EXHIBIT 3(c)
TESORO PETROLEUM CORPORATION
CERTIFICATE OF DESIGNATION
ESTABLISHING A SERIES OF
$2.20 CUMULATIVE CONVERTIBLE PREFERRED STOCK
Tesoro Petroleum Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware, pursuant to the requirements
of Section 151(g) of said General Corporation Law, DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority conferred upon the Board of Directors by
the Certificate of Incorporation (as amended) of said corporation, and pursuant
to the provisions of Section 151(g) of the General Corporation Law, said Board
of Directors, at a meeting duly held on January 26, 1983, adopted a resolution
providing for the voting powers, designations, preferences and relative,
participating, optional or other special rights of the $2.20 Cumulative
Convertible Preferred Stock, which resolution is as follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation
is hereby created, such series of Preferred Stock to be designated the $2.20
Convertible Preferred Stock, to consist of 2,875,000 shares of the stated
value of one dollar ($1.00) each, of which the voting powers, designations,
preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, shall be as
follows:
1. DESIGNATION OF SERIES AND NUMBER OF SHARES.
This series of Preferred Stock is designated '$2.20 Cumulative
Convertible Preferred Stock' (hereinafter referred to as '$2.20 Preferred
Stock'), and the number of shares which shall constitute such series shall
be 2,875,000 shares of a stated value of $1.00 per share, which number may
not be increased but may be decreased (but not below the number thereof then
outstanding) from time to time by the Board of Directors.
2. DIVIDENDS.
Shares of $2.20 Preferred Stock shall rank on a parity as to dividends
with shares of 8% Convertible Preferred Stock of the Corporation
(hereinafter referred to as '8% Preferred Stock') and shares of $2.16
Cumulative Convertible Preferred Stock (hereinafter referred to as '$2.16
Preferred Stock'). The holders of $2.20 Preferred Stock shall be entitled to
receive, as and when declared by the Board of Directors and out of assets of
the Corporation which are by law available for payment of dividends,
cumulative preferential cash dividends, at, but not exceeding, the rate of
$2.20 per share per annum, payable quarterly on May 15, August 15, November
15, and February 15, in each year, accruing from the date on which
respective shares of $2.20 Preferred Stock shall be issued. So long as any
$2.20 Preferred Stock shall remain outstanding, no dividend whatsoever shall
be declared or paid upon or set apart for any class of stock or series
thereof ranking junior to $2.20 Preferred Stock in the payment of dividends
nor shall any shares of any class of stock or series thereof ranking junior
to or on a parity with $2.20 Preferred Stock in payment of dividends be
redeemed or purchased by the Corporation or any subsidiary thereof nor shall
any moneys be paid to or made available for a sinking fund for redemption or
purchase of any shares of any class of stock or series thereof ranking
junior to or on a parity with $2.20 Preferred Stock in payment of dividends,
unless in each instance full dividends on all outstanding shares of $2.20
Preferred Stock for all past dividend periods shall have been paid at the
rate fixed therefor and the dividends on all outstanding shares of $2.20
Preferred Stock for the then current quarterly dividend period shall have
been paid or declared
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and sufficient funds set aside for payment thereof. Accumulations of
dividends on any shares of $2.20 Preferred Stock shall not bear interest.
No dividend shall be paid upon or declared or set apart for (a) any
share of $2.20 Preferred Stock for any dividend period unless at the same
time (i) a like proportionate dividend for the same dividend period shall be
paid upon or declared or set apart for all shares of $2.20 Preferred Stock
then outstanding and entitled to receive such dividend and (ii) there shall
have been paid upon or declared or set aside for all shares of 8% Preferred
Stock, $2.16 Preferred Stock and for all shares of Preferred Stock of all
other series or of any other class of stock or series thereof, if any, then
outstanding and ranking on a parity with $2.20 Preferred Stock in respect of
payment of dividends, for the same dividend period as the dividend period of
the $2.20 Preferred Stock, or for the respective dividend periods of 8%
Preferred Stock, $2.16 Preferred Stock and said parity stock terminating
within the dividend period of the $2.20 Preferred Stock, dividends in
proportion to the respective dividend rates fixed for the 8% Preferred
Stock, $2.16 Preferred Stock and said parity stock; and (b) any shares of 8%
Preferred Stock, $2.16 Preferred Stock or other series of Preferred Stock or
other class of stock or series thereof, if any, ranking on a parity with
$2.20 Preferred Stock in respect of payment of dividends for any dividend
period unless there shall have been paid upon or declared or set apart for
all shares then outstanding of $2.20 Preferred Stock, for the same dividend
period, or for the dividend period of the $2.20 Preferred Stock terminating
within the dividend period of said parity stock, dividends in proportion to
the respective dividend rates fixed for $2.20 Preferred Stock and said
parity stock.
3. LIQUIDATION.
Shares of $2.20 Preferred Stock shall rank on a parity with shares of 8%
Preferred Stock and $2.16 Preferred Stock as to distribution of assets in
the event of any liquidation, dissolution or winding up of the affairs of
the Corporation. In the event of any such liquidation, dissolution or
winding up, after payment or provision for payment of the debts and other
liabilities of the Corporation, the holders of $2.20 Preferred Stock shall
be entitled to receive, out of the net assets of the Corporation, (i) if
such liquidation, dissolution or winding up is voluntary, the applicable
redemption price per share determined as provided in paragraph 4 below, or
(ii) if such liquidation, dissolution or winding up is involuntary, $20 per
share plus, in either case, an amount equal to all dividends accrued and
unpaid on each share of $2.20 Preferred Stock to the date fixed for
distribution, and no more, before any distribution of assets shall be made
to the holders of Common Stock or any other class of stock or series thereof
ranking junior to $2.20 Preferred Stock with respect to the distribution of
assets; provided, however, that no distribution as aforesaid shall be made
to the holders of $2.20 Preferred Stock unless at the same time a like
proportionate distribution shall be made, ratably in proportion to the
respective amounts payable upon liquidation, dissolution or winding up of
the affairs of the Corporation, to the holders of all shares of 8% Preferred
Stock, $2.16 Preferred Stock and Preferred Stock of all other series or any
other class of stock or series thereof, if any, then outstanding and ranking
as to distribution of assets on a parity with $2.20 Preferred Stock.
Nothing herein contained shall be deemed to prevent redemption of $2.20
Preferred Stock by the Corporation in the manner provided in paragraph 4
below. Neither the merger or consolidation of the Corporation into or with
any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer or lease of
all or any part of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the affairs of the Corporation
within the meaning of this paragraph 3.
No payment on account of such liquidation, dissolution or winding up of
the affairs of the Corporation shall be made to the holders of any other
class or series of stock ranking on a parity with $2.20 Preferred Stock with
respect to preferential distribution of assets unless a payment on account
of such liquidation, dissolution or winding up shall be made at the same
time to the
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holders of $2.20 Preferred Stock in proportion to the full distributive
amounts to which they and the holders of such parity stock are respectively
entitled.
Written notice of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation, stating the payment date
and the place where the distributable amounts shall be payable and
containing a statement of or reference to the conversion right set forth in
paragraph 5 below, shall be given by mail, postage prepaid, not less than 30
days prior to the payment date stated therein, to the holders of record of
$2.20 Preferred Stock at their respective addresses as the same shall appear
on the books of the Corporation.
4. REDEMPTION.
The Corporation at its option may, at any time or from time to time, on
or after February 15, 1988, redeem the whole or any part of this issue of
$2.20 Preferred Stock at the applicable redemption price plus in each case
accrued and unpaid dividends thereon to the date fixed for redemption.
The applicable redemption prices for the $2.20 Preferred Stock shall be
as follows:
IF REDEEMED DURING REDEMPTION PRICE
12 MONTHS BEGINNING PER SHARE
1988--------------------------- $ 21.00
1989--------------------------- 20.80
1990--------------------------- 20.60
1991--------------------------- 20.40
1992--------------------------- 20.20
and thereafter at $20 per share.
The Corporation shall on each February 15, beginning with February 15,
1994, so long as any shares of $2.20 Preferred Stock are outstanding, set
aside, out of funds legally available therefor, an amount sufficient to
effect the redemption, at the applicable redemption price provided above,
plus accrued and unpaid dividends thereon, if any, of the number of shares
of $2.20 Preferred Stock equal to 6 2/3% of the total number of shares of
$2.20 Preferred Stock outstanding on February 15, 1994, less the number of
shares for which the Corporation may receive credit, as hereinafter
provided, and the Corporation shall call for redemption such number of
shares on such date. The Corporation may credit against any redemption
required by this paragraph 4 the number of shares of $2.20 Preferred Stock
which have been redeemed by the Corporation after February 15, 1994
(including shares called for redemption if the redemption price thereof has
been deposited with a bond or trust company as hereinafter provided in this
paragraph 4) or which have been presented for conversion to the Corporation
after February 15, 1994, and which have not been theretofor (i) used to
satisfy the Corporation's obligation to redeem shares of $2.20 Preferred
Stock pursuant to this paragraph 4 or (ii) used as a basis for a reduction
in the number of shares of $2.20 Preferred Stock to be redeemed pursuant to
this paragraph 4. The redemptions required of the Corporation by this
paragraph 4 shall be cumulative, so that if the Corporation shall fail, for
any reason whatsoever, to set aside funds and call for redemption shares of
$2.20 Preferred Stock on the date set forth above, as required by this
paragraph 4, the obligation to redeem such shares shall continue, and shall,
until satisfied, increase the obligation of the Corporation to redeem shares
in each subsequent year. If, at any time, the Corporation shall have failed
to set aside funds and call for redemption shares of $2.20 Preferred Stock
on the date set forth above, no dividend whatsoever shall be declared or
paid upon or set apart and no asset shall be distributed for any class of
stock or series thereof ranking junior to or on a parity with $2.20
Preferred Stock in the payment of dividends (except the $2.16 Preferred) nor
shall any shares of any class of stock or series thereof ranking junior to
or on a parity with $2.20 Preferred Stock in payment of dividends be
redeemed or purchased by the Corporation or any subsidiary thereof.
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If at any time the Corporation shall be in default in the payment of
dividends on the $2.20 Preferred Stock of an amount equivalent to or
exceeding twelve full quarterly dividends (whether or not consecutive) or
shall have failed to make the mandatory redemptions of $2.20 Preferred Stock
required by the preceding paragraph of a number of shares equivalent to or
exceeding the number of shares to be redeemed pursuant to such paragraph in
any three year period, and all of the outstanding shares of $2.20 Preferred
Stock are held by the person to which such shares were originally issued or
by any affiliate or affiliates of such person, the Corporation shall redeem,
at the option of such original holder or any such affiliates, out of funds
legally available therefor, within 60 days of the occurrence thereof, each
outstanding share of $2.20 Preferred Stock, at the applicable redemption
price hereinabove set forth plus accrued and unpaid dividends to the date
fixed for redemption.
At or prior to the time of each redemption pursuant to this paragraph 4,
the Corporation shall pay or make provision for payment of all accrued and
unpaid dividends on all shares of $2.20 Preferred Stock, 8% Preferred Stock,
$2.16 Preferred Stock and all shares of Preferred Stock of all other series
or of any other class of stock or series thereof, if any, then outstanding
and ranking on a parity with or prior to the $2.20 Preferred Stock in
respect of payment of dividends.
In the event the Corporation shall determine or shall be required to
redeem less than the entire issue of $2.20 Preferred Stock then outstanding,
(i) the shares to be redeemed shall be selected pro rata (as nearly as may
be) so that the number of shares redeemed from each holder shall be the same
proportion of all the shares to be redeemed that the total number of shares
then held by such holder bears to the total number of shares then
outstanding or (ii) if the number of holders of $2.20 Preferred Stock
exceeds 250, and the Board of Directors so determines, the shares shall be
selected by lot.
Notice of every such redemption shall be mailed, first class postage
prepaid, not less than 30 nor more than 45 days prior to the date fixed for
redemption ('redemption date'), to each holder of record of shares to be
redeemed, at his address as it appears on the books of the Corporation. Each
such notice shall state the redemption date; the number of shares of $2.20
Preferred Stock to be redeemed, and, if less than all shares of $2.20
Preferred Stock held by such holder are to be redeemed, the number of such
shares to be redeemed from him; the redemption price applicable to the
shares to be redeemed; the place or places where such shares are to be
surrendered; that dividends on shares to be redeemed will cease to accrue on
the redemption date; and that shares to be redeemed may be converted at any
time prior to the close of business on the business day next preceding the
redemption date in accordance with paragraph 5 below.
Notice having been mailed, from and after the redemption date (unless
the Corporation defaults in providing money for the payment of the
redemption price) the right to receive dividends on shares called for
redemption shall cease to accrue, said shares shall no longer be deemed to
be outstanding, all rights of holders thereof as shareholders of the
Corporation (except the right to receive the redemption price thereof, but
without interest) shall terminate, and, upon surrender, in accordance with
said notice, of the certificates for any such shares (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require), such shares shall be redeemed by the Corporation at the applicable
redemption price; provided, however, that the Corporation may include in
such notice a statement that the money required for the payment of the
redemption price, plus accrued and unpaid dividends, if any, will be
deposited on a specified date, prior to the redemption date, with a
specified bank or trust company (which shall have an office in The City of
New York and which shall have a combined capital and surplus of not less
than $50,000,000) in trust for the benefit of holders of shares called for
redemption, and, notice having been given, from and after such deposit
shares called for redemption shall no longer be deemed to be outstanding,
all rights with respect to shares of $2.20 Preferred Stock shall forthwith
upon such deposit cease and terminate, except only the right of
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the holders thereof to convert such shares in accordance with the provisions
of paragraph 5 below at any time prior to the close of business on the
business day next preceding the redemption date, and holders of such shares
shall look for payment of the redemption price only to funds so deposited
and in no event to the Corporation unless said funds shall be repaid to the
Corporation as hereinafter provided. Holders of such shares shall not be
entitled to any interest allowed by such depositary on money so deposited
but any such interest shall be paid to the Corporation. Any moneys deposited
as aforesaid for redemption of any shares and remaining unclaimed for four
years after the date of such deposit shall then be repaid to the Corporation
upon its request, and the holders of such shares shall thereafter look only
to the Corporation for payment of the redemption price thereof, but without
interest.
Any provision of this paragraph 4 to the contrary notwithstanding, in
the event that any quarterly dividend due on $2.20 Preferred Stock shall be
in default, and until all such defaults shall have been cured, the
Corporation shall not redeem any shares of $2.20 Preferred Stock unless all
outstanding shares of $2.20 Preferred Stock are simultaneously redeemed and
shall not purchase or otherwise acquire any shares of $2.20 Preferred Stock
except in accordance with a purchase offer made by the Corporation on the
same terms to all holders of record of $2.20 Preferred Stock.
Any shares of $2.20 Preferred Stock redeemed or otherwise purchased or
acquired by the Corporation shall be retired, shall no longer be deemed
outstanding, and shall assume the status of authorized but unissued
Preferred Stock, with no par value, undesignated as to series, subject to
reissuance by the Corporation as shares of Preferred Stock of any one or
more series, as may be determined from time to time by the Board of
Directors, except that such shares may not be reissued as additional shares
of $2.20 Preferred Stock.
5. CONVERSION.
Shares of $2.20 Preferred stock may be converted at the option of the
holder thereof, at any time prior to the close of business on the business
day next preceeding the date fixed for redemption of such shares pursuant to
paragraph 4 above, into fully paid and non-assessable shares of Common Stock
of the Corporation at the rate of 0.8696 shares of Common Stock as now
constituted for each share of $2.20 Preferred Stock surrendered for
conversion (the 'conversion rate'), subject to the following provisions:
(A) The conversion rate shall be subject to adjustment from time to
time as follows:
(1) In case the Corporation shall (i) pay a dividend, or make a
distribution, to all holders of its Common Stock in shares of its
capital stock (whether shares of Common Stock or of capital stock of
any other class), (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue
by reclassification of its shares of Common Stock any shares of
capital stock of the Corporation, the conversion rate in effect
immediately prior to such action shall be adjusted so that the holder
of any share of $2.20 Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of
capital stock of the Corporation which he would have owned
immediately following such action had such share of $2.20 Preferred
Stock been converted immediately prior thereto. An adjustment made
pursuant to this subparagraph (1) shall become effective immediately
after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of any
adjustment made pursuant to this subparagraph (1), the holder of any
shares of $2.20 Preferred Stock thereafter surrendered for conversion
shall become entitled to receive shares of two or
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more classes of capital stock of the Corporation, the Board of
Directors (whose determination shall be conclusive) shall determine,
in good faith, the allocation of the conversion price of the $2.20
Preferred Stock (determined by dividing the adjusted conversion rate
into $20) between or among shares of such classes of capital stock.
(2) In case the Corporation shall hereafter issue rights or
warrants to all holders of its Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase shares of Common Stock at a price per
share less than the current market price per share of Common Stock
(as determined pursuant to subparagraph (4) below) on the record date
mentioned below, the conversion rate shall be adjusted effective
immediately after the expiration date of such rights or warrants so
that the same shall equal the rate determined by multiplying the
conversion rate in effect immediately prior to the date of issuance
of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding (excluding
treasury shares) on the date of issuance such rights or warrants plus
the number of additional shares of Common Stock purchased pursuant to
such offer for subscription or purchase and of which the denominator
shall be the number of shares of Common Stock outstanding (excluding
treasury shares) on the date of issuance of such rights or warrants
plus the number of shares of Common Stock which the aggregate
subscription or purchase price of the total number of shares so
purchased would purchase at such current market price (determined as
provided in subparagraph (4) below).
(3) In case the Corporation shall distribute to all holders of
its Common Stock evidences of its indebtedness or assets (excluding
cash distributions made out of current or retained earnings) or
rights to subscribe (excluding those referred to in subparagraph (2)
above), then in each such case the conversion rate shall be adjusted
so that the same shall equal the rate determined by multiplying the
conversion rate in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the
current market price per share of Common Stock (determined as
provided in subparagraph (4) below) at the record date mentioned
below, and the denominator of which shall be such current market
price per share of Common Stock, less the then fair market value (as
determined, in good faith, by the Board of Directors of the
Corporation, whose determination shall be conclusive) of the portion
of the assets or evidences of indebtedness so distributed or of such
subscription rights applicable to one share of Common Stock. Such
adjustment shall become effective immediately after the record date
for determination of stockholders entitled to receive such
distribution.
(4) For the purpose of any computation under subparagraphs (2)
and (3) above, the current market price per share of Common Stock on
any date shall be deemed to be the average of the daily closing
prices for 30 consecutive business days commencing 45 business days
before the day in question. The closing price for each day shall be
the last reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case on the New York Stock
Exchange or, if the Common Stock is not listed or admitted to trading
on such Exchange, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices as furnished by any
New York Stock Exchange member firm selected from time to time by the
Corporation for that purpose.
(5) In any case in which this paragraph 5 shall require that an
adjustment be made immediately following a record date, the
Corporation may elect to defer (but only until five business days
following the filing by the Corporation of the statement required by
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subparagraph (7) below) issuing to the holder of any share of $2.20
Preferred Stock converted after such record date shares of Common
Stock and other capital stock of the Corporation issuable upon such
conversion over and above the number of shares of Common Stock and
other capital stock of the Corporation issuable upon such conversion
as computed on the basis of the conversion rate prior to adjustment.
(6) All calculations under this paragraph 5 shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case
may be.
(7) Whenever the conversion rate is adjusted as herein provided,
the Corporation shall (i) file at the office or agency in the Borough
of Manhattan in the City of New York maintained by the Corporation
pursuant to subparagraph (D) of this paragraph 5 and with each
transfer agent for its Common Stock a statement, signed by the
Chairman of the Board of Directors, the President or one of the Vice
Presidents of the Corporation and by its Treasurer or one of its
Assistant Treasurers, stating the adjusted conversion rate determined
as provided herein and setting forth the method of calculation and
the facts requiring such adjustment and upon which such calculation
is based, and (ii) mail or cause to be mailed a copy of such
statement setting forth the adjusted conversion rate to each person
who is a registered holder of $2.20 Preferred Stock at such person's
last address as the same appears on the books of the Corporation.
Each adjustment shall remain in effect until a subsequent adjustment
is required hereunder.
(B) In the case of a merger or consolidation of the Corporation with
or into another corporation, or the sale of the Corporation's property or
assets as, or substantially as, an entirety, to another corporation, or
the reclassification of the Corporation's Common Stock (other than
through a subdivision or combination thereof, or change in par value),
holders of shares of $2.20 Preferred Stock shall thereafter have the
right to convert each of such shares into the kind and amount of shares
of stock and other securities and property receivable upon such merger,
consolidation, sale or reclassification by a holder of the number of
shares of Common Stock (whether whole or fractional) of the Corporation
into which shares of $2.20 Preferred Stock might have been converted
immediately prior to such a merger, consolidation, sales or
reclassification, and shall have no other conversion rights under these
provisions; and effective provision shall be made in the charter of the
resulting or surviving corporation or otherwise, so that the provisions
set forth herein for the protection of conversion rights of $2.20
Preferred Stock shall thereafter be applicable, as nearly as reasonably
may be, to any such other shares of stock and other securities and
property deliverable upon conversion of $2.20 Preferred Stock remaining
outstanding or other convertible preferred stock received by the holders
in place thereof. Any such resulting or surviving corporation shall
expressly assume the obligation to deliver, upon the exercise of the
conversion right, such shares, securities or property as holders of $2.20
Preferred Stock remaining outstanding, or other convertible preferred
stock received by such holders in place thereof, shall be entitled to
receive pursuant to the provisions hereof, and to make provision for
protection of conversion rights as above provided.
(C) If, at any time while shares of $2.20 Preferred Stock are
outstanding, the Corporation shall (i) declare a dividend (or any other
distribution) on its Common Stock, other than in cash out of current or
retained earnings; or (ii) authorize the issuance to all holders of its
Common Stock of rights or warrants to subscribe for or purchase shares of
its Common Stock or of any other subscription rights or warrants; or
(iii) reclassify its Common Stock (other than through a subdivision or
combination thereof) or become a party to any consolidation or merger for
which approval of the holders of its Common Stock is required, or sell or
transfer all or substantially all of the assets of the Corporation; then
the Corporation shall cause to be mailed to registered holders of $2.20
Preferred Stock, at their last addresses as they shall appear upon the
Corporation's stock transfer record, at least ten days
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prior to the applicable record date hereinafter specified, a notice
stating (i) the date on which a record is 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 holders of Common Stock of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, or (ii) the date on which any such reclassification,
consolidation, merger, sale or transfer is expected to become effective,
and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or
other property, if any, deliverable upon such reclassification,
consolidation, merger, sale or transfer. Failure to give or receive the
notice required by this subparagraph (C) or any defect therein shall not
affect the legality or validity of any such dividend, distribution, right
or warrant or other action.
(D) The holder of any shares of $2.20 Preferred Stock may exercise
his option to convert such shares into shares of Common Stock only by
surrendering for such purpose to the Corporation at the office or agency
in the Borough of Manhattan in The City of New York maintained by the
Corporation for that purpose certificates representing the shares to be
converted, accompanied by written notice that such holder elects to
convert such shares in accordance with the provisions of this paragraph
5. Said notice shall also state the name or names (with addresses) in
which the certificate or certificates for shares of Common Stock which
shall be issuable on such conversion shall be issued. Each certificate or
certificates surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as that in which such
certificate or certificates are registered, be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by
the holder or by his duly authorized attorney. Each conversion shall be
deemed to have been effected on the date on which such certificate or
certificates shall have been surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become on said date
the holder or holders of record of the shares represented thereby
notwithstanding that the transfer books of the Corporation may then be
closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to such person.
(E) Upon any such conversion of shares of $2.20 Preferred Stock, no
allowance, adjustment or payment shall be made with respect to dividends
upon either the shares of $2.20 Preferred Stock surrendered for
conversion or the shares of Common Stock issuable upon conversion.
(F) In connection with the conversion of shares of $2.20 Preferred
Stock into Common Stock, no fractions of shares of $2.20 Preferred Stock
or of Common Stock shall be issued, but the Corporation shall pay a cash
adjustment in respect of such fractional interest in an amount equal to
the market value of such fractional interest. In such event, the market
value of a share of Common Stock shall be the last recorded sale price of
such a share on the New York Stock Exchange on the business day
immediately preceding the date upon which such shares of $2.20 Preferred
Stock are deemed to have been converted, or, if there be no such recorded
sale price on such day, the last quoted bid price per share of Common
Stock on such exchange at the close of trading on such business day. If
the Common Stock shall not at the time be listed or admitted to trading
on the New York Stock Exchange, such market value shall be the average of
the reported closing bid and asked prices regular way on such day on the
principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or admitted to trading on
any national securities exchange, the average of the closing bid and
asked prices on such day as furnished by any New York Stock Exchange
member firm selected from time to time by the Corporation for that
purpose. The issue of stock certificates on conversions of shares of
$2.20 Preferred Stock shall be made without charge to converting holders
of shares of $2.20 Preferred Stock
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for any tax in respect of the issue thereof. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of
any registration of transfer involved in the issue and delivery of stock
in any name other than that of the holder of any shares of $2.20
Preferred Stock converted, and the Corporation shall not be required to
so issue or deliver any stock certificate unless and until the person or
persons requesting the registration of transfer shall have paid to the
Corporation the amount of such tax or shall have established to the
satisfaction of the Corporation that such tax has been paid.
(G) The Corporation shall at all times reserve and keep available
out of its authorized Common Stock the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of $2.20
Preferred Stock.
(H) Any shares of $2.20 Preferred Stock converted shall no longer be
deemed outstanding and shall assume the status of authorized but unissued
shares of Preferred Stock, with no par value, undesignated as to series,
subject to reissuance by the Corporation as shares of Preferred Stock of
any one or more series, as may be determined from time to time by the
Board of Directors, except, that such shares may not be reissued as
additional shares of $2.20 Preferred Stock.
(I) For purposes of this paragraph (5):
(1) 'business day' shall mean a day on which the New York Stock
Exchange (or a successor or an equivalent or substitute organization
or facility) is open for the trading of securities in the Borough of
Manhattan in The City of New York; and
(2) 'Common Stock' shall mean (a) the Corporation's Common Stock,
$.16 2/3 par value per share, or (b) any other class of stock
resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to
no par value, or from no par value to par value; provided, however,
that in the event that at any time as a result of an adjustment made
pursuant to subparagraph (A)(1) above, the holder of any share of
$2.20 Preferred Stock thereafter surrendered for conversion would
become entitled to receive any stock of the Corporation other than
shares of its Common Stock, thereafter the conversion rate with
respect to such other shares so receivable upon conversion of any
share of $2.20 Preferred Stock shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained
in this paragraph 5.
6. VOTING RIGHTS.
(A) The holders of $2.20 Preferred Stock shall be entitled to one vote
per share, voting together as one class with the holders of Common Stock, 8%
Preferred Stock, and $2.16 Preferred Stock and any other series of Preferred
Stock entitled to vote, on all matters to be voted by stockholders of the
Corporation, in addition to their rights set forth in subparagraphs (B), (C)
and (D) below and otherwise provided by law.
(B) If at any time the Corporation shall have failed to make the
mandatory redemptions of $2.20 Preferred Stock required by the third
subparagraph of paragraph 4 of a number of shares equivalent to or exceeding
the number of shares to be redeemed pursuant to such paragraph on any two
redemption dates as specified in such paragraph, and if the default in
dividends specified in subparagraph (C) of this paragraph 6 (the 'Dividend
Default') is not then in effect, the number of directors constituting the
Board of Directors of the Corporation shall be increased by two, and the
holders of $2.20 Preferred Stock, voting as a separate series shall be
entitled at the next annual meeting of stockholders or the next special
meeting of stockholders, or at a special meeting of holders of $2.20
Preferred Stock called as hereinafter provided, to elect two directors to
fill such newly created directorships, and in addition thereto, such holders
shall be entitled to participate with holders of Common Stock and holders,
if any, of any other capital stock of the
9
Corporation entitled to vote for the election of directors in the election
of any other directors; provided, however, that when all arrears in such
redemptions of the $2.20 Preferred Stock shall have been made or if a
Dividend Default shall occur, then (i) the right of holders of $2.20
Preferred Stock to participate in the election of two directors shall cease
but subject always to the same provisions for vesting of such voting rights
in the case of any similar future arrearages in redemptions at a time when a
Dividend Default is not in effect; (ii) the term of the directors then in
office elected by holders of $2.20 Preferred Stock as a class shall
terminate; and (iii) the number of directors constituting the Board of
Directors shall be reduced by two (except that upon a Default in Dividends
the number of directors shall then be increased in accordance with
subparagraph (C) of this paragraph 6).
Whenever such voting right shall vest, it may be exercised initially
either at a special meeting of holders of $2.20 Preferred Stock or at any
annual or special stockholders' meeting, but thereafter it shall be
exercised only at annual stockholders' meetings. A special meeting for the
exercise of such right shall be called by the Secretary of the Corporation
within ten days after receipt of a written request therefor, signed by the
holders of record of at least 10% of the votes of the then outstanding
shares of $2.20 Preferred Stock; however, no such special meeting shall be
held during the 90-day period preceding the date fixed for the annual
meeting of stockholders.
Any director who shall have been elected by holders of $2.20 Preferred
Stock as a series pursuant to this subparagraph (B) shall hold office for a
term expiring (subject to the earlier termination of the default in
redemptions or the occurrence of a Dividend Default) at the next annual
meeting of stockholders, and during such term may be removed at any time,
either for or without cause, only by the affirmative votes of holders of
record of a majority of the votes of the then outstanding shares of $2.20
Preferred Stock given at a special meeting of such stockholders called for
the purpose. Any vacancy created by such removal may also be filled at such
meeting. A meeting for the removal of a director elected by holders of $2.20
Preferred Stock as a series and the filling of the vacancy created thereby
shall be called by the Secretary of the Corporation within ten days after
receipt of a written request therefor, signed by the holders of not less
than 25% of the votes of the then outstanding shares of $2.20 Preferred
Stock. Such meeting shall be held at the earliest practicable date
thereafter.
Any vacancy caused by the death, resignation, or expiration of term
(except upon a termination of the default in redemptions or the occurrence
of a Dividend Default) of a director who shall have been elected by the
holders of $2.20 Preferred Stock as a series pursuant to this subparagraph
(B) may be filled only by the holders of $2.20 Preferred Stock at a meeting
called for such purpose. Such meeting of the holders of $2.20 Preferred
Stock shall be called by the Secretary of the Corporation at the earliest
practicable date after any such death or resignation and in any event within
ten days after receipt of a written request therefor, signed by the holders
of record of at least 10% of the votes of the then outstanding shares of
$2.20 Preferred Stock.
If any meeting of the holders of $2.20 Preferred Stock required by this
subparagraph (B) to be called shall not have been called within ten days
after personal service of a written request therefor upon the Secretary of
the Corporation or within 15 days after mailing the same within the United
States of America by registered mail addressed to the Secretary of the
Corporation at its principal office, then holders of record of at least 10%
of the votes of the then outstanding shares of $2.20 Preferred Stock 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 notice required for annual meetings of stockholders. Any
holder of $2.20 Preferred Stock so designated shall have access to the stock
books of the Corporation for the purpose of causing meetings of stockholders
to be called pursuant to these provisions.
Any meeting of holders of $2.20 Preferred Stock to vote as a series for
the election or removal of directors shall be held at the place for the
holding of the annual meeting of stockholders of the Corporation. At such
meeting, the presence in person or by proxy of holders
10
of a majority of the votes of the then outstanding shares of $2.20 Preferred
Stock shall be required to constitute a quorum; in the absence of a quorum,
a majority of the holders present in person or by proxy shall have power to
adjourn the meeting from time to time without notice, other than
announcement at the meeting, until a quorum shall be present.
(C) If at any time the Corporation shall be in default in the payment
of dividends on the $2.20 Preferred Stock of an amount equivalent to or
exceeding six full quarterly dividends (whether or not consecutive), the
number of directors constituting the Board of Directors of the Corporation
shall be increased by two, and the holders of $2.20 Preferred Stock, voting
as a separate class together with the holders of all other series of
Preferred Stock outstanding (other than 8% Preferred Stock) having similar
voting rights (such other series of Preferred Stock and the $2.20 Preferred
Stock being hereinafter collectively referred to as 'Special Preferred
Stock'), whether or not the payment of quarterly dividends shall be in
default on all Special Preferred Stock outstanding shall be entitled at the
next annual meeting of stockholders, or at a special meeting of holders of
Special Preferred Stock called as hereinafter provided, to elect two
directors to fill such newly created directorships, and in addition thereto,
such holders shall be entitled to participate with holders of Common Stock
and holders, if any, of any other capital stock of the Corporation entitled
to vote for the election of directors in the election of any other
directors; provided, however, that when all arrears in dividends on Special
Preferred Stock then outstanding shall have been paid and dividends thereon
for the current quarterly period shall have been paid or declared and a sum
sufficient for the payment thereof set aside, then (i) the right of holders
of Special Preferred Stock to participate in the election of two directors
shall cease but subject always to the same provisions for vesting of such
voting rights in the case of any similar future arrearages in dividends;
(ii) the term of the directors then in office elected by holders of Special
Preferred Stock as a class shall terminate; and (iii) the number of
directors constituting the Board of Directors shall be reduced by two.
Whenever such voting right shall vest, it may be exercised initially
either at a special meeting of holders of Special Preferred Stock or at any
annual or special stockholders' meeting, but thereafter it shall be
exercised only at annual stockholders' meetings. A special meeting for the
exercise of such right shall be called by the Secretary of the Corporation
within ten days after receipt of a written request therefor, signed by the
holders of record of at least 10% of the votes of the then outstanding
shares of Special Preferred Stock; however, no such special meeting shall be
held during the 90-day period preceding the date fixed for the annual
meeting of stockholders.
Any director who shall have been elected by holders of Special Preferred
Stock as a class pursuant to this subparagraph (C) shall hold office for a
term expiring (subject to the earlier termination of the default in
dividends) at the next annual meeting of stockholders, and during such term
may be removed at any time, either for or without cause, only by the
affirmative votes of holders of record of a majority of the votes of the
then outstanding shares of Special Preferred Stock given at a special
meeting of such stockholders called for the purpose. Any vacancy created by
such removal may also be filled at such meeting. A meeting for the removal
of a director elected by holders of Special Preferred Stock as a class and
the filling of the vacancy created thereby shall be called by the Secretary
of the Corporation within ten days after receipt of a written request
therefor, signed by the holders of not less than 25% of the votes of the
then outstanding shares of Special Preferred Stock. Such meeting shall be
held at the earliest practicable date thereafter.
Any vacancy caused by the death, resignation, or expiration of term
(except upon a termination of the default in dividends) of a director who
shall have been elected by the holders of Special Preferred Stock as a class
pursuant to this subparagraph (C) may be filled only by the holders of
Special Preferred Stock at a meeting called for such purpose. Such meeting
of the holders of Special Preferred Stock shall be called by the Secretary
of the Corporation at the earliest practicable date after any such death or
resignation and in any event within ten days after
11
receipt of a written request therefor, signed by the holders of record of at
least 10% of the votes of the then outstanding shares of Special Preferred
Stock.
If any meeting of the holders of Special Preferred Stock required by
this subparagraph (C) to be called shall not have been called within ten
days after personal service of a written request therefor upon the Secretary
of the Corporation or within 15 days after mailing the same within the
United States of America by registered mail addressed to the Secretary of
the Corporation at its principal office, then holders of record of at least
10% of the votes of the then outstanding shares of Special Preferred Stock
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 notice required for annual meetings of stockholders. Any
holder of Special Preferred Stock so designated shall have access to the
stock books of the Corporation for the purpose of causing meetings of
stockholders to be called pursuant to these provisions.
Any meeting of holders of Special Preferred Stock to vote as a class for
the election or removal of directors shall be held at the place for the
holding of the annual meeting of stockholders of the Corporation. At such
meeting, the presence in person or by proxy of holders of a majority of the
votes of the then outstanding shares of Special Preferred Stock shall be
required to constitute a quorum; in the absence of a quorum, a majority of
the holders present in person or by proxy shall have power to adjourn the
meeting from time to time without notice, other than announcement at the
meeting, until a quorum shall be present.
(D) So long as any shares of $2.20 Preferred Stock are outstanding, the
Corporation shall not, in any manner, whether by amendment to the
Certificate of Incorporation or By-Laws of the Corporation, by merger
(whether or not the Corporation is a surviving corporation in such merger),
by consolidation, or otherwise:
(1) without the written consent or the affirmative vote at a meeting
called for that purpose of the holders of at least two-thirds of the
votes of the shares of $2.20 Preferred Stock then outstanding, voting
separately as a class, (a) amend, alter or repeal any of the provisions
of Article IV of the Certificate of Incorporation of the Corporation, or
of any resolution or resolutions establishing the $2.20 Preferred Stock,
so as to affect adversely the powers, preferences or special rights of
the $2.20 Preferred Stock; or (b) authorize or increase the authorized
amount of, or authorize any obligation or security convertible into or
evidencing the right to purchase shares of, any additional class or
series of stock ranking prior to the $2.20 Preferred Stock in the payment
of dividends or the preferential distribution of assets; or (c) authorize
or increase the authorized amount of, or authorize any obligation or
security convertible into or evidencing the right to purchase shares of,
any shares of Preferred Stock of any series having more than one vote per
share of such Preferred Stock or amend, alter or repeal any of the
provisions of Article IV of the Certificate of Incorporation of the
Corporation, or of any resolution or resolutions establishing any series
of the Preferred Stock, so as to provide any share of Preferred Stock
with more than one vote per share of Preferred Stock; or
(2) without the written consent or the affirmative vote at a meeting
called for that purpose of the holders of at least a majority of the
aggregate number of the votes of the shares of Preferred Stock of all
series (including $2.20 Preferred Stock) then outstanding, voting
separately as a class, (a) increase the number of shares of Preferred
Stock authorized by the provisions of Article IV of the Certificate of
Incorporation; or (b) authorize or increase the authorized amount of, or
authorize any obligation or security convertible into or evidencing the
right to purchase shares of, any additional class of stock ranking on a
parity with the $2.20 Preferred Stock in the payment of dividends or the
preferential distribution of assets;
PROVIDED, HOWEVER, that the foregoing provisions of this subparagraph (D)
shall not require the consent or vote of the holders of $2.20 Preferred Stock or
any Preferred Stock for the authorization or
12
an increase in the authorized amount of any class or series of stock, or for the
authorization of any obligation or security convertible into or evidencing the
right to purchase shares of any class or series of stock, except to the extent
specifically provided in sections (1) (b), (2) (a) and (2) (b) of this
subparagraph (D); and PROVIDED further, that, except as otherwise required by
law, no such consent or vote shall be required for any merger or consolidation:
(i) in which (x) the Corporation is the surviving corporation; (y) no
adverse change is made in the powers, preferences or special rights of the
$2.20 Preferred Stock; and (z) no additional class or series of stock is
authorized or the authorized amount thereof increased, and no obligation or
security convertible into or evidencing the right to purchase shares of any
additional class or series of stock is authorized, if no such consent or
vote would have been required for any such authorization, or increase in
authorized amount, immediately prior to such merger or consolidation; or
(ii) in which (x) the Corporation is a party but is not the surviving
corporation; (y) the surviving corporation shall, in connection with and at
the same time as such merger or consolidation, issue in exchange for each
share of $2.20 Preferred Stock then outstanding a share of preferred stock
of the surviving corporation with the same powers, preferences and special
rights as the $2.20 Preferred Stock; and (z) immediately after such merger
or consolidation only classes or series of stock of the surviving
corporation and obligations or securities convertible into or evidencing the
right to purchase shares of a class or series of stock of the surviving
corporation shall be authorized or outstanding, for which no such consent or
vote would have been required if such classes or series of stock and
obligations or securities had been authorized by the Corporation immediately
prior to such merger or consolidation, or which have, or are convertible
into or evidence the right to purchase shares of a class or series of stock
of the surviving corporation which have, the same powers, preferences and
special rights and authorized amount as a class or series of stock of the
Corporation which was authorized (with such consent or vote) prior to such
merger or consolidation and is continuing as an authorized class or series
of stock at the time thereof.
SECOND: That the number of shares of $2.20 Cumulative Convertible Preferred
Stock is 2,875,000.
IN WITNESS WHEREOF, said Tesoro Petroleum Corporation has caused this
certificate to be signed by Robert V. West, Jr., its Chairman of the Board of
Directors, and attested by M. Richard Stewart, its Secretary, this 26th day of
January, 1983.
By /s/ ROBERT V. WEST, JR.
Chairman of the
Board of Directors
ATTEST:
By /s/ M. RICHARD STEWART
Secretary
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