EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS
OF
7% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
The number, voting powers, designations, preferences,
rights, qualifications, limitations and restrictions of the
corporation's 7% Convertible Exchangeable Preferred Stock are as
set forth below:
1. Designation. (a) 447,800 shares of Preferred Stock
of the corporation are hereby constituted as a series of
Preferred Stock designated as "7% Convertible Exchangeable
Preferred Stock" (hereinafter called "this Series"). Each share
of this Series shall be identical in all respects with the other
shares of this Series except as to the dates from and after which
dividends thereon shall be cumulative. The Board of Directors is
authorized to increase or decrease (but not below the number of
shares of this Series then outstanding) the number of shares of
this Series.
(b) Shares of this Series which have been redeemed,
converted into Class A Common Stock, exchanged into Debentures
(as hereinafter defined), as hereinafter provided, or purchased
by the corporation shall be canceled, and shall revert to
authorized but unissued Preferred Stock undesignated as to
series, and may be reissued as a part of this Series or may be
reclassified and reissued as part of a new or existing series of
Preferred Stock to be created by resolution or resolutions of the
Board of Directors, all subject to the conditions or restrictions
on issuance set forth in any resolution or resolutions adopted by
the Board of Directors providing for the issue of such series of
Preferred Stock.
2. Dividends. (a) The holders of shares of this Series
shall be entitled to receive, but only out of funds legally
available therefor, cash dividends as hereinafter provided. Such
dividends shall be paid when, as and if declared by the Board of
Directors on the first day of February, May, August and November
in each year (each such date being referred to herein as a
"Dividend Payment Date") to holders of record on the record date
determined by the Board of Directors in advance of the payment of
each particular dividend. Such dividends shall be cumulative
from the date of original issuance of the shares of this Series.
(b) So long as any shares of this Series shall be
outstanding, the corporation shall not, unless full cumulative
dividends for all past dividend periods shall have been paid or
declared and set apart for payment upon all outstanding shares of
this Series and the shares of any other class or series of
Preferred Stock (including the Gold-Denominated Preferred Stock,
the Gold-Denominated Preferred Stock, Series II, the Silver-
Denominated Preferred Stock and the Step-Up Convertible Preferred
Stock) and any other class or series of stock of the corporation
ranking, as to dividends, on a parity with the shares of this
Series (the shares of any other class or series of Preferred
Stock and any other class or series of stock of the corporation
ranking as to dividends, on a parity with the shares of this
Series being herein referred to as "Parity Dividend Stock"), (i)
declare, pay or set apart any amounts for dividends on, or make
any other distribution in cash or other property in respect of,
the Class A Common Stock of the corporation, the Class B Common
Stock of the corporation or any other stock of the corporation
ranking junior to this Series as to dividends or distribution of
assets upon liquidation, dissolution or winding up of the affairs
of the corporation (the Class A Common Stock, the Class B Common
Stock and any such other stock being herein referred to as
"Junior Stock"), other than a dividend payable solely in Junior
Stock, (ii) purchase, redeem or otherwise acquire for value any
shares of Junior Stock, directly or indirectly, other than as a
result of a reclassification, exchange or conversion of one
Junior Stock for or into another Junior Stock, or other than
through the use of proceeds of a substantially contemporaneous
sale of other Junior Stock, or (iii) make any payment on account
of, or set aside money for, a sinking or other like fund for the
purchase, redemption or other acquisition for value of any shares
of Junior Stock. For purposes of this Section 2, if any
depositary shares have been issued with respect to any series of
stock, actions with respect to such depositary shares, including
acquisition of and payments on or with respect to such depositary
shares, shall be regarded as actions with respect to such series
of stock.
(c) If the funds available for the payment of dividends
are insufficient to pay in full the dividends payable on all
outstanding shares of this Series and shares of Parity Dividend
Stock, the total available funds to be paid in partial dividends
on the shares of this Series and shares of Parity Dividend Stock
shall be divided among this Series and the Parity Dividend Stock
in proportion to the aggregate amounts of dividends accrued and
unpaid with respect to this Series and the Parity Dividend Stock.
Accruals of dividends shall not bear interest.
3. Dividend Rate. The Dividend Rate on the shares of
this Series for each Dividend Period shall be $35.00 per annum.
The term "Dividend Period", as used herein, means, with respect
to any Dividend Payment Date, the period commencing on the day
following the immediately preceding Dividend Payment Date to and
including such Dividend Payment Date.
4. Redemption. (a) The shares of this Series shall not
be redeemable prior to August 1, 1995. On and after that date,
the corporation may, at its option, redeem the shares of this
Series, in whole or in part, at any time or from time to time,
upon notice given as hereinafter specified, at the following
redemption prices per share if redeemed during the twelve month
period commencing on August 1 of the years indicated:
Year Price
1995 $524.50
1996 521.00
1997 517.50
1998 514.00
1999 510.50
2000 507.00
2001 503.50
and at $500.00 per share thereafter, plus, in each case, an
amount equal to all accrued and unpaid dividends on the shares
being redeemed to and including the date fixed for such
redemption. Notwithstanding any provision of this Section 4 to
the contrary, any accrued and unpaid dividends in respect of
shares of this Series to be redeemed shall be payable to the
holder of record of such shares, as determined on the relevant
record date.
(b) Notice of redemption shall be mailed by the
corporation by first class mail, postage prepaid, not less than
30 nor more than 60 days before the date fixed for redemption, to
each transfer agent for the shares of this Series to be redeemed
and to each holder of record of such shares addressed to such
holder at his address shown on the registry books of the
corporation. Such notice of redemption shall set forth the date
fixed for redemption, the number of shares of this Series to be
redeemed and, if less than all of the shares held by such holder
are to be redeemed, the number of shares to be redeemed from such
holder, the applicable redemption price and the place or places
(including a place in the Borough of Manhattan, The City of New
York) at which stockholders may obtain payment of such redemption
price plus accrued dividends upon the surrender of the
certificates representing their shares. Failure to mail such
notice, or any defect therein or in the mailing thereof, to any
particular holder shall not affect the validity of the proceeding
for the redemption of any shares so to be redeemed from any other
holder.
(c) If less than all the outstanding shares of this
Series are to be redeemed, the number of shares of this Series to
be redeemed and the method of effecting such redemption, whether
by lot or pro rata, shall be as determined by the Board of
Directors.
(d) At any time after a notice of redemption has been
given in the manner prescribed herein and prior to the date fixed
for redemption, the corporation may deposit in trust, with a bank
or trust company identified in the notice of redemption having
capital, surplus and undistributed profits aggregating at least
$50,000,000, an aggregate amount of funds sufficient for such
redemption (including dividends accrued on the shares of this
Series called for redemption to the date fixed for redemption)
for immediate payment in the appropriate amounts upon surrender
of certificates for such shares. Any interest accrued on such
funds shall be paid to the corporation from time to time. Such
deposit in trust shall be irrevocable, except that any funds
deposited by the corporation which shall not be required for the
redemption for which they were deposited because of the exercise
of rights of conversion subsequent to the date of deposit shall
be returned to the corporation forthwith, and any funds deposited
by the corporation which are unclaimed at the end of two years
from the date fixed for such redemption shall be paid over to the
corporation upon its request, and upon such repayment the holders
of the shares so called for redemption shall look only to the
corporation for payment of the appropriate amount.
(e) From and after the date fixed for redemption (unless
the corporation shall default in making payment of the amount
payable upon such redemption), whether or not certificates for
shares so called for redemption have been surrendered by the
holders thereof as described below, dividends on the shares of
this Series so called for redemption shall cease to accrue, and
from and after the date of the deposit of trust funds for the
redemption of shares of this Series in accordance with the
provisions of Section 4(d) hereof, such shares shall be deemed to
be no longer outstanding, and all rights of the holders thereof
as stockholders of the corporation (except the right to receive
from the corporation the amount payable upon such redemption and,
up to the close of business on the date fixed for such
redemption, the right to convert such shares as set forth in
Section 7 hereof) shall cease and terminate. Upon surrender in
accordance with the notice of redemption of the certificates for
any shares of this Series so redeemed (properly endorsed or
assigned for transfer if the Board of Directors shall so require
and the notice shall so state), the holder thereof shall be
entitled to receive payment of the redemption price plus an
amount equal to all accrued and unpaid dividends as aforesaid.
If less than all of the shares represented by any such
surrendered certificate are redeemed, the corporation shall
execute and deliver to the holder thereof, or to his written
order, a certificate or certificates representing the unredeemed
shares.
(f) In no event shall the corporation redeem less than
all the outstanding shares of this Series and shares of any other
series of stock of the corporation ranking, as to dividends and
distribution of assets upon liquidation, dissolution or winding
up of the affairs of the corporation, on a parity with the shares
of this Series ("Parity Stock") pursuant to this Section 4 unless
full cumulative dividends for all past dividend periods shall
have been paid or declared and set apart for payment upon all
outstanding shares of this Series and the shares of such Parity
Stock.
(g) In connection with any redemption of shares of this
Series, the corporation may enter into an agreement with one or
more investment bankers or other purchasers for the purchase of
the shares to be redeemed from the holders thereof and the
conversion of such purchased shares into shares of Class A Common
Stock as provided in Section 7 hereof. Such agreement shall
provide that the amount to be paid by such purchasers to the
holders of the shares of this Series to be redeemed shall not be
less than the redemption price for such shares together with all
accrued and unpaid dividends thereon to and including the date
fixed for redemption and may provide further that such amount be
deposited in trust, on or before the close of business on the
date fixed for redemption, with a bank or trust company
designated by the corporation meeting the requirements set forth
in Section 4(d) hereof. Notwithstanding anything to the contrary
contained in this Section, the obligation of the corporation to
pay the redemption price of the shares of this Series to be
redeemed, together with accrued and unpaid dividends thereon to
the date fixed for redemption, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any shares of
this Series to be redeemed that have not been duly surrendered
for conversion by the holders thereof may, at the option of the
corporation, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in this
subsection (g) or in Section 7 hereof) surrendered by such
purchasers for conversion, all as of immediately prior to the
close of business on the date fixed for redemption, subject to
payment of the above amount as aforesaid.
(h) For purposes of this Section 4, "accrued and unpaid
dividends" in respect of any share of this Series shall mean an
amount computed at the Dividend Rate for this Series from the
date on which dividends on such share became cumulative to and
including the date to which such dividends are to be accrued,
less the aggregate amount of all dividends theretofore paid
thereon. The amount accrued subsequent to the most recent
Dividend Period shall be computed by dividing the quarterly
dividend payment by the actual number of days in the uncompleted
quarter, and thereafter multiplying this figure by the number of
days in such quarter up to and including the date to which
dividends are to be accrued.
5. Voting Rights. (a) Except for the voting rights
described below and except as otherwise required by law, the
holders of shares of this Series shall not be entitled to vote on
any matter or to receive notice of, or to participate in, any
meeting of the stockholders of the corporation.
(b) The shares of this Series shall be entitled to vote
with respect to the election of directors in accordance with
Sections (b)(4) and (b)(5) of Article FOURTH of the certificate
of incorporation.
(c) Whenever dividends payable on shares of this Series
shall be in default in an aggregate amount equal to or exceeding
six full quarterly dividends on all shares of this Series at the
time outstanding, the number of directors then constituting the
Board of Directors of the corporation shall be increased by two,
and holders of shares of this Series shall, in addition to any
other voting rights, have the right, voting separately as a class
together with holders of all other series of stock of the
corporation ranking on a parity with shares of this Series either
as to dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights have
been conferred and are exercisable (such other series of stock
being herein referred to as "Other Voting Stock"), to elect such
two additional directors. In such case, the Board of Directors
will be increased by two directors, and the holders of Preferred
Stock of such series (either alone or with the holders of Other
Voting Stock) will have the exclusive right as members of such
class, as described above, to elect two directors at the next
annual meeting of stockholders. Whenever such right of the
holders of shares of this Series shall have vested, such right
may be exercised initially either at a special meeting of such
holders as provided in Section 5(d) hereof or at any annual
meeting of stockholders held for the purpose of electing
directors, and thereafter at such annual meetings. The right of
the holders of shares of this Series to vote together as a class
with the holders of shares of any Other Voting Stock shall
continue until such time as all dividends accrued on outstanding
shares of this Series to the Dividend Payment Date next preceding
the date of any such determination shall have been paid in full,
or declared and set apart in trust for payment, at which time the
right of the holders of shares of this Series so to vote shall
terminate, except as herein or by law expressly provided, subject
to revesting upon the occurrence of a subsequent default of the
character mentioned above.
(d) At any time when the right of the holders of shares
of this Series to elect directors as provided in Section 5(c)
hereof shall have vested, and if such right shall not already
have been initially exercised, a proper officer of the
corporation, upon the written request of holders of record of at
least 10% of the aggregate number of shares of this Series and
shares of any Other Voting Stock at the time outstanding,
addressed to the Secretary of the corporation, shall call a
special meeting of the holders of shares of this Series and of
such Other Voting Stock for the purpose of electing directors.
Such meeting shall be held at the earliest practicable date upon
the same form of notice as is required for annual meetings of
stockholders at the place for the holding of annual meetings of
stockholders of the corporation (or such other suitable place as
is designated by such officer). If such meeting shall not be
called by a proper officer of the corporation within 20 days
after personal service of such written request upon the Secretary
of the corporation, or within 20 days after mailing the same
within the United States of America, addressed to the Secretary
of the corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal
authorities), then the holders of record of at least 10% of the
aggregate number of shares of this Series and shares of any Other
Voting Stock at the time outstanding may designate in writing one
of their number to call such a meeting at the expense of the
corporation, and such meeting may be called by such person so
designated upon the same form of notice as is required for annual
meetings of stockholders and shall be held at the place for the
holding of annual meetings of stockholders of the corporation (or
such other suitable place as is designated by such person). Any
holder of shares of this Series so designated shall have access
to the registry books of the corporation for the purpose of
causing a meeting of stockholders to be called pursuant to this
subsection 5(d). Notwithstanding anything to the contrary
contained in this subsection 5(d), no such special meeting shall
be called during the period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders of the
corporation.
(e) At any meeting held for the purpose of electing
directors at which holders of shares of this Series shall have
the right, voting together as a class with holders of shares of
any Other Voting Stock to elect directors as provided in Section
5(c) hereof, the presence, in person or by proxy, of the holders
of 33 1/3% of the aggregate number of shares of this Series and
shares of such Other Voting Stock at the time outstanding shall
be required and be sufficient to constitute a quorum of such
class for the election of directors pursuant to such Section
5(c). At any such meeting or adjournment thereof, (i) the
absence of a quorum of the shares of this Series and shares of
such Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section 5(c)
hereof and (ii) in the absence of a quorum, either of the shares
of this Series and shares of such Other Voting Stock or of any
other shares of stock of the corporation, or both, a majority of
the holders, present in person or by proxy, of the class or
classes of stock which lack a quorum shall have the power to
adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than
announcement at the meeting, until a quorum shall be present.
(f) During any period when the holders of shares of this
Series shall have the right to vote together as a class with the
holders of shares of any Other Voting Stock for directors as
provided in Section 5(c) hereof, (i) the directors so elected by
such holders shall continue in office until their successors
shall have been elected by such holders or until termination of
the rights of such holders to vote as a class for directors and
(ii) any vacancies in the Board of Directors shall be filled only
by a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of the
class or classes of stock which elected the director whose office
shall have become vacant. Immediately upon termination of the
right of holders of this Series and any Other Voting Stock to
vote as a class for directors, (i) the term of office of the
directors so elected shall terminate and (ii) the number of
directors shall be such number as may be provided for in the
by-laws of the corporation irrespective of any increase pursuant
to the provisions of Section 5(c) hereof.
(g) In addition to any other vote required by law, the
corporation shall not change the preferences, rights or
limitations with respect to this Series, if such action would
materially adversely affect the interests of the holders thereof,
without the affirmative vote or consent of the holders of at
least two-thirds of the aggregate number of shares of this Series
at the time outstanding, voting as a separate class; provided,
that nothing herein contained shall require such a class vote in
connection with any increase in the total number of authorized
shares of Common Stock (or any series thereof) or Preferred Stock
(or any series thereof), or the creation, authorization or
issuance of any Junior Stock or any series of stock of the
corporation ranking, as to dividends or distribution of assets
upon liquidation, dissolution or winding up of the affairs of the
corporation, prior to or on a parity with the shares of this
Series; provided, further, that no such vote of the holders of
shares of this Series shall be required if, at or prior to the
time when the actions described in this subsection 5(g) shall
become effective, provision is made in accordance with Section 4
hereof for the redemption of all shares of this Series at the
time outstanding.
6. Preference upon Liquidation. (a) In the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the corporation, after payment or provision for
payment of the debts and other liabilities of the corporation and
of dividends and liquidation preferences in respect of any stock
of the corporation ranking senior to the shares of this Series as
to such payments, the holders of shares of this Series shall be
entitled to receive, out of the remaining net assets of the
corporation, the amount of $500.00 in cash for each share of this
Series, plus an amount equal to all dividends (whether or not
earned or declared) accrued and unpaid on each such share up to
the date fixed for distribution, before any distribution shall be
made to or set apart for the holders of any Junior Stock. If,
after payment or provision for payment of the debts and other
liabilities of the corporation and of dividends and liquidation
preferences in respect of any stock of the corporation ranking
senior to the shares of this Series as to such payments, the
remaining net assets of the corporation are not sufficient to pay
to the holders of shares of this Series the full amount of their
preference set forth above, then the remaining net assets of the
corporation shall be divided among and paid to the holders of
shares of this Series, holders of shares of any other class or
series of Preferred Stock and holders of shares of any stock of
the corporation on a parity with this Series as to dividends and
distribution of assets upon liquidation, dissolution or winding
up of the affairs of the corporation ratably per share in
proportion to the full per share amounts to which they
respectively are entitled. For purposes of this subsection (a)
and Section 6(b) hereof, a consolidation or merger of the
corporation with one or more other corporations or the sale of
all or substantially all of the assets of the corporation shall
not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation.
(b) Subject to the rights of the holders of shares of
any series or class of stock ranking prior to this Series and of
the holders of shares of any stock of the corporation ranking on
a parity as to dividends and distribution of assets upon
liquidation, dissolution or winding up of the affairs of the
corporation, after payment shall have been made in full to the
holders of this Series as provided in Section 6(a) hereof and
this subsection (b), the holders of any Junior Stock shall,
subject to the respective terms and provisions (if any) applying
thereto, be entitled to receive any and all assets remaining to
be paid or distributed, and shares of this Series shall not be
entitled to share therein.
7. Conversion Privilege. (a) Subject to and upon
compliance with the provisions of this Section 7, at the option
of the holder thereof, each share of this Series may, at any time
(unless shares of this Series shall be called for redemption,
then, with respect to shares of this Series so called, until and
including, but, if the corporation shall not default in making
payment of the amount payable on such redemption, not after, the
close of business on the date fixed for redemption), be converted
into a number of fully paid and nonassessable shares of Class A
Common Stock equal to the quotient obtained by dividing $500.00
by the Conversion Price (as hereinafter defined) in effect at the
Date of Conversion (as hereinafter defined).
(b) In order to exercise the conversion privilege, any
holder of shares of this Series to be converted shall surrender
such shares to the corporation at any time during usual business
hours at the place or places (including a place in the Borough of
Manhattan, The City of New York) maintained for such purpose,
accompanied by a fully executed written notice, in substantially
the form set forth on the reverse of the certificate representing
shares of this Series, that the holder elects to convert such
shares. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of
Class A Common Stock shall be issued. Shares of this Series
surrendered for conversion shall (if so required by the
corporation) be properly endorsed or assigned for transfer by the
holder or his attorney duly authorized in writing. The holders
of shares of this Series at the close of business on any record
date for the payment of dividends on such shares will be entitled
to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
conversion thereof or the corporation's default in the payment of
the dividend due on such Dividend Payment Date. Shares of this
Series surrendered for conversion during the period from the
close of business on any record date for the payment of dividends
on such shares to the opening of business on the corresponding
Dividend Payment Date (except shares called for redemption on a
redemption date during the period from such record date to and
including the Dividend Payment Date) must be accompanied by
payment of an amount equal to the dividend payable on such shares
on such Dividend Payment Date. A holder of shares of this Series
on a record date for the payment of dividends on such shares who
converts such shares on a Dividend Payment Date will receive the
dividend payable on such shares by the corporation on such date,
and the converting holder need not include a payment in the
amount of any such dividend upon surrender of such shares for
conversion. As promptly as practicable after the receipt of such
notice and the surrender of such shares of this Series as
aforesaid, the corporation shall, subject to the provisions of
Section 10 hereof, issue and deliver at such place or places
referred to in this subsection (b) to such holder, or on his
written order, a certificate or certificates for the number of
full shares of Class A Common Stock issuable on such conversion
of shares of this Series in accordance with the provisions of
this Section 7, and cash, as provided in Section 7(c) hereof, in
respect of any fraction of a share of Class A Common Stock
otherwise issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of
business on the date (herein called, the "Date of Conversion") on
which such notice shall have been received by the corporation and
such shares of this Series shall have been surrendered as
aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Class A Common Stock
shall be issuable upon such conversion shall be deemed to have
become on the Date of Conversion the holder or holders of record
of the shares of Class A Common Stock represented thereby;
provided, that any such surrender on any date when the registry
books of the corporation shall be closed shall constitute the
person or persons in whose name or names the certificate or
certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of
business on the next succeeding day on which such registry books
are open, but such conversion shall nevertheless be at the
Conversion Price in effect at the close of business on the date
when such shares of this Series shall have been so surrendered
with the conversion notice. In the case of conversion of a
portion, but less than all, of the shares of this Series
represented by a certificate surrendered for conversion, the
corporation shall execute, and deliver to the holder thereof, or
on his written order, a certificate or certificates representing
the shares of this Series which the holder has not elected to
convert into shares of Class A Common Stock. No payment or
adjustment shall be made for dividends accrued on the shares of
this Series converted as provided in this Section 7 or for
dividends or distributions accrued on any Class A Common Stock.
(c) No fractions of shares or scrip representing
fractions of shares shall be issued upon conversion of shares of
this Series. If more than one share of this Series shall be
surrendered for conversion at one time by the same holder, the
number of full shares of Class A Common Stock which shall be
issuable upon conversion of such shares shall be computed on the
basis of the aggregate number of shares of this Series
surrendered for conversion. If any fraction of a share of Class
A Common Stock would, except for the provisions of this
subsection (c), be issuable on the conversion of any shares of
this Series, the corporation shall make payment in lieu thereof
in an amount of United States dollars equal to the value of such
fraction computed on the basis of the closing price of the Class
A Common Stock as reported on the Composite Tape for New York
Stock Exchange - Listed Stocks (or if the Class A Common Stock is
not listed or admitted to trading on such exchange on the Date of
Conversion, then on the principal national or regional securities
exchange on which the Class A Common Stock is then listed or
admitted to trading, or, if not listed or admitted to trading on
any national or regional securities exchange, then as reported by
the National Association of Securities Dealers, Inc. through
NASDAQ or a similar organization if NASDAQ is no longer reporting
information) on the last Trading Day (as hereinafter defined)
prior to the Date of Conversion or if no such sale takes place on
such day, the last sale price for such day shall be the average
of the closing bid and asked prices regular way on the New York
Stock Exchange (or if the Class A Common Stock is not listed or
admitted to trading on such exchange, on the principal national
securities exchange on which the Class A Common Stock is then
listed or admitted to trading, or, if not listed or admitted to
trading on any national securities exchange, the average of the
highest bid and lowest asked prices as reported by the National
Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting
information) (any such last sale price being herein referred to
as the "Last Sale Price"). If on such Trading Day the Class A
Common Stock is not quoted by any such organization, the fair
value of such Class A Common Stock on such day, as determined by
the Board of Directors, shall be used. For the purpose of this
subsection (c), the term "Trading Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are not traded on such exchange or in such
market.
(d) The Conversion Price per share of Class A Common
Stock issuable upon conversion of shares of this Series (herein
called the "Conversion Price") shall initially be $24.49 as of
the Initial Filing Date (as defined in the Certificate of
Incorporation). The Conversion Price shall be subject to
adjustment from time to time as follows:
(i) In case the corporation shall (1) pay a
dividend or make a distribution in shares of Class A
Common Stock, (2) subdivide its outstanding shares of
Class A Common Stock into a greater number of shares or
(3) combine its outstanding shares of Class A Common
Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such action shall be
adjusted so that the holder of any shares of this Series
thereafter surrendered for conversion shall be entitled
to receive the number of shares of Class A Common Stock
which he would have owned or have been entitled to
receive immediately following such action had such shares
been converted immediately prior thereto. An adjustment
made pursuant to this subsection (d)(i) shall become
effective immediately, except as provided in subsection
(d)(v) below, after the record date in the case of a
dividend or distribution and shall become effective
immediately after the effective date in the case of a
subdivision or combination.
(ii) In case the corporation shall issue rights,
warrants or options to all holders of Class A Common
Stock entitling them (for a period not exceeding 45 days
from the date of such issuance) to subscribe for or
purchase shares of Class A Common Stock at a price per
share less than the Recent Market Price per share (as
determined pursuant to subsection (d)(iv) below) of the
Class A Common Stock on the record date mentioned below,
the Conversion Price shall be adjusted to a price,
computed to the nearest cent, so that the same shall
equal the price determined by multiplying:
(1) the Conversion Price in effect immediately
prior to the date of issuance of such rights or
warrants by a fraction, of which
(2) the numerator shall be (A) the number of
shares of Class A Common Stock outstanding on the
date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of shares which the aggregate
offering price of the total number of shares so
offered for subscription or purchase would purchase
at such Recent Market Price (determined by
multiplying such total number of shares by the
exercise price of such rights, warrants or options
and dividing the product so obtained by such Recent
Market Price), and of which
(3) the denominator shall be (A) the number of
shares of Class A Common Stock outstanding on the
date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of additional shares of Class A
Common Stock which are so offered for subscription
or purchase.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after the record
date for the determination of holders entitled to receive such
rights, warrants or options.
(iii) In case the corporation shall distribute to
substantially all holders of Class A Common Stock
evidences of indebtedness, equity securities (including
equity interests in the corporation's Subsidiaries (as
hereinafter defined)) other than Class A Common Stock, or
other assets (other than cash dividends paid out of
earned surplus of the corporation or, if there shall be
no earned surplus, out of net profits for the fiscal year
in which the dividend is made and/or the preceding fiscal
year), or shall distribute to substantially all holders
of Class A Common Stock rights or warrants to subscribe
for securities (other than those referred to in
subsection (d)(ii) above), then in each such case the
Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying:
(1) the Conversion Price in effect immediately
prior to the date of such distribution by a
fraction, of which
(2) the numerator shall be the Recent Market
Price per share (as determined as provided in
subsection (d)(iv) below) of the Class A Common
Stock on the record date mentioned below less the
then fair market value (as determined by the Board
of Directors, whose determination shall be
conclusive evidence of such fair market value, and
described in a resolution of the Board of Directors
filed with the transfer agent for the shares of this
Series) of the portion of the assets, evidences of
indebtedness and equity securities so distributed or
of such subscription rights or warrants applicable
to one share of Class A Common Stock, and of which
(3) the denominator shall be such Recent
Market Price per share of the Class A Common Stock.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date for the determination of
stockholders entitled to receive such distribution.
As used herein, the term "Subsidiary" means (i) any
corporation or other entity of which securities or
other ownership interests having ordinary voting
power to elect a majority of the Board of Directors
or other persons performing similar functions are at
the time directly or indirectly owned by the
corporation or (ii) any partnership of which more
than 50% of the partnership interests are owned by
the corporation or any Subsidiary.
(iv) For purposes of any computation under
subsections (d)(ii) and (d)(iii) above, the Recent Market
Price per share of Class A Common Stock on any date shall
be deemed to be the average of the Last Sale Prices of a
share of Class A Common Stock for the five consecutive
Trading Days commencing not more than 20 Trading Days
before and ending not later than the earliest of the date
in question and the date before the "ex" date with
respect to the issuance or distribution requiring such
computation. If on any such Trading Day the Class A
Common Stock is not quoted by any organization referred
to in the definition of Last Sale Price in Section 7(c)
hereof, the fair value of the Class A Common Stock on
such day, as determined by the Board of Directors, shall
be used. For purposes of this paragraph, the term "'ex'
date", when used with respect to any issuance or
distribution, means the first date on which the Class A
Common Stock trades regular way on the principal national
securities exchange on which the Class A Common Stock is
listed or admitted to trading (or, if not so listed or
admitted, on NASDAQ or a similar organization if NASDAQ
is no longer reporting trading information) without the
right to receive such issuance or distribution.
(v) In any case in which this subsection (d) shall
require that an adjustment be made immediately following
a record date, the corporation may elect to defer the
effectiveness of such adjustment (but in no event until a
date later than the effective time of the event giving
rise to such adjustment), in which case the corporation
shall, with respect to any shares of this Series
converted after such record date and before such
adjustment shall have become effective (1) defer paying
any cash payment pursuant to Section 7(c) hereof or
issuing to the holder of shares of this Series the number
of shares of Class A Common Stock issuable upon
conversion in excess of the number of shares of Class A
Common Stock issuable thereupon only on the basis of the
Conversion Price prior to adjustment and (2) not later
than five business days after such adjustment shall have
become effective, pay to such holder the appropriate cash
payment pursuant to Section 7(c) hereof and issue to such
holder the additional shares of Class A Common Stock and
other capital stock of the corporation issuable on such
conversion.
(vi) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase
or decrease of at least 1% in the Conversion Price;
provided, that any adjustments which by reason of this
subsection (d)(vi) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 7 shall
be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
(vii) Whenever the Conversion Price is adjusted as
herein provided, the corporation shall promptly (1) file
with the transfer agent for the shares of this Series a
certificate of an officer of the corporation (an
"Officer's Certificate") setting forth the Conversion
Price after such adjustment and setting forth in
reasonable detail the facts requiring such adjustment and
the calculations on which the adjustment is based, which
certificate shall be conclusive evidence of the
correctness of such adjustment and (2) mail or cause to
be mailed a notice of such adjustment to each holder of
shares of this Series at his address as the same appears
on the registry books of the corporation.
Notwithstanding anything in this Section 7 to the contrary, the
corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this Section
7, as it in its discretion shall determine to be advisable in
order that any stock dividend, subdivision or combination of
shares, distribution of rights or warrants to purchase stock or
securities, distribution of securities convertible into or
exchangeable for stock, or distribution of assets (other than
cash dividends) hereafter made by the corporation to its
stockholders shall not be taxable.
(e) In case of any reclassification or change of
outstanding shares of Class A Common Stock (other than a change
in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the corporation
with, or merger of the corporation into, any other Person, or any
merger of another Person into the corporation (other than a
merger which does not result in any reclassification, change,
conversion, exchange or cancellation of outstanding shares of
Class A Common Stock) or any sale or transfer of all or
substantially all of the assets of the corporation, the
corporation, or the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the
case may be, shall make effective provision in the articles or
certificate of incorporation, providing that the holder of each
share of this Series then outstanding shall have the right
thereafter to convert such share only into the kind and amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or
transfer, by a holder of the number of shares of Class A Common
Stock into which such shares of this Series might have been
converted immediately prior to such reclassification, change,
consolidation, merger, sale or transfer, assuming such holder of
Class A Common Stock of the corporation (i) is not a Person with
which the corporation consolidated or into which the corporation
merged or which merged into the corporation or to which such sale
or transfer was made, as the case may be ("constituent Person"),
or an Affiliate (as hereinafter defined) of a constituent Person
and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or transfer
is not the same for each share of Class A Common Stock of the
corporation held immediately prior to such reclassification,
change, consolidation, merger, sale or transfer by others than a
constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this subsection
(e) the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such articles or
certificate of incorporation shall provide for adjustments which,
for events subsequent to the effective date of such articles or
certificate of incorporation, shall be as nearly equivalent as
may be practicable to the adjustments provided for herein. The
above provisions of this subsection (e) shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales or transfers.
For the purpose of this subsection (e), the term "Person"
means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or
political subdivision thereof, and the term "Affiliate" of any
specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of the
definition of "Affiliate", the term "control" when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
(f) The corporation shall reserve, free from preemptive
rights, out of its authorized but unissued shares, sufficient
shares of Class A Common Stock to provide for the conversion of
the shares of this Series from time to time outstanding as such
shares of this Series are presented for conversion.
(g) The corporation covenants that all shares of Class A
Common Stock which may be issued upon conversion of shares of
this Series will upon issue be duly and validly issued, fully
paid and nonassessable by the corporation and except as provided
in Section 10 hereof free from all taxes, liens and charges with
respect to the issue thereof.
8. Exchange. (a) The shares of this Series are
exchangeable in whole, but not in part, at the option only of the
corporation on any Dividend Payment Date for the corporation's 7%
Convertible Subordinated Debentures Due 2007 issued under the
Subordinated Indenture dated as of July 21, 1992, as amended (the
"Indenture"), between the corporation and Chemical Bank, as
trustee (the "Debentures"); provided that on or prior to the date
of exchange the corporation shall have paid to or declared and
set aside for payment to the holders of outstanding shares of
this Series all accrued and unpaid dividends on shares of this
Series through the Exchange Date (as hereinafter defined). The
holders of shares of this Series will be entitled to receive
$500.00 principal amount of Debentures in exchange for each share
of this Series held by them at the time of exchange. The
corporation will mail to each holder of record of the shares of
this Series written notice of its intention to exchange not less
than 30 nor more than 60 days prior to the date fixed for the
exchange (the "Exchange Date"). Each such notice shall state:
(i) the Exchange Date, (ii) the place or places where
certificates for shares of this Series are to be surrendered for
exchange into Debentures and (iii) that dividends on the shares
of this Series to be exchanged will cease to accrue on the
Exchange Date. Prior to giving notice of intention to exchange,
the corporation shall execute and deliver with a bank or trust
company selected by the corporation an Indenture in substantially
the form filed as an exhibit to the Registration Statement on
Form S-3 (Registration No. 33-45787) filed with the Securities
and Exchange Commission (the "Commission") on February 18, 1992,
as amended as declared effective by the Commission on June 26,
1992 referred to above with such changes as may be required by
law or usage. The corporation will cause the Debentures to be
authenticated on the Dividend Payment Date on which the exchange
is effective, and will pay interest on the Debentures at the rate
and on the dates specified in such Indenture from the Exchange
Date.
(b) The corporation will not give notice of its
intention to exchange under Section 8(a) hereof unless it shall
file at the place or places (including a place in the Borough of
Manhattan, The City of New York) maintained for such purpose an
opinion of counsel (who may be an employee of the corporation) to
the effect that (i) the Indenture has been duly authorized,
executed and delivered by the corporation, has been duly
qualified under the Trust Indenture Act of 1939 (or that such
qualification is not necessary) and constitutes a valid and
binding instrument enforceable against the corporation in
accordance with its terms (subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles, and subject to such other
qualifications as are then customarily contained in opinions of
counsel experienced in such matters), (ii) the Debentures have
been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered in
exchange for the shares of this Series, will constitute valid and
binding obligations of the corporation entitled to the benefits
of the Indenture (subject as aforesaid), (iii) neither the
execution nor delivery of the Indenture or the Debentures nor
compliance with the terms, conditions or provisions of such
instruments will result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or agreement or instrument,
known to such counsel to which the corporation or any of its
Subsidiaries is a party or by which it or any of them is bound,
or any decree, judgment, order, rule or regulation, known to such
counsel, of any court or governmental agency or body having
jurisdiction over the corporation and such Subsidiaries or any of
their properties, and (iv) the Debentures have been duly
registered for such exchange with the Securities and Exchange
Commission under a registration statement that has become
effective under the Securities Act of 1933 (the "Act") or that
the exchange of the Debentures for the shares of this Series is
exempt from registration under the Act.
(c) If notice has been mailed as aforesaid, from and
after the Exchange Date (unless the corporation shall default in
issuing Debentures in exchange for shares of this Series or in
making or providing for the payment of accrued and unpaid
dividends on the outstanding shares of this Series to the
Exchange Date) dividends on the shares of this Series shall cease
to accrue, and such shares shall be deemed to be no longer
outstanding, and all rights of the holders thereof as
stockholders of the corporation shall cease and terminate. Upon
surrender in accordance with said notice of the certificates for
shares of this Series so exchanged (properly endorsed or assigned
for transfer if the Board of Directors shall so require and the
notice shall so state), such shares shall be exchanged by the
corporation into Debentures as aforesaid.
9. Notice of Certain Events. In case:
(a) the corporation shall declare a dividend (or any
other distribution) payable to the holders of Class A Common
Stock (otherwise than cash dividends paid out of the earned
surplus of the corporation or, if there shall be no earned
surplus, out of net profits for the fiscal year in which the
dividend is made and/or the preceding fiscal year, and dividends
payable in Class A Common Stock); or
(b) the corporation shall authorize the granting to the
holders of Class A Common Stock of rights to subscribe for or
purchase any shares of stock of any class or of any other rights
or warrants; or
(c) the corporation shall authorize any reclassification
or change of the Class A Common Stock (other than a subdivision
or combination of its outstanding shares of Class A Common Stock
or a change in par value, or from par value to no par value, or
from no par value to par value), or any consolidation, merger or
share exchange to which the corporation is a party and for which
approval of any stockholders of the corporation is required, or
the sale or conveyance of all or substantially all the property
or business of the corporation; or
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the corporation; then,
the corporation shall cause to be filed at the place or places
maintained for the purpose of conversion of shares of this Series
as provided in Section 7(b) hereof, and shall cause to be mailed
to each holder of shares of this Series, at his address as it
shall appear on the registry books of the corporation, as
promptly as possible but in any event at least 20 days before the
date hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one date is
specified), a notice stating the date on which (i) a record is
expected to be taken for the purpose of such dividend,
distribution, rights or warrants, or if a record is not to be
taken, the date as of which the holders of Class A Common Stock
of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or (ii) such reclassification,
change, consolidation, merger, share exchange, sale, transfer,
conveyance, dissolution, liquidation or winding-up is expected to
become effective and the date, if any is to be fixed, as of which
it is expected that holders of Class A Common Stock of record
shall be entitled to exchange their shares of Class A Common
Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, share exchange,
sale, transfer, conveyance, dissolution, liquidation or
winding-up.
10. Taxes. The corporation will pay any and all
documentary, stamp or similar taxes payable to the United States
of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery of (a)
certificates for shares of this Series on redemption of less than
all of the shares represented by any certificate for such shares
surrendered for redemption or (b) certificates for shares of
Class A Common Stock on conversion of shares of this Series
pursuant to Section 7 hereof; provided, that the corporation
shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of
certificates for shares of this Series or Class A Common Stock,
as the case may be, in a name other than that of the holder of
shares of this Series to be redeemed or converted and no such
issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the corporation the
amount of any such tax or has established, to the satisfaction of
the corporation, that such tax has been paid. The corporation
extends no protection with respect to any other taxes imposed in
connection with such redemption or conversion of shares of this
Series.
11. No Other Rights. The shares of this Series shall
not have any relative, participating, optional or other special
rights and powers other than as set forth herein and other than
any which may be provided by law.
12. Miscellaneous. Capitalized terms which are defined
in this Exhibit are defined only for the purposes of this
Exhibit, and not for the purposes of other Exhibits to the
certificate of incorporation. Unless otherwise indicated,
section references contained in this Exhibit refer to the
corresponding sections of this Exhibit.