EXHIBIT 3.5
CERTIFICATE OF DETERMINATION OF
PREFERENCES OF PREFERRED STOCK OF
INTERNATIONAL LEASE FINANCE CORPORATION,
A CALIFORNIA CORPORATION
The undersigned, Steven F. Udvar-Hazy and Julie I. Sackman hereby certify
that:
1. They are the duly elected and acting President and Secretary,
respectively, of International Lease Finance Corporation (the "Company").
2. Pursuant to authority given by the Company's Restated Articles of
Incorporation, a duly appointed committee (the "Special Committee") of the Board
of Directors of the Company (such committee having been previously authorized to
exercise the powers of the Board of Directors as to the subject matter), has
duly adopted the following recitals and resolutions:
WHEREAS, the Restated Articles of Incorporation of the Company provide for a
class of shares known as Preferred Stock, issuable from time to time in one or
more series; and
WHEREAS, the Board of Directors of the Company is authorized to determine or
alter the rights, preferences, privileges, and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock, to fix the number of
shares constituting any such series, and to determine the designation thereof,
or any of them; and
WHEREAS, the Company desires, pursuant to its authority as aforesaid, to
determine and fix the rights, preferences, privileges, and restrictions relating
to a series of said Preferred Stock and the number of shares constituting and
the designation of said series;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and
determines the designation of, the number of shares constituting, and the
rights, preferences, privileges, and restrictions relating to, said series of
Preferred Stock as follows:
ARTICLE ONE
DESIGNATION
Section 1. Designation.
A series of Preferred Stock shall be designated "Market Auction Preferred
Stock, Series F" (the "Series F MAPS").
Section 2. Amount.
The number of shares constituting Series F MAPS shall be 500.
ARTICLE TWO
SERIES F MAPS--GENERAL PROVISIONS.
Section 1. Definitions.
As used herein, the following terms have the following meanings:
(a) "Additional Directors" has the meaning specified in Section 6(a) of this
ARTICLE TWO.
(b) "Agent Member" means the member of the Securities Depositary that will
act on behalf of an Existing Holder or a Potential Holder and that is identified
as such in such Existing Holder's or Potential Holder's Master Purchaser's
Letter.
(c) "Applicable 'AA' Composite Commercial Paper Rate," on any date, shall
mean in the case of any Standard Dividend Period or Short Dividend Period of (1)
49 days or more but less than 70 days, the interest equivalent of the 60-day
rate, (2) 70 days or more but less than 85 days, the arithmetic average of the
interest equivalent of the 60-day and 90-day rates, (3) 85 days or more but less
than 120 days, the interest equivalent of the 90-day rate, (4) 120 days or more
but less than 148 days, the arithmetic average of the interest equivalent of the
90-day and 180-day rates, and (5) 148 days or more but less than 184 days, the
interest equivalent of the 180-day rate, in each case, on commercial paper
placed on behalf of issuers whose corporate bonds are rated "AA" by S&P or "Aa"
by Moody's, or the equivalent of such rating by another rating agency, as made
available on a discount basis or otherwise by the Federal Reserve Bank of New
York for the Business Day immediately preceding such date. In the event that the
Federal Reserve Bank of New York does not make available any of the foregoing
rates, then such rates shall be the 60-day rate or arithmetic average of such
rates, as the case may be, as quoted on a discount basis or otherwise, by
Commercial Paper Dealers to the Auction Agent as of the close of business on the
Business Day next preceding such date. If any Commercial Paper Dealer does not
quote a rate required to determine the Applicable "AA" Composite Commercial
Paper Rate, the Applicable "AA" Composite Commercial Paper Rate shall be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer (if any) and any Substitute Commercial Paper
Dealer or Substitute Commercial Paper Dealers selected by the Company to provide
such rate or rates or, if the Company does not select any Substitute Commercial
Paper Dealer or Substitute Commercial Paper Dealers, by the remaining Commercial
Paper Dealer (if any). "Substitute Commercial Paper Dealer" means Goldman, Sachs
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated or Salomon Brothers
Inc or their respective affiliates or successors or, if no such dealer furnishes
such quotations, a leading dealer in the commercial paper market selected by the
Company in good faith. For purposes of this definition, the "interest
equivalent" means the equivalent yield on a 360-day basis of a discount-basis
security to an interest-bearing security.
(d) "Applicable Rate" means the rate per annum, resulting from the next
preceding Auction, at which dividends are payable on the shares of Series F MAPS
for any Dividend Period.
(e) "Applicable Treasury Bill Rate" for any Short Dividend Period in excess
of 183 days and "Applicable Treasury Note Rate" for any Long Dividend Period, on
any date, shall mean the interest equivalent of the rate for direct obligations
of the United States Treasury having an original maturity which is equal to, or
next lower than, the length of such Short Dividend Period or Long Dividend
Period, as the case may be, as published weekly by the Board of Governors of the
Federal Reserve System (the "Board") in "Federal Reserve Statistical Release
H.15(519)-Selected Interest Rates," or any successor publication by the Board,
within five Business Days preceding such date. In the event that the Board does
not publish such rate, or if such release is not available, the Applicable
Treasury Bill Rate or Applicable Treasury Note Rate will be the arithmetic mean
of the secondary market bid rate as of approximately 3:30 P.M., New York City
time, on the Business Day next preceding such date of the U.S. Government
Securities Dealers furnished to
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the Auction Agent for the issue of direct obligations of the United States
Treasury, in an aggregate principal amount of at least $1,000,000 with a
remaining maturity equal to, or next lower than, the length of such Short
Dividend Period or Long Dividend Period, as the case may be. If any U.S.
Government Securities Dealer does not quote a rate required to determine the
Applicable Treasury Bill Rate or Applicable Treasury Note Rate, the Applicable
Treasury Bill Rate or Applicable Treasury Note Rate shall be determined on the
basis of the quotation or quotations furnished by any Substitute U.S. Government
Securities Dealer or Dealers selected by the Company to provide such rate or
rates or, if the Company does not select any such Substitute U.S. Government
Securities Dealer or Dealers, by the remaining U.S. Government Securities
Dealer (if any). "Substitute U.S. Government Securities Dealers" means Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated or Salomon
Brothers Inc or their respective affiliates or successors or, if no such dealer
provides such quotes, a leading dealer in the government securities market
selected by the Company in good faith. For purposes of this definition, the
"interest equivalent" of a rate stated on a discount basis shall be equal to the
quotient of (A) the discount rate divided by (B) the difference between 1.00 and
the discount rate.
(f) "Auction Agent" means Chemical Bank, or its successors, or any other bank
or trust company appointed by a resolution of the Board of Directors of the
Company, or its Special Committee, which enters into an agreement with the
Company to follow the Auction Procedures set forth in ARTICLE THREE hereof.
(g) "Auction Date" means the first Business Day preceding the first day of a
Dividend Period other than the Initial Dividend Period.
(h) "Broker-Dealer" means any broker-dealer, or other entity permitted by law
to perform the functions required of a Broker-Dealer in ARTICLE THREE, that has
been selected by the Company and has entered into a Broker-Dealer Agreement with
the Auction Agent that remains effective.
(i) "Broker-Dealer Agreement" means an agreement between the Auction Agent
and a Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the
procedures specified in ARTICLE THREE.
(j) "Business Day" means a day on which the New York Stock Exchange is open
for trading and which is not a Saturday, Sunday or other day on which banks in
New York City are authorized or obligated by law to close.
(k) "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock, whether outstanding on the Date of Original Issue or
thereafter.
(l) "Code" means the Internal Revenue Code of 1986, as amended.
(m) "Commercial Paper Dealers" means Morgan Stanley & Co. Incorporated and
Lehman Brothers Inc. or, in lieu of either thereof, their respective affiliates
or successors.
(n) "Common Stock" means all shares now or hereafter authorized of the class
of Common Stock of the Company presently authorized and any other shares into
which such shares may hereafter be changed from time to time.
(o) "Date of Original Issue" means the date on which the Company initially
issues shares of Series F MAPS.
(p) "Default Period" has the meaning specified in Section 6(a) of this
ARTICLE TWO.
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(q) "Default Rate" means the Applicable Determining Rate multiplied by the
percentage shown opposite the lowest Credit Ratings category in the definition
of Maximum Applicable Rate, determined as of the Business Day preceding a
Failure to Deposit.
(r) "Dividend Payment Date" has the meaning specified in Section 2(b) of this
ARTICLE TWO.
(s) "Dividend Period" has the meaning specified in Section 2(c) of this
ARTICLE TWO.
(t) "Dividend Quarter" has the meaning specified in Section 2(b) of this
ARTICLE TWO.
(u) "Dividends-Received Deduction" has the meaning specified in Section 2(b)
of this ARTICLE TWO.
(v) "Existing Holder," means a Person who has signed a Master Purchaser's
Letter and is listed as the beneficial owner of shares of Series F MAPS in the
records of the Auction Agent.
(w) "Failure to Deposit" has the meaning specified in Section 2(e) of this
ARTICLE TWO.
(x) "Initial Dividend Payment Date" means March 21, 1995.
(y) "Initial Dividend Period" has the meaning specified in Section 2(c) of
this ARTICLE TWO.
(z) "Initial Dividend Rate" has the meaning specified in Section 2(a) of this
ARTICLE TWO.
(aa) "Junior Capital Stock" means, with respect to the Company, any and all
Capital Stock of the Company ranking junior to the Series F MAPS with respect to
the payment of dividends or the distribution of assets upon liquidation.
(ab) "Long Dividend Period" has the meaning specified in Section 2(c) of this
ARTICLE TWO.
(ac) "MAPS" means all shares of each series of the Company's Market Auction
Preferred Stock now or hereafter authorized.
(ad) "Maximum Applicable Rate," on any Auction Date, shall mean the rate per
annum obtained by multiplying the Applicable Determining Rate on such Auction
Date by a percentage determined as set forth below based on the lower of the
credit ratings assigned to the Series F MAPS by Moody's and S&P (or if Moody's
or S&P or both shall not make such rating available, the equivalent of either or
both of such ratings by a Substitute Rating Agency or two Substitute Rating
Agencies, as the case may be, or in the event that only one such rating shall be
available, the percentage shall be based on such rating).
Credit Ratings Applicable Percentage
--------------
of Applicable
Moody's S&P Determining Rate
----------------- ------------- ----------------------
"aa3" or Above AA-- or Above 150%
"a3" to "a1" A-- to A+ 200%
"baa3" to "baa1" BBB-- to BBB+ 225%
Below "baa3" Below BBB-- 275%
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(ae) "Master Purchaser's Letter" means a letter addressed to the Company, the
Auction Agent and a Broker-Dealer in which a Person agrees, among other things,
to offer to purchase, purchase, offer to sell or sell shares of Series F MAPS as
set forth in ARTICLE THREE.
(af) "Minimum Holding Period" has the meaning specified in Section 2(b) of
this ARTICLE TWO.
(ag) "Moody's" means Moody's Investors Service, Inc.
(ah) "Normal Dividend Payment Date" has the meaning specified in Section 2(b)
of this ARTICLE TWO.
(ai) "Notice" has the meaning specified in Section 2(c) of this ARTICLE TWO.
(aj) "Notice of Long Dividend Period" has the meaning specified in Section
2(c) of this ARTICLE TWO.
(ak) "Notice of Revocation" has the meaning specified in Section 2(c) of this
ARTICLE TWO.
(al) "Notice of Short Dividend Period" has the meaning specified in Section
2(c) of this ARTICLE TWO.
(am) "Outstanding" means, as of any date, shares of MAPS theretofore issued by
the Company except, without duplication, (i) any shares of MAPS theretofore
cancelled, delivered to the Company for cancellation or redeemed and (ii) as of
any Auction Date, any shares of MAPS subject to redemption on the next following
Business Day.
(an) "Parity Capital Stock" means any and all shares of Capital Stock of the
Company ranking on a parity with or equal to the Series F MAPS as to the payment
of dividends and distribution of assets.
(ao) "Parity Securities" has the meaning specified in Section 6(a) of this
ARTICLE TWO.
(ap) "Person" means and includes an individual, a partnership, a corporation,
a trust, an unincorporated association, a joint venture or other entity or a
government or any agency or political subdivision thereof.
(aq) "Potential Holder" means any Person, including any Existing Holder, (i)
who has executed a Master Purchaser's Letter and (ii) who may be interested in
acquiring shares of Series F MAPS (or, in the case of an Existing Holder,
additional shares of Series F MAPS).
(ar) "Preferred Stock" means all shares now or hereafter authorized of the
class of Preferred Stock, without par value, of the Company, including the
shares of MAPS of any series.
(as) "S&P" means Standard & Poor's Corporation.
(at) "Securities Depositary" means The Depository Trust Company and its
successors and assigns or any other securities depository selected by the
Company which agrees to follow the procedures required to be followed by such
Securities Depositary in connection with shares of Series F MAPS.
(au) "Short Dividend Period" has the meaning specified in Section 2(c) of this
ARTICLE TWO.
(av) "Standard Dividend Period" has the meaning specified in Section 2(c) of
this ARTICLE TWO.
(aw) "Subsequent Dividend Period" has the meaning specified in Section 2(c) of
this ARTICLE TWO.
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(ax) "Subsequent Dividend Period Days" has the meaning specified in Section
2(b) of this ARTICLE TWO.
(ay) "Substitute Rating Agency" shall mean a nationally recognized
statistical rating organization (as that term is used in the rules and
regulations of the Securities Exchange Act of 1934, as amended) selected by the
Company, subject to the approval by Morgan Stanley & Co. Incorporated and Lehman
Brothers Inc., such approval not to be unreasonably withheld.
(az) "Sufficient Clearing Bids" has the meaning specified in Section 4(a) of
ARTICLE THREE.
(ba) "U.S. Government Securities Dealers" shall mean Morgan Stanley & Co.
Incorporated and Lehman Brothers Inc. or, in lieu of either thereof, their
respective affiliates or successors.
Section 2. Dividends.
(a) Holders of Series F MAPS shall be entitled to receive, when, as and if
declared by the Board of Directors of the Company, out of funds available
therefor under applicable law and the Restated Articles of Incorporation of the
Company, cumulative cash dividends at the Applicable Rate, determined as set
forth below, payable on the respective dates set forth below that may be
applicable with respect to such Series F MAPS. For the Initial Dividend Period,
dividends will accumulate at a rate per annum of 4.60% (the "Initial Dividend
Rate"). For each subsequent Dividend Period, the dividend rate for the Series F
MAPS will be the Applicable Rate, determined as set forth herein, and will be
payable on the respective dates set forth below.
(b) Dividends on the Series F MAPS will accumulate (whether or not declared)
from the Date of Original Issue. Except for the Initial Dividend Payment Date,
dividends on the Series F MAPS with a Standard Dividend Period will be payable,
except as provided below, on each seventh Tuesday following the preceding
Dividend Payment Date. Dividends on the Series F MAPS with a Short Dividend
Period will be payable, except as provided below, on the day following the last
day of such Short Dividend Period and will also be payable on such other dates
as are established at the time such Short Dividend Period is determined.
Dividends on the Series F MAPS with a Long Dividend Period will be payable,
except as provided below, on the day following the last day of such Long
Dividend Period and on the first day of the fourth calendar month after the
commencement of such Long Dividend Period and quarterly thereafter on the first
day of each applicable month. Each day on which dividends on Series F MAPS
would be payable as determined as set forth in this paragraph but for the
adjustments set forth below is referred to herein as a "Normal Dividend Payment
Date."
(i) In the case of dividends payable on Series F MAPS with a Standard
Dividend Period or a Short Dividend Period, if:
(A)(1) the Securities Depositary shall continue to make available to
Agent Members the amounts due as dividends on the Series F MAPS in next-day
funds on the dates on which such dividends are payable and (2) a Normal
Dividend Payment Date is not a Business Day, or the day next succeeding such
Normal Dividend Payment Date is not a Business Day, then dividends shall be
payable on the first Business Day preceding such Normal Dividend Payment Date
that is next succeeded by a Business Day; or
(B)(1) the Securities Depositary shall make available to Agent Members
the amounts due as dividends on Series F MAPS in immediately available funds
on the dates on which such dividends are payable (and the Securities
Depositary shall have so advised the Auction Agent) and (2) a Normal
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Dividend Payment Date is not a Business Day, then dividends shall be payable
on the first Business Day following such Normal Dividend Payment Date.
(ii) In the case of dividends payable on Series F MAPS with a Long Dividend
Period, if:
(A)(1) the Securities Depositary shall continue to make available to
Agent Members the amounts due as dividends on the Series F MAPS in next-day
funds on the dates on which such dividends are payable and (2) a Normal
Dividend Payment Date is not a Business Day, or the day next succeeding such
Normal Dividend Payment Date is not a Business Day, then dividends shall be
payable on the first Business Day following such Normal Dividend Payment Date
that is next succeeded by a Business Day; or
(B)(1) the Securities Depositary shall make available to Agent Members
the amounts due as dividends on the Series F MAPS in immediately available
funds on the dates on which such dividends are payable (and the Securities
Depositary shall have so advised the Auction Agent) and (2) a Normal Dividend
Payment Date is not a Business Day, then dividends shall be payable on the
first Business Day following such Normal Dividend Payment Date.
Notwithstanding the foregoing, in case of payment in next-day funds, if the
date on which dividends on Series F MAPS would be payable as determined as set
forth in the preceding paragraphs is a day that would result in the number of
days between successive Auction Dates (determined by excluding the first Auction
Date and including the second Auction Date) not being at least equal to the
then-current minimum holding period (currently set forth in Section 246(c) of
the Code) (the "Minimum Holding Period") required for corporate taxpayers to be
entitled to the dividends-received deduction on preferred stock held by
nonaffiliated corporations (currently set forth in Section 243(a) of the Code)
(the "Dividends-Received Deduction"), then dividends on the Series F MAPS shall
be payable on the first Business Day following such date on which dividends
would be so payable that is next succeeded by a Business Day that results in the
number of days between such successive Auction Dates (determined as set forth
above) being at least equal to the then-current Minimum Holding Period.
Each date on which dividends on Series F MAPS shall be payable as determined
as set forth above is referred to herein as a "Dividend Payment Date". If
applicable, the period from the preceding Dividend Payment Date to the next
Dividend Payment Date for Series F MAPS with a Long Dividend Period is hereby
referred to as a "Dividend Quarter." Although any particular Dividend Payment
Date may not occur on the originally scheduled Normal Dividend Payment Date
because of the adjustments set forth above, each succeeding Dividend Payment
Date will be, subject to such adjustments, the date determined as set forth
above as if each preceding Dividend Payment Date had occurred on the respective
originally scheduled Normal Dividend Payment Date.
In addition, notwithstanding the foregoing, in the event of a change in law
altering the Minimum Holding Period, the period of time between Dividend Payment
Dates shall automatically be adjusted so that there shall be a uniform number of
days in subsequent Dividend Periods (such number of days without giving effect
to the adjustment referred to above being referred to herein as the "Subsequent
Dividend Period Days") commencing after the date of such change in law equal to
or to the extent necessary, in excess of the then-current Minimum Holding
Period, provided that the number of Subsequent Dividend Period Days shall not
exceed by more than nine days the length of such then-current Minimum Holding
Period and shall be evenly divisible by seven, and the maximum number of
Subsequent Dividend Period Days, as adjusted pursuant to this provision, in no
event shall exceed 119 days.
(c) After the Initial Dividend Period for the Series F MAPS, each subsequent
Dividend Period will (except for the adjustments for non-Business Days described
above) be 49 days (each such 49-day period, subject to any adjustment as a
result of a change in law altering the Minimum Holding Period as described
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above, being herein referred to as a "Standard Dividend Period"), unless the
Company specifies that any such subsequent Dividend Period will be a Dividend
Period of 50 to 364 days and consisting of a whole number of weeks (a "Short
Dividend Period") or a Dividend Period of one year or longer (a "Long Dividend
Period"). Each such Standard Dividend Period, Short Dividend Period and Long
Dividend Period (together with the period commencing on the Date of Original
Issue and ending on the Initial Dividend Payment Date for the Series F MAPS (the
"Initial Dividend Period")) being referred to herein as a "Dividend Period."
After the Initial Dividend Period for the Series F MAPS, each successive
Dividend Period will commence on the Dividend Payment Date for the preceding
Dividend Period and will end (i) in the case of a Standard Dividend Period, on
the day preceding the next Dividend Payment Date and (ii) in the case of a Short
Dividend Period or a Long Dividend Period, on the last day of the Short Dividend
Period or the Long Dividend Period specified by the Company in the related
Notice.
The Company may give telephonic and written notice, not less than ten and not
more than 30 days prior to an Auction Date, to the Auction Agent and the
Securities Depositary that the next succeeding Dividend Period will be a Short
Dividend Period (a "Notice of Short Dividend Period") or a Long Dividend Period
(a "Notice of Long Dividend Period" and, together with a Notice of Short
Dividend Period, a "Notice"). Each such Notice will specify (i) the next
succeeding Dividend Period as a Short Dividend Period or a Long Dividend Period,
(ii) the term thereof, (iii) in the case of any Long Dividend Period, additional
redemption provisions or restrictions on redemption, if any, and (iv) the
Dividend Payment Dates; provided that, for any Auction occurring after the
initial Auction, the Company may not give a Notice of a Short Dividend Period or
a Notice of a Long Dividend Period (and any such Notice shall be null and void)
unless Sufficient Clearing Bids were made in the last occurring Auction of any
series of MAPS (or all shares of such series were subject to Submitted Hold
Orders) and full cumulative dividends, if any, for all series of MAPS payable
prior to such date have been paid in full. The Board of Directors of the
Company may establish a Short Dividend Period or a Long Dividend Period for the
Series F MAPS. Notice may be revoked by the Company on or prior to the Business
Day prior to the related Auction Date by telephonic and written notice (a
"Notice of Revocation") to the Auction Agent and the Securities Depositary.
If the Company does not give a Notice with respect to the next succeeding
Dividend Period or gives a Notice of Revocation with respect thereto, such next
succeeding Dividend Period will be a Standard Dividend Period. In addition, if
the Company has given Notice with respect to the next succeeding Dividend Period
and has not given Notice of Revocation with respect thereto, but Sufficient
Clearing Bids are not made in the Auction for the Series F MAPS (other than
because all shares of Series F MAPS were subject to Submitted Hold Orders) or
such Auction is not held for any reason, such next succeeding Dividend Period
will, notwithstanding such Notice, be a Standard Dividend Period and the Company
may not again give a Notice (and such Notice shall be null and void) until
Sufficient Clearing Bids have been made in an Auction of a series of MAPS or an
Auction has been held in which all shares of a series of MAPS were subject to
Submitted Hold Orders.
(d) Prior to each Dividend Payment Date for the Series F MAPS, the Company
shall deposit with the Auction Agent sufficient funds for the payment of
declared dividends.
Each dividend will be payable to the holder or holders of record of Series F
MAPS as they appear on the stock books of the Company on the Business Day next
preceding the applicable Dividend Payment Date. Dividends in arrears for any
past Dividend Period (and for any past Dividend Quarter during a Long Dividend
Period) may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to the holder or holders of record of the Series F MAPS.
Any dividend payment made shall first be credited against the dividends
accumulated with respect to the earliest Dividend Period (or, if applicable, the
earliest Dividend Quarter) for which dividends have not been paid. So long as
the Series F MAPS are held of record by the nominee of the Securities
Depositary, dividends will be paid to the nominee of the Securities Depositary
on each Dividend Payment Date. The Securities Depositary will credit the
accounts of the Agent Members of Existing Holders in accordance with the
Securities Depositary's normal procedures, which now
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provide for payments in next-day funds settled through the New York Clearing
House. The Agent Member of an Existing Holder will be responsible for holding
or disbursing such payments to Existing Holders in accordance with the
instructions of such Existing Holders.
Holders of shares of the Series F MAPS shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends. No dividends will be declared or paid or set apart for payment on
the Series F MAPS for any period unless full cumulative dividends have been or
contemporaneously are declared and paid on all series of MAPS through the most
recent applicable Dividend Payment Date for such series of MAPS. No interest,
or sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series F MAPS which may be in arrears.
So long as any MAPS are Outstanding, the Company shall not declare, pay or set
aside for payment any dividend or other distribution in respect of Junior
Capital Stock or call for redemption, redeem, purchase or otherwise acquire for
consideration any shares of Junior Capital Stock unless (i) full cumulative
dividends for all past Dividend Periods (and, if applicable, for all past
Dividend Quarters) and all Dividend Payment Dates occurring on or prior to the
date of the transaction shall have been declared and paid (or declared and a sum
sufficient for payment of the dividends set apart for payment) on all such MAPS
Outstanding and (ii) the Company has redeemed (or set apart for payment a sum
sufficient for redemption) the full number of MAPS required to be redeemed after
giving any notice of an optional redemption.
The amount of dividends per share on Series F MAPS payable for each Dividend
Period (or for each Dividend Quarter) shall be computed by multiplying the
Applicable Rate for each Dividend Period (or Dividend Quarter) by a fraction,
the numerator of which shall be the number of days in the Dividend Period (or
Dividend Quarter) (calculated by counting both the last day and the first day
thereof) such share was Outstanding, and the denominator of which shall be 360
and multiplying the amount so obtained by $100,000.
(e) The dividend rate for each Dividend Period subsequent to the Initial
Dividend Period for the Series F MAPS will be, except as provided below, the
Applicable Rate.
Notwithstanding the results of any Auction or any other provision herein, the
dividend rate on the Series F MAPS shall not exceed the Maximum Applicable Rate
for any Dividend Period. The provisions of the previous sentence of this
paragraph notwithstanding, at any time that the application of the provisions of
the next paragraph would result in a dividend rate on the Series F MAPS being in
excess of the Maximum Applicable Rate, the maximum dividend rate applicable to
such Series F MAPS shall be such higher dividend rate as provided below.
In the event of the failure by the Company to pay to the Auction Agent by
12:00 noon, New York City time, (i) on the Business Day next preceding any
Dividend Payment Date, the full amount of any dividend (whether or not earned or
declared) to be paid on such Dividend Payment Date on the Series F MAPS or (ii)
on the Business Day next preceding any redemption date, the full redemption
price (including accumulated and unpaid dividends) to be paid on such redemption
date for any share of the Series F MAPS (in each case referred to as a "Failure
to Deposit"), then, until the full amount due shall have been paid to the
Auction Agent, Auctions will be suspended and the Applicable Rate for such
Series shall be the Default Rate as determined as of the Business Day preceding
the Failure to Deposit. If such Failure to Deposit is cured within three
Business Days as provided below, the Applicable Rate for the Dividend Period
commencing on the second Business Day following such cure will be based upon the
results of an Auction to be held on the Business Day next succeeding such cure.
Unless such a cure is effected, the Default Rate shall continue in effect until
there shall occur a Dividend Payment Date at least two Business Days prior to
which the full amount of any dividends (whether or not earned or declared)
payable on each Dividend Payment Date prior to and including such Dividend
Payment Date, and the full amount of any redemption price (including accumulated
and unpaid dividends) then due, shall have been paid to the Auction Agent, and
thereupon Auctions shall resume on the terms stated herein for Dividend Periods
commencing with such Dividend Payment Date. If an Auction is not held on an
Auction Date for any reason (other than the
9
suspension of Auctions due to a Failure to Deposit), the dividend rate for the
applicable Dividend Period shall be the Maximum Applicable Rate determined as of
such Auction Date.
Any Failure to Deposit with respect to the Series F MAPS shall be deemed to be
cured if, within three Business Days of such Failure to Deposit, with respect to
a Failure to Deposit relating to (a) the payment of dividends, the Company
deposits with the Auction Agent by 12:00 noon, New York City time, all
accumulated and unpaid dividends on the Series F MAPS, including the full amount
of any dividends to be paid with respect to the Dividend Period with respect to
which the Failure to Deposit occurred, plus an amount computed by multiplying
the Default Rate by a fraction, the numerator of which shall be the number of
days during the period from the Dividend Payment Date in respect of which such
Failure to Deposit occurred through the day preceding the Business Day next
succeeding the Auction held following such cure and the denominator of which
shall be 360, and applying the rate obtained against the aggregate liquidation
preference of the Series F MAPS and (b) the redemption of shares of Series F
MAPS, the deposit by the Company with the Auction Agent, by 12:00 noon, New York
City time, of funds sufficient for the redemption of such shares (including
accumulated and unpaid dividends), plus an amount computed by multiplying the
Default Rate by a fraction, the numerator of which shall be the number of days
for which such Failure to Deposit is not cured in accordance with this paragraph
(including the day such Failure to Deposit occurs and excluding the day such
Failure to Deposit is cured) and the denominator of which shall be 360, and
applying the rate obtained against the aggregate liquidation preference of the
shares of Series F MAPS to be redeemed, and the giving of irrevocable
instructions by the Company to apply such funds and, if applicable, the income
and proceeds therefrom, to the payment of the redemption price (including
accumulated and unpaid dividends) for such shares of the Series F MAPS. If the
Company shall have cured such Failure to Deposit by making timely payment to the
Auction Agent, the Auction Agent shall give telephonic and written notice of
such cure to each Existing Holder of MAPS at the telephone number and address
specified in such Existing Holder's Master Purchaser's Letter and to each
Broker-Dealer as promptly as practicable after such cure is effected and
schedule an Auction for such Series for the next Business Day.
Section 3. Redemption.
The Series F MAPS shall be redeemable by the Company as provided below:
(a) At the option of the Company, the Series F MAPS may be redeemed, in whole
or from time to time in part, out of funds legally available therefor, on any
Dividend Payment Date for the Series F MAPS, upon at least fifteen but not more
than 45 days' notice, at a redemption price per share equal to the sum of
$100,000 plus an amount equal to accumulated and unpaid dividends thereon
(whether or not earned or declared) to the date that the Company pays the full
amount payable upon redemption of the shares of Series F MAPS. The Company may
only redeem Series F MAPS in whole shares. Pursuant to such right of optional
redemption, the Company may elect to redeem some or all of the shares of Series
F MAPS without redeeming shares of any other series of MAPS or redeem some or
all of the shares of any other series of MAPS without redeeming shares of Series
F MAPS. In the event of a partial redemption, the shares to be redeemed shall
be selected by the Company or, at the Company's request, the Auction Agent by
lot or by such other method as such Person shall deem fair and equitable.
Upon any date fixed for redemption (unless a Failure to Deposit occurs), all
rights of the holders of shares of Series F MAPS called for redemption will
cease and terminate, except the right of such holders to receive the amounts
payable in respect of such redemption therefor, but without interest, and such
shares of the Series F MAPS will be deemed no longer Outstanding.
So long as all of the Series F MAPS to be redeemed are held of record by a
nominee of the Securities Depositary, the redemption price (including
accumulated and unpaid dividends) for such shares of the
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Series F MAPS will be paid by the Company to the Securities Depositary on the
redemption date for distribution to Agent Members in accordance with its normal
procedures.
(b) Any shares of Series F MAPS which shall at any time have been redeemed or
purchased by the Company shall, after such redemption or purchase, be restored
to the status of authorized unissued shares, undesignated as to series, in the
manner provided by the laws of the State of California.
Section 4. Conversion or Exchange.
The holders of shares of Series F MAPS shall not have any rights to convert
such shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of the Capital Stock of
the Company or into any other securities of the Company.
Section 5. Liquidation Rights.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, holders of the Series F MAPS will be
entitled to receive, out of the assets of the Company available for distribution
to shareholders after satisfying claims of creditors but before any payment or
distribution of assets is made to holders of Junior Capital Stock, a
preferential liquidation distribution in the amount of $100,000 per share plus
an amount equal to accumulated and unpaid dividends on each such share (whether
or not declared) to and including the date of such distribution. If upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
the assets of the Company are insufficient to pay the holders of the Series F
MAPS the full amount of the preferential liquidation distributions to which they
are entitled, holders of the Series F MAPS will share ratably in any such
distribution of such assets with holders of Parity Capital Stock. Unless and
until payment in full has been made to holders of the Series F MAPS of the
liquidation distributions to which they are entitled as described in this
paragraph, no dividends or distributions will be made to holders of the
Company's Junior Capital Stock, and no purchase, redemption or other acquisition
for any consideration by the Company will be made in respect of the Company's
Junior Capital Stock. After the payment to the holders of the Series F MAPS of
the full amount of the preferential liquidation distributions to which they are
entitled pursuant to this paragraph, such holders (in their capacity as such
holders) will have no right or claim to any of the remaining assets of the
Company. Neither the consolidation nor the merger of the Company with or into
any other corporation or corporations, nor the sale or transfer by the Company
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Company for purposes of this Section 5.
Section 6. Voting Rights.
(a) Holders of the Series F MAPS will have no voting rights except as
hereinafter described, or as expressly required by law.
During any period when dividends on the Series F MAPS or any other Parity
Capital Stock of the Company which has voting rights comparable to the Series F
MAPS which are then exercisable (the Series F MAPS and all such other securities
being referred to as the "Parity Securities") shall be in arrears for at least
180 consecutive days and shall not have been paid in full (a "Default Period"),
the holders of record of the Parity Securities voting as described below will be
entitled to elect two directors to the Board of Directors (the "Additional
Directors") whether or not the Board of Directors of the Company has taken
appropriate action to increase the established number of directors of the
Company by two, and the holders of the Common Stock as a class, shall be
entitled to elect the remaining number of directors. If the Board of Directors
has not taken appropriate action to authorize an increase in the number of
directors by two and
11
there are not two vacancies then existing on the Board of Directors, then, upon
the election of the two Additional Directors as provided below, the term of all
previously sitting directors shall cease (a "Termination of Directors").
As soon as practicable after the beginning of a Default Period (or a
reinstatement of the voting rights of holders of Parity Securities as provided
herein), the Board of Directors of the Company will call or cause to be called a
special meeting of the holders of Parity Securities and, in the case of a
Termination of Directors, all holders of Capital Stock of the Company entitled
to vote for the election of directors generally ("Other Voting Securities"), by
mailing or causing to be mailed to such holders a notice of such special meeting
to be held not less than ten and not more than 45 days after the date such
notice is given. If the Board of Directors of the Company does not call or
cause to be called such a special meeting, it may be called by any of such
holders on like notice. The record date for determining the holders of the
Parity Securities and, if applicable, Other Voting Securities entitled to notice
of and to vote at such special meeting will be the close of business on the
Business Day preceding the day on which such notice is mailed. At any such
special meeting, the holders of Parity Securities, by plurality vote, voting
together as a single class without regard to series (to the exclusion of the
holders of Junior Capital Stock) will be entitled to elect the two Additional
Directors on the basis of one vote per $100,000 liquidation preference
(excluding amounts in respect of accumulated and unpaid dividends) and, in the
case of a Termination of Directors, the holders of Other Voting Securities shall
be entitled to elect the remaining members of the Board of Directors in the same
manner as if such election had occurred at an annual meeting of the Company.
The holder or holders of one-third of the Parity Securities then outstanding,
present in person or by proxy, will constitute a quorum for the election of the
Additional Directors except as otherwise provided by law. Notice of all
meetings at which holders of the Series F MAPS shall be entitled to vote will be
given to such holders at their addresses as they appear on the register of the
Company. If a Default Period shall terminate after the notice of a special
meeting has been given but before such special meeting has been held, the
Company shall, as soon as practicable after such termination, mail or cause to
be mailed notice of such termination to holders of the Parity Securities and, if
applicable, Other Voting Securities that would have been entitled to vote at
such special meeting.
So long as a Default Period continues, (i) any vacancy in the office of an
Additional Director may be filled (except as provided in the following clause
(ii)) by the person appointed in an instrument in writing signed by the
remaining Additional Director and filed with the Secretary of the Company or, in
the event there is no remaining Additional Director, by vote of the holders of
the outstanding Parity Securities, voting together as a single class without
regard to series, in a meeting of shareholders or at a meeting of holders of
Parity Securities called for such purpose, and (ii) in the case of the removal
of any Additional Director, the vacancy may be filled by appointment by the
person elected by the vote of the holders of the outstanding Parity Securities,
voting together as a single class without regard to series, at the same meeting
at which such removal shall be voted upon or any subsequent meeting. Each
director who shall be elected or appointed by the remaining Additional Director
as aforesaid shall be an Additional Director.
At such time as a Default Period shall terminate, (i) the term of office of
the Additional Directors shall terminate and (ii) the voting rights of the
holders of the Parity Securities to elect directors shall cease (subject to the
occurrence of a subsequent Default Period).
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(b) Except as provided below, so long as any Series F MAPS remain
Outstanding, the Company shall not, without the consent of the holders of at
least two-thirds of all of the MAPS then outstanding (taken together as a single
class), given in person or by proxy, either in writing or at a meeting (voting
separately as a single class), (i) authorize, create or issue, or increase the
authorized amount of, any Capital Stock of the Company of any class ranking, as
to dividends or upon the liquidation, dissolution or winding up of the Company,
prior to the Series F MAPS, or reclassify any authorized Capital Stock of the
Company into any such Capital Stock, or authorize, create or issue any
obligation or security convertible into or evidencing the right to purchase any
such Capital Stock, or (ii) amend, alter or repeal the provisions of the
Company's Articles of Incorporation, whether by merger, consolidation, share
exchange, division or otherwise, so as to adversely affect any preference,
limitation or special right of the Series F MAPS.
Except as provided by law, the consent of the holders of the Series F MAPS is
not required and such holders are not entitled to vote upon (i) the
authorization, creation, issuance or increase in the authorized amount of the
Common Stock, additional series of MAPS or any Capital Stock of the Company of
any class ranking, as to dividends and upon the liquidation, dissolution or
winding up of the Company, on a parity with or junior to the Series F MAPS or
(ii) any merger, consolidation, share exchange or division of the Company (or
any successor corporation) with or into another corporation the result of which
is that the Series F MAPS that may be Outstanding from time to time may be
junior to any preferred shares of such corporation as to dividends and upon the
liquidation, dissolution or winding up of the surviving corporation if on or
prior to the date of effectiveness of such merger or consolidation, the Company
shall have given Moody's and S&P written notice of such merger or consolidation
and Moody's and S&P shall have confirmed in writing that the transaction will
not adversely affect the then existing rating for the MAPS. If either Moody's
or S&P shall change its rating categories for preferred stock, then the
determination of whether the transaction will not adversely affect the then
existing rating for the MAPS shall be made based upon the substantially
equivalent new rating categories for preferred stock of such rating agency. If
either Moody's or S&P, or both, shall not make a rating available for the Series
F MAPS necessary to make such a determination or will not confirm whether the
transaction will adversely affect its then existing rating for the Series F
MAPS, such confirmation will be sought from two Substitute Rating Agencies if
they have made ratings available for the Series F MAPS necessary to make the
determination and are willing to make such confirmation or, in the event that
only one such rating agency shall make such ratings available and is willing to
make such confirmation, based upon such rating agency's confirmation.
Section 7. Sinking Fund.
Shares of Series F MAPS are not subject or entitled to the benefit of a
sinking fund.
ARTICLE THREE
AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms not defined in this Section 1 shall have the respective
meanings specified in Section 1 of ARTICLE TWO. As used in this ARTICLE THREE,
the following terms have the following meanings:
(a) "Affiliate" means any Person controlled by, in control of or under common
control with the Company.
13
(b) "Applicable Determining Rate" means, (i) for any Standard Dividend Period
or Short Dividend Period of 183 days or less, the Applicable "AA" Composite
Commercial Paper Rate, (ii) for any Short Dividend Period of 184 to 364 days,
the Applicable Treasury Bill Rate and (iii) for any Long Dividend Period, the
Applicable Treasury Note Rate.
(c) "Available Shares of Series F MAPS" has the meaning specified in Section
4(a) of this ARTICLE THREE.
(d) "Bid" has the meaning specified in Section 2(a) of this ARTICLE THREE.
(e) "Bidder" has the meaning specified in Section 2(a) of this ARTICLE THREE.
(f) "Hold Order" has the meaning specified in Section 2(a) of this ARTICLE
THREE.
(g) "Order" has the meaning specified in Section 2(a) of this ARTICLE THREE.
(h) "Sell Order" has the meaning specified in Section 2(a) of this ARTICLE
THREE.
(i) "Submission Deadline" means 1:00 P.M., New York City time, on any Auction
Date or such other time on any Auction Date as may be specified from time to
time by the Auction Agent as the time prior to which each Broker-Dealer must
submit to the Auction Agent in writing all Orders obtained by it for the Auction
to be conducted on such Auction Date.
(j) "Submitted Bid" has the meaning specified in Section 3(a) of this ARTICLE
THREE.
(k) "Submitted Hold Order" has the meaning specified in Section 3(a) of this
ARTICLE THREE.
(l) "Submitted Order" has the meaning specified in Section 3(a) of this
ARTICLE THREE.
(m) "Submitted Sell Order" has the meaning specified in Section 3(a) of this
ARTICLE THREE.
(n) "Winning Bid Rate" has the meaning specified in Section 4(a) of this
ARTICLE THREE.
Section 2. Orders by Existing Holders and Potential Holders.
(a) Prior to the Submission Deadline on each Auction Date for Series F MAPS:
(i) each Existing Holder may submit to a Broker-Dealer information as to:
(A) the number of Outstanding shares of Series F MAPS, if any, held
by such Existing Holder that such Existing Holder desires to continue to hold
without regard to the Applicable Rate for the next succeeding Dividend Period;
(B) the number of Outstanding shares of Series F MAPS, if any, held
by such Existing Holder that such Existing Holder desires to sell, provided
that the Applicable Rate for the next succeeding Dividend Period is less than
the rate per annum specified by such Existing Holder; and/or
(C) the number of Outstanding shares of Series F MAPS, if any, held
by such Existing Holder that such Existing Holder desires to sell without
regard to the Applicable Rate for the next succeeding Dividend Period; and
14
(ii) each Broker-Dealer, using a list of Potential Holders that shall be
maintained in accordance with the provisions set forth in the Broker-Dealer
Agreement for the purpose of conducting a competitive Auction, shall contact
both Existing Holders and Potential Holders, including Existing Holders with
respect to an offer by any such Existing Holder to purchase additional shares
of Series F MAPS, on such list to notify such Existing Holders and Potential
Holders as to the length of the next Dividend Period and (A) with respect to
any Short Dividend Period or Long Dividend Period, the Dividend Payment
Date(s) and (B) with respect to any Long Dividend Period, any dates before
which shares of Series F MAPS may not be redeemed and any redemption premium
applicable in an optional redemption and to determine the number of
Outstanding shares of Series F MAPS, if any, with respect to which each such
Existing Holder desires to submit an Order and each such Potential Holder
desires to submit a Bid.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i) or (ii) of this Subsection (a) is hereinafter
referred to as an "Order" and each Existing Holder and each Potential Holder
placing an Order is hereinafter referred to as a "Bidder," an Order containing
the information referred to in clause (i)(A) of this Su bsection (a) is
hereinafter referred to as a "Hold Order," an Order containing the information
referred to in clause (i)(B) or (ii) of this Subsection (a) is hereinafter
referred to as a "Bid;" and an Order containing the information referred to in
clause (i)(C) of this Subsection (a) is hereinafter referred to as a "Sell
Order."
(b) (i) A Bid by an Existing Holder shall constitute an irrevocable offer
to sell:
(A) the number of Outstanding shares of Series F MAPS specified in
such Bid if the Applicable Rate determined on such Auction Date shall be less
than the rate per annum specified in such Bid; or
(B) such number or a lesser number of Outstanding shares of Series F
MAPS to be determined as set forth in Subsections (a)(iv) and (c) of Section 5
of this ARTICLE THREE if the Applicable Rate determined on such Auction Date
shall be equal to the rate per annum specified therein; or
(C) a lesser number of Outstanding shares of Series F MAPS to be
determined as set forth in Subsections (b)(iii) and (c) of Section 5 of this
ARTICLE THREE if such specified rate per annum shall be higher than the
Maximum Applicable Rate and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of Outstanding shares of Series F MAPS specified in
such Sell Order; or
(B) such number or a lesser number of Outstanding shares of Series F
MAPS to be determined as set forth in Subsections (b)(iii) and (c) of Section
5 of this ARTICLE THREE if Sufficient Clearing Bids do not exist.
(iii) A Bid by a Potential Holder shall constitute an irrevocable offer to
purchase:
(A) the number of Outstanding shares of Series F MAPS specified in
such Bid if the Applicable Rate determined on such Auction Date shall be
higher than the rate per annum specified in such Bid; or
(B) such number or a lesser number of Outstanding shares of Series F
MAPS to be determined as set forth in Subsections (a)(v) and (d) of Section 5
of this ARTICLE THREE if the Applicable Rate determined on such Auction Date
shall be equal to the rate per annum specified therein.
15
(c) Orders may be submitted for whole shares of MAPS only. Orders submitted
for fractional shares of MAPS shall not be valid.
Section 3. Submission of Orders by Broker-Dealers to Auction Agent.
(a) Each Broker-Dealer shall submit in writing to the Auction Agent prior to
the Submission Deadline on each Auction Date for the Series F MAPS all Orders
obtained by such Broker-Dealer, specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of Outstanding shares of Series F MAPS that are
the subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder;
(A) the number of Outstanding shares of Series F MAPS, if any,
subject to any Hold Order placed by such Existing Holder;
(B) the number of Outstanding shares of Series F MAPS, if any,
subject to any Bid placed by such Existing Holder and the rate per annum
specified in such Bid; and
(C) the number of Outstanding shares of Series F MAPS, if any,
subject to any Sell Order placed by such Existing Holder; and
(iv) to the extent such Bidder is a Potential Holder, the rate per annum
specified in such Potential Holder's Bid.
(Each "Hold Order," "Bid" or "Sell Order" as submitted or deemed submitted
by a Broker-Dealer is hereinafter referred to individually as a "Submitted
Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may
be, or as a "Submitted Order.")
(b) If any rate per annum specified in any Submitted Bid contains more than
three figures to the right of the decimal point, the Auction Agent shall round
such rate up to the next highest one-thousandth (.001) of 1%.
(c) If one or more Orders covering in the aggregate all of the Outstanding
shares of Series F MAPS held by an Existing Holder are not submitted to the
Auction Agent prior to the Submission Deadline for any reason (including the
failure of a Broker-Dealer to contact such Existing Holder or to submit such
Existing Holder's Order or Orders), such Existing Holder shall be deemed to have
submitted a Hold Order covering the number of Outstanding shares of Series F
MAPS held by such Existing Holder that are not subject to Orders submitted to
the Auction Agent.
(d) A Submitted Order or Submitted Orders of an Existing Holder that cover in
the aggregate more than the number of Outstanding shares of Series F MAPS held
by such Existing Holder will be considered valid in the following order of
priority:
(i) any Submitted Hold Order of such Existing Holder will be considered
valid up to and including the number of Outstanding shares of Series F MAPS
held by such Existing Holder, provided that, if there is more than one such
Submitted Hold Order and the aggregate number of shares of Series F MAPS
subject to such Submitted Hold Orders exceeds the number of Outstanding shares
of Series F MAPS held by such Existing Holder, the number of shares of Series
F MAPS subject to each
16
such Submitted Hold Order will be reduced pro rata so that such Submitted Hold
Orders in the aggregate will cover exactly the number of Outstanding shares of
Series F MAPS held by such Existing Holder;
(ii) any Submitted Bids of such Existing Holder will be considered valid (in
the ascending order of their respective rates per annum if there is more than
one Submitted Bid of such Existing Holder) for the number of Outstanding
shares of Series F MAPS held by such Existing Holder equal to the difference
between (A) the number of Outstanding shares of Series F MAPS held by such
Existing Holder and (B) the number of Outstanding shares of Series F MAPS
subject to any Submitted Hold Order of such Existing Holder referred to in
clause (d)(i) above (and, if more than one Submitted Bid of such Existing
Holder specifies the same rate per annum and together they cover more than the
remaining number of shares of Series F MAPS that can be the subject of valid
Submitted Bids of such Existing Holder after application of clause (d)(i)
above and of the foregoing portion of this clause (d)(ii) to any Submitted Bid
or Submitted Bids of such Existing Holder specifying a lower rate or rates per
annum, the number of shares of Series F MAPS subject to each of such Submitted
Bids specifying the same rate per annum will be reduced pro rata so that such
Submitted Bids, in the aggregate, cover exactly such remaining number of
Outstanding shares of Series F MAPS of such Existing Holder);
(iii) any Submitted Sell Order of such Existing Holder will be considered
valid up to and including the excess of the number of Outstanding shares of
Series F MAPS held by such Existing Holder over the sum of (A) the number of
shares of Series F MAPS subject to Submitted Hold Orders by such Existing
Holder referred to in clause (d)(i) above and (B) the number of shares of
Series F MAPS subject to valid Submitted Bids by such Existing Holder referred
to in clause (d)(ii) above; provided that, if there is more than one Submitted
Sell Order of such Existing Holder and the number of shares of Series F MAPS
subject to such Submitted Sell Orders is greater than such excess, the number
of shares of Series F MAPS subject to each of such Submitted Sell Orders will
be reduced pro rata so that such Submitted Sell Orders, in the aggregate, will
cover exactly the number of shares of Series F MAPS equal to such excess.
The number of Outstanding shares of Series F MAPS, if any, subject to Submitted
Bids of such Existing Holder not valid under clause (d)(ii) above shall be
treated as the subject of a Submitted Bid by a Potential Holder at the rate per
annum specified in such Submitted Bids.
(e) If there is more than one Submitted Bid by any Potential Holder in any
Auction, each such Submitted Bid shall be considered a separate Submitted Bid
with respect to the rate per annum and number of shares of Series F MAPS
specified therein.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate.
(a) Not earlier than the Submission Deadline on each Auction Date for the
Series F MAPS, the Auction Agent shall assemble all Orders submitted or deemed
submitted to it by the Broker-Dealers and shall determine:
(i) the excess of the total number of Outstanding shares of Series F MAPS
over the number of shares of Series F MAPS that are the subject of Submitted
Hold Orders (such excess being hereinafter referred to as the "Available
Shares of Series F MAPS");
(ii) from the Submitted Orders, whether the number of Outstanding shares of
Series F MAPS that are the subject of Submitted Bids by Potential Holders
specifying one or more rates per annum equal to or lower than the Maximum
Applicable Rate exceeds or is equal to the sum of:
17
(A) the number of Outstanding shares of Series F MAPS that are the
subject of Submitted Bids by Existing Holders specifying one or more rates per
annum higher than the Maximum Applicable Rate, and
(B) the number of Outstanding shares of Series F MAPS that are
subject to Submitted Sell Orders.
(if such excess or such equality exists (other than because the number of
Outstanding shares of Series F MAPS in clauses (A) and (B) above are each zero
because all of the Outstanding shares of Series F MAPS are the subject of
Submitted Hold Orders), there shall exist "Sufficient Clearing Bids" and such
Submitted Bids by Potential Holders shall be hereinafter referred to
collectively as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the winning bid rate (the "Winning
Bid Rate"), which shall be the lowest rate per annum specified in the
Submitted Bids that if:
(A) each Submitted Bid from Existing Holders specifying the Winning
Bid Rate and all other Submitted Bids from Existing Holders specifying lower
rates per annum were accepted, thus entitling such Existing Holders to
continue to hold the shares of Series F MAPS that are the subject of such
Submitted Bids, and
(B) each Submitted Bid from Potential Holders specifying the Winning
Bid Rate and all other Submitted Bids from Potential Holders specifying lower
rates per annum were accepted, thus entitling such Potential Holders to
purchase the shares of Series F MAPS that are the subject of such Submitted
Bids,
would result in such Existing Holders described in subclause (iii)(A) continuing
to hold an aggregate number of Outstanding shares of Series F MAPS that, when
added to the number of Outstanding shares of Series F MAPS to be purchased by
such Potential Holders described in subclause (iii)(B), would equal or exceed
the number of Available Shares of Series F MAPS.
(b) In connection with any Auction and promptly after the Auction Agent has
made the determinations pursuant to Subsection (a), the Auction Agent shall
advise the Company of the Maximum Applicable Rate and, based on such
determinations, the Applicable Rate for the next succeeding Dividend Period as
follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of the
Outstanding shares of Series F MAPS are the subject of Submitted Hold Orders),
that the next succeeding Dividend Period will be a Standard Dividend Period
and the Applicable Rate for the next succeeding Dividend Period shall be equal
to the Maximum Applicable Rate for a Standard Dividend Period determined as of
the Business Day immediately preceding such Auction; or
(iii) if all of the Outstanding shares of Series F MAPS are the subject of
Submitted Hold Orders, that the Applicable Rate for the next succeeding
Dividend Period shall be equal to 59% of the Applicable "AA" Composite
Commercial Paper Rate, in the case of Series F MAPS with a Standard Dividend
Period or a Short Dividend Period of 183 days or less, 59% of the Applicable
Treasury Bill Rate in the case of Series F MAPS with a Short Dividend Period
of 184 to 364 days, or 59% of the Applicable Treasury Note Rate in the case of
Series F MAPS with a Long Dividend Period, in effect on the Auction Date.
18
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares of Series F MAPS.
Based on the determinations made pursuant to Subsection (a) of Section 4, the
Submitted Bids and Submitted Sell Orders shall be accepted or rejected and the
Auction Agent shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Subsections (c) and (d), Submitted Bids and Submitted Sell Orders shall be
accepted or rejected in the following order of priority and all other Submitted
Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be accepted and the
Submitted Bid of each of the Existing Holders specifying any rate per annum
that is higher than the Winning Bid Rate shall be rejected, thus requiring
each such Existing Holder to sell the Outstanding shares of Series F MAPS that
are the subject of such Submitted Sell Order or Submitted Bid;
(ii) the Submitted Bid of each of the Existing Holders specifying any rate
per annum that is lower than the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the Outstanding shares
of Series F MAPS that are the subject of such Submitted Bid;
(iii) the Submitted Bid of each of the Potential Holders specifying any rate
per annum that is lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bid of each of the Existing Holders specifying a rate per
annum that is equal to the Winning Bid Rate shall be accepted, thus entitling
each such Existing Holder to continue to hold the Outstanding shares of Series
F MAPS that are the subject of such Submitted Bid, unless the number of
Outstanding shares of Series F MAPS subject to all such Submitted Bids shall
be greater than the number of Outstanding shares of Series F MAPS ("Remaining
Shares of Series F MAPS") equal to the excess of the Available Shares of
Series F MAPS over the number of Outstanding shares of Series F MAPS subject
to Submitted Bids described in Subsections (a)(ii) and (a)(iii), in which
event the Submitted Bids of each such Existing Holder shall be rejected, and
each such Existing Holder shall be required to sell Outstanding shares of
Series F MAPS, but only in an amount equal to the difference between (A) the
number of Outstanding shares of Series F MAPS then held by such Existing
Holder subject to such Submitted Bid and (B) the number of shares of Series F
MAPS obtained by multiplying (x) the number of Remaining Shares of Series F
MAPS by (y) a fraction, the numerator of which shall be the number of
Outstanding shares of Series F MAPS held by such Existing Holder subject to
such Submitted Bid and the denominator of which shall be the aggregate number
of Outstanding shares of Series F MAPS subject to such Submitted Bids made by
all such Existing Holders that specified a rate per annum equal to the Winning
Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying a rate
per annum that is equal to the Winning Bid Rate shall be accepted, but only in
an amount equal to the number of Outstanding shares of Series F MAPS obtained
by multiplying (x) the difference between the Available Shares of Series F
MAPS and the number of Outstanding shares of Series F MAPS subject to
Submitted Bids described in Subsections (a)(ii), (a)(iii) and (a)(iv) by (y) a
fraction, the numerator of which shall be the number of Outstanding shares of
Series F MAPS subject to such Submitted Bid and the denominator of which shall
be the aggregate number of Outstanding shares of Series F MAPS subject to such
Submitted Bids made by all such Potential Holders that specified rates per
annum equal to the Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of Series F MAPS are subject to Submitted Hold Orders),
subject to the provisions of Subsection (c),
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Submitted Orders shall be accepted or rejected as follows in the following order
of priority and all other Submitted Bids of Potential Holders shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any rate per annum
that is equal to or lower than the Maximum Applicable Rate shall be accepted,
thus entitling such Existing Holder to continue to hold the Outstanding shares
of Series F MAPS that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any rate per
annum that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus requiring such Potential Holder to purchase the Outstanding
shares of Series F MAPS that are the subject of such Submitted Bid; and
(iii) the Submitted Bids of each Existing Holder specifying any rate per
annum that is higher than the Maximum Applicable Rate shall be rejected, thus
requiring each such Existing Holder to sell the Outstanding shares of Series F
MAPS that are the subject of such Submitted Bid, and the Submitted Sell Orders
of each Existing Holder shall be accepted, in both cases only in an amount
equal to the difference between (A) the number of Outstanding shares of Series
F MAPS then held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and (B) the number of shares of Series F MAPS obtained by
multiplying (x) the difference between the Available Shares of Series D MAPS
and the aggregate number of Outstanding shares of Series F MAPS subject to
Submitted Bids described in Subsections (b)(i) and (b)(ii) by (y) a fraction,
the numerator of which shall be the number of Outstanding shares of Series F
MAPS held by such Existing Holder subject to such Submitted Bid or Submitted
Sell Order and the denominator of which shall be the aggregate number of
Outstanding shares of Series F MAPS subject to all such Submitted Bids and
Submitted Sell Orders.
(c) If, as a result of the procedures described in Subsections (a) or (b),
any Existing Holder would be entitled or required to sell or any Potential
Holder would be entitled or required to purchase, a fraction of a share of
Series F MAPS on any Auction Date, the Auction Agent shall, in such manner as in
its sole discretion it shall determine, round up or down the number of shares of
Series F MAPS to be purchased or sold by any Existing Holder or Potential Holder
on such Auction Date so that only whole shares of Series F MAPS will be entitled
or required to be sold or purchased.
(d) If, as a result of the procedures described in Subsection (a), any
Potential Holder would be entitled or required to purchase less than a whole
share of Series F MAPS on any Auction Date, the Auction Agent shall, in such
manner as in its sole discretion it shall determine, allocate shares of Series F
MAPS for purchase among Potential Holders so that only whole shares of Series F
MAPS are purchased on such Auction Date by any Potential Holder, even if such
allocation results in one or more of such Potential Holders not purchasing any
shares of Series F MAPS on such Auction Date.
(e) Based on the results of each Auction, the Auction Agent shall determine,
with respect to each Broker-Dealer that submitted Bids or Sell Orders on behalf
of Existing Holders or Potential Holders, the aggregate number of Outstanding
shares of Series F MAPS to be purchased and the aggregate number of Outstanding
shares of Series F MAPS to be sold by such Potential Holders and Existing
Holders and, to the extent that such aggregate number of Outstanding shares of
Series F MAPS to be purchased and such aggregate number of Outstanding shares of
Series F MAPS to be sold differ, the Auction Agent shall determine to which
other Broker-Dealer or Broker-Dealers acting for one or more purchasers such
Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers
acting for one or more sellers such Broker-Dealer shall receive, as the case may
be, Outstanding shares of Series F MAPS.
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Section 6. Participation in Auctions.
The Company and its Affiliates shall not submit any Order in any Auction
except as set forth in the next sentence. Any Broker-Dealer that is an
Affiliate of the Company may submit Orders in Auctions but only if such Orders
are not for its own account, except that if such affiliated Broker-Dealer holds
shares of Series F MAPS for its own account, it must submit a Sell Order in the
next Auction with respect to such shares of Series F MAPS.
Section 7. Miscellaneous.
An Existing Holder (a) may sell, transfer or otherwise dispose of shares of
Series F MAPS only pursuant to a Bid or Sell Order in accordance with the
procedures described in these Auction Procedures or to or through a Broker-
Dealer or to a Person that has delivered a signed copy of a Master Purchaser's
Letter to a Broker-Dealer, provided that in the case of all transfers other than
pursuant to Auctions such Existing Holder, its Broker-Dealer or its Agent Member
advises the Auction Agent of such transfer and (b) unless otherwise required by
law, shall have the beneficial ownership of the shares of Series F MAPS held by
it maintained in book-entry form by the Securities Depositary in the account of
its Agent Member, which in turn will maintain records of such Existing Holder's
beneficial ownership. All of the Outstanding shares of Series F MAPS of each
Series shall be represented by a single certificate for each Series registered
in the name of the nominee of the Securities Depositary unless otherwise
required by law or unless there is no Securities Depositary. If there is no
Securities Depositary, shares of Series F MAPS shall be registered in the
register of the Company in the name of the Existing Holder thereof and such
Existing Holder thereupon will be entitled to receive a certificate therefor and
be required to deliver a certificate therefor upon transfer or exchange thereof.
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RESOLVED FURTHER, that the Chairman of the Board, the President or any Vice
President, and the Secretary, the Chief Financial Officer, the Treasurer, or any
Assistant Secretary or Assistant Treasurer of this Company are each authorized
to execute, verify, and file a certificate of determination of preferences in
accordance with California law.
3. The authorized number of shares of Preferred Stock of the Company is
20,000,000, and the number of shares constituting Series F MAPS, none of which
has been issued, is 500.
IN WITNESS WHEREOF, the undersigned have executed this certificate on January
25, 1995.
/s/ STEVEN F. UDVAR-HAZY
---------------------------------------------
STEVEN F. UDVAR-HAZY, President
/s/ JULIE I. SACKMAN
---------------------------------------------
JULIE I. SACKMAN, Secretary
The undersigned, STEVEN F. UDVAR-HAZY and JULIE I. SACKMAN, the President and
Secretary, respectively, of INTERNATIONAL LEASE FINANCE CORPORATION, each
declares under penalty of perjury that the matters set forth in the foregoing
Certificate are true of his or her own knowledge.
Executed at Los Angeles, California on January 25, 1995.
/s/ STEVEN F. UDVAR-HAZY
---------------------------------------------
STEVEN F. UDVAR-HAZY
/s/ JULIE I. SACKMAN
---------------------------------------------
JULIE I. SACKMAN
22