EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
UNION CARBIDE CORPORATION
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
The undersigned William H. Joyce and John Macdonald, being respectively
the President and Assistant Secretary of Union Carbide Corporation, hereby
certify as follows:
1. The name of the Corporation is Union Carbide Corporation. The
name under which the Corporation was formed was Union Carbide and Carbon
Corporation.
2. The certificate of incorporation was filed in the Office of the
Secretary of State of the State of New York on November 1, 1917.
3. This restatement of the certificate of incorporation of the
Corporation was authorized by unanimous written consent of the Board of
Directors of the Corporation.
4. The certificate of incorporation, as heretofore amended and
changed to date, is hereby restated, without further amendment or change, to
read in its entirety as follows:
CERTIFICATE OF INCORPORATION
OF
UNION CARBIDE CORPORATION
UNDER SECTION 402 OF THE BUSINESS CORPORATION LAW
l. The name of the Corporation is Union Carbide Corporation.
2. The Corporation may engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Law provided that
the Corporation is not formed to engage in any act or activity which requires
the consent or approval of any state official, department, board, agency or
other body, without such consent or approval first being obtained.
3. The total number of shares that the Corporation may issue is
525,000,000, of which 500,000,000 shall be shares of Common Stock, par value
$1.00 each, and 25,000,000 shall be shares of Preferred Stock, par value $1.00
each.
(a) The holders of the Common Stock shall be entitled to one
vote per share on all matters upon which stockholders are entitled
to vote and shall not be entitled to any preference in the
distribution of dividends or assets.
(b) The Preferred Stock may be issued from time to time in
series. Each share of a series shall be equal to every other
share of the same series. The Board of Directors is authorized to
establish and designate series and to fix the number of shares and
the relative rights, preferences and limitations as between
series, subject to such limitations as may be prescribed by law.
In particular, the Board of Directors may establish, designate and
fix the following with respect to each series of Preferred Stock:
(1) The distinctive serial designation of the shares of
the series which shall distinguish those shares from the shares of
all other series;
(2) The number of shares included in the series, which may
be increased or decreased from time to time unless otherwise
provided by the Board of Directors in creating the series;
(3) The annual dividend rate for the shares of the series
and the date or dates upon which such dividends shall be payable;
(4) Whether dividends on the shares of the series shall be
cumulative and, on the shares of any series having cumulative
dividend rights, the date or dates or method of determining the
date or dates from which dividends on the shares of the series
shall be cumulative;
(5) The amount or amounts which shall be paid out of the
assets of the Corporation to the holders of the shares of the
series upon the involuntary liquidation, dissolution or winding up
of the Corporation and upon the voluntary liquidation, dissolution
or winding up of the Corporation;
(6) The price or prices at which, the period or periods
within which and the terms and conditions upon which the shares of
the series may be redeemed in whole or in part, at the option of
the Corporation;
(7) The obligation, if any, of the Corporation to purchase
or redeem shares of the series pursuant to a sinking fund and the
price or prices at which, the period or periods within which and
the terms and conditions upon which the shares of the series shall
be redeemed, in whole or in part, pursuant to such sinking fund;
(8) The period or periods within which and the terms and
conditions, if any, including the price or prices or the rate or
rates of conversion and the terms and conditions of any
adjustments thereof, upon which the shares of the series shall be
convertible at the option of the holder into shares of any class
of stock or into shares of any other series of Preferred Stock,
except into a class of shares having rights or preferences as to
dividends or distributions of assets upon liquidation which are
prior or superior in rank to those of the shares being converted;
(9) The voting rights, if any, of the shares of the series
in addition to those required by law, including the number of
votes per share and the transaction of any business or of any
specified item of business in connection with which the shares of
the series shall vote as a class; and
(10) Any other relative rights, preferences, or limitations
of the shares of the series not inconsistent herewith or with
applicable law.
(c) ESOP CONVERTIBLE PREFERRED STOCK
Section 1. Definitions, Designation and Issuance.
1.01 Definitions. For purposes of this subparagraph (c):
"BCL" means the Business Corporation Law of the State of New York, as
amended from time to time.
"Board" means the Board of Directors of the Corporation or any
authorized committee of the Board.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Common Stock" means the shares of common stock, par value $1.00 each,
authorized by paragraph 3 of the Certificate of Incorporation of the
Corporation.
"Conversion Price" means $8.981 per share, as such may be adjusted from
time to time as provided herein.
"Dividend Payment Date" means the Quarterly Payment Date or such other
dates as the Board may designate for payment of Preferred Dividends in
conjunction with an election to cause Preferred Dividends to become payable on
an annual or semi-annual basis.
"Dividend Redemption" means a redemption of ESOP Shares, at the election
of the Holder, in connection with any Preferred Dividend.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ESOP Preferred Stock" or "ESOP Shares" means the ESOP Convertible
Preferred Stock as designated in Subsection 1.02.
"Holder" means the Trustee holding ESOP Shares.
"Junior Stock" means the Common Stock and any series of stock ranking
junior to the ESOP Preferred Stock as to dividends or upon dissolution.
"Liquidation Price" means $8.981 per share as such may be subject to
adjustment from time to time as provided herein.
"Parity Stock" means any series of stock ranking on a parity with the
ESOP Preferred Stock as to dividends.
"Plan" means the Union Carbide Corporation Employee Stock Ownership Plan
which forms a part of the Union Carbide Corporation Savings Program.
"Preferred Dividend Rate" means the amount per year specified in
Subsection 2.01, as such amount may be adjusted from time to time pursuant to
the terms hereof.
"Preferred Dividends" means cash dividends, when as and if declared by
the Board out of funds legally available therefor, with respect to ESOP
Preferred Stock.
"Quarterly Payment Date" means, at any time that Preferred Dividends are
paid on a quarterly basis, the dates determined from time to time by the Board
pursuant to Subsection 2.01 for payment of Preferred Dividends.
"Rights" means rights to purchase Common Stock (or other securities in
lieu thereof) pursuant to the Rights Agreement between the Corporation and
Chemical Bank, Rights Agent, as such agreement may be amended from time to
time, or any rights issued to holders of Common Stock in addition thereto or
in replacement therefor.
"Special Redemption Price" means, in connection with a redemption
pursuant to Subsection 7.01, a redemption price equal to the higher of (a) the
Liquidation Price per share of ESOP Preferred Stock on the date fixed for
redemption and (b) the Fair Market Value (as defined in Subsection 9.01) of
the number of shares of Common Stock into which each ESOP Share is convertible
at the time the notice of such redemption is given, plus in either case an
amount equal to accrued (whether or not accumulated) and unpaid dividends
thereon to the date fixed for redemption.
"Transfer" means any sale, transfer or other disposition of ESOP Shares
other than to the Corporation.
"Trustee" means a trustee or trustees acting on behalf of the trust
established in connection with the Plan.
1.02 Designation. Of the 25,000,000 authorized shares of Preferred
Stock, par value $1.00 each, 16,668,893 shares shall be designated ESOP
CONVERTIBLE PREFERRED STOCK. The Board may from time to time, by resolution,
fix such number of shares to an increased or decreased number. However, no
such decrease shall reduce the number of ESOP Shares to a number less than
that number of ESOP Shares then outstanding. If the Corporation redeems or
purchases any ESOP Shares, such ESOP Shares (a) shall remain issued and
outstanding for all purposes (except that as long as such shares are held by
the Corporation, no dividends shall be paid on such shares and they shall
neither be entitled to vote nor counted for quorum purposes) and (b) may
thereafter be transferred by the Corporation from time to time to the Trustee,
and upon such transfer the voting and dividend rights of such shares shall be
restored. However, the Corporation may, at the time of or at any time after
such redemption or purchase, retire any such shares then held by the
Corporation, and such shares shall then be restored to the status of
authorized but unissued shares of Preferred Stock of the Corporation.
1.03 Issuance. ESOP Shares shall be issued only to the Trustee. In
the event of any Transfer to any person (including, without limitation, any
participant in the Plan) other than (a) any Trustee or (b) any pledgee (other
than the Corporation or any subsidiary of the Corporation) of such ESOP Shares
acquiring such ESOP Shares as security for any loan or loans made to the Plan
or to any Trustee, the ESOP Shares so Transferred shall, upon such Transfer
and without any further action by the Corporation or the Holder, be
automatically converted into shares of Common Stock at the Conversion Price
and on the terms otherwise provided for conversions pursuant to Section 5. No
such transferee shall have any of the voting powers, preferences and relative,
participating, optional or special rights ascribed to the ESOP Shares
hereunder, but, shall have only the powers and rights pertaining to the Common
Stock into which such ESOP Shares shall be so converted. However, in the
event of a foreclosure or other realization upon the ESOP Shares pledged as
security for any loan or loans made to the Plan or to the Trustee (other than
by the Corporation or any subsidiary of the Corporation), the pledged ESOP
Shares so foreclosed or otherwise realized upon shall be converted
automatically into shares of Common Stock at the Conversion Price and on the
terms otherwise provided for conversions pursuant to Section 5. In the event
of such a conversion, the transferee shall be treated for all purposes as the
record holder of the shares of Common Stock into which the ESOP Shares shall
have been converted as of the date of such conversion. Certificates
representing ESOP Shares shall be legended to reflect the restrictions on
transfer set forth above. Notwithstanding the foregoing provisions of this
Subsection 1.03, ESOP Shares (x) may be converted into shares of Common Stock
as provided by Section 5 and the shares of Common Stock issued upon such
conversion may be transferred by the holder thereof as permitted by law and
(y) shall be redeemable by the Corporation upon the terms and conditions
provided by Sections 6, 7 and 8.
Section 2. Dividends and Distributions.
2.01 Dividends. The Holder shall, subject to the provisions for
adjustment hereinafter set forth, be entitled to receive Preferred Dividends
payable in an amount initially equal to $0.794 per share per year, and no
more, on a quarterly basis, on the last business day of each calendar quarter
(or such later date not more than five business days thereafter as the Board
may from time to time elect in its absolute discretion), beginning on the
second Quarterly Payment Date occurring in 1994. However, the Board may in
its absolute discretion elect to cause Preferred Dividends to become payable
on an annual or semi-annual basis if such election is made effective during
the period beginning on January 5 and ending on March 30 in each year. The
Corporation shall give prompt notice to the Holder of (a) any election to
cause Preferred Dividends to become payable on an annual or semi-annual basis
and (b) the Dividend Payment Date from time to time determined by the Board.
Preferred Dividends shall be made to the Holder at the opening of business on
each applicable Dividend Payment Date.
2.02 Cumulation. Dividends in respect of ESOP Shares shall begin to
accrue from April 1, 1994, except that with respect to any ESOP Shares
redeemed or purchased by the Corporation and then reissued, dividends shall
accrue on such shares from their date of reissuance. Dividends shall accrue
on a daily basis, whether or not the Corporation shall then have earnings or
surplus (computed on the basis of a 360-day year of 30-day months in case of
any period less than one year), based on the Preferred Dividend Rate then in
effect. However, if the Board elects to cause Preferred Dividends to be
payable on an annual or semi-annual basis, payments in respect of dividends on
ESOP Preferred Stock made after the effective date of such election shall be
computed using the Preferred Dividend Rate in effect on the Dividend Payment
Date as determined by the Board. Accrued but unpaid Preferred Dividends shall
cumulate as of the Dividend Payment Date on which they first become payable.
No interest shall accrue on accumulated but unpaid Preferred Dividends.
2.03 Distributions. So long as any ESOP Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any Parity Stock unless there shall also be or have been declared and paid or
set apart for payment on the ESOP Preferred Stock, like dividends for all
dividend payment periods of the ESOP Preferred Stock ending on or before the
dividend payment date of the Parity Stock, ratably in proportion to the
respective amounts of dividends (a) accumulated and unpaid or payable on the
Parity Stock, and (b) accumulated and unpaid through the dividend payment
period or periods of the ESOP Preferred Stock next preceding such dividend
payment date. The Corporation shall not declare or pay or set apart for
payment any dividends or make any other distributions on, or make any payment
on account of the purchase, redemption or other retirement of any Junior Stock
until full cumulative dividends on the ESOP Preferred Stock shall have been
declared and paid or set apart for payment when due. However, the foregoing
sentence shall not apply to (x) any dividend or distribution payable solely in
any shares of, or options, warrants or rights to subscribe for or purchase
shares of, any Junior Stock or (y) the acquisition of shares of any Junior
Stock in exchange solely for or by conversion solely into shares of any other
Junior Stock or (z) any payment on account of the redemption of the Rights.
Any Preferred Dividend shall first be credited against the earliest
accumulated but unpaid dividend due with respect to ESOP Preferred Stock.
Section 3. Liquidation Preference.
3.01 Liquidation Price. In the event of any dissolution or liquidation
of the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of any series or class or
classes of stock of the Corporation ranking junior to ESOP Preferred Stock
upon dissolution or liquidation, the Holder shall be entitled to receive the
Liquidation Price per share in effect at the time of dissolution or
liquidation plus an amount equal to all dividends accrued (whether or not
accumulated) and unpaid to the date of final distribution to such Holder, and
such Holder shall not be entitled to receive any further payments. If, upon
any dissolution or liquidation of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable to the Holder shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other series ranking, as to dissolution or liquidation, on a
parity with ESOP Preferred Stock, then such assets, or the proceeds thereof,
shall be distributed to the Holder and any other such shares ratably in
accordance with the respective amounts that would be payable on the ESOP
Preferred Stock and any other such shares if all amounts payable thereon were
paid in full. For the purposes of this Section 3, neither (a) the
consolidation or merger of the Corporation with or into one or more
corporations, (b) the sale, transfer, lease or exchange (for cash, shares of
equity stock, securities or other consideration) of all or substantially all
of the assets of the Corporation, nor (c) the distribution to the shareholders
of the Corporation of all or substantially all of the consideration for such
sale shall be deemed to be a dissolution or liquidation (voluntarily or
involuntarily), unless such consideration (apart from assumption of
liabilities) or the net proceeds thereof consists substantially entirely of
cash. After payment shall have been made in full to the Holder as provided in
this Subsection 3.01 the Holder shall not be entitled to share in the
remaining assets of the Corporation.
Section 4. Ranking and Voting of Shares.
4.01 Ranking. Unless otherwise provided in this Certificate of
Incorporation, as the same may be amended, relating to any subsequent series
of Preferred Stock, the ESOP Preferred Stock shall rank on a parity with all
series of Preferred Stock as to dividends and as to the distribution of assets
upon dissolution or liquidation.
4.02 Voting Rights. The Holder shall have the following voting rights:
(i) The Holder shall be entitled to vote on all matters
submitted to a vote of the shareholders of the Corporation, voting
together with the holders of Common Stock as one class. The
Holder shall be entitled to a number of votes equal to the number
of shares of Common Stock into which the ESOP Shares could be
converted on the record date for determining the shareholders
entitled to vote. Whenever the Conversion Price is adjusted as
provided in Section 9, the number of votes of the ESOP Shares
shall also be correspondingly adjusted.
(ii) Except as otherwise required by law or set forth
herein, the Holder shall have no special voting rights and the
consent of the Holder shall not be required (except to the extent
the Holder is entitled to vote with holders of Common Stock as set
forth herein) for the taking of any corporate action, including
the issuance of any Preferred Stock now or hereafter authorized;
provided, however, that the vote of at least a majority of the
outstanding ESOP Shares, voting separately as a series, shall be
necessary to authorize the amendment of the Certificate of
Incorporation if the proposed amendment relates to any of the
matters enumerated in Section 804 of the BCL.
Section 5. Conversion into Common Stock.
5.01 Conversion Price. The Holder shall be entitled to cause any or
all of the ESOP Shares to be converted into shares of Common Stock at any time
prior to the close of business on the date fixed for redemption of such shares
pursuant to Sections 6, 7 or 8. The number of shares of Common Stock into
which each ESOP Share may be converted shall be determined by dividing the
Liquidation Price in effect at the time of conversion by the Conversion Price
in effect at the time of conversion. The initial conversion rate is
equivalent to one share of Common Stock for each ESOP Share, and is subject to
adjustment as hereinafter provided.
5.02 Surrender of Certificates. The Holder shall convert ESOP Shares
into shares of Common Stock by surrender, if certificated, of the certificate
or certificates representing the ESOP Shares being converted, duly assigned or
endorsed for transfer to the Corporation (or accompanied by duly executed
stock powers relating thereto), or if uncertificated, a duly executed stock
power relating thereto. Such conversion shall be effected at the principal
executive office of the Corporation. The certificate or certificates shall be
accompanied by a notice of conversion which shall specify (a) the number of
ESOP Shares to be converted, (b) the name or names in which the Common Stock
and any ESOP Shares not to be so converted are to be issued, and (c) the
address to which delivery is to be made of a confirmation of such conversion,
if uncertificated, or any new certificates which may be issued upon such
conversion, if certificated.
5.03 Delivery of Common Stock Upon Conversion. The Corporation shall,
upon receipt of a certificate representing the ESOP Shares for conversion, or
if uncertificated, of a duly executed stock power relating thereto, issue and
send by hand delivery (with receipt to be acknowledged) or by first class
mail, to the Holder, at the address designated by the Holder, a certificate or
certificates for, or if uncertificated, confirmation of, the number of shares
of Common Stock to which the Holder shall be entitled upon conversion. If
only part of the ESOP Shares surrendered are to be converted, the Corporation
shall issue and deliver to the Holder a new certificate or certificates
representing the number of ESOP Shares that shall not have been converted, or
if uncertificated, confirmation of the number of ESOP Shares that shall not
have been converted.
5.04 Effective Date of Issuance of Common Stock. The issuance of
shares of Common Stock upon conversion of ESOP Shares shall be effective as of
the earlier of (a) the delivery to the Holder of the certificates representing
the shares of Common Stock issued upon conversion thereof, if certificated, or
confirmation, if uncertificated, and (b) the commencement of business on the
second business day after the surrender of the certificate or certificates, if
certificated, or a duly executed stock power, if uncertificated, for the ESOP
Shares to be converted. The person or persons entitled to receive Common
Stock issuable upon such conversion shall, on and after the effective date of
conversion, be treated for all purposes as the record holder or holders of
such shares of Common Stock, and no allowance or adjustment shall be made in
respect of dividends payable to holders of Common Stock of record on any date
prior to such effective date. The Corporation shall not be obligated to pay
to the Holder any dividend that may have accrued or that may have been
declared if the Dividend Payment Date for such dividend is on or subsequent to
the effective date of conversion.
5.05 No Fractional Shares. The Corporation shall not be obligated to
deliver any fractional share of Common Stock issuable upon any conversion of
ESOP Shares, but in lieu thereof may make a cash payment in respect thereof in
any manner permitted by law.
5.06 Common Stock Reserved. The Corporation shall at all times reserve
and keep available out of its authorized and unissued Common Stock or treasury
Common Stock, solely for issuance upon the conversion of ESOP Shares as herein
provided, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all of the ESOP Shares then outstanding.
5.07 Issuance of Rights. Whenever the Corporation shall issue shares
of Common Stock upon conversion of ESOP Shares as contemplated by this Section
5, the Corporation shall issue together with each such share of Common Stock
one Right, whether or not the Rights shall be exercisable at such time, but
only if the Rights are issued and outstanding and held by other holders of
Common Stock at such time and have not expired.
Section 6. Redemption at the Option of the Corporation.
6.01 Redemption After December 31, 1998. At the option of the
Corporation, ESOP Preferred Stock shall be redeemable, in whole or in part, at
any time after December 3l, 1998, out of funds legally available therefor, at
a redemption price per share equal to the following percentages of the
Liquidation Price in effect on the date fixed for redemption:
During the Twelve-
Month Period Percentage of
Beginning January 1, Liquidation Price
1999 101.7750
2000 100.8875
and thereafter at l00%, plus, in each case, an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon to the date fixed
for redemption.
6.02 Notice of Redemption. The Corporation shall deliver a notice of
redemption to the Holder, by first class mail, mailed not less than 20 days
nor more than 60 days prior to the redemption date. Each notice shall state:
(a) the redemption date; (b) the total number of ESOP Shares to be redeemed;
(c) the redemption price; (d) that the shares are to be surrendered at the
principal office of the Corporation for payment of the redemption price; (e)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date; (f) whether such redemption price will be paid in cash or in
shares of Common Stock; and (g) the conversion rights of the shares to be
redeemed, the period within which conversion rights may be exercised, and the
Conversion Price and number of shares of Common Stock issuable upon conversion
of an ESOP Share at such time.
6.03 Redemption if Change in Tax Law or Plan Does Not Qualify. In the
event that:
(i) there shall be a change in the federal tax law or
regulations of the United States of America or of an
interpretation or application of such law or regulations or of a
determination by a court of competent jurisdiction that in any
case has the effect of precluding the Corporation from claiming
(other than for purposes of calculating any alternative minimum
tax) any of the tax deductions for dividends paid on the ESOP
Preferred Stock when such dividends are used as provided under
Section 404(k)(2) of the Code, as in effect on the date the ESOP
Preferred Stock is initially issued, or
(ii) the Corporation shall certify to the Holder that the
Corporation has determined in good faith that the Plan either is
not qualified as a "stock bonus plan" within the meaning of
Section 401(a) of the Code or is not an "employee stock ownership
plan" within the meaning of 4975(e)(7) of the Code,
then, notwithstanding anything to the contrary in Subsection 6.01, the
Corporation may, in its sole discretion, at any time within one year after
either of the foregoing events, elect either to:
(a) redeem, out of funds legally available therefor, any or all
of the ESOP Preferred Stock at a redemption price equal to the
Liquidation Price per share on the date fixed for redemption, plus an
amount equal to accrued (whether or not accumulated) and unpaid
dividends thereon to the date fixed for redemption, or
(b) exchange for any or all of such ESOP Shares, securities of at
least equal value (as determined by an independent appraiser) that
constitute "qualifying employer securities" with respect to the Holder
within the meaning of Section 409(1) of the Code and Section 407(d)(5)
of ERISA, or any successor provisions of law.
If the Corporation elects to redeem any or all of the ESOP Preferred Stock
pursuant to clause (a) above, a notice of redemption shall be given as
required in Subsection 6.02. If the Corporation elects to exchange securities
for ESOP Preferred Stock pursuant to clause (b) above, it shall cause notice
of such election to be sent to the Holder by first class mail, mailed not less
than 20 days nor more than 60 days prior to the date of exchange. Each notice
of election shall state: (i) the exchange date; (ii) the total number of ESOP
Shares to be exchanged; (iii) the exchange rate; (iv) that the shares are to
be surrendered for exchange at the principal office of the Corporation; and
(v) that dividends on the shares to be exchanged will cease to accrue on such
exchange date.
6.04 Redemption upon Termination of Plan. The Corporation may, in its
sole discretion and notwithstanding anything to the contrary in Subsection
6.01, call for redemption any or all of the then outstanding ESOP Preferred
Stock in the event that the Plan is, or contributions thereto are, terminated.
Any such redemption shall be effected upon notice as required in Subsection
6.02. The redemption shall be made out of funds legally available therefor at
a redemption price per share equal to the following percentages of the
Liquidation Price in effect on the date fixed for redemption:
During the Twelve-
Month Period Percentage of
Beginning January 1, Liquidation Price
1994 106.2125
1995 105.3250
1996 104.4375
1997 103.5500
1998 102.6625
1999 101.7750
2000 100.8875
and thereafter at l00%, plus, in each case, an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon to the date fixed
for redemption.
6.05 Payment of Redemption Price. The Corporation, at its option, may
make payment of the redemption price required upon redemption of ESOP Shares
pursuant to this Section 6 in cash or in shares of Common Stock, or in a
combination of such shares and cash. Any shares of Common Stock shall be
valued for such purpose at their Fair Market Value (as defined in Subsection
9.01); provided, however, that in calculating their Fair Market Value, the
Adjustment Period (as defined in Subsection 9.01) shall be deemed to be the
five consecutive trading days preceding the date of redemption.
6.06 Effect of Redemption. Upon surrender of the certificates, if
certificated, for any shares called for redemption, or upon the date fixed for
redemption, if uncertificated, the Corporation shall, unless such shares have
previously been converted, redeem such shares as of the close of business on
the date fixed for redemption and at the redemption price set forth in
Subsection 6.01, 6.03 or 6.04 as the case may be. From and after the date
fixed for redemption, dividends on ESOP Shares called for redemption will
cease to accrue and all rights of the Holder in respect of such shares shall
cease, except the right to receive the redemption price. Upon payment of the
redemption price, such shares shall be deemed to have been transferred to the
Corporation, to be held as provided in Subsection 1.02.
Section 7. Redemption at the Option of the Holder.
7.01 Redemption to Provide for Plan Distributions. The Corporation
shall, unless otherwise provided by law, redeem ESOP Shares at the option of
the Holder when and to the extent necessary for the Holder to provide for
distributions required to be made under, or to satisfy an investment election
provided to participants in accordance with, the Plan or any successor plan or
in connection with a Dividend Redemption. The Holder may exercise such
option, at any time and from time to time, by delivering notice to the
Corporation not less than five business days prior to the date fixed for
redemption by the Holder in such notice. The redemption shall be made at a
redemption price equal to the Special Redemption Price, in shares of Common
Stock legally available therefor or, at the election of the Corporation, may
be made out of funds legally available therefor in cash or a combination of
Common Stock and cash. Shares of Common Stock shall be valued for purposes of
redemption pursuant to this Subsection 7.01 as provided by Subsection 6.05.
In the case of any Dividend Redemption, the Holder shall give the notice
specified above on the tenth business day after the related Dividend Payment
Date and such redemption shall be effective as to such number of ESOP Shares
as shall equal (a) the aggregate amount of such Preferred Dividends paid with
respect to ESOP Shares allocated or credited to the accounts of participants
in the Plan or any successor plan that are used to repay any loan associated
with such allocated or credited shares divided by (b) the Special Redemption
Price specified above in this Subsection 7.01.
7.02 Redemption to Satisfy Plan Obligations or if Plan Does Not Qualify
Under Certain Circumstances. The Corporation shall, unless otherwise provided
by law, redeem ESOP Shares upon certification by the Holder to the Corporation
of the following events:
(i) when and to the extent necessary for the Holder to make
any payments of principal, interest or premium due and payable
(whether voluntary, scheduled, upon acceleration or otherwise)
upon any obligations of the trust established under the Plan in
connection with the acquisition of ESOP Preferred Stock or any
indebtedness, expenses or costs incurred by the Holder for the
benefit of the Plan, or
(ii) when and if it shall be established to the satisfaction
of the Holder that the Plan has not initially been determined by
the Internal Revenue Service to be qualified as a "stock bonus
plan" and an "employee stock ownership plan" within the meaning of
Section 401(a) or 4975(e) (7) of the Code, respectively.
The Holder may exercise such option at any time and from time to time upon
notice to the Corporation given not less than five business days prior to the
date fixed for redemption by the Holder in such notice. A redemption pursuant
to Subsection 7.02 shall be made in shares of Common Stock legally available
therefor, at a redemption price equal to the Liquidation Price plus an amount
equal to accrued and unpaid dividends thereon to the date fixed for
redemption. At the election of the Corporation, such redemption may instead
be made out of funds legally available therefor in cash or a combination of
Common Stock and cash. Any shares of Common Stock shall be valued for the
purposes of redemption pursuant to this Subsection 7.02 as provided by
Subsection 6.05.
Section 8. Consolidation, Merger, etc.
8.01 Exchange for Qualifying Employer Securities. If the Corporation
shall consummate any consolidation or merger or similar transaction, however
named, pursuant to which the outstanding shares of Common Stock are by
operation of law exchanged solely for, or changed, reclassified or converted
solely into, securities of any successor or resulting company (including the
Corporation) that constitute "qualifying employer securities" with respect to
the Holder within the meanings of Section 409(l) of the Code and Section
407(d) (5) of ERISA, or any successor provision of law, and, if applicable,
for a cash payment in lieu of fractional shares, if any, then, in such event,
(i) the terms of such consolidation or merger or similar
transaction shall provide that the ESOP Shares shall be converted
into or exchanged for and shall become preferred securities of
such successor or resulting company, having in respect of such
company insofar as possible (taking into account, without
limitation, any requirements relating to the listing of such
preferred securities on any national securities exchange or the
qualification of such preferred securities for trading in any
over-the-counter market) the same powers, preferences and
relative, participating, optional or other special rights
(including the redemption rights provided by Sections 6, 7 and 8),
and the qualifications, limitations or restrictions thereon, that
the ESOP Preferred Stock had immediately prior to such
transaction,
(ii) after such transaction each security into which the ESOP
Shares are so converted or for which they are exchanged shall be
convertible, pursuant to the terms and conditions provided by
Subsection 5.01, into the number and kind of qualifying employer
securities receivable by the Holder equivalent to the number of
shares of Common Stock into which the ESOP Shares could have been
converted pursuant to Subsection 5.01 immediately prior to such
transaction,
(iii) if by virtue of the structure of such transaction, a
holder of Common Stock is required to make an election with
respect to the nature and kind of consideration to be received in
such transaction, which election cannot practicably be made by the
Holder, then such election shall be deemed to be solely for
"qualifying employer securities" (together, if applicable, with a
cash payment in lieu of fractional shares) with the effect
provided in clauses (i) and (ii) above on the basis of the number
and kind of qualifying employer securities receivable by the
Holder of the number of shares of Common Stock into which the ESOP
Shares could have been converted pursuant to Subsection 5.01
immediately prior to such transaction (it being understood that if
the kind or amount of qualifying employer securities receivable in
respect of each share of Common Stock upon such transaction is not
the same for each such share, then the kind and amount of
qualifying employer securities deemed to be receivable in respect
of each share of Common Stock for purposes of this clause (iii)
shall be the kind and amount so receivable per share of Common
Stock by a plurality of such shares), and
(iv) the rights of the ESOP Preferred Stock as preferred
equity of such successor or resulting company shall successively
be subject to adjustments pursuant to Section 9 after any such
transaction as nearly equivalent as practicable to the adjustments
provided for by Section 9 prior to such transaction.
The Corporation shall not consummate any such merger, consolidation or
similar transaction unless all the terms of this Subsection 8.01 are complied
with.
8.02. Exchange for Non-Qualifying Employer Securities. If the
Corporation shall consummate any consolidation or merger or similar
transaction, however named, pursuant to which the outstanding shares of Common
Stock are by operation of law exchanged for, or changed, reclassified or
converted into, other shares or securities or cash or any other property, or
any combination thereof, other than any such consideration which is
constituted solely of qualifying employer securities that are common stock or
common equity (as referred to in Subsection 8.01) and cash payments, if
applicable, in lieu of fractional shares or other interests, the outstanding
ESOP Shares shall, without any action on the part of the Corporation or the
Holder thereof (but subject to Subsection 8.03), be automatically converted
immediately prior to the consummation of such merger, consolidation or similar
transaction into shares of Common Stock at the Conversion Price then in
effect.
8.03. Redemption Alternative. If the Corporation shall enter into any
agreement providing for any consolidation or merger or similar transaction
described in Subsection 8.02, then the Corporation shall as soon as
practicable thereafter (and in any event at least ten business days before
consummation of such transaction) give notice of such agreement and the
material terms thereof to the Holder. The Holder may elect, by notice of
redemption to the Corporation, to receive, upon consummation of such
transaction, in lieu of any cash or other securities which such holder would
otherwise be entitled to receive under Subsection 8.02, a cash payment equal
to a redemption price per share determined pursuant to Subsection 6.04, plus
an amount equal to accrued (whether or not accumulated) and unpaid dividends
thereon to the date fixed for such transaction. The cash payment shall be
paid out of funds legally available therefor, by the Corporation or the
successor of the Corporation, in redemption of the ESOP Preferred Stock. No
such notice of redemption shall be effective unless delivered to the
Corporation prior to the close of business of the fifth business day prior to
consummation of such transaction, unless the Corporation or the successor of
the Corporation shall waive such prior notice. The Holder may withdraw the
notice of redemption by delivery of a notice of withdrawal to the Corporation
at any time prior to the close of business on the fifth business day prior to
consummation of such transaction.
Section 9. Anti-dilution Adjustments.
9.01 Definitions. For purposes of this Section 9, the following
definitions shall apply:
"Adjustment Period" means the period of five consecutive trading days,
selected by the Corporation, during the 20 trading days preceding, and
including, the date as of which the Fair Market Value of a security is to be
determined.
"Current Market Price" means with respect to publicly traded shares of
Common Stock or any other class of capital stock or other security of the
Corporation or any other issuer, for a day, the last reported sales price,
regular way, or, in case no sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in either case as reported
on the New York Stock Exchange Composite Tape or, if such security is not
listed on the New York Stock Exchange, on the principal national securities
exchange on which such security is listed, if not listed on any national
securities exchange, on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") National Market System or, if such
security is not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such security on such day
shall not have been reported through NASDAQ, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member firm
regularly making a market in such security selected for such purpose by the
Corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Extraordinary Distribution" means any dividend or other distribution to
holders of Common Stock (effected while any of the ESOP Shares are
outstanding) of (i) any shares of capital stock of the Corporation (other than
shares of Common Stock), other securities of the Corporation (other than
securities of the type referred to in Subsection 9.03), evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of any subsidiary of the Corporation), or (ii) cash, or any
combination of the foregoing, where the aggregate amount of such cash dividend
or other distribution together with the amount of all cash dividends and other
distributions made during the preceding period of twelve months, when combined
with the aggregate amount of all Pro Rata Repurchases (for this purpose,
including only that portion of the aggregate purchase price of such Pro Rata
Repurchase that is in excess of the Fair Market Value of the Common Stock
repurchased as determined on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer that is a Pro Rata
Repurchase, or the date of purchase with respect to any other Pro Rata
Repurchase that is not a tender offer or exchange offer) made during such
period, exceeds 12.5% of the aggregate Fair Market Value of all shares of
Common Stock outstanding on the day before the ex-dividend date with respect
to such Extraordinary Distribution that is paid in cash and on the
distribution date with respect to an Extraordinary Distribution that is paid
other than in cash.
The Fair Market Value of an Extraordinary Distribution for purposes of
Subsection 9.05 shall be the sum of the Fair Market Value of such
Extraordinary Distribution plus the aggregate amount of any cash dividends or
other distributions that are not Extraordinary Distributions made during such
twelve month period and not previously included in the calculation of an
adjustment pursuant to Subsection 9.05, but shall exclude the aggregate amount
of regular quarterly dividends declared by the Board and paid by the
Corporation in such twelve month period.
"Fair Market Value" means,
(i) as to shares of Common Stock or any other class of
capital stock or securities of the Corporation or any other issuer
that are publicly traded, the average of the Current Market Price
of such shares or securities for each day of the Adjustment
Period, and
(ii) as to any security that is not publicly traded or of any
other property means the fair value thereof as determined by an
independent investment banking or appraisal firm experienced in
the valuation of such securities or property selected in good
faith by the Corporation, or, if no such investment banking or
appraisal firm is in the good faith judgment of the Corporation
available to make such determination, as determined in good faith
by the Corporation.
"Non-Dilutive Amount" means, in respect of an issuance, sale or exchange
by the Corporation of any right or warrant to purchase or acquire shares of
Common Stock (including any security convertible into or exchangeable for
shares of Common Stock), the difference between (a) the product of the Fair
Market Value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum
number of shares of Common Stock that could be acquired on such date upon the
exercise in full of such rights or warrants (including upon the conversion or
exchange of all such convertible or exchangeable securities), whether or not
exercisable (or convertible or exchangeable) at such date, and (b) the
aggregate amount payable pursuant to such right or warrant to purchase or
acquire such maximum number of shares of Common Stock including the amount
paid to acquire such right or warrant: provided, however, that in no event
shall the Non-Dilutive Amount be less than zero. For purposes of the
foregoing, in the case of a security convertible into or exchangeable for
shares of Common Stock, the amount payable pursuant to a right or warrant to
purchase or acquire shares of Common Stock shall be the Fair Market Value of
such security on the date of the issuance, sale or exchange of such security
by the Corporation.
"Pro Rata Repurchase" means any purchase of shares of Common Stock by
the Corporation or any subsidiary thereof, whether for cash, shares of capital
stock or other securities of the Corporation, evidences of indebtedness of the
Corporation or any other person or any other property (including shares of a
subsidiary of the Corporation), or any combination thereof, effected while any
of the ESOP Shares are outstanding, pursuant to any tender offer or exchange
offer subject to Section 13(e) of the Exchange Act, or any successor provision
of law, or pursuant to any other offer available to substantially all holders
of Common Stock. However, no purchase of shares by the Corporation or any
subsidiary thereof made in open market transactions shall be deemed a Pro Rata
Repurchase. For purposes of this Subsection 9.01, shares shall be deemed to
have been purchased by the Corporation or any subsidiary thereof "in open
market transactions" if they have been purchased (a) substantially in
accordance with the requirements of Rule 10b-18 as in effect under the
Exchange Act on the date the ESOP Shares are initially issued by the
Corporation or (b) on such other terms and conditions as the Corporation shall
have determined are reasonably designed to prevent such purchases from having
a material effect on the trading market for the Common Stock.
"Special Dividend" means a dividend in respect of ESOP Preferred Stock
in shares of ESOP Preferred Stock.
9.02 Stock Dividend/Stock Split/Recapitalization.
(i) Subject to the provisions of Subsections 9.06 and 9.07,
in the event the Corporation shall, at any time or from time to
time while any of the ESOP Shares are outstanding, (a) pay a
dividend or make a distribution in respect of the Common Stock in
shares of Common Stock or (b) subdivide the outstanding shares of
Common Stock into a greater number of shares, in each case whether
by reclassification of shares, recapitalization of the Corporation
(excluding a recapitalization or reclassification effected by a
merger or consolidation to which Section 8 applies) or otherwise,
then, in such event, the Board shall, to the extent legally
permissible, declare a Special Dividend in such a manner that the
Holder will become a holder of that number of ESOP Shares equal to
the product of the number of shares held prior to such event
multiplied by a fraction (the "Section 9.02 Fraction") as follows:
NA
____
NB
Where:
NA = Number of shares of Common Stock outstanding immediately
after such event.
NB = Number of shares of Common Stock outstanding immediately
before such event.
A Special Dividend declared pursuant to this Subsection 9.02 shall be
effective, upon payment of such dividend or distribution in respect of the
Common Stock, as of the record date for the determination of shareholders
entitled to receive such dividend or distribution (on a retroactive basis),
and in the case of a subdivision shall become effective immediately as of the
effective date thereof. Concurrently with the declaration of the Special
Dividend pursuant to this Subsection 9.02, the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all ESOP Shares shall be
adjusted by dividing the Conversion Price, the Liquidation Price and the
Preferred Dividend Rate, respectively, in effect immediately before such event
by the Section 9.02 Fraction.
(ii) Subject to the provisions of Subsections 9.06 and 9.07,
in the event the Corporation shall, at any time or from time to
time while any of the ESOP Shares are outstanding, combine the
outstanding shares of Common Stock into a lesser number of shares,
whether by reclassification of shares, recapitalization of the
Corporation (excluding a recapitalization or reclassification
effected by a merger, consolidation or other transaction to which
Section 8 applies) or otherwise, then, in such event and effective
immediately as of the effective date of such combination, the
Holder will become a holder of that number of ESOP Shares equal to
the number of ESOP Shares held prior to such event multiplied by
the Section 9.02 Fraction. Concurrently, the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all ESOP
Shares shall automatically be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate,
respectively, in effect immediately before such event by the
Section 9.02 Fraction.
9.03 Rights or Warrants to Purchase Common Stock. Subject to the
provisions of Subsections 9.06 and 9.07, in the event the Corporation shall,
at any time or from time to time while any of the ESOP Shares are outstanding,
issue to holders of shares of Common Stock as a dividend or distribution,
including by way of a reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common Stock (but not
including as a right or warrant for this purpose any security convertible into
or exchangeable for shares of Common Stock) for a consideration having a Fair
Market Value per share less than the Fair Market Value of a share of Common
Stock on the date of issuance of such right or warrant (other than pursuant to
any employee or director incentive, compensation or benefit plan of the
Corporation or any subsidiary of the Corporation heretofore or hereafter
adopted), then, in such event, the Board shall, to the extent legally
permissible, declare a Special Dividend in such a manner that the Holder will
become a holder of that number of ESOP Shares equal to the product of the
number of shares held prior to such event multiplied by a fraction (the
"Section 9.03 Fraction") as follows:
NB + M
______
NB + F
Where:
NB = Number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants.
M = Maximum number of shares of Common Stock that could be
acquired upon exercise in full of all such rights and
warrants.
F = Number of shares of Common Stock that could be purchased at
the Fair Market Value of a share of Common Stock at the time
of such issuance for the maximum aggregate consideration
payable upon exercise in full of all rights and warrants.
A Special Dividend declared pursuant to this Section 9.03 shall be effective
upon such issuance of rights or warrants. Concurrently with the declaration
of the Special Dividend pursuant to this Section 9.03, the Conversion Price,
the Liquidation Price and the Preferred Dividend Rate of all ESOP Shares shall
be adjusted by dividing the Conversion Price, the Liquidation Price and the
Preferred Dividend Rate, respectively, in effect immediately before such event
by the Section 9.03 Fraction.
9.04 Sale of Common Stock for less than Fair Market Value.
(i) Subject to the provisions of Subsections 9.06 and 9.07,
in the event the Corporation shall, at any time or from time to
time while any of the ESOP Shares are outstanding, issue, sell or
exchange shares of Common Stock (other than pursuant to (a) any
right or warrant to purchase or acquire shares of Common Stock
(including as such a right or warrant any security convertible
into or exchangeable for shares of Common Stock) or (b) any
employee or director incentive, compensation or benefit plan or
arrangement of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) for a consideration
per share less than the Fair Market Value of a share of Common
Stock on the date of such issuance, sale or exchange, then, in
such event, the Board shall, to the extent legally permissible,
declare a Special Dividend in such a manner that the Holder will
become a holder of that number of ESOP Shares equal to the product
of the number of shares held prior to such event multiplied by a
fraction (the "Section 9.04(i) Fraction") as follows:
NB + I
______
NB + F
Where:
NB = Number of shares of Common Stock outstanding immediately
before such issuance, sale or exchange.
I = Number of shares of Common Stock so issued, sold or
exchanged.
F = Number of shares of Common Stock that could be purchased at
Fair Market Value of a share of Common Stock at the time of
such issuance, sale or exchange for the maximum aggregate
consideration paid therefor.
(ii) Subject to the provisions of Subsections 9.06 and 9.07,
in the event the Corporation shall, at any time or from time to
time while any of the ESOP Shares are outstanding, issue, sell or
exchange any right or warrant to purchase or acquire shares of
Common Stock (including as such a right or warrant any security
convertible into or exchangeable for shares of Common Stock) other
than pursuant to (a) any employee or director incentive,
compensation or benefit plan or arrangement of the Corporation or
any subsidiary of the Corporation heretofore or hereafter adopted
or (b) any dividend or distribution on shares of Common Stock
contemplated in Subsection 9.02 for a consideration having a Fair
Market Value, on the date of such issuance, sale or exchange, less
than the Non-Dilutive Amount, then, in such event, the Board
shall, to the extent legally permissible, declare a Special
Dividend in such manner that the Holder will become a holder of
that number of ESOP Shares equal to the product of the number of
shares held prior to such event times a fraction (the "Section
9.04 (ii) Fraction") as follows:
NB + M
______
NB + N
Where:
NB = Number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants.
M = Maximum number of shares of Common Stock that could be
acquired upon exercise in full of all such rights and
warrants.
N = Number of shares of Common Stock that could be purchased at
the Fair Market Value of a share of Common Stock at the time
of such issuance for the total of (x) the maximum aggregate
consideration payable at the time of the issuance, sale or
exchange of such right or warrant and (y) the maximum
aggregate consideration payable upon exercise in full of all
such rights or warrants.
A Special Dividend declared pursuant to this Subsection 9.04 shall be
effective upon the effective date of such issuance, sale or exchange.
Concurrently with the declaration of the Special Dividend pursuant to this
Subsection 9.04, the Conversion Price, the Liquidation Price and the Preferred
Dividend Rate of all ESOP Shares shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate, respectively, in
effect immediately before such event by the Section 9.04(i) Fraction or
Section 9.04(ii) Fraction, as the case may be.
9.05 Extraordinary Distribution/Pro Rata Repurchase.
(i) Subject to the provisions of Subsections 9.06 and 9.07,
in the event the Corporation shall, at any time or from time to
time while any of the ESOP Shares are outstanding, make an
Extraordinary Distribution in respect of the Common Stocks,
whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including capitalization or
reclassification effected by a merger or consolidation to which
Section 8 does not apply), then, in such event, the Board shall,
to the extent legally permissible, declare a Special Dividend in
such a manner that the Holder will become a holder of that number
of ESOP Shares equal to the product of the number of such shares
held prior to such event times a fraction (the "Section 9.05(i)
Fraction") as follows:
NB x F
________________
(NB x F) - D
Where:
NB = Number of shares of Common Stock outstanding immediately
before such Extraordinary Distribution.
F = The Fair Market Value of a share of Common Stock on the day
before the ex-dividend date with respect to an Extraordinary
Distribution that is paid in cash and on the distribution
date with respect to an Extraordinary Distribution that is
paid in other than cash.
D = The Fair Market Value of the Extraordinary Distribution.
(ii) Subject to the provisions of Subsections 9.06 and 9.07,
in the event the Corporation shall, at a any time or from time to
time while any of the ESOP Shares are outstanding, effect a Pro
Rata Repurchase of Common Stock, then in such event, the Board
shall, to the extent legally permissible, declare a Special
Dividend in such a manner that the Holder will become the holder
of the number of ESOP Shares equal to the product of the number of
such shares held prior to such event times a fraction (the Section
9.05(ii) Fraction") as follows:
(NB - R) x F
________________
(NB x F) - A
Where:
NB = Number of shares of Common Stock outstanding immediately
before such Pro Rata Repurchase.
R = Number of shares of Common Stock repurchased by the
Corporation.
F = The Fair Market Value of a share of Common Stock on the
applicable expiration date (including all extensions
thereof) of any tender offer that is a Pro Rata Repurchase
or on the date of purchase with respect to any Pro Rata
Repurchase that is not a tender offer.
A = The Fair Market Value of the aggregate purchase price of
the Pro Rata Repurchase.
The Corporation shall deliver to the Holder (a) notice of its intent to make
any Extraordinary Distribution and (b) notice of any offer by the Corporation
to make a Pro Rata Repurchase, in each case at the same time as, or as soon as
practicable after, such offer is first communicated to holders of Common Stock
or, in the case of an Extraordinary Distribution, the announcement of a record
date in accordance with the rules of any stock exchange on which the Common
Stock is listed or admitted to trading. Such notice shall set forth the
intended record date and the amount and nature of such dividend or
distribution, or, if a Pro Rata Repurchase, (x) the number of shares subject
to such offer, (y) the purchase price payable by the Corporation pursuant to
such offer, and (z) the Conversion Price and the number of shares of Common
Stock into which an ESOP Share may be converted at such time. Concurrently
with a Special Dividend paid pursuant to this Subsection 9.05, the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate of all ESOP
Shares shall be adjusted by dividing the Conversion Price, the Liquidation
Price and the Preferred Dividend Rate, respectively, in effect immediately
before such Extraordinary Distribution or Pro Rata Repurchase by the Section
9.05(i) Fraction or Section 9.05(ii) Fraction, as the case may be.
9.06 Adjustment Alternatives. Notwithstanding any other provision of
this Section 9, the Corporation shall not be required to make (a) any Special
Dividend, combination of shares or any adjustment of the Conversion Price, the
Liquidation Price or the Preferred Dividend Rate unless such Special Dividend,
combination of shares or adjustment would require an increase or decrease of
at least one percent in the number of ESOP Shares outstanding, or, (b) if no
additional ESOP Shares are issued, any adjustment of the Conversion Price
unless such adjustment would require an increase or decrease of at least one
percent in the Conversion Price. Any lesser Special Dividend, combination of
shares or adjustment shall be carried forward and shall be made no later than
the time of, and together with, the next subsequent Special Dividend,
combination of shares or adjustment which, together with any Special Dividend
or Dividends, adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least one percent of the number of ESOP Shares
outstanding or, if no additional ESOP Shares are being issued, an increase or
decrease of at least one percent of the Conversion Price, whichever the case
may be.
9.07 Alternative to Special Dividend. The Corporation and the Board
shall each use their best efforts to take all necessary steps or to take all
actions as are reasonably necessary or appropriate for declaration of any
Special Dividend or combination of shares provided in this Section 9, but
shall not be required to call a special meeting of shareholders in order to
implement the provisions thereof. If for any reason the Board is precluded
from giving full effect to the Special Dividend provided in this Section 9,
then no such Special Dividend shall be declared, but instead the Conversion
Price shall automatically be adjusted by dividing the Conversion Price in
effect immediately before the relevant event by the applicable Section 9.02,
Section 9.03, Section 9.04(i), Section 9.04(ii), Section 9.05(i) or Section
9.05(ii) Fraction, and the Liquidation Price and the Preferred Dividend Rate
will not be adjusted. An adjustment to the Conversion Price made pursuant to
this Subsection 9.07 shall be given effect, (a) in the case of a payment of a
dividend or distribution under Subsection 9.02(i), upon payment thereof as of
the record date for the determination of holders entitled to receive such
dividend or distribution (on a retroactive basis), and, in the case of a
subdivision under Subsection 9.02(ii), immediately as of the effective date
thereof, (b) in the case of Subsection 9.03, upon such issuance of rights or
warrants,(c) in the case of Subsection 9.04, upon the effective date of a such
issuance, sale or exchange, (d) in the case of an Extraordinary Distribution
under Subsection 9.05(i), as of the record date for the determination of
holders entitled to receive such Extraordinary Distribution (on a retroactive
basis) and (e) in the case of a Pro Rata Repurchase under Subsection 9.05(ii),
upon the expiration date thereof (if such Pro Rata Repurchase is a tender
offer) or the effective date thereof (if such Pro Rata Repurchase is not a
tender offer). If subsequently the Board is able to give full effect to the
Special Dividend as provided in Subsections 9.02, 9.03, 9.04 or 9.05, then
such Special Dividend will be declared and other adjustments will be made in
accordance with the provisions of the applicable Subsection and the adjustment
in the Conversion Price as provided in this Subsection 9.07 will automatically
be reversed and nullified prospectively.
9.08 Equitable Adjustments. If (a) the Corporation shall make any
dividend or distribution on the Common Stock or issue any Common Stock, other
capital stock or other security of the Corporation or any rights or warrants
to purchase or acquire any such security or effect any other similar corporate
change, or (b) the Corporation shall otherwise be recapitalized, reorganized
or restructured, and in either case the transaction (x) does not result in an
adjustment pursuant to the foregoing provisions of this Section 9 or (y) does
result in an adjustment pursuant to such provisions but the Board, in its sole
discretion, determines that under the circumstances the adjustment is
inadequate, then in either case the Board may, in its sole discretion,
determine whether an equitable adjustment should be made or an additional
equitable adjustment should be made in respect of such transaction. If in
such case the Board determines that some type of adjustment should be made, an
adjustment shall be made effective as of such date as determined by the Board.
The Corporation shall be entitled, but not required, to make such
additional adjustments, in addition to the foregoing provisions of this
Section 9, as shall be necessary in order that any dividend or distribution in
shares of capital stock of the Corporation, subdivision, reclassification or
combination of shares of the Corporation or any recapitalization of the
Corporation shall not be taxable to the holders of the Common Stock.
A determination of the Board made pursuant to this Subsection 9.08 shall
be final and binding on the Corporation and all shareholders of the
Corporation.
If the Corporation shall be required to (a) declare a Special Dividend
or combination of shares and effect concurrent adjustments or (b) effect any
adjustments in lieu of a Special Dividend, in each case pursuant to this
Section 9, the Board may, in its sole discretion, modify the amount of the
Special Dividend or combination of shares or any required adjustment for the
benefit of the Holder to such extent as the Board deems equitable.
9.09 Documentation of Adjustments. Whenever an adjustment increasing
the number of ESOP Shares outstanding is required pursuant hereto, the Board
shall take action as is necessary so that a sufficient number of ESOP Shares
are designated with respect to such increase resulting from such adjustment.
Whenever an adjustment to the Conversion Price, the Liquidation Price or the
Preferred Dividend Rate of the ESOP Preferred Stock is required pursuant
hereto, the Corporation shall forthwith place on file with the transfer agent
for the Common Stock and with the Treasurer of the Corporation a statement
signed by the Treasurer or any Assistant Treasurer of the Corporation stating
the adjusted Conversion Price, Liquidation Price and Preferred Dividend Rate
determined as provided herein. Such statement shall set forth in reasonable
detail such facts as shall be necessary to show the reason and the manner of
computing such adjustment, including any determination of Fair Market Value
involved in such computation. Promptly after each adjustment to the number of
ESOP Shares outstanding, the Conversion Price, the Liquidation Price or the
Preferred Dividend Rate, the Corporation shall mail a notice to the Holder
stating the then prevailing number of ESOP Shares outstanding, the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate.
Section 10. Miscellaneous.
10.01 Notices. All notices referred to herein shall be in writing.
All notices hereunder shall be deemed to have been given upon the earlier of
receipt thereof or three business days after the mailing thereof. Notices
shall be addressed: (a) if to the Corporation, to its office at 39 Old
Ridgebury Road, Danbury, Connecticut 06817-0001 (Attention: Secretary), (b)
if to the Holder, at the address of the Holder as listed in the stock record
books of the Corporation (which may include the records of any transfer agent
for Common Stock) or (c) to such other address as the Corporation or the
Holder, as the case may be, shall have designated by notice similarly given.
10.02 Stamp Taxes. The Corporation shall pay any and all stock
transfer and documentary stamp taxes that may be payable in respect of any
issuance or delivery of ESOP Shares or shares of Common Stock or other
securities issued on account of ESOP Shares pursuant thereto or certificates
representing such shares or securities. The Corporation shall not, however,
be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of ESOP Shares or Common Stock
or other securities in a name other than that in which the ESOP Shares with
respect to which such shares or other securities are issued or delivered were
registered, or in respect of any payment to any person with respect to any
such shares or securities other than a payment to the registered holder
thereof, and shall not be required to make any such issuance, delivery or
payment unless and until the person otherwise entitled to such issuance,
delivery or payment has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax has
been paid or is not payable.
10.03 Failure to Designate Recipient. In the event that the Holder
shall not, by notice, designate the name in which shares of Common Stock to be
issued upon conversion or exchange should be registered, or to whom payment
upon redemption of ESOP Shares should be made or the address to which the
certificate or certificates representing such shares, or such payment, should
be sent, the Corporation shall be entitled to register such shares, and make
such payment, in the name of the Holder and to send the certificate or
certificates or other documentation representing such shares, or such payment,
to the address of the Holder.
4. The holders of shares of stock of the Corporation shall have no
preemptive rights to purchase any shares of stock or any other securities of
the Corporation.
5. The number of directors of the Corporation shall be fixed and may
from time to time be increased or decreased by resolution or other action of
the Board of Directors, but in no event shall the number of directors be less
than three or more than 19.
6. The office of the Corporation is to be located in the City of New
York, County of New York. The Secretary of State of the State of New York is
designated as the agent of the Corporation upon whom process in any action or
proceeding against it may be served, and the address without the State to
which the Secretary of State shall mail a copy of process in any action or
proceeding against the Corporation which may be served upon him is:
Secretary
Union Carbide Corporation
39 Old Ridgebury Road
Danbury, Connecticut 06817-0001
7. The By-laws may be adopted, amended or repealed by the
stockholders, or by the Board of Directors by a vote of a majority of the
entire Board.
8. A person who is or was a director of the Corporation shall not be
liable to the Corporation or its stockholders for damages for any breach of
duty in such capacity, except to the extent such liability may not be
eliminated or limited by applicable law from time to time in effect.
IN WITNESS WHEREOF, the undersigned have signed this Restated
Certificate of Incorporation this 2nd day of May, 1994 and affirm the
statements contained herein as true under the penalties of perjury.
______________________________
William H. Joyce
President
______________________________
John Macdonald
Assistant Secretary