THE COMMONWEALTH OF MASSACHUSETTS
FEDERAL ID
MICHAEL JOSEPH CONNOLLY
Secretary of State NO. 04-1961130
ONE ASHBURTON PLACE, BOSTON, MASS, 02108
RESTATED ARTICLES OF ORGANIZATION
General Laws, Chapter 164, Section 8C
This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
restated articles of organization. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section 114. Make check payable to
The Commonwealth of Massachusetts.
We, Hugh C. MacKenzie, President
Mark A. Joyse, Assistant Clerk of
WESTERN MASSACHUSETTS ELECTRIC COMPANY
located at, 174 Brush Hill Avenue, West Springfield, Massachusetts 01089 do
hereby certify that the following restatement of the articles of organization of
the corporation was duly adopted by unanimous consent on , 1995, by vote of
1,072,471 shares of common out of 1,072,471 shares outstanding,
(Class of Stock)
being all of each class of stock outstanding and entitled to vote thereon
1. The name by which the corporation shall be known is:
WESTERN MASSACHUSETTS ELECTRIC COMPANY
2. The purpose for which the corporation is formed are as follows:
See attached RIDER 2A, pages 1-2
3. The total number of shares and the par value, if any, of each class of
stock which the corporate is authorized to issue is as follows:
WITHOUT PAR VALUE WITH PAR VALUE
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
7.72% Preferred Stock, 200,000 $100
Series B
Preferred 7.60% Class A, 1,200,000 $ 25
Preferred Stock, 1987 Series
Dutch Auction Rate Transferable
Securities Class A, 2,140,000 $ 25
Preferred Stock, 1988 Series
Common 1,072,471 $ 25
*4. If more than one class is authorized, a description of each of the
difference classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established:
See attached RIDER 4A, pages 1-28
*5. The restrictions, if any, imposed by the articles or organization upon the
transfer of shares of stock of any class are as follows: None
*6. Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or
for limiting, defining, or regulating the powers of the corporation, or of
its directors or stockholders, or of any class of stockholders:
See attached RIDER 6A, page 1
*If there are no such provisions, state "None".
WESTERN MASSACHUSETTS ELECTRIC COMPANY
RESTATED ARTILCES OF ORGANIZATION RIDER 2A
To make, purchase, transmit, distribute, and sell electricity. To
generate, by means of water power, steam power, atomic energy, or other means,
electricity within or without the Commonwealth of Massachusetts; to purchase
from others electricity generated within or without the said Commonwealth; and
to sell or distribute and sell electricity within or without the said
Commonwealth. To supply electricity in bulk within or without the said
Commonwealth. To transmit, within or without the said Commonwealth, electricity
for itself and for others. To manufacture, by such means as may be necessary or
desirable for the purpose, steam, and to sell or distribute and sell steam
within or without the said Commonwealth. To construct, operate, and maintain,
within or without the said Commonwealth, works and structures, including,
without limitation, dams, reservoirs, canals, power houses, water conduits,
cables, transmission lines, substations and other facilities used or useful for
the purpose of generating and transmitting electricity and for incidental
beneficial uses, including recreational and water supply purposes. To hold,
purchase, convey, sell, mortgage or lease, within or without the said
Commonwealth, real or personal property, including without limiting the
generality of the foregoing the right to hold property as a tenant-in-common
with others. To purchase, hold, display, lease, sell or otherwise obtain
receipts from, and to install and service within the Commonwealth, merchandise,
equipment, utensils, and chattels of any description incidental or auxiliary to
the use of electricity distributed to its consumers, or necessary or expedient
in the protection or management of its property used in its business. To carry
on and conduct from time to time all activities to which its utility properties
may be usefully applied, subject to all requisite regulatory approvals. To loan
its funds or invest its funds in the stocks, bonds, certificates of
participation, or other securities of any domestic or foreign corporation,
association, or trust, subject to all requisite regulatory approvals. To
guarantee the performance of any contract or obligation of domestic or foreign
corporations, associations, or trusts, any obligation of which or any interest
in which is held by this corporation or in the affairs of which this corporation
has an interest, subject to all requisite regulatory approvals. To indemnify,
to the extent permitted by law, its officers and directors, past or present,
against all liability and expenses incurred in connection with the defense or
disposition of any action, suit or proceeding, actual or threatened, whether
civil or criminal, in which they may be involved by reason of being or having
been directors or officers. To do every act and thing necessary, convenient, or
proper for the accomplishment of any of the purposes herein enumerated, or
incidental to any of the powers herein stated. It is expressly intended that no
specific enumeration in the foregoing clauses shall restrict in any way any
general language, that none of the purposes set forth in any of the above
clauses shall be limited or restricted in any way by the terms of any other
clause, that each purpose may be pursued independently of any other purpose from
time to time and whenever deemed desirable, and that the corporation shall have
and possess all the rights, privileges, and powers now or hereafter conferred by
the laws of the Commonwealth of Massachusetts upon electric companies organized
under such laws.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
RESTATED ARTILCES OF ORGANIZATION RIDER 4A
CAPITAL STOCK PROVISIONS
PART ONE
AMOUNT AND CLASSES OF AUTHORIZED STOCK
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 number of shares of Common Stock is 1,072,471 shares of the par value
of $25 per share. The authorized number of shares of Preferred Stock is 200,000
shares of the par value of $100 per share. The authorized number of shares of
Class A Preferred Stock is 3,340,000 shares of the par value of $25 per share.
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 Articles of Organization or the
Company's By-laws 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 variations in the relative rights and
preferences as between the different series of either class of Senior Stock, the
series designation, dividend rate, redemption prices, and any other terms or
limitations shall be determined by the Board of Directors to the extent not
fixed and determined by law or by these Articles of Organization or the
Company's By-laws.
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 these Articles of Organization or in the
Company's By-laws or 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 of
Organization or the Company's By-laws 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 of Organization or the Company's By-laws 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 of these Articles of Organization 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.
PART TWO
PROVISIONS WITH RESPECT TO THE SERIES OF PREFERRED STOCK
1. 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.
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.
2. 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 this Article and 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.
3. 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 Section 5C of this Article and the Company's 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 Section 3 of this Article and the Company's
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 section 3A of this
Article and the Company's 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 Section 3E of this Article and
the Company's 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 Section 5 of this Article
and the Company's By-laws. Notwithstanding the provisions of this Article and
the Company's 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 these provisions establishing and designating the Dutch
Auction Rate Transferable Securities Class A Preferred Stock, 1988 Series, 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
in paragraph (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 shall be
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 Units to be purchased and such aggregate
number of Outstanding Units 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 Units.
(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.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
RESTATED ARTICLES OF ORGANIZATION RIDER 6A
Each meeting of the stockholders, annual or special, shall be held at such
hour of the day, and at such place within the United States, or at such other
place as shall then be permitted by law, as may be designated by the Board of
Directors, by the Chairman of the Board or by the President.
*We further certify that the foregoing restated articles of organization
effect no amendments to the articles of organization of the corporation as
heretofore amended, except amendments to the following articles: 3, 4 and 6
(*If there are no such amendments, state "None".)
Briefly describe amendments in space below:
Article 3 - Article 3 has been amended to eliminate the provisions with
respect to the 9.60% Preferred Stock, Series A, the 16% Preferred Stock, Series
C and the Adjustable Rate Preferred Stock, Series D. Each of these series has
been retired or redeemed in its entirety.
Article 4 - Article 4 has been amended to include the amount and classes of
authorized stock and to delete references to specific sections of the Company's
By-laws in favor of general references. These changes are ministerial only and
do not affect any of the rights or obligations of the holders of shares of any
class or series of the capital stock of the company. It also has been amended
to eliminate the provisions with respect to the 9.60% Preferred Stock, Series A,
the 16% Preferred Stock, Series C and the Adjustable Rate Preferred Stock,
Series D. Each of these series has been retired or redeemed in its entirety.
Article 6 - has been amended regarding the time and place for meetings of
stockholders.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this 17th day of February in the year 1995
\s\ Hugh C. MacKenzie President
\s\ Mark A Joyse Assistant Clerk
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(General Laws, Chapter 164, Section 8c)
I hereby approved the within restated articles of organization and, the
filing fee in the amount of $ 500.00 having been paid, said articles are deemed
to be filed with me this 23rd day of February, 1995.
/s/William Francis Galvin
Secretary of State
TO BE FILED IN BY CORPORATION
PHOTO COPY OF RESTATED ARTICLES OF ORGANIZATION TO BE SENT
TO: Robert L. Dewees, Jr.
Peabody & Brown
101 Federal Street
Boston, MA 02110-1832