stockholders and
in the absence of the Chairman of the Board at all meetings of the Board of
Directors. The President shall be the chief executive officer of the
corporation and shall have full charge of its business and affairs and
shall perform all the duties of this office prescribed by law and all
powers and duties given him by the Board of Directors.
ARTICLE VII
ECUTIVE VICE-PRESIDENT AND VICE-PRESIDENTS
The Executive Vice-president shall have such powers and perform such
duties as may be assigned to him by the Board of Directors or as may be
delegated to him by the President. In the absence or disability of the
President, or in case of an unfilled vacancy in that office, the Executive
Vice-president shall perform the duties and exercise the powers of the
President.
The Vice-president or Vice-presidents shall perform such duties of a
general or special nature as may be assigned to him or them by the Board of
Directors or as may be delegated to him or them by or through the
President. In case of the absence or disability of the Executive
Vice-president, a Vice-president shall perform all the duties and have all
the powers of the Executive Vice-president. If there are at any time two
or more Vice-presidents, the one to act in place of the Executive
Vice-president shall be selected by the Board of Directors, provided,
however, that prior to the making of such selection by said Board a
Vice-president to act as aforesaid may be appointed by the President, or if
he is unable to make such appointment or fails to do so, by the Chairman of
the Board, and the Vice-president so appointed shall continue to act as
aforesaid until another Vice-president has been appointed for that purpose
by the Board of Directors.
ARTICLE VIII
THE SECRETARY AND THE CLERK
The Secretary shall have such duties as may from time to time be
delegated to him by the Board of Directors.
The Clerk shall be a resident of Massachusetts. He shall be sworn,
and shall record all votes of the corporation in a book to be kept for the
purpose. He shall attend all meetings of stockholders, of the Board of
Directors, and of the Executive Committee. In the absence of the Clerk or
if at any such meeting he shall be otherwise engaged, an Assistant Clerk if
present shall record the votes taken at the meeting, and if no Assistant
Clerk shall be present, a Clerk pro tempore shall be chosen for that
purpose. The Clerk or any Assistant Clerk may furnish certified copies of
any portion of the records of the corporation under its corporate seal.
All Assistant Clerks shall be sworn.
ARTICLE IX
THE TREASURER
The Treasurer when required by the Directors shall give bond with
sureties acceptable to them for the faithful discharge of his duties and in
such sum as the Directors may determine, and the premium may, by vote of
the Board of Directors, be paid from the funds of the corporation.
He shall be the transfer agent of the stock of the corporation unless
a special transfer agent is appointed by the Directors, shall keep a record
of the names and residences of all the stockholders, shall have the custody
of the corporate seal and of all the moneys, funds and valuable papers and
documents of the corporation except his own bond which shall be in the
custody of the President.
He shall deposit all the funds of the corporation in such bank or
banks as the Directors shall designate to the credit of the corporation by
its corporate name, subject to the checks of the corporation signed by its
Treasurer or an Assistant Treasurer or such other officer or employee as
may be designated for that purpose by the vote of the Directors, but with
such requirements, if any, as to joint signatures and such other
limitations, if any, of the authority as aforesaid of any signing officer
or employee as the Directors may see fit to impose.
He shall issue notes and accept drafts on behalf of the corporation
only when authorized thereto by the Directors.
He shall keep accurate books of account of the corporation's
transactions which shall be the property of the corporation, which together
with all its property in his custody shall be subject at all times to
inspection and control of the Directors.
ARTICLE X
ASSISTANT TREASURER
Each Assistant Treasurer, if any, shall have such powers and duties
as may be given him by the Directors and shall give bond when required by
the Directors with sureties acceptable to them for the faithful discharge
of his duties in such sum as the Directors may determine, and the premiums
may, by vote of the Board of Directors, be paid by the corporation.
ARTICLE XI
SALES, LEASES, AND CONVEYANCES OF REAL ESTATE
The President and Treasurer may in their discretion, to the extent
authorized by law and by vote of the Directors or of the Executive
Committee, lease for any term of time and convey all of its real estate
including water power and release or modify easements and other rights in
real estate whether granted to or by the corporation; and all deeds,
conveyances and leases of real estate including water power and releases
and modifications of easements and of other rights in real estate of the
corporation, unless otherwise provided by vote of the corporation, shall be
made in the name of the corporation under its corporate seal, and be signed
by the President, the Executive Vice-president, or any Vice-president
thereto authorized by a vote of the Directors or of the Executive Committee
and may be acknowledged by any person signing as aforesaid.
ARTICLE XII
CERTIFICATES OF STOCK-TRANSFERS
Certificates of stock may be signed by the President or a
Vice-president and the Treasurer or an Assistant Treasurer. Such
certificates shall be in such form as the Directors may approve, and shall
also bear the seal of the corporation which shall be in the form
theretofore used by the corporation, or in a newer form adopted by the
Directors.
Shares of stock may be transferred by assignment thereof in writing,
accompanied by delivery of the certificates; but no such transfer of stock
shall affect the right of the corporation to pay any dividend thereon or to
treat the holder of record as the holder in fact until the transfer has
been recorded upon the books of the corporation or a new certificate has
been issued to the person to whom the stock has been transferred.
In case of the loss of a certificate, a duplicate may be issued on
such reasonable terms as the Directors shall prescribe.
ARTICLE XIII
CLOSING OF TRANSFER BOOKS
The transfer books of the corporation may be closed for not exceeding
fifteen (15) days next prior to any meeting of the stock-holders and at
such other times and for such reasonable periods as may be determined by
the Board of Directors.
ARTICLE XIV
FISCAL YEAR
The fiscal year of the corporation shall end on the thirty-first day
of December in each year.
ARTICLE XV
TRANSFER AGENT AND REGISTRAR
If the Board of Directors deem it advisable to have a transfer agent
other than the Treasurer, they may appoint any Bank or Trust Company to
that office. They may appoint the same or any other Bank or Trust Company
as Registrar of stock certificates if it appear desirable to have the stock
registered. They may terminate the authority of any Bank acting in either
capacity whenever it shall seem wise.
ARTICLE XVI
SENIOR STOCK PROVISIONS
The Company's capital stock includes a class of capital stock
designated "Common Stock," a class of capital stock designated "Preferred
Stock," and a class of capital stock designated "Class A Preferred Stock."
The authorized shares of Common Stock, Preferred Stock and Class A
Preferred Stock are the number of shares authorized in the Company's
articles of organization, as amended from time to time. The Preferred
Stock and the Class A Preferred Stock are hereinafter for convenience of
reference sometimes collectively referred to as the "Senior Stock," and
either class may hereinafter individually be referred to as "Senior Stock."
Shares of Preferred Stock and shares of Class A Preferred Stock shall rank
on a parity in respect of dividends or payment in case of liquidation, and,
to the extent not fixed and determined by these by-laws or the Company's
articles of organization or otherwise by law, shall have the same rights,
preferences and powers. The general terms, limitations and relative rights
and preferences of each share of Preferred Stock and each share of Class A
Preferred Stock shall be determined in accordance with the following
Sections:
Section 1. Issuance of Senior Stock
Shares of Preferred Stock may be issued from time to time in one or
more series on such terms and for such consideration as may be determined
by the Board of Directors. Shares of Class A Preferred Stock may be issued
from time to time in one or more series on such terms and for such
consideration as may be determined by the Board of Directors. The series
designation, dividend rate, redemption prices, and any other terms,
limitations and relative rights and preferences of each series of either
class of Senior Stock shall be determined by the Board of Directors to the
extent not fixed and determined by this Article or the Company's articles
of organization.
Section 2. Dividends
A. The holders of either class of the Senior Stock shall receive,
but only when and as declared by the Board of Directors, cumulative
dividends at the rate provided for the particular series and payable on
such dividend payment dates in each year as said Board may determine, such
dividends to be payable to holders of record on such dates as may be fixed
by said Board but not more than 45 days before each dividend date,
provided, however, that dividends shall not be declared and set apart for
payment, or paid, on Senior Stock of any one class and series, for any
dividend period, unless dividends have been or are contemporaneously
declared and set apart for payment, or paid, on Senior Stock of all series
for all dividend periods terminating on the same or an earlier date.
B. Dividends on each share of Senior Stock shall be cumulative from
the date of issue thereof or from such earlier date as the Board of
Directors may determine therefor. Unless full cumulative dividends to the
last preceding dividend date shall have been paid or set apart for payment
on all outstanding shares of Senior Stock, no dividend shall be paid on any
junior stock. The term "junior stock" means Common Stock or any other
stock of the Company subordinate to the Senior Stock in respect of
dividends or payments in liquidation.
C. So long as any shares of Senior Stock are outstanding, the
Company shall not declare any dividends or make any other distributions in
respect of outstanding shares of any junior stock of the Company, other
than dividends or distributions in shares of junior stock, or purchase or
otherwise acquire for value any outstanding shares of junior stock (the
declaration of any such dividend or the making of any such distribution,
purchase or acquisition being herein called a "junior stock payment") in
contravention of the following:
(1) If and so long as the junior stock equity (hereinafter
defined), adjusted to reflect the proposed junior stock payment, at the end
of the calendar month immediately preceding the calendar month in which the
proposed junior stock payment is to be made is less than 20% of total
capitalization (hereinafter defined) at that date, as so adjusted, the
Company shall not make such junior stock payment in an amount which,
together with all other junior stock payments made within the year ending
with and including the date on which the proposed junior stock payment is
to be made, exceeds 50% of the net income of the Company available for
dividends on junior stock for the 12 full calendar months immediately
preceding the calendar month in which such junior stock payment is made,
except in an amount not exceeding the aggregate of junior stock payments
which under the restrictions set forth above in this paragraph (1) could
have been, and have not been, made.
(2) If and so long as the junior stock equity, adjusted to
reflect the proposed junior stock payment, at the end of the calendar month
immediately preceding the calendar month in which the proposed junior stock
payment is to be made, is less than 25% but not less than 20% of the total
capitalization at that date, as so adjusted, the Company shall not make
such junior stock payment in an amount which, together with all other
junior stock payments made within the year ending with and including the
date on which the proposed junior stock payment is to be made, exceeds 75%
of the net income of the Company available for dividends on the junior
stock for the 12 full calendar months immediately preceding the calendar
month in which such junior stock payment is made, except in an amount not
exceeding the aggregate of junior stock payments which under the
restrictions set forth above in this paragraph (2) could have been, and
have not been, made.
D. The term "junior stock equity" means the aggregate of the part
value of or stated capital represented by, the outstanding shares of junior
stock, all earned surplus, capital or paid-in surplus, and any premiums on
the junior stock then carried on the books of the Company, less:
(1) the excess, if any, of the aggregate amount payable on
involuntary liquidation of the Company upon all outstanding shares of
Senior Stock over the sum of (i) the aggregate par or stated value of such
shares and (ii) any premiums thereon;
(2) any amounts on the books of the Company known, or estimated
if not known, to represent the excess, if any, of recorded value over
original cost of used or useful utility plant; and
(3) any intangible items set forth on the asset side of the
balance sheet of the Company as a result of accounting convention, such as
unamortized debt discount and expense; provided, however, that no
deductions shall be required to be made in respect of items referred to in
clauses (2) and (3) of this subsection D in cases in which such items are
being amortized or are provided for, or are being provided for, by
reserves.
E. The term "total capitalization" means the aggregate of:
(1) the principal amount of all outstanding indebtedness of the
Company maturing more than 12 months after the date of issue thereof; and
(2) the par value or stated capital represented by, and any
premiums carried on the books of the Company in respect of, the outstanding
shares of all classes of the capital stock of the Company, earned surplus,
and capital or paid-in surplus, less any amounts required to be deducted
pursuant to clauses (2) and (3) of subsection D of this Section 2 in the
determination of junior stock equity.
Section 3. Redemption or Purchase of Senior Stock
A. All or any part of any series of Senior Stock may by vote of
the Board of Directors be called for redemption at any time at the
redemption price provided for the particular series and in the manner
hereinbelow provided. Subject to the provisions of subsection B of this
Section 3, all or any part of any series of Senior Stock may be called for
redemption without calling all or any part of any other series of Senior
Stock. If less than all of any series of Senior Stock is so called, the
Transfer Agent shall determine by lot or in some other manner approved by
the Board of Directors the shares of such series of Senior Stock to be
called.
B. No call for redemption of less than all shares of Senior Stock
outstanding shall be made if the Company shall be in arrears in respect of
payment of dividends on any shares of Senior Stock outstanding.
C. The sums payable in respect of any shares of Senior Stock so
called shall be payable at the office of an incorporated bank or trust
company in good standing. Notice of such call stating the redemption date
shall be mailed not less than 30 days before the redemption date to each
holder of record of shares of Senior Stock so called at his address as it
appears upon the books of the Company.
D. The Company shall, before the redemption date, deposit with
said bank or trust company all sums payable with respect to shares of
Senior Stock so called. After such mailing and deposit the holders of
shares of Senior Stock so called for redemption shall cease to have any
right to future dividends or other rights or privileges as stockholders
in respect of such shares and shall be entitled to look for payment on and
after the redemption date only to the sums so deposited with said bank or
trust company for their respective amounts. Shares so redeemed may be
reissued but only subject to the limitations imposed upon the issue of
Senior Stock.
E. The Company may at any time purchase all or any of the
then outstanding shares of Senior Stock of any class and series upon the
best terms reasonably obtainable, but not exceeding the then current
redemption price of such shares, except that no such purchase shall be made
if the Company shall be in arrears in respect of payment of dividends on
any shares of Senior Stock outstanding or if there shall exist an event of
default as defined in Section 5 hereof.
Section 4. Amounts Payable on Liquidation
A. The holders of any series of Senior Stock shall receive upon
any voluntary liquidation, dissolution or winding up of the Company the
then current redemption price of the particular series and if such action
is involuntary $100 per share in the case of the Preferred Stock and $25
per share in the case of the Class A Preferred Stock, plus in each case all
dividends accrued and unpaid to the date of such payment, before any
payment in liquidation is made on any junior stock.
B. If the net assets of the Company available for distribution on
liquidation to the holders of Senior Stock shall be insufficient to pay
said amounts in full, then such net assets shall be distributed among the
holders of Senior Stock, who shall receive a common percentage of the full
respective preferential amounts.
Section 5. Voting Powers
A. Except as provided in this Article or in the Company's articles
of organization and as provided by law, the holders of Senior Stock shall
have no voting power or right to notice of any meeting.
B. Whenever the holders of the Senior Stock shall have the
right to vote or consent to an action as provided in these Articles or the
Company's articles of organization or as provided by law, both classes of
Senior Stock shall (except as provided below) vote together as a single
class, each outstanding share of Preferred Stock entitled to vote and each
outstanding share of Class A Preferred Stock entitled to vote having such
voting rights as are proportionate to the ratio of (i) the par value
represented by such share to (ii) the par value represented by all shares
of Senior Stock then outstanding. Whenever only one class of the Senior
Stock shall have the right to vote or consent to an action as provided in
these Articles or the Company's articles of organization or as provided by
law, or whenever each class of the Senior Stock shall be entitled or be
required to vote as a separate class on a matter, each outstanding share
of such class entitled to vote shall be entitled to one vote on each such
matter.
C. Whenever dividends on any share of Senior Stock shall be in
arrears in an amount equal to or exceeding four quarterly dividend
payments, or whenever there shall have occurred some default in the
observance of any of the provisions of this Article, or some default on
which action has been taken by debentureholders, bondholders or the trustee
of any deed of trust or mortgage of the Company, or whenever the Company
shall have been declared bankrupt or a receiver of its property shall have
been appointed (any of said conditions being herein called an "event of
default"), then the holders of Senior Stock shall be given notice of all
stockholders' meetings and shall have the right voting together as a class
to elect the smallest number of directors necessary to constitute a
majority of the Board of Directors of the Company and the exclusive right
voting together as a class to amend the by-laws to make such appropriate
increase in the number of directorships as may be required to effect such
election. When all arrears of dividends shall have been paid and such
event of default shall have been terminated, all the rights and powers of
the holders of Senior Stock to receive notice and to vote shall cease,
subject to being again revived on any subsequent event of default.
D. Whenever the right to elect directors shall have accrued to the
holders of Senior Stock the Company shall call a meeting of stockholders
for the election of directors and, if necessary, the amendment of the
by-laws to permit the holders of Senior Stock to exercise their rights
pursuant to subsection C of this Section 5, such meeting to be held not
less than 45 days and not more than 90 days after the accrual of such
rights. When such rights shall cease, the Company shall, within seven days
from the delivery to the Company of a written request therefor by any
stockholder, cause a meeting of the stockholders to be held within 30 days
from the delivery of such request for the purpose of electing a new Board
of Directors. Forthwith, upon the election of such new Board of Directors,
the directors in office immediately prior to such election (other than
persons elected directors in such election) shall be deemed removed from
office without further action by the Company.
Section 6. Action Requiring Certain Consent of Senior
Stockholders
A. So long as any Senior Stock is outstanding, the Company,
without the affirmative vote or written consent of at least a majority in
interest of the Senior Stock then outstanding voting or giving consent
together as a class shall not:
(1) Issue or assume any unsecured notes, unsecured debentures
or other securities representing unsecured debt (other than for the purpose
of refunding or renewing outstanding unsecured securities issued or assumed
by the Company resulting in equal or longer maturities or redeeming or
otherwise retiring all outstanding shares of Senior Stock) if immediately
after such issue or assumption (a) the total outstanding principal amount
of all unsecured notes, unsecured debentures or other securities
representing unsecured debt of the Company will thereby exceed 20% of the
aggregate of all outstanding secured debt of the Company and the capital
stock, premiums thereon, and surplus of the Company, as stated on its
books, or (b) the total outstanding principal amount of all unsecured debt
of the Company of maturities of less than 10 years will thereby exceed 10%
of the aggregate of all outstanding secured debt of the Company and the
capital stock, premiums thereon, and surplus of the Company, as stated on
its books. For the purposes of this subsection A, the payment due upon the
maturity of unsecured debt having an original single stated maturity of 10
years or more shall not be regarded as unsecured debt with a maturity of
less than 10 years until within three years of the maturity thereof, and
none of the payments due upon any unsecured serial debt having an original
stated maturity for the final serial payment of 10 years or more shall be
regarded as unsecured debt of a maturity of less than 10 years until within
three years of the maturity of the final serial payment.
(2) Issue, sell or otherwise dispose of any shares of the then
authorized but unissued Senior Stock or any other stock ranking on a parity
with or having a priority over Senior Stock in respect of dividends or of
payments in liquidation, or reissue, sell or otherwise dispose of any
reacquired shares of Senior Stock or such other stock, other than to
refinance an equal par value or stated value of Senior Stock or of stock
ranking on a parity with or having priority over Senior Stock in respect of
dividends or of payments in liquidation, if:
(a) For a period of 12 consecutive calendar months within
15 calendar months immediately preceding the calendar month in which any
such shares shall be issued, the Income before Interest Charges of the
Company for said period available for the payment of interest determined in
accordance with the systems of accounts then prescribed for the Company by
the Department of Public Utilities of the Commonwealth of Massachusetts (or
by such other official body as may then have authority to prescribe such
systems of accounts) but in any event after deducting depreciation charges
and taxes (including income taxes) and including, in any case in which such
stock is to be issued, sold or otherwise disposed of in connection with the
acquisition of any property, the Income before Interest Charges of the
property to be so acquired, computed as nearly as practicable in the manner
specified above, shall not have been at least one and one-half (1 1/2)
times the sum of (i) the interest charges for one year on all indebtedness
which shall then be outstanding (excluding interest charges on any
indebtedness, proposed to be retired in connection with the issue, sale or
other disposition of such shares), and (ii) an amount equal to all annual
dividend requirements on all outstanding shares of Senior Stock and all
other stock, if any, ranking on a parity with or having priority over
Senior Stock in respect of dividends or of payments in liquidation,
including the shares proposed to be issued, but not including any shares
proposed to be retired in connection with such issue, sale or other
disposition; or if
(b) Such issue, sale or disposition would bring the
aggregate of the amount payable in connection with an involuntary
liquidation of the Company with respect to all shares of Senior Stock and
all shares of stock, if any, ranking on a parity with or having priority
over Senior Stock in respect of dividends or of payments in liquidation to
an amount in excess of the sum of the junior stock equity. If for the
purposes of meeting the requirements of this clause (b), it shall have been
necessary to take into consideration any earned surplus of the Company, the
Company shall not thereafter pay any dividends on or make any distributions
in respect of, or make any payment for the purchase or other acquisition
of, junior stock which would result in reducing the junior stock equity to
an amount less than the amount payable on involuntary liquidation of the
Company in respect of Senior Stock and all shares ranking on a parity with
or having a priority over Senior Stock in respect of dividends or of
payments in liquidation at the time outstanding.
If during the period for which Income before Interest Charges is to be
determined for the purpose set forth in this paragraph (2), the amount, if
any, required to be expended by the Company during such period for property
additions pursuant to a renewal and replacement fund or similar fund
established under any indenture of mortgage or deed of trust of the Company
shall exceed the amount deducted during such period in the determination of
such Income before Interest Charges on account of depreciation and
amortization of electric plan acquisition adjustments, such excess shall
also be deducted in determining such Income before Interest Charges.
B. So long as any Senior Stock is outstanding, the Company,
without the affirmative vote or written consent of at least two-thirds in
interest of the Senior Stock then outstanding voting or giving consent
together as a class shall not authorize any shares of any class of stock
having a priority over the Senior Stock in respect of dividends or of
payments in liquidation or issue any shares of any such prior ranking stock
more than 12 months after the date of the vote or consent authorizing such
prior ranking stock.
C. The provisions of this Article may be changed only by the
affirmative vote or written consent of at least two-thirds in interest of
the issued and outstanding shares of each class of capital stock of the
Company voting or giving their consent in each case separately as a class;
provided, however, that if any such change or proposed change would affect
only one class of Senior Stock, then such change may be effected only by
the affirmative vote or written consent of at least two-thirds in interest
of the issued and outstanding shares of Common Stock and at least
two-thirds in interest of the issued and outstanding shares of the class of
Senior Stock that is affected, voting or giving their consent in each case
separately as a class; and provided further, however, the holders of
Senior Stock shall not be entitled to vote on an increase in the number of
authorized shares of Preferred Stock or Class A Preferred Stock. In no
event shall any reduction of the dividend rate or of the amounts payable
upon redemption or liquidation with respect to any share of Senior Stock be
made without the consent of the holder thereof, and no such reduction in
respect of the shares of any particular series of Senior Stock shall be
made without the consent of all the holders of shares of such series.
D. No share of Senior Stock shall be deemed to be "outstanding"
within the meaning of this Section 6 or of Section 7 if, at or prior to the
time when the approval herein or therein referred to would otherwise be
required, provision shall be made for its redemption, including a deposit
complying with the requirements of subsection D of Section 3.
Section 7. Merger, Consolidation or Sale of All Assets Except
with the affirmative vote or written consent of a majority in interest of
Senior Stock then outstanding voting or giving consent together as a class,
the Company shall not merge or consolidate with or into any other
corporation or sell or otherwise dispose of all or substantially all of its
assets (except by mortgage or pledge) unless such merger, consolidation,
sale or other disposition, or the issuance or assumption of securities in
the effectuation thereof shall have been ordered, approved or permitted
under the Public Utility Holding Company Act of 1935.
Section 8. No Preemptive Right
Except as otherwise expressly provided by law, the holders of Senior
Stock shall have no preemptive right to subscribe to any further issue of
additional shares of Senior Stock or of any other class of stock now or
hereafter authorized, nor for any future issue of bonds, debentures, notes
or other evidence of indebtedness or other security convertible into stock.
If it is expressly required by law that, notwithstanding the provisions of
the preceding sentence, any such further or future issue be offered
proportionately to the stockholders, the holders of Preferred Stock only
shall be entitled to subscribe for new or additional Preferred Stock, the
holders of Class A Preferred Stock only shall be entitled to subscribe for
new or additional Class A Preferred Stock and the holders of Common Stock
only shall be entitled to subscribe for new or additional Common Stock; and
notice of such increase as required by law need be given and the new shares
need be offered proportionately only to the stockholders who are so
entitled to subscribe.
Section 9. Immunity of Directors, Officers and Agents No
director, officer or agent of the Company shall be held personally
responsible for any action taken in good faith though subsequently adjudged
to be in violation of this Article.
Section 10. Transfer Agent
The Company shall always have at least one transfer agent for Senior
Stock, which shall be an incorporated bank or trust company of good
standing.
ARTICLE XVII
PROVISIONS WITH RESPECT TO THE SERIES OF PREFERRED STOCK
1. 9.60% Preferred Stock, Series A
There shall be a series of Preferred Stock designated "9.60%
Preferred Stock, Series A," and consisting of 150,000 shares with an
aggregate par value of $15,000,000 and a par value per share of $100. The
dividend rate and redemption prices as to said 9.60% Preferred Stock,
Series A, shall be as follows:
(a) Dividends on said 9.60% Preferred Stock, Series A, shall be
at the rate of 9.60% per share per annum, and no more, and shall be
cumulative from June 1, 1970. Said dividends, when declared, shall be
payable on the first days of March, June, September and December in each
year.
(b) Redemption Prices of said 9.60% Preferred Stock, Series A,
shall be $111.19 per share if redeemed on or before June 1, 1975, $108.79
per share if redeemed after June 1, 1975 and on or before June 1, 1980,
$106.39 per share if redeemed after June 1, 1980 and on or before June 1,
1985, and $103.99 per share if redeemed after June 1, 1985, plus in all
cases that portion of the quarterly dividend accrued thereon to the
redemption date and all unpaid dividends thereon, if any.
2. 7.72% Preferred Stock, Series B
There shall be a series of Preferred Stock designated "7.72%
Preferred Stock, Series B," and consisting of 200,000 shares with an
aggregate par value of $20,000,000 and a par value per share of $100. The
dividend rate and redemption prices as to said 7.72% Preferred Stock,
Series B, shall be as follows:
(a)Dividends on said 7.72% Preferred Stock, Series B, shall be
at the rate of 7.72% per share per annum, and no more, and shall be
cumulative from October 1, 1971. Said dividends, when declared, shall be
payable on the first days of January, April, July and October in each year.
(b)Redemption Prices of said 7.72% Preferred Stock, Series B,
shall be $109.30 per share if redeemed on or before October 1, 1976,
$107.37 per share if redeemed after October 1, 1976 and on or before
October 1, 1981, $105.44 per share if redeemed after October 1, 1981 and on
or before October 1, 1986, and $103.51 per share if redeemed after October
1, 1986, plus in all cases that portion of the quarterly dividend accrued
thereon to the redemption date and all unpaid dividends thereon, if any,
provided, however, that none of the 7.72% Preferred Stock, Series B shall
be redeemed prior to October 1, 1976, if such redemption is for the purpose
of or in anticipation of refunding such 7.72% Preferred Stock, Series B
through the use, directly or indirectly, of finds borrowed by the Company
or of the proceeds of the issue by the Company of shares of any stock
ranking prior to or on a parity with the 7.72% Preferred Stock, Series B as
to dividends or assets, if such borrowed funds or such shares have an
effective interest cost or effective dividend cost to the Company (computed
in accordance with generally accepted financial principles), as the case
may be, of less than 7.69% per annum.
3. 16% Preferred Stock, Series C
There shall be a series of Preferred Stock designated "16% Preferred
Stock, Series C," and consisting of 150,000 shares with an aggregate par
value of $15,000,000 and a par value per share of $100. The dividend rate
and redemption prices as to said 16% Preferred Stock, Series C, shall be as
follows:
(a)Dividends on said 16% Preferred Stock, Series C, shall be at
the rate of 16% per share per annum, and no more, and shall be cumulative
from date of issuance. Said dividends, when declared, shall be payable on
the first days of March, June, September and December in each year,
commencing March 1, 1982.
(b)Redemption Prices of said 16% Preferred Stock, Series C,
shall be $116.00 per share if redeemed on or before December 1, 1986,
$112.00 per share if redeemed after December 1, 1986 and on or before
December 1, 1991, $108.00 per share if redeemed after December 1, 1991 and
on or before December 1, 1996, $104.00 per share if redeemed after December
1, 1996 and on or before December 1, 2001, and at $101.60 per share if
redeemed after December 1, 2001, plus in all cases that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any; provided, however, that none of the 16%
Preferred Stock, Series C shall be redeemed prior to December 1, 1986, if
such redemption is for the purpose of or in anticipation of refunding such
16% Preferred Stock, Series C through the use, directly or indirectly, of
funds borrowed by the Company or of the proceeds of the issue by the
company of shares of any stock ranking prior to or on a parity with the 16%
Preferred Stock, Series C as to dividends or assets, if such borrowed funds
or such shares have an effective interest cost or effective dividend cost
to the Company (computed in accordance with generally accepted financial
principles), as the case may be, of less than 16.59% per annum.
(c)As and for a sinking fund for said 16% Preferred Stock,
Series C, commencing on December 1, 1986 and on or before each December 1
in each year thereafter so long as any shares of the 16% Preferred Stock,
Series C remain outstanding, the Company shall, to the extent of any funds
of the Company legally available therefor and except as otherwise
restricted by the Company's Statement of Preferred Stock Provisions, redeem
7,500 shares of 16% Preferred Stock, Series C (or such lesser number of
such shares as remain outstanding) at $100 per share plus accrued dividends
to the date of redemption; provided, however, that if in any year the
Company does not redeem the full number of shares of 16% Preferred Stock,
Series C required to be redeemed pursuant to this sinking fund, the
deficiency shall be made good on the next December 1 on which the Company
has funds legally available for, and is otherwise permitted to effect, the
redemption of shares of 16% Preferred Stock, Series C, pursuant to this
sinking fund. The number of shares of 16% Preferred Stock, Series C,
redeemed on any December 1 shall be reduced by the number of such shares
purchased and cancelled by the Company during the preceding twelve-month
period or redeemed during such period pursuant to subsection (b) hereof.
Any shares so redeemed or purchased or cancelled may be given the status of
authorized but unissued shares or Preferred Stock, but none of such shares
shall be reissued as shares of 16% Preferred Stock, Series C. The Company
shall have the option, which shall be noncumulative, to redeem on December
1, 1986 and on each December 1 thereafter up to an additional 7,500 shares
of 16% Preferred Stock, Series C, at the sinking fund redemption price. No
such optional sinking fund shall operate to reduce the number of shares of
the 15% Preferred Stock, Series C, required to be redeemed pursuant to the
mandatory sinking fund provisions hereinabove set forth. In the event that
the Company shall at any time fail to make a full mandatory sinking fund
payment on any sinking fund payment date, the Company shall not pay any
dividends or make any other distributions in respect of outstanding shares
of any junior stock (as that term is defined in Subsection A of Section of
Article XVI of the by-laws of the Company) of the Company, other than
dividends or distributions in shares of junior stock, or purchase or
otherwise acquire for value any out-standing shares of junior stock, until
all such payments have been made.
4. Adjustable Rate Preferred Stock, Series D
There shall be a series of Preferred Stock designated "Adjustable
Rate Preferred Stock, Series D", and consisting of 350,000 shares with an
aggregate par value of $35,000,000 and a par value per share of $100. The
dividend rate provisions, redemption prices and sinking fund provisions as
to said Adjustable Rate Preferred Stock, Series D, shall be as follows:
(a)The dividend per share on said Adjustable Rate Preferred
Stock, Series D, shall be (1) at the rate of 12% per annum per share for
the Initial Dividend Payment Period (as herein defined) (2) at the rate of
forty-one hundredth (40/100th) of one percentage point above the Applicable
Rate (as herein defined), from time to time in effect, for each subsequent
quarterly Dividend Period (as herein defined); provided, however, the
dividend rate for any Dividend Period (including the Initial Dividend
Payment Period) shall not be at a rate of less than 8% per annum per share
or greater than 13% per annum per share. Dividends shall be cumulative
from the date of issuance. Except as provided below in this paragraph,
the "Applicable Rate" for any Dividend Period shall be the highest of (i)
the Treasury Bill Rate, (ii) the Ten Year Constant Maturity Rate and (iii)
the Twenty Year Constant Maturity Rate (each as hereinafter defined) for
such Dividend Period. If the Company determines in good faith that for any
reason one or more of such rates cannot be determined for a particular
Dividend Period, then the Applicable Rate for such Dividend Period shall be
the higher of whichever of such rates can be so determined. If the Company
determines in good faith that none of such rates can be determined for a
particular Dividend Period, then the Applicable Rate in effect for the
preceding Dividend Period shall be continued for such Dividend Period.
Except as provided below in this paragraph, the "Treasury Bill
Rate" for each Dividend Period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published during
the relevant Calendar Period (as defined below)) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve Board or its
successor agency during the Calendar Period immediately prior to the ten
calendar days immediately preceding the Dividend Payment Date for the
dividend period immediately prior to the Dividend Period for which the
dividend rate on the Adjustable Rate Preferred Stock, Series D is being
determined. If the Federal Reserve Board or its successor agency does not
publish such a weekly per annum market discount rate during such Calendar
Period, then the Treasury Bill Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum market discount
rates (or the one weekly per annum market discount rate, if one such rate
shall be published during the relevant Calendar Period) for three-month
U.S. Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If a per annum market discount rate for
three-month U.S. Treasury bills shall not be published by the Federal
Reserve Board or its successor agency or by any Federal Reserve Bank or by
any U.S. Government department or agency during such Calendar Period, then
the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or
the one weekly per annum market discount rate, if one such rate shall be
published during the relevant Calendar Period) for all of the U.S. Treasury
bills then having maturities of not less than 80 nor more than 100 days, as
published during such Calendar Period by the Federal Reserve Board or its
successor agency or, if the Federal Reserve Board or its successor agency
shall not publish such rates, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Company. If the Company
determines in good faith that for any reason no such U.S. Treasury bill
rates are published as provided above during such Calendar Period, then the
Treasury Bill Rate for such Dividend Period shall be the arithmetic average
of the per annum market discount rates based upon the closing bids during
such Calendar Period for each of the issues of marketable non-interest
bearing U.S. Treasury securities with a maturity of not less than 80 nor
more than 100 days from the date of each such quotation, as quoted daily
for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Company by at least
three recognized U.S. Government securities dealers selected by the
Company. If the Company determines in good faith that for any reason the
Company cannot determine the Treasury Bill Rate for any Dividend Period as
provided above in this paragraph, the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount
rates based upon the closing bids during the related Calendar Period for
each of the issues of marketable interest-bearing U.S. Treasury securities
with a maturity of not less than 80 nor more than 100 days from the date of
each such quotation, as quoted daily for each business day in New York City
(or less frequently if daily quotations shall not be generally available)
to the Company by at least three recognized U.S. Government securities
dealers selected by the Company.
Except as provided below in this paragraph, the "Ten Year
Constant Maturity Rate" for each Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or
the one weekly per annum Ten Year Average Yield, if only one such Yield
shall be published during the relevant Calendar Period as provided below),
as published weekly by the Federal Reserve Board or its successor agency
during the Calendar Period immediately prior to the ten calendar days
immediately preceding the Dividend Payment Date prior to the Dividend
Period for which the dividend rate on the Adjustable Rate Preferred Stock,
Series D is being determined. If the Federal Reserve Board or its
successor agency does not publish such a weekly per annum Ten Year Average
Yield during such Calendar Period, then the Ten Year Constant Maturity Rate
for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one weekly per
annum Ten Year Average Yield, if only one such Yield shall be published
during such Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Company. If a per annum Ten Year Average Yield
shall not be published by the Federal Reserve Board or its successor agency
or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or the one
weekly average yield to maturity, if only one such yield shall be
published during such Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special
Securities (as defined below)) then having maturities of not less than
eight nor more than twelve years, as published during such Calendar Period
by the Federal Reserve Board or its successor agency or, if the Federal
Reserve Board or its successor agency shall not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If the Company determines in good faith that for
any reason the Company cannot determine the Ten Year Constant Maturity Rate
for any Dividend Period as provided above in this paragraph, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the per annum average yields to maturity based upon
the closing bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not less than
eight nor more than twelve years from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the Company by at
least three recognized U.S. Government securities dealers selected by the
Company.
Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields
(or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period), as published
weekly by the Federal Reserve Board or its successor agency during the
Calendar Period immediately prior to the ten calendar days immediately
preceding the Dividend Payment Date prior to the Dividend Period for which
the dividend rate on the Adjustable Rate Preferred Stock, Series D is being
determined. If the Federal Reserve Board or its successor agency does not
publish such a weekly per annum Twenty Year Average Yield during such
Calendar Period, then the Twenty Year Constant Maturity Rate for such
Dividend Period shall be the arithmetic average of the two most recent
weekly per annum Twenty Year Average Yields (or the one weekly per annum
Twenty Year Average Yield, if only one such Yield shall be published during
such Calendar Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. If a per annum Twenty Year Average Yield shall
not be published by the Federal Reserve Board or its successor agency or by
any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Twenty Year Constant Maturity Rate
for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield shall be published during
such Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities)
then having maturities of not less than eighteen nor more than twenty-two
years, as published during such Calendar Period by the Federal Reserve
Board or its successor agency or, if the Federal Reserve Board or its
successor agency shall not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Company. If
the Company determines in good faith that for any reason the Company cannot
determine the Twenty Year Constant Maturity Rate for any Dividend Period as
provided above in this paragraph, then the Twenty Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eighteen nor more than twenty-two
years from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Company by at least three recognized
U.S. Government securities dealers selected by the Company.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Twenty Year Constant Maturity Rate shall each be rounded to the nearest
five one-hundredths of a percentage point.
The "Initial Dividend Payment Period" shall be that period
beginning on April 19, 1983 (the date of issuance) and continuing through
and including June 30, 1983. The initial dividend payment date shall be
July 1, 1983.
A "Dividend Period" shall mean the three month period beginning
April 1, July 1, October 1, and January 1 in each year. A "Dividend
Payment Date" shall mean the first day of April, July, October, and January
in each year, commencing October 1, 1983.
The amount of dividends per share payable for each Dividend
Period shall be computed by dividing the dividend rate for such Dividend
Period by four and applying such rate against the par value per share of
the Adjustable Rate Preferred Stock, Series D. The amount of dividends
payable for the Initial Dividend Period or any period shorter than a full
quarterly Dividend Period shall be computed on the basis of 30-day months,
a 360-day year and the actual number of days elapsed in such period.
The dividend rate with respect to each Dividend Period will be
calculated as promptly as practicable by the Company according to the
appropriate method described herein. The mathematical accuracy of each
such calculation will be confirmed in writing by independent accountants of
recognized standing. The Company will cause each dividend rate to be
published in a newspaper of general circulation in New York City prior to
the commencement of the new Dividend Period to which it applies and will
cause notice of such dividend rate to be enclosed with the dividend payment
checks next mailed to the holders of the Adjustable Rate Preferred Stock,
Series D.
As used herein, the term "Calendar Period" means a period of
fourteen calendar days; the term "Special Securities" means securities
which can, at the option of the holder, be surrendered at face value in
payment of any Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount; the term "Ten Year Average Yield"
means the average yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to constant maturities of
ten years); and the term "Twenty Year Average Yield" means the average
yield to maturity for actively traded marketable U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of twenty years).
(b)The redemption prices of the Adjustable Rate Preferred Stock,
Series D, shall be $112.00 per share if redeemed on or before April 1,
1988, $103.00 per share if redeemed after April 1, 1988 but on or before
April 1, 1993, or $100.00 per share if redeemed after April 1, 1993. In
each case the redemption price will also include accrued dividends to the
date of redemption. None of the Adjustable Rate Preferred Stock, Series D
shall be redeemed prior to April 1, 1988 if such redemption is for the
purpose of or in anticipation of refunding the Adjustable Rate Preferred
Stock, Series D through the use, directly or indirectly, of borrowed funds
or of the proceeds of the issue by the Company of shares of any stock
ranking prior to or on a parity with the Adjustable Rate Preferred Stock,
Series D as to dividends or assets, if such borrowed funds or such shares
have an effective interest cost or effective dividend cost (computed in
accordance with generally accepted financial principles), as the case may
be, of less than 12.36 % per annum per share.
(c) As and for a sinking fund for the Adjustable Rate
Preferred Stock, Series D, commencing on April 1, 1988 and on or before
each April 1 in each year thereafter so long as any shares of the
Adjustable Rate Preferred Stock, Series D remain outstanding, the Company
shall, to the extent of any funds of the Company legally available therefor
and except as otherwise restricted by the Company's Statement of Preferred
Stock Provisions, redeem 17,500 shares of Adjustable Rate Preferred Stock,
Series D (or such lesser number of such shares as remain outstanding) at
$100 per share plus accrued dividends to the date of redemption; provided,
however, that if in any year the Company does not redeem the full number of
shares of Adjustable Rate Preferred Stock, Series D required to be redeemed
pursuant to this sinking fund, the deficiency shall be made good on the
next April 1 on which the Company has funds legally available for, and is
otherwise permitted to effect, the redemption of shares of Adjustable Rate
Preferred Stock, Series D, pursuant to this sinking fund. The number of
shares of Adjustable Rate Preferred Stock, Series D, redeemed on any April
1 shall be reduced by the number of such shares purchased and cancelled by
the Company during the preceding twelve-month period or redeemed during
such period pursuant to subsection (b) hereof. Any shares so redeemed or
purchased or cancelled may be given the status of authorized but unissued
shares of Preferred Stock, but none of such shares shall be reissued as
shares of Adjustable Rate Preferred Stock, Series D. The Company shall
have the option, which shall be noncumulative, to redeem on April 1, 1988
and on each April 1 thereafter up to an additional 17,500 shares of
Adjustable Rate Preferred Stock, Series D, at the sinking fund redemption
price. No such optional sinking fund shall operate to reduce the number of
shares of the Adjustable Rate Preferred Stock, Series D, required to be
redeemed pursuant to the mandatory sinking fund provisions hereinabove set
forth. In the event that the Company shall at any time fail to make a full
mandatory sinking fund payment on any sinking fund payment date, the
Company shall not pay any dividends or make any other distributions in
respect of outstanding shares of any junior stock (as that term is defined
in Subsection A of Section of Article XVI of the by-laws of the Company) of
the Company, other than dividends or distributions in shares of junior
stock, or purchase or otherwise acquire for value any outstanding shares of
junior stock, until all such payments have been made.
5. 7.60% Class A Preferred Stock, 1987 Series
There shall be a series of Preferred Stock designated "7.60% Class A
Preferred Stock, 1987 Series," and consisting of 1,200,000 shares with an
aggregate par value of $30,000,000 and a par value per share of $25. The
dividend rate and redemption prices as to said 7.60% Class A Preferred
Stock, 1987 Series, shall be as follows:
(a) Dividends on said 7.60% Class A Preferred Stock, 1987 Series,
shall be at the rate of 7.60% per share per annum, and no more, and shall
be cumulative from the date of issuance. Said dividends, when declared,
shall be payable on the first days of February, May, August and November in
each year, commencing May 1, 1987.
(b) For each of the twelve month periods commencing February 1,
1987, the redemption prices of said 7.60% Class A Preferred Stock, 1987
Series, shall be the amount per share set forth below:
Twelve Twelve
Months Redemption Months Redemption
Beginning Price Beginning Price
February 1 Per Share February 1 Per Share
1987 $26.90 2000 $25.26
1988 26.90 2001 25.13
1989 26.90 2002 25.00
1990 26.90 2003 25.00
1991 26.90 2004 25.00
1992 26.27 2005 25.00
1993 26.14 2006 25.00
1994 26.02 2007 25.00
1995 25.89 2008 25.00
1996 25.76 2009 25.00
1997 25.64 2010 25.00
1998 25.51 2011 25.00
1999 25.38
plus in all cases that portion of the quarterly dividend accrued thereon
to the redemption date and all unpaid dividends thereon, if any; provided,
however, that none of the 7.60% Class A Preferred Stock, 1987 Series, shall
be redeemed prior to February 1, 1992, if such redemption is for the
purpose of or in anticipation of refunding such 7.60% Class A Preferred
Stock, 1987 Series, through the use, directly or indirectly, of funds
borrowed by the Company or of the proceeds of the issue by the Company of
shares of any stock ranking prior to or on a parity with the 7.60% Class A
Preferred Stock, 1987 Series, as to dividends or assets, if such borrowed
funds or such shares have an effective interest cost or effective dividend
cost to the Company (computed in accordance with generally accepted
financial principles), as the case may be, of less than 7.69% per annum.
(c) As and for a sinking fund for said 7.60% Class A Preferred
Stock, 1987 Series, commencing on February 1, 1992, and on each February
1 in each year thereafter so long as any shares of the 7.60% Class A
Preferred Stock, 1987 Series, remain outstanding, the Company shall, to the
extent of any funds of the Company legally available therefor and except as
otherwise restricted by the Company's Statement of Preferred Stock
Provisions, redeem 60,000 shares of 7.60% Class A Preferred Stock, 1987
Series (or such lesser number of such shares as remain outstanding) at $25
per share plus accrued dividends to the date of redemption; provided,
however, that if in any year the Company does not redeem the full number of
shares of 7.60% Class A Preferred Stock, 1987 Series, required to be
redeemed pursuant to this sinking fund, the deficiency shall be made good
on the next succeeding February 1 on which the Company has funds legally
available for, and is otherwise permitted to effect, the redemption of
shares of 7.60% Class A Preferred Stock, 1987 Series, pursuant to this
sinking fund. At the option of the Company, the number of shares of 7.60%
Class A Preferred Stock, 1987 Series, redeemed on any February 1 may be
reduced by the number of such shares purchased and canceled by the Company
during the preceding twelve-month period or redeemed during such period
pursuant to subsection (b) hereof. Any shares so redeemed or purchased and
canceled may be given the status of authorized but unissued shares of
Senior Stock, but none of such shares shall be reissued as shares of 7.60%
Class A Preferred Stock, 1987 Series. The Company shall have the option,
which shall be noncumulative, to redeem on February 1, 1992 and on each
February 1 thereafter up to an additional 60,000 shares of 7.60% Class A
Preferred Stock, 1987 Series, at the sinking fund redemption price. No
such optional sinking fund shall operate to reduce the number of shares of
the 7.60% Class A Preferred Stock, 1987 Series, required to be redeemed
pursuant to the mandatory sinking fund provisions hereinabove set forth.
In the event that the Company shall at any time fail to make a full
mandatory sinking fund payment on any sinking fund payment date, the
Company shall not pay any dividends or make any other distributions in
respect of outstanding shares of any junior stock (as that term is defined
in Subsection 2D of Section 2 of Article XVI of the by-laws of the Company)
of the Company, other than dividends or distributions in shares of junior
stock, or purchase or otherwise acquire for value any outstanding shares of
junior stock, until all such payments have been made.
6. Dutch Auction Rate Transferable Securities Class A Preferred
Stock, 1988 Series
There shall be a series of Class A Preferred Stock designated "Dutch
Auction Rate Transferable Securities Class A Preferred Stock, 1988
Series" (the "1988 DARTS") consisting of 2,140,000 shares with an
aggregate par value of $53,500,000 and a par value per share of $25. The
provisions governing the issue and sale of the 1988 DARTS in Units,
certification, dividend rights, redemption, reacquisition, auction
procedures, and other preferences, qualifications and special or relative
rights or privileges with respect to the 1988 DARTS shall be as follows:
(1) Units
The 1988 DARTS shall be issued and sold by the Company only in units
of 4,000 shares per unit ("Units"). No partial Units shall be issued and
sold by the Company, and no fractional shares of the 1988 DARTS shall be
issued and sold, no transfer of the 1988 DARTS in less than whole Units
shall be made, nor shall any transfer in less than whole Units be
registered on the transfer books of the Company or be effective for any
purpose.
(2) Certification
Except as otherwise provided by law, all outstanding DARTS shall be
represented by a certificate or certificates registered in the name of a
nominee of the Securities Depository (as defined in Section (6)(a)(xxi)
below), and no person acquiring Units shall be entitled to receive a
certificate representing the 1988 DARTS. The nominee of the Securities
Depository shall be the sole holder of record of the 1988 DARTS. Each
purchaser of Units will receive dividends, distributions and notices
according to the procedures of the Securities Depository and, if such
purchaser is not a member of the Securities Depository, of such purchaser's
Agent Member (as defined in Section (6)(a)(ii) below).
(3) Dividend Rights
(a) Dividends on the 1988 DARTS shall be paid, when, as and if
declared by the Board of Directors of the Company out of funds legally
available therefor, at the rate per annum determined as set forth below in
subsection (c) of this Section (3) and no more (the "Applicable Rate"),
payable on the respective dates set forth below.
(b) Dividends on the 1988 DARTS shall accrue from the date of
original issuance and shall be payable commencing on May 3, 1988, and on
each succeeding seventh Tuesday thereafter, except that if any of such
Tuesday, the Monday preceding such Tuesday, or the Wednesday following such
Tuesday is not a Business Day (as defined below), then (i) the dividend
payment date shall be the first Business Day after such Tuesday that is
immediately followed by a Business Day and is preceded by a Business Day
that is the preceding Monday or a day after such Monday, or (ii) if the
Securities Depository shall make available to its participants and members,
in funds immediately available in New York City on dividend payment dates,
the amount due as dividends on such dividend payment dates (and the
Securities Depository shall have so advised the Trust Company (as defined
in Section (6)(a)(xxx) below)), then the dividend payment date shall be the
first Business Day on or after such Tuesday that is preceded by a Business
Day that is the preceding Monday or a day after such Monday. "Business
Day" means a day on which the New York Stock Exchange is open for trading
and which is not a day on which banks in New York City are authorized by
law to close. Each dividend payment date determined as provided above is
referred to herein as the "Dividend Payment Date." Although any particular
Dividend Payment Date may not occur on the originally scheduled Tuesday
because of the exceptions discussed above, the next succeeding Dividend
Payment Date shall be, subject to such exceptions, the seventh Tuesday
following the originally designated Tuesday Dividend Payment Date for the
prior Dividend Period. As used herein, Dividend Period means the period
commencing on a Dividend Payment Date for DARTS and ending on the day next
preceding the next Dividend Payment Date. Notwithstanding the foregoing,
in the event of a change in law altering the minimum holding period
(currently found in Section 246(c) of the Internal Revenue Code of 1986, as
amended (the "Code")) required for taxpayers to be entitled to the
dividends received deduction on preferred stock held by non-affiliated
corporations (currently found in Section 243(a) of the Code), the Company
shall adjust the period of time between Dividend Payment Dates so as to
adjust uniformly the number of days (such number of days without giving
effect to the exceptions referred to above being hereinafter referred to as
"Dividend Period Days") in Dividend Periods commencing after the date of
such change in law to equal or exceed the then current minimum holding
period; provided that the number of Dividend Period Days shall not exceed
by more than nine days the length of such then current minimum holding
period and shall be evenly divisible by seven, and the maximum number of
Dividend Period Days in no event shall exceed 98 days. Upon any such
change in the number of Dividend Period Days as a result of a change in
law, the Company shall give notice of such change to all Existing Holders
of Units.
(c) The dividend rate on shares of the 1988 DARTS during the period
from and after the date of original issuance to the Initial Dividend
Payment Date (the "Initial Dividend Period") shall be 6.375 percent per
annum. Commencing on the Initial Dividend Payment Date, the dividend rate
on shares of the 1988 DARTS for each subsequent Dividend Period shall be at
a rate per annum that results from the implementation of the Auction
procedures set forth in Section (6) below.
The amount of dividends per Unit for the 1988 DARTS payable for each
Dividend Period shall be computed by multiplying the dividend rate for such
series for each Dividend Period determined in accordance with subsection
(c) above by a fraction the numerator of which shall be the number of days
in such Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) such Unit was outstanding and the
denominator of which shall be 360, and multiplying the amount so obtained
by $100,000 per Unit.
(d) Prior to each Dividend Payment Date, the Company shall pay to the
Trust Company sufficient funds for the payment of declared dividends.
(e) For the purpose of determining whether and when holders of the
Senior Stock are entitled to the rights to elect certain directors of the
Company, described under Article XVI, Section 5(c) of these By-laws,
dividends on the DARTS shall be deemed to be in arrears "in an amount equal
to or exceeding four quarterly dividend payments," if, at the time
dividends are in arrears for four quarterly dividend payments for Senior
Stock having quarterly dividend payments, dividends on the 1988 DARTS are
in arrears for each Dividend Period beginning on or after the first day of
the first of the four quarterly dividend periods as to which dividends on
the Senior Stock having quarterly dividends are in arrears.
(4) Redemption Provisions
(a) At the option of the Company, the Units may be redeemed out of
funds legally available therefor in whole on any Dividend Payment Date at a
redemption price of $25 per share of the 1988 DARTS ($100,000 per Unit)
plus accrued and unpaid dividends (whether or not earned or declared) to
the redemption date. Only whole Units may be redeemed. See Section (5)
below for restrictions on the reissue of Units after redemption.
(b) In accordance with Article XVI, Section 3 of these By-laws,
notice of redemption shall be mailed to each record holder of Units and to
the Trust Company not less than 30 days prior to the date fixed for
redemption thereof. Each notice of redemption shall include a statement
setting forth: (i) the redemption date, (ii) the number of Units to be
redeemed, (iii) the redemption price, (iv) the place or places where Units
are to be surrendered for payment of the redemption price, and (v) that
dividends of the Units to be redeemed will cease to accrue on such
redemption date. No defect in the notice of redemption or in the mailing
thereof shall affect the validity of the redemption proceedings, except as
required by applicable law.
(c) If less than all of the outstanding Units are to be redeemed,
the number of Units to be redeemed shall be determined by the Company and
communicated to the Trust Company. In accordance with Article XVI, Section
3A of these By-laws, the Trust Company shall give notice to the Securities
Depository and the Securities Depository will determine by lot under its
usual operating procedures the number of Units, if any, to be redeemed from
the account of the Agent Member of each Existing Holder. An Agent Member
may determine to redeem Units from some Existing Holders without redeeming
Units from the accounts of other Existing Holders.
(5) Reacquisition
Except in an Auction (as defined in Section (6)(a)(iii) below), the
Company shall have the right, in accordance with Article XVI, Section 3E of
these By-laws, and where permitted by applicable law, to purchase or
otherwise acquire Units upon the best terms reasonably obtainable, but not
exceeding the then current redemption price of such Units, except that no
such purchase shall be made if the Company shall be in arrears in respect
to payment of dividends on any shares of Senior Stock outstanding or if
there shall exist an event of default as defined in Article XVI, Section 5
of these By-laws. Notwithstanding the provisions of Article XVI, Section
3D of these By-laws, Units that have been redeemed, purchased or otherwise
acquired by the Company shall not be reissued as 1988 DARTS and shall
either be restored to authorized but unissued shares of the Company's Class
A Preferred Stock or canceled at the Company's option.
(6) Auction Procedures
(a) Certain Definitions. As used in this Section 6 of these
Provisions with Respect to the series of Senior Stock, the following terms
shall have the following meanings, unless the context otherwise requires:
(i) "Affiliate" shall mean any Person known to the Trust
Company to be controlled by, in control of, or under common control with
the Company.
(ii) "Agent Member" shall mean the member of the Securities
Depository that will act on behalf of a Bidder and is identified as such in
such Bidder's Purchaser's Letter.
(iii) "Auction" shall mean the periodic operation of the
procedures set forth herein.
(iv) "Auction Date" shall mean the Business Day next
preceding a Dividend Payment Date.
(v) "Available Units" shall have the meaning specified in
paragraph (d)(i)(A) below.
(vi) "Bid" shall have the meaning specified in paragraph
(b)(i) below.
(vii) "Bidder" shall have the meaning specified in paragraph
(b)(i) below.
(viii) "Board of Directors" shall mean the Board of Directors of
the Company.
(ix) "Broker-Dealer" shall mean any broker-dealer, or other
entity permitted by law to perform the functions required of a
Broker-Dealer herein, that has been selected by the Company and has entered
into a Broker-Dealer Agreement with the Trust Company that remains
effective.
(x) "Broker-Dealer Agreement" shall mean an agreement between
the Trust Company and a Broker-Dealer pursuant to which such Broker-Dealer
agrees to follow the procedures specified herein.
(xi) "DARTS" or "1988 DARTS" shall mean the 2,140,000 shares of
Dutch Auction Rate Transferable Securities Class A Preferred Stock, 1988
Series, $25 Par Value, of the Company.
(xii) "Existing Holder," when used with respect to Units, shall
mean a Person who has signed a Purchaser's Letter and is listed as the
beneficial owner of such Units in the records of the Trust Company.
(xiii) "Hold Order" shall have the meaning specified in
paragraph (b)(i) below.
(xiv) "Maximum Applicable Rate," on any Auction Date, shall
mean the percentage of the 60-day "AA" Composite Commercial Paper Rate (as
defined below) in effect on such Auction Date, determined as set forth
below based on the prevailing rating of the DARTS in effect at the close of
business on the day preceding such Auction Date:
Prevailing Rating Percentage
AA/aa or Above........................... 110%
A/a...................................... 120%
BBB/baa.................................. 130%
BB/ba.................................... 175%
Below BB/ba.............................. 200%
For purposes of this definition, the "prevailing rating" of
the DARTS shall be (i) AA/aa or Above, if the DARTS have a rating of AA- or
better by Standard & Poor's Corporation or its successor ("S&P") and aa3 or
better by Moody's Investors Service, Inc. or its successor ("Moody's"), or
the equivalent of both of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected as provided below,
(ii) if not AA/aa or Above, then A/a, if the DARTS have a rating of A- or
better by S&P and a3 or better by Moody's or the equivalent of both of such
ratings by such agencies or a substitute rating agency or substitute rating
agencies selected as provided below, (iii) if not AA/aa or Above or A/a,
then BBB/Baa, if the DARTS have a rating of BBB- or better by S&P and baa3
or better by Moody's or the equivalent of both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, and (iv) if not AA/aa or Above, A/a or BBB/baa,
then BB/ba, if the DARTS have a rating of BB- or better by S&P and Ba3 or
better by Moody's, or the equivalent of both of such ratings by such
agencies or a substitute rating agency or substitute rating agencies
selected as provided below, and (v) if not AA/aa or Above, A/a, BBB/baa or
BB/ba, then Below BB/ba. The Company shall take all reasonable action
necessary to enable S&P and Moody's to provide a rating for the DARTS. If
either S&P or Moody's shall not make such a rating available, or neither
S&P nor Moody's shall make such a rating available, Salomon Brothers Inc
and Morgan Stanley & Co. Incorporated, or their successors shall select a
nationally recognized securities rating agency or two nationally recognized
securities rating agencies to act as substitute rating agency or substitute
rating agencies, as the case may be.
(xv) "Minimum Applicable Rate," on any Auction Date, shall mean
59% of the 60-day "AA" Composite Commercial Paper Rate in effect on such
Auction Date.
(xvi) "Order" shall have the meaning specified in
paragraph(b)(i) below.
(xvii) "Outstanding" shall mean, as of any date, the DARTS
theretofore issued by the Company except, without duplication, (A) any
DARTS theretofore canceled or delivered to the Trust Company for
cancellation, or redeemed by the Company, or as to which a notice of
redemption shall have been given by the Company, (B) any DARTS as to which
the Company or any Affiliate thereof shall be an Existing Holder and (C)
any DARTS represented by any certificate in lieu of which a new
certificate has been executed and delivered by the Company.
(xviii) "Person" shall mean and include an individual, a
partnership, a corporation, a trust, an unincorporated association, a joint
venture or other entity or a government or any agency or political
subdivision thereof.
(xix) "Potential Holder" shall mean any Person, including any
Existing Holder, (A) who shall have executed and delivered or caused to be
delivered a Purchaser's Letter to the Trust Company and (B) who may be
interested in acquiring Units (or, in the case of an Existing Holder,
additional Units).
(xx) "Purchaser's Letter" shall mean a letter addressed to the
Company, the Trust Company, Broker-Dealer and other persons in which a
Person agrees, among other things, to offer to purchase, purchase, offer to
sell and/or sell Units as set forth herein.
(xxi) "Securities Depository" shall mean The Depository Trust
Company and its successors and assigns or any other securities depository
selected by the Company which agrees to follow the procedures required to
be followed by such securities depository in connection with the DARTS.
(xxii) "Sell Order" shall have the meaning specified in paragraph
(b)(i) below.
(xxiii) "60-day 'AA' Composite Commercial Paper Rate," on any
date, means (i) the interest equivalent of the 60-day rate on commercial
paper placed on behalf of issuers whose corporate bonds are rated "AA" by
S&P or the equivalent of such rating by S&P or another rating agency, as
such 60-day rate is made available on a discount basis or otherwise by the
Federal Reserve Bank of New York for the Business Day immediately preceding
such date, or (ii) in the event that the Federal Reserve Bank of New York
does not make available such a rate, then the interest equivalent of the
60-day rate on commercial paper placed on behalf of such issuers, as quoted
on a discount basis or otherwise by Morgan Stanley & Co. Incorporated or,
in lieu thereof, any affiliates or successor thereof (the "Commercial
Paper Dealer"), to the Trust Company for the close of business on the
Business Day immediately preceding such date. If the Commercial Paper
Dealer does not quote a rate required to determine the 60-day "AA"
Composite Commercial Rate, the 60-day "AA" Composite Commercial Paper Rate
shall be determined on the basis of the quotation or quotations furnished
by any Substitute Commercial Paper Dealer or Substitute Commercial Paper
Dealers selected by the Company to provide such rate. If the Company,
however, shall adjust the number of Dividend Period Days in the event of a
change in the dividends received deduction minimum holding period contained
in the Internal Revenue Code of 1986, as amended, with the result that (i)
the Dividend Period Days shall be fewer than 70 days, such rate shall be
the interest equivalent of the 60-day rate on such commercial paper, (ii)
the Dividend Period Days shall be 70 or more days but fewer than 85 days,
such rate shall be the arithmetic average of the interest equivalent of the
60-day and 90-day rates on such commercial paper, and (iii) the Dividend
Period Days shall be 85 or more days but 98 or fewer days, such rate shall
be the interest equivalent of the 90-day rate on such commercial paper.
For the purposes of such definition, "interest equivalent" means the
equivalent yield on a 360-day basis of a discount basis security to an
interest-bearing security and "Substitute Commercial Paper Dealer" shall
mean any commercial paper dealer that is a leading dealer in the
commercial paper market, provided that neither such dealer nor any of its
affiliates is a Commercial Paper Dealer.
(xxiv) "Submission Deadline" shall mean 12:30 P.M., New York City
time, on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Trust Company as
specified by the Trust Company from time to time.
(xxv) "Submitted Bid" shall have the meaning specified
inparagraph (d)(i) below.
(xxvi) "Submitted Hold Order" shall have the meaning specified
in paragraph (d)(i) below.
(xxvii) "Submitted Order" shall have the meaning specified in
paragraph (d)(i) below.
(xxviii) "Submitted Sell Order" shall have the meaning specified
in paragraph (d)(i) below.
(xxvix) "Sufficient Clearing Bids" shall have the meaning
specified in paragraph (d)(i) below.
(xxx) "Trust Company" shall mean Bankers Trust Company and its
successor, and assigns or any other bank, trust company or other entity
selected by the Company which agrees to follow the Auction Procedures
described in this Section (6) for the purposes of determining the
Applicable Rate for the DARTS.
(xxxi) "Winning Bid Rate" shall have the meaning specified in
paragraph (d)(i) below.
(b) Orders by Existing Holders and Potential Holders
(i) On or prior to each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer
information as to:
(1) the number of Outstanding Units, if any, held by
such Existing Holder which such Existing Holder desires to continue to hold
without regard to the Applicable Rate for the next succeeding Dividend
Period;
(2) the number of Outstanding Units, if any, held by such
Existing Holder which such Existing Holder desires to continue to hold,
provided that the Applicable Rate for the next succeeding Dividend Period
shall not be less than the rate per annum specified by such Existing
Holder; and/or (3) the number of Outstanding Units, if any, held by
such Existing Holder which such Existing Holder offers to sell without
regard to the Applicable Rate for the next succeeding Dividend Period; and
(B) Each Broker-Dealer, using a list of Potential Holders
that shall be maintained in good faith for the purpose of conducting a
competitive Auction shall contact Potential Holders, including Persons that
are not Existing Holders, on such list to determine the number of
Outstanding Units, if any, which each such Potential Holder offers to
purchase, provided that the Applicable Rate for the next succeeding
Dividend Period shall not be less than the rate per annum specified by such
Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of
information referred to in clause (A) or (B) of this paragraph (b)(i) is
hereinafter referred to as an "Order" and each Existing Holder and each
Potential Holder placing an Order is hereinafter referred to as a "Bidder";
and Order containing the information referred to in clause (A)(1) of this
paragraph (b)(i) is hereinafter referred to as a "Hold Order"; an Order
containing the information referred to in clause (A)(2) or (B) of this
paragraph (b)(i) is hereinafter referred to as a "Bid"; and an Order
containing the information referred to in clause (A)(3) of this paragraph
(b)(i) is hereinafter referred to as a "Sell Order."
(ii) (A) A Bid by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding Units specified in such
Bid if the Applicable Rate determined on such Auction Date shall be less
than the rate specified therein; or
(2) such number or a lesser number of Outstanding
Units to be determined as set forth in paragraph (e)(i)(D) if the
Applicable Rate determined on such Auction Date shall be equal to the rate
specified therein; or
(3) a lesser number of Outstanding Units to be determined
as set forth in paragraph (e)(ii)(C) if such specified rate shall be higher
than Maximum Applicable Rate and Sufficient Clearing Bids do not exist.
(B) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding Units specified in such Sell
Order; or
(2) such number or a lesser number of Outstanding
Units to be determined as set forth in paragraph (e)(ii)(C) if Sufficient
Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(1) the number of Outstanding Units specified in such Bid
if the Applicable Rate determined on such Auction Date shall be higher than
the rate specified therein; or
(2) such number of a lesser number of Outstanding Units to
be determined as set forth in paragraph (e)(i)(E) if the Applicable Rate
determined on such Auction Date shall be equal to the rate specified
therein.
(c) Submission of Orders by Broker-Dealers to Trust Company (i) Each
Broker-Dealer shall submit in writing to the Trust Company prior to the
Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer and specifying with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of Outstanding Units that are subject
of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of Outstanding Units, if any, subject to any
Hold Order placed by such Existing Holder;
(2) the number of Outstanding Units, if any, subject to
any Bid placed by such Existing Holder and the rate specified in such Bid;
and
(3) the number of Outstanding Units, if any, subject to
any Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Trust Company shall round
such rate up to the next highest one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding Units
held by an Existing Holder is not submitted to the Trust Company prior to
the Submission Deadline, the Trust Company shall deem a Hold Order to have
been submitted on behalf of such Existing Holder covering the number of
Outstanding Units held by such Existing Holder and not subject to Orders
submitted to the Trust Company.
(iv) If one or more Orders covering in the aggregate more than the
number of Outstanding Units held by an Existing Holder are submitted to the
Trust Company, such Orders shall be considered valid as follows and in the
following order or priority:
(A) any Hold Order submitted on behalf of such Existing
Holder shall be considered valid up to and including the number of
Outstanding Units held by such Existing Holder; provided that if more than
one Hold Order is submitted on behalf of such Existing Holder and the
number of Units subject to such Hold Orders exceeds the number of
Outstanding Units held by such Existing Holder, the number of Units subject
to such Hold Orders shall be reduced pro rata so that such Hold Orders
shall cover the number of Outstanding Units held by such Existing Holder;
(B) (1) any Bid shall be considered valid up to and including
the excess of the number of Outstanding Units held by such Existing Holder
over the number of Units subject to Hold Orders referred to in paragraph
(c)(iv)(A);
(2) subject to clause (1) above, if more than one Bid
with the same rate is submitted on behalf of such Existing Holder and the
number of Outstanding Units subject to such Bids is greater than such
excess, the number of Outstanding Units subject to such Bids shall be
reduced pro rata so that such Bids shall cover the number of Outstanding
Units equal to such excess; and
(3) subject to clause (1) above, if more than one Bid
with different rates is submitted on behalf of such Existing Holder, such
Bids shall be considered valid in the ascending order of their respective
rates and in any such event the number, if any, of such Outstanding shares
subject to Bids not valid under this clause (B) shall be treated as the
subject of a Bid by a Potential Holder; and (C) any Sell Order shall be
considered valid up to and including the excess of the number of
Outstanding Units held by such Existing Holder over the number of
Outstanding Units subject to Hold Orders referred to in paragraph
(c)(iv)(A) and Bids referred to in paragraph (c)(iv)(B).
(v) If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate and Units
therein specified.
(vi) If any rate specified in any Bid is lower than the Minimum
Applicable Rate for the Dividend Period to which such Bid relates, such Bid
shall be deemed to be a Bid specifying a rate equal to such Minimum
Applicable Rate.
(vii) Orders by Existing Holders and Potential Holders must specify
numbers of Units in whole Units. Any Order that specifies a number of
Units other than in whole shares will be invalid and will not be considered
a Submitted Order for purposes of an Auction.
(d) Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate (i) Not earlier than the Submission Deadline on each
Auction Date, the Trust Company shall assemble all Orders submitted or
deemed submitted to it by the Broker-Dealers (each such Order as submitted
or deemed submitted by a Broker-Dealer being hereinafter referred to
individually as a "Submitted Hold Order" a "Submitted Bid" or a "Submitted
Sell Order," as the case may be, or as a "Submitted Order") and shall
determine:
(A) the excess of the total number of Outstanding Units over
the number of Outstanding Units that are the subject of Submitted Hold
Orders (such excess being hereinafter referred to as the "Available
Units");
(B) from the Submitted Orders, whether:
(1) the number of Outstanding Units that are the
subject of Submitted Bids by Potential Holders specifying one or more rates
equal to or lower than the Maximum Applicable Rate exceeds or is equal to
the sum of:
(2) [a] the number of Outstanding Units that are the
subject of Submitted Bids by Existing Holders specifying one or more
rates higher than the Maximum Applicable Rate, and [b] the number of
Outstanding Units that are subject to Submitted Sell Orders (if such excess
of such equality exists (other than because the number of Outstanding Units
in clauses [a] and [b] above are each zero because all of the Outstanding
Units are the subject of Submitted Hold Orders), such Submitted Bids in
clause (1) above being hereinafter referred to collectively as "Sufficient
Clearing Bids"); and (C) if Sufficient Clearing Bids exist, the lowest
rate specified in the Submitted Bids (the "Winning Bid Rate"), which if:
(1) each Submitted Bid from Existing Holders specifying the
Winning Bid Rate and all other Submitted Bids from Existing Holders
specifying lower rates were rejected, thus entitling such Existing Holders
to continue to hold the Units that are the subject of such Submitted Bids,
and (2) each Submitted Bid from Potential Holders specifying the Winning
Bid Rate and all other Submitted Bids from Potential Holders specifying
lower rates were accepted, thus entitling the Potential Holders to purchase
the Units that are the subject of such Submitted Bids, would result in the
number of shares subject to all Submitted Bids specifying the Winning Bid
Rate or a lower rate being at least equal to the Available Units.
(ii) Promptly after the Trust Company has made the determinations
pursuant to paragraph (d)(i), the Trust Company shall advise the Company
of the Maximum Applicable Rate and the Minimum Applicable Rate and, based
on such determinations, the Applicable Rate for the next succeeding
Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable
Rate for the next succeeding Dividend Period shall be equal to the Winning
Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding Units are the subject of Submitted Hold
Orders), that the Applicable Rate for the next succeeding Dividend Period
shall be equal to the Maximum Applicable Rate; or (C) if all the
Outstanding Units are the subject of Submitted Hold Orders, that the
Applicable Rate for the next succeeding Dividend Period shall be equal to
the Minimum Applicable Rate.
(e) Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares Based on the determinations made pursuant to
paragraph (d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Trust Company shall take such other action as
set forth below:
(i) If Sufficient Clearing Bids have been made, subject to
the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Bids and
Submitted Sell Orders shall be accepted or rejected in the following order
or priority and all other Submitted bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders specifying
any rate that is higher than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the Outstanding Units that are
the subject of such Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted, thus entitling each such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(D) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted,
thus entitling each such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid, unless the
number of Outstanding Units subject to all such Submitted Bids shallbe
greater than the number of Outstanding Units ("remaining shares") equal to
the excess of the Available Units over the number of Outstanding Units
subject to Submitted Bids described in paragraphs (e)(i)(B) and (e)(i)(C),
in which event the Submitted Bids of each such Existing Holder shall be
rejected, and each such Existing Holder shall be required to sell
Outstanding Units, but only in an amount equal to the difference between
(1) the number of Outstanding Units then held by such Existing Holder
subject to such Submitted Bid and (2) the number of Units obtained by
multiplying (x) the number of remaining shares by (y) a fraction the
numerator of which shall be the number of Outstanding Units held by such
Existing Holder subject to such Submitted Bid and the denominator of which
shall be the sum of the number of Outstanding Units subject to such
Submitted Bids made by all such Existing Holders that specified a rate
equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted
but only in an amount equal to the number of Outstanding Units obtained by
multiplying (x) the difference between the Available Units and the number
of Outstanding Units subject to the Submitted Bids described inparagraphs
(e)(i)(B), (e)(i)(C) and (e)(i)(D) by (y) a fraction the numerator of which
shall be the number of Outstanding shares of Units subject to such
Submitted Bid and the denominator of which shall be the sum of the number
of Outstanding Units subject to such Submitted Bids made by all such
Potential Holders that specified rates equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have been made (other than because
all of the Outstanding Units are subject to Submitted Hold Orders), subject
to the provisions of paragraphs (e)(iii) and (e)(iv), Submitted Orders
shall be accepted or rejected as follows in the following order of priority
and all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus entitling such Existing Holder to continue to hold the
Outstanding Units that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder specifying any
rate that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus requiring such Potential Holder to purchase the Outstanding
Units that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Applicable Rate shall be rejected and
the Submitted Sell Orders of each Existing Holder shall be accepted, in
both cases only in an amount equal to the difference between (1) the number
of Outstanding Units then held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (2) the number of Units obtained
by multiplying (x) the difference between the Available Units and the
aggregate number of Outstanding Units subject to Submitted Bids described
in paragraphs (e)(ii)(A) and (e)(ii)(B) by (y) a fraction the numerator of
which shall be the number of Outstanding Units held by such Existing Holder
subject to such Submitted Bid or Submitted Sell Order and the denominator
of which shall be the number of Outstanding Units subject to all such
Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in paragraph (e)(i)
or (e)(ii), any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction
of a Unit on any Auction Date, the Trust Company shall, in such manner as,
in its sole discretion, it shall determine, round up or down the number of
Units to be purchased or sold by any Existing Holder or Potential Holder on
such Auction Date so that the number of Outstanding shares purchased or
sold by each Existing Holder or Potential Holder on such Auction Date shall
be whole Units.
(iv) If, as a result of the procedures described in paragraph
(e)(i), any Potential Holder would be entitled or required to purchase less
than a whole Unit on any Auction Date, the Trust Company shall, in such
manner as, in its sole discretion, it shall determine, allocate Units for
purchase among Potential Holders so that only whole Units are purchased on
such Auction Date by any Potential Holder, even if such allocation results
in one or more of such Potential Holders not purchasing Units on such
Auction Date.
(v) Based on the results of each Auction, the Trust Company shall
determine the aggregate number of Outstanding Units to be purchased and the
aggregate number of Outstanding Units to be sold by Potential Holders and
Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders, and, with respect to each Broker-Dealer, to the extent that such
aggregate number of Outstanding shares to be purchased and such aggregate
number of Outstanding shares to be sold differ, determine to which other
Broker-Dealer or Broker-Dealers acting for one or more purchasers such
Broker-Dealer
shall deliver, or from which other Broker-Dealer or Broker-Dealers acting
for one or more sellers such Broker-Dealer shall receive, as the case may
be, Outstanding Units.
(f) Miscellaneous
The Board of Directors may interpret the provisions of these Auction
Procedures to resolve any inconsistency or ambiguity, and may remedy any
formal defect or make any other change or modification which does not
adversely affect the rights of Existing Holders of Units. An Existing
Holder (A) may sell, transfer or otherwise dispose of Units only pursuant
to a Bid or Sell Order in accordance with the procedures described in this
paragraph or to or through a Broker-Dealer or to a Person that has
delivered a signed copy of a Purchaser's Letter to the Trust Company,
provided that in the case of all transfers other than pursuant to Auctions
such Existing Holder, its Broker-Dealer or its Agent Member advises the
Trust Company of such transfer and (B) shall have the ownership of the
Units held by it maintained in book entry form by the Securities Depository
in the account of its Agent Member, which in turn will maintain records of
such Existing Holder's beneficial ownership. Neither the Company nor any
Affiliate shall submit an Order, either directly or indirectly, in any
Auction. Except as otherwise provided by law, all of the Outstanding Units
shall be represented by a certificate registered in the name of the nominee
of the Securities Depository and no Person acquiring Units shall be
entitled to receive a certificate representing such shares.
(g) Headings of Subdivisions
The headings of the various subdivisions of these Auction Procedures are
for convenience of reference only and shall not affect the interpretation
of any of the provisions hereof.
ARTICLE XVIII
AMENDMENTS
Except as otherwise provided in Article XVI hereof, these By-Laws may
be altered, amended or repealed at any meeting of the stockholders called
for the purpose by vote of a majority of stock present and voting thereon
or at any meeting of the Board of Directors called for the purpose by vote
of a majority of the Board of Directors.