EXHIBIT 3(i)
RESTATED
CERTIFICATE OF INCORPORATION
of
EXXON MOBIL CORPORATION
Exxon Mobil Corporation, a corporation organized and existing under
the laws of the State of New Jersey, restates and integrates its Certificate of
Incorporation, as heretofore restated and amended, to read in full as herein set
forth:
FIRST. The name of the corporation is:
EXXON MOBIL CORPORATION
SECOND. The address of the corporation's registered office is 830
Bear Tavern Road, West Trenton, New Jersey 08628-1020. The name of the
corporation's registered agent at such address, upon whom process against the
corporation may be served, is Corporation Service Company.
THIRD. The purposes for which the corporation is organized are to
engage in any or all activities within the purposes for which corporations now
or at any time hereafter may be organized under the New Jersey Business
Corporation Act and under all amendments and supplements thereto, or any
revision thereof or any statute enacted to take the place thereof, including but
not limited to the following:
(1) To do all kinds of mining, manufacturing and trading business;
transporting goods and merchandise by land or water in any manner; to buy, sell,
lease and improve lands; to build houses, structures, vessels, cars, wharves,
docks and piers; to lay and operate pipelines; to erect and operate telegraph
and telephone lines and lines for conducting electricity; to enter into and
carry out contracts of every kind pertaining to its business; to acquire, use,
sell and grant licenses under patent rights; to purchase or otherwise acquire,
hold, sell, assign and transfer shares of capital stock and bonds or other
evidences of indebtedness of corporations, and to exercise all the privileges of
ownership including voting upon the securities so held; to carry on its business
and have offices and agencies therefor in all parts of the world; and to hold,
purchase, mortgage and convey real estate and personal property within or
without the State of New Jersey;
(2) To engage in any activities encompassed within this Article Third
directly or through a subsidiary or subsidiaries and to take any and all acts
deemed appropriate to promote the interests of such subsidiary or subsidiaries,
including, without limiting the foregoing, the following: making contracts and
incurring liabilities for the benefit of such subsidiary or subsidiaries;
transferring or causing to be transferred to any such subsidiary or subsidiaries
assets of this corporation; guaranteeing dividends on any shares of the capital
stock of any such subsidiary; guaranteeing the principal and interest or either
of the bonds, debentures, notes or other evidences of indebtedness issued or
obligations incurred by any such subsidiary or
subsidiaries; securing said bonds, debentures, notes or other evidences of
indebtedness so guaranteed by mortgage of or security interest in the property
of this corporation; and contracting that said bonds, debentures, notes or other
evidences of indebtedness so guaranteed, whether secured or not, may be
convertible into shares of this corporation upon such terms and conditions as
may be approved by the board of directors;
(3) To guarantee the bonds, debentures, notes or other evidences of
indebtedness issued, or obligations incurred, by any corporation, partnership,
limited partnership, joint venture or other association in which this
corporation at the time such guarantee is made has a substantial interest or
where such guarantee is otherwise in furtherance of the interests of this
corporation; and
(4) To exercise as a purpose or purposes each power granted to
corporations by the New Jersey Business Corporation Act or by any amendment or
supplement thereto or by any statute enacted to take the place thereof, insofar
as such powers authorize or may hereafter authorize corporations to engage in
activities.
FOURTH. The aggregate number of shares which the corporation shall
have authority to issue is four billion seven hundred million (4,700,000,000)
shares, divided into two hundred million (200,000,000) shares of preferred stock
without par value and four billion five hundred million (4,500,000,000) shares
of common stock without par value.
(1) The board of directors of the corporation is authorized at any
time or from time to time (i) to divide the shares of preferred stock into
classes and into series within any class or classes of preferred stock; (ii) to
determine for any such class or series its designation, relative rights,
preferences and limitations; (iii) to determine the number of shares in any such
class or series (including a determination that such class or series shall
consist of a single share); (iv) to increase the number of shares of any such
class or series previously determined by it and to decrease such previously
determined number of shares to a number not less than that of the shares of such
class or series then outstanding; (v) to change the designation or number of
shares, or the relative rights, preferences and limitations of the shares, of
any theretofore established class or series no shares of which have been issued;
and (vi) to cause to be executed and filed without further approval of the
shareholders such amendment or amendments to the Restated Certificate of
Incorporation as may be required in order to accomplish any of the foregoing.
In particular, but without limiting the generality of the foregoing, the board
of directors is authorized to determine with respect to the shares of any class
or series of preferred stock:
(a) whether the holders thereof shall be entitled to cumulative,
non-cumulative or partially cumulative dividends or to no dividends and, with
respect to shares entitled to dividends, the dividend rate or rates (which may
be fixed or variable and may be made dependent upon facts ascertainable outside
of the Restated Certificate of Incorporation) and any other terms and conditions
relating to such dividends;
(b) whether the holders thereof shall be entitled to receive
dividends payable on a parity with or subordinate or in preference to the
dividends payable on any other class or series of shares of the corporation;
2
(c) whether, and if so to what extent and upon what terms and
conditions, the holders thereof shall be entitled to preferential rights upon
the liquidation of, or upon any distribution of the assets of, the corporation;
(d) whether, and if so upon what terms and conditions, such
shares shall be convertible into other securities;
(e) whether, and if so upon what terms and conditions, such
shares shall be redeemable;
(f) the terms and amount of any sinking fund provided for the
purchase or redemption of such shares; and
(g) the voting rights, if any, to be enjoyed by such shares and
the terms and conditions for the exercise thereof.
(2) Each holder of shares of common stock shall be entitled to one
vote for each share of common stock held of record by such holder on all matters
on which holders of shares of common stock are entitled to vote.
(3) No holder of any shares of common or preferred stock of the
corporation shall have any right as such holder (other than such right, if any,
as the board of directors in its discretion may determine) to purchase,
subscribe for or otherwise acquire any unissued or treasury shares, or any
option rights, or securities having conversion or option rights, of the
corporation now or hereafter authorized.
(4) The relative voting, dividend, liquidation and other rights,
preferences and limitations of the shares of the class of preferred stock
designated "Class A Preferred Stock" and the class of preferred stock designated
"Class B Preferred Stock" are as set forth in this Article FOURTH and in Exhibit
A to this Restated Certificate of Incorporation.
FIFTH. The following is a list of the names and residences of the
original shareholders, and of the number of shares held by each:
H.M. Flagler of New York City, One share.
Paul Babcock, Jr. of Jersey City, One share.
James McGee of Plainfield, New Jersey, One share.
Thos. C. Bushnell of Morristown, New Jersey, One share.
John D. Rockefeller of Cleveland, Ohio, }
Wm. Rockefeller of New York City, }
J.A. Bostwick of New York City, }
John D. Archbold of New York City, }
O.H. Payne of Cleveland, Ohio, }
Wm. G. Warden of Philadelphia, Pa., }
Benj. Brewster of New York City, }
Chas. Pratt of Brooklyn, N.Y., }
and H.M. Flagler of New York City. }
3
Trustees of Standard Oil Trust, twenty-nine thousand nine hundred and
ninety-six shares (29,996), of which twenty-one thousand seven hundred
and twenty-four shares (21,724) were issued for property purchased and
necessary for the business of this corporation.
SIXTH. The number of directors of the corporation as of November 30,
1999 is 19 and their names and business office addresses are:
4
Dr. Michael J. Boskin Mr. Phillip E. Lippincott
Hoover Institution P.O. Box 2159
Stanford University Park City, Utah 84060
Stanford, California 94305-6010
Mr. Harry J. Longwell
Mr. Rene Dahan 5959 Las Colinas Boulevard
5959 Las Colinas Boulevard Irving, Texas 75039-2298
Irving, Texas 75039-2298
Mrs. Marilyn Carlson Nelson
Mr. William T. Esrey Carlson Companies, Inc.
Sprint Corporation 1405 Xenium Lane North
2330 Shawnee Mission Pkwy. Plymouth, Minnesota 55441
Westwood, Kansas 66205
Mr. J. Richard Munro
Mr. Donald V. Fites Time Warner Cable
100 N. E. Adams Street 290 Harbor Drive
Peoria, IL 61629-9210 Stamford, CT 06902
Mr. Jess Hay Mr. Lucio A. Noto
Chase Tower 5959 Las Colinas Boulevard
2200 Ross Avenue Irving, TX 75039-2298
Dallas, Texas 75201-2764
Mr. Lee R. Raymond
Mr. Charles A. Heimbold, Jr. 5959 Las Colinas Boulevard
Bristol-Myers Squibb Company Irving, Texas 75039-2298
345 Park Avenue
New York, NY 10154-0037 Mr. Eugene A. Renna
5959 Las Colinas Boulevard
Mr. James R. Houghton Irving, Texas 75039-2298
80 East Market Street
Corning, New York 14830 Mr. Walter V. Shipley
The Chase Manhattan Corporation
Mr. William R. Howell 270 Park Avenue
6501 Legacy Drive New York, New York 10017-2070
Plano, Texas 75024-3698
Mr. Robert E. Wilhelm
Mrs. Helene L. Kaplan 5959 Las Colinas Boulevard
Skadden, Arps, Slate, Meagher & Flom Irving, Texas 75039-2298
919 Third Avenue
New York, NY 10022-3897
Dr. Reatha Clark King
General Mills Foundation
One General Mills Boulevard
Minneapolis, Minnesota 55426
5
SEVENTH. The number of directors at any time may be increased or
diminished by vote of the board of directors, and in case of any such increase
the board of directors shall have power to elect each such additional director
to hold office until the next succeeding annual meeting of shareholders and
until his successor shall have been elected and qualified.
The board of directors, by the affirmative vote of a majority of the
directors in office, may remove a director or directors for cause where, in the
judgment of such majority, the continuation of the director or directors in
office would be harmful to the corporation and may suspend the director or
directors for a reasonable period pending final determination that cause exists
for such removal.
The board of directors from time to time shall determine whether and
to what extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the corporation, or any of them, shall be
open to the inspection of the shareholders; and no shareholder shall have any
right of inspecting any account or book or document of the corporation, except
as conferred by statute or authorized by the board of directors, or by a
resolution of the shareholders.
EIGHTH. The following action may be taken by the affirmative vote of
a majority of the votes cast by the holders of shares of the corporation
entitled to vote thereon:
(1) The adoption by the shareholders of a proposed amendment of the
certificate of incorporation of the corporation;
(2) The adoption by the shareholders of a proposed plan of merger or
consolidation involving the corporation;
(3) The approval by the shareholders of a sale, lease, exchange, or
other disposition of all, or substantially all, the assets of the corporation
otherwise than in the usual and regular course of business as conducted by the
corporation; and
(4) Dissolution.
NINTH. Except as otherwise provided by statute or by this certificate
of incorporation or the by-laws of the corporation as in each case the same may
be amended from time to time, all corporate powers may be exercised by the board
of directors. Without limiting the foregoing, the board of directors shall have
power, without shareholder action:
(1) To authorize the corporation to purchase, acquire, hold, lease,
mortgage, pledge, sell and convey such property, real, personal and mixed,
without as well as within the State of New Jersey, as the board of directors may
from time to time determine, and in payment for any property to issue, or cause
to be issued, shares of the corporation, or bonds, debentures, notes or other
obligations or evidence of indebtedness thereof secured by pledge, security
interest or mortgage, or unsecured; and
(2) To authorize the borrowing of money, the issuance of bonds,
debentures, notes and other obligations or evidences of indebtedness of the
corporation, secured or unsecured, and the inclusion of provisions as to
redeemability and convertibility into shares of
6
stock of the corporation or otherwise, and, as security for money borrowed or
bonds, debentures, notes and other obligations or evidences of indebtedness
issued by the corporation, the mortgaging or pledging of any property, real,
personal, or mixed, then owned or thereafter acquired by the corporation.
TENTH. To the full extent from time to time permitted by law, no
director or officer of the corporation shall be personally liable to the
corporation or its shareholders for damages for breach of any duty owed to the
corporation or its shareholders. Neither the amendment or repeal of this
Article, nor the adoption of any provision of this certificate of incorporation
inconsistent with this Article, shall eliminate or reduce the protection
afforded by this Article to a director or officer of the corporation with
respect to any matter which occurred, or any cause of action, suit or claim
which but for this Article would have accrued or arisen, prior to such
amendment, repeal or adoption.
7
EXHIBIT A
PART I
Class A Preferred Stock
Section 1. Designation and Amount; Special Purpose Restricted
--------- --------------------------------------------------
Transfer Issue.
- - - - - - - - - - - - - - - - --------------
(A) The shares of this class of preferred stock shall be designated as
"Class A Preferred Stock" (referred to herein as the "Class A Preferred Stock")
and the aggregate number of shares constituting such class which the Corporation
shall have the authority to issue is 16,500,000. The shares of this class shall
have a stated value of $61.50 per share (the "Stated Value").
(B) Shares of Class A Preferred Stock shall be issued only to a
trustee acting on behalf of the Plan (as defined in Section 9(F)(vii)). In the
event of any transfer of shares of Class A Preferred Stock to any person other
than the Corporation or the trustee of the Plan, the shares of Class A Preferred
Stock so transferred, upon such transfer and without any further action by the
Corporation or the holder, shall be automatically converted into shares of the
Corporation's Common Stock without par value (the "Common Stock") pursuant to
Section 5 hereof and no such transferee shall have any of the voting powers,
preferences and relative, participating, optional or special rights ascribed to
shares of Class A Preferred Stock hereunder but, rather, only the powers and
rights pertaining to the Common Stock into which such shares of Class A
Preferred Stock shall be so converted. In the event of such a conversion, the
transferee of the shares of Class A Preferred Stock shall be treated for all
purposes as the record holder of the shares of Common Stock into which such
shares of Class A Preferred Stock have been automatically converted as of the
date of such transfer; provided, however, that the pledge of Class A Preferred
-------- -------
Stock as collateral under any credit agreement for the financing or refinancing
of the initial purchase of the Class A Preferred Stock by the Plan shall not
constitute a transfer for purposes of this Section 1. Certificates representing
shares of Class A Preferred Stock shall be legended to reflect such restrictions
on transfer. Notwithstanding the foregoing provisions of this Section 1 (B),
shares of Class A Preferred Stock (i) upon allocation to the account of a
participant in the Plan, shall be converted into shares of Common Stock pursuant
to Section 5 hereof and the shares of Common Stock issued upon such conversion
may be transferred by the holder thereof as permitted by law and (ii) shall be
redeemable by the Corporation upon the terms and conditions provided by Sections
6, 7 and 8 hereof.
Section 2. Dividends and Distributions.
--------- ---------------------------
(A) Subject to the provisions for adjustment hereinafter set forth,
the holders of shares of Class A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds available under
applicable law and the Certificate of Incorporation, cumulative cash dividends
("Preferred Dividends") in an amount per share equal to $4.68 per annum and no
more, payable (x) monthly in arrears, one-twelfth on the 20th day of each month,
commencing on July 20, 1989 and ending on June 20, 1990, and thereafter (y)
quarterly in arrears, one-quarter on the 20th day of each March, June, September
and December in each year (each such monthly and quarterly date a "Dividend
Payment Date"), to holders of record at the start of business on such Dividend
Payment Date. In the event that any Dividend Payment Date shall occur on any
day other than a "Business Day" (as defined in Section 9(F)(i)),
8
the dividend payment due on such Dividend Payment Date shall be paid on the
Business Day immediately succeeding such Dividend Payment Date. Preferred
Dividends shall begin to accrue on outstanding shares of Class A Preferred Stock
from the date of issuance of such shares of Class A Preferred Stock. Preferred
Dividends shall accrue on a daily basis whether or not the Corporation shall
have earnings or surplus at the time. Preferred Dividends accrued after the
date of issuance for any period less than a full monthly or quarterly period, as
the case may be, between Dividend Payment Dates shall be computed on the basis
of a 360-day year consisting of twelve 30-day months and such a proportional
dividend shall accrue for the period from the date of issuance until the end of
the dividend payment period in which such issuance occurs. Accumulated but
unpaid Preferred Dividends shall accumulate as of the Dividend Payment Date on
which they first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends.
(B) So long as any Class A Preferred Stock shall be outstanding, no
dividend shall be declared or paid or set apart for payment on any other class
of stock ranking on a parity with the Class A Preferred Stock as to dividends
("Parity Stock"), unless there shall also be or have been declared and paid or
set apart for payment on the Class A Preferred Stock dividends ratably in
proportion to the respective amounts of dividends (a) accumulated and unpaid
through all dividend payment periods for the Class A Preferred Stock ending on
or before the dividend payment date of such Parity Stock and (b) accumulated and
unpaid on such Parity Stock through the dividend payment period on such Parity
Stock next preceding such dividend payment date. So long as any Class A
Preferred Stock shall be outstanding, in the event that full cumulative
dividends on the Class A Preferred Stock have not been declared and paid or set
apart for payment for all prior dividend payment periods, the Corporation shall
not declare or pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase, redemption or
other retirement of, any other class of stock or series thereof of the
Corporation ranking as to dividends junior to the Class A Preferred Stock
("Junior Stock") until full cumulative and unpaid dividends on the Class A
Preferred Stock shall have been paid or declared and set apart for payment;
provided, however, that the foregoing shall not apply to (i) any dividend
- - - - - - - - - - - - - - - - -------- -------
payable solely in any shares of any Junior Stock, or (ii) the acquisition of
shares of any Junior Stock either (x) pursuant to any employee or director
incentive or benefit plan or arrangement (including any employment, severance or
consulting agreement) of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted or (y) in exchange solely for shares of any
other Junior Stock.
Section 3. Voting Rights. The holders of shares of Class A Preferred
--------- -------------
Stock shall have the following voting rights:
(A) The holders of Class A Preferred Stock shall be entitled to vote
on all matters submitted to a vote of the holders of Common Stock of the
Corporation, voting together as one class with the holders of Common Stock and
any other class or series of preferred stock so voting as one class. Each share
of the Class A Preferred Stock shall entitle the holder thereof to a number of
votes equal to the number of shares of Common Stock into which such share of
Class A Preferred Stock could be converted pursuant to the first sentence of
Section 5(A) hereof on the record date for determining the shareholders entitled
to vote, rounded to the nearest one-tenth of a vote; it being understood that
whenever the "Conversion Ratio" (as defined in Section 5 hereof) is adjusted
pursuant to Section 9 hereof, the voting rights of the Class A Preferred Stock
shall also be similarly adjusted.
9
(B) Except as otherwise required by law, holders of Class A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock or any other class or series of preferred stock) for the taking of any
corporate action.
Section 4. Liquidation, Dissolution or Winding-Up.
--------- --------------------------------------
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the holders of Class A Preferred Stock shall be
entitled to receive out of assets of the Corporation which remain after
satisfaction in full of all valid claims of creditors of the Corporation and
which are available for payment to shareholders, and subject to the rights of
the holders of any class of stock of the Corporation ranking senior to or on a
parity with the Class A Preferred Stock in respect of distributions upon
liquidation, dissolution or winding-up of the Corporation, before any amount
shall be paid or distributed among the holders of Common Stock or any other
class of stock ranking junior to the Class A Preferred Stock in respect of
distributions upon liquidation, dissolution or winding-up of the Corporation,
liquidating distributions in an aggregate amount of $61.50 per share of Class A
Preferred Stock plus an amount equal to all accrued and unpaid dividends thereon
to the date fixed for distribution, and no more. If upon any liquidation,
dissolution or winding-up of the Corporation, the amounts payable with respect
to the Class A Preferred Stock and any other class of stock ranking as to any
such distribution on a parity with the Class A Preferred Stock are not paid in
full, the holders of the Class A Preferred Stock and such other class of stock
shall share ratably in any distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After payment of
the full amount to which they are entitled as provided by the foregoing
provisions of this Section 4(A), the holders of shares of Class A Preferred
Stock shall not be entitled to any further right or claim to any of the
remaining assets of the Corporation.
(B) Neither the merger, consolidation or combination of the
Corporation with or into any other corporation, nor the sale, lease, transfer or
other exchange of all or any portion of the assets of the Corporation (or any
purchase or redemption of some or all of the shares of any class or series of
stock of the Corporation), shall be deemed to be a dissolution, liquidation or
winding-up of the affairs of the Corporation for purposes of this Section 4, but
the holders of Class A Preferred Stock shall nevertheless be entitled in the
event of any such transaction to the rights provided by Section 8 hereof.
(C) Written notice of any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, stating the payment date or dates
when, and the place or places where, the amounts distributable to holders of
Class A Preferred Stock and any other class or series of preferred stock in such
circumstances shall be payable, and stating that, except in the case of Class A
Preferred Stock represented by uncertificated shares, such payment will be made
only after the surrender (or submission for notation of any partial payment) of
such holder's certificates representing shares of Class A Preferred Stock, shall
be given by first class mail, postage prepaid, mailed not less than twenty (20)
days prior to any payment date stated therein, to the holders of Class A
Preferred Stock, at the address shown on the books of the Corporation or any
transfer agent for the Class A Preferred Stock.
10
Section 5. Conversion into Common Stock.
--------- ----------------------------
(A) A holder of shares of Class A Preferred Stock shall be entitled at
any time, but not later than the close of business on the Redemption Date (as
hereinafter defined) of such shares pursuant to Section 6, 7 or 8 hereof, to
cause any or all of such shares to be converted into a number of shares of
Common Stock for each share of Class A Preferred Stock which initially shall be
one and which shall be adjusted as hereinafter provided (and, as so adjusted, is
hereinafter sometimes referred to as the "Conversion Ratio"). In addition to
the foregoing and subject to Section 5(B) hereof, a holder of shares of Class A
Preferred Stock upon allocation of such shares to the account of a participant
in the Plan shall be required to convert each such share of Class A Preferred
Stock into the greater of (i) that number of shares of Common Stock which shall
be the quotient obtained by dividing the Stated Value of each share of Class A
Preferred Stock by the greater of (x) $15 divided by the Conversion Ratio or (y)
the average of the high and low sales prices for a share of Common Stock on the
trading day next preceding the Conversion Date (as hereinafter defined) on which
one or more sales of shares of Common Stock occur, all as reported on the
Composite Tape (as hereinafter defined), or (ii) that number of shares of Common
Stock equal to the Conversion Ratio. The Corporation's determination in good
faith in respect of the number of shares to be issued upon any and all
conversions pursuant to the preceding sentence shall be conclusive.
(B) Any holder of shares of Class A Preferred Stock desiring or
required to convert such shares into shares of Common Stock shall surrender the
certificate or certificates representing the shares of Class A Preferred Stock
being converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto) in case of a request
for registration in a name other than that of such holder, at the offices of the
Corporation or the transfer agent for the Common Stock accompanied by written
notice of conversion. Such notice of conversion shall specify (i) the number of
shares of Class A Preferred Stock to be converted, and the name or names in
which such holder wishes the certificate or certificates for Common Stock and
for any shares of Class A Preferred Stock not to be so converted to be issued
(or the name or names in which ownership of such shares is to be registered in
the event that they are to be uncertificated), (ii) the address or addresses to
which such holder wishes delivery to be made of such new certificates to be
issued upon such conversion, and (iii) whether the conversion is being effected
pursuant to the second sentence of Section 5(A) hereof.
(C) A conversion of shares of Class A Preferred Stock into shares of
Common Stock pursuant to Section 5(A) shall be effective immediately before the
close of business on the day of the later of (i) the surrender to the
Corporation of the certificate or certificates for the shares of Class A
Preferred Stock to be converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto) in
case of a request for registration in a name other than that of such holder and
(ii) the giving of the notice of conversion as provided herein (the "Conversion
Date"). On and after such Conversion Date, the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock.
(D) Promptly after the Conversion Date for shares of Class A Preferred
Stock to be converted, the Corporation or the transfer agent for the Common
Stock shall issue and send by hand delivery (with receipt to be acknowledged) or
by first class mail, postage prepaid, to the holder of such shares or to such
holder's designee, at the address designated by such holder, a
11
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled upon conversion. In the event that there shall
have been surrendered a certificate or certificates representing shares of Class
A Preferred Stock only part of which are to be converted, the Corporation or the
transfer agent for the Common Stock shall issue and deliver to such holder or
such holder's designee a new certificate or certificates representing the number
of shares of Class A Preferred Stock which shall not have been converted.
(E) The Corporation shall not be obligated to deliver to holders of
Class A Preferred Stock any fractional share or shares of Common Stock issuable
upon any conversion of such shares of Class A Preferred Stock, but in lieu
thereof may make a cash payment in respect thereof in any manner permitted by
law. The determination in good faith by the Corporation of the amount of any
such cash payments shall be conclusive.
(F) The Corporation shall at all times reserve and keep available out
of its authorized and unissued and/or treasury Common Stock solely for issuance
upon the conversion of shares of Class A Preferred Stock as herein provided,
free from any preemptive rights, the maximum number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all shares of Class A
Preferred Stock then outstanding.
Section 6. Redemption at the Option of the Corporation.
--------- -------------------------------------------
(A) The Class A Preferred Stock shall be redeemable, in whole or in
part, at the option of the Corporation at any time at the Stated Value, plus an
amount equal to all accrued and unpaid dividends thereon to the date fixed for
redemption (the close of business on such date being referred to as the
"Redemption Date"); provided that such redemption may be made on or after
--------
December 20, 1990 and prior to July 20, 1995 only if (i) the Corporation shall
have requested that the trustee of the Plan repay the indebtedness incurred by
such trustee to purchase the shares of Class A Preferred Stock and (ii) either
(x) Section 404(k) of the Code (as hereinafter defined) is repealed or amended
or the Internal Revenue Service or the Treasury Department promulgates a Revenue
Ruling or Regulation or a federal Court of Appeals issues a decision involving
the Corporation, at any time on or after December 20, 1990 and prior to July 20,
1995 with the effect that less than 100% of the dividends payable on the shares
of any capital stock of the Corporation including, without limitation, Class A
Preferred Stock or Common Stock held in the Plan is deductible by the
Corporation, when paid to participants in the Plan or their beneficiaries or
used to repay indebtedness as described in Section 404(k) of the Code, from its
gross income for purposes of determining its liability for the federal income
tax imposed by Section 11 of the Code or (y) the Code is amended at any time on
or after December 20, 1990 and prior to July 20, 1995 (other than to change the
rate of any existing tax imposed by the Code) or the Internal Revenue Service or
the Treasury Department promulgates a Revenue Ruling or Regulation or a federal
Court of Appeals issues a decision involving the Corporation, with the effect
that the Corporation's liability for the alternative minimum tax imposed by
Section 55 of the Code, the general federal income tax imposed by Section 11 of
the Code or any other tax hereafter imposed by the Code is increased solely by
reason of its claiming a deduction in respect of dividends paid on the shares of
any capital stock of the Corporation including, without limitation, Class A
Preferred Stock or Common Stock held in the Plan in a manner consistent with
Section 404(k) of the Code. Payment of the redemption price shall be made by
the Corporation in cash or shares of Common Stock or a combination thereof, as
permitted by paragraph (C) of this Section 6. From and after the Redemption
Date, dividends on shares of Class A Preferred Stock called for redemption will
cease to accrue, such shares will no longer be
12
deemed to be outstanding and all rights in respect of such shares of the
Corporation shall cease, except the right to receive the redemption price. No
interest shall accrue at the redemption price after the Redemption Date. If
less than all of the outstanding shares of Class A Preferred Stock are to be
redeemed, the Corporation shall either redeem a portion of the shares of each
holder determined pro rata based on the number of shares held by each holder or
shall select the shares to be redeemed by lot or as may be otherwise determined
by the Board of Directors of the Corporation.
(B) Unless otherwise required by law, notice of redemption pursuant to
paragraph (A) of this Section 6 will be sent to the holders of Class A Preferred
Stock at the address shown on the books of the Corporation or any transfer agent
for the Class A Preferred Stock by first class mail, postage prepaid, mailed not
less than thirty (30) days nor more than sixty (60) days prior to the Redemption
Date. Such Class A Preferred Stock shall continue to be entitled to the
conversion rights provided in Section 5 hereof through such Redemption Date.
Each such notice shall state: (i) the Redemption Date; (ii) the total number of
shares of the Class A Preferred Stock to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price and the intended form of
payment; (iv) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such Redemption Date; and (vi) a
summary of the conversion rights of the shares to be redeemed, the period within
which conversion rights may be exercised, and the Conversion Ratio in effect at
the time. Upon surrender of the certificate for any shares so called for
redemption and not previously converted (or upon giving the notice of redemption
in the case of uncertificated shares), but not earlier than the Redemption Date,
the Corporation shall pay to the holder of such shares or its designee the
redemption price set forth pursuant to this Section 6.
(C) The Corporation, at its option, may make payment of the redemption
price required upon redemption of shares of Class A Preferred Stock pursuant to
Section 6 or 7 hereof in cash or in shares of Common Stock or in a combination
of such shares and cash, any such shares of Common Stock to be valued for such
purpose at their Fair Market Value (as defined in Section 9(F)(iii)) on the
Redemption Date. Any shares of Common Stock so issued or delivered (or issued
or delivered pursuant to Section 7) shall be deemed to have been issued or
delivered to the holder of the Class A Preferred Stock as of the Redemption Date
and such holder shall be deemed to have become the record holder thereof as of
the Redemption Date.
Section 7. Other Redemption Rights.
--------- -----------------------
Shares of Class A Preferred Stock shall be redeemed by the Corporation
for cash or, if the Corporation so elects, in shares of Common Stock, or a
combination of such shares and cash (any such shares of Common Stock to be
valued for such purpose in accordance with Section 6(C)), at a redemption price
equal to the Stated Value plus accrued and unpaid dividends thereon to the date
fixed for redemption, at the option of the holder, at any time and from time to
time upon notice to the Corporation given not less than five (5) Business Days
prior to the Redemption Date fixed by the holder in such notice (i) in the event
that the Plan is determined by the Internal Revenue Service not to be qualified
within the meaning of Sections 401(a) and 4975(e)(7) of the Internal Revenue
Code of 1986, as amended from time to time (the "Code") or (ii) in the event
that the Plan is terminated in accordance with its terms.
13
Section 8. Consolidation, Combination, Merger, Etc.
--------- ---------------------------------------
(A) In the event that the Corporation shall consummate any
consolidation, combination, merger or substantially similar transaction,
pursuant to which the outstanding shares of Common Stock are by operation of law
exchanged solely for or changed, reclassified or converted solely into stock of
any successor or resulting corporation (including the Corporation) that
constitutes "qualifying employer securities" with respect to a holder of Class A
Preferred Stock within the meaning of Section 409(1) of the Code and Section
407(d)(5) of the Employee Retirement Income Security Act of 1974, as amended, or
any successor provisions of law, and, if applicable, for a cash payment in lieu
of fractional shares, if any, the shares of Class A Preferred Stock of such
holder shall in connection therewith be exchanged for or converted into
preferred stock of such successor or resulting corporation, having in respect of
such corporation insofar as possible the same powers, preferences and relative,
participating, optional or other special rights (including the redemption rights
provided by Sections 6, 7 and 8 hereof), and the qualifications, limitations or
restrictions thereon, that the Class A Preferred Stock had immediately prior to
such transaction, except that after such transaction each share of the Class A
Preferred Stock shall be convertible, otherwise on the terms and conditions
provided by Section 5 hereof, into the number and kind of qualifying employer
securities so receivable by a holder of the number of shares of Common Stock
into which such shares of Class A Preferred Stock could have been converted
pursuant to the first sentence of Section 5(A) hereof immediately prior to such
transaction; provided, however, that if by virtue of the structure of such
-------- -------
transaction, a holder of Common Stock is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, such holder of shares of Class A Preferred Stock shall be entitled
to make an equivalent election as to the nature and kind of consideration it
shall receive, and if such election cannot practicably be made by the holders of
the Class A Preferred Stock, then the shares of Class A Preferred Stock shall,
by virtue of such transaction and on the same terms as apply to the holders of
Common Stock, be convertible into or exchangeable for the aggregate amount of
qualifying employer securities (payable in like kind and proportion) receivable
by a holder of the number of shares of Common Stock into which such shares of
Class A Preferred Stock could have been converted immediately prior to such
transaction if such holder of Common Stock failed to exercise any rights of
election to receive any kind or amount of qualifying employer securities
receivable upon such transaction (provided that, if the kind or amount of
--------
qualifying employer securities receivable upon such transaction is not the same
for each non-electing share, then the kind and amount of qualifying employer
securities receivable upon such transaction for each such non-electing share
shall be the kind and amount so receivable per share by a plurality of the non-
electing shares). The conversion rights of the class of preferred stock of such
successor or resulting corporation for which the Class A Preferred Stock is
exchanged or into which it is converted, shall successively be subject to
adjustments pursuant to Section 9 hereof after any such transactions as nearly
equivalent as practicable to the adjustments provided for by such Section prior
to such transaction. The Corporation shall not consummate any such merger,
consolidation or similar transaction unless the successor or resulting
corporation shall have agreed to recognize and honor the rights of the holders
of Class A Preferred Stock set forth in this Section 8(A).
(B) In the event that the Corporation shall consummate any
consolidation, combination, merger or substantially similar transaction,
pursuant to which the outstanding shares of Common Stock are by operation of law
exchanged for or changed, reclassified or converted into other stock or
securities or cash or any other property, or any combination thereof,
14
other than solely qualifying employer securities (as referred to in Section
8(A)) and cash payments, if applicable, in lieu of fractional shares,
outstanding shares of Class A Preferred Stock shall, without any action on the
part of the Corporation or any holder thereof (but subject to Section 8(C)), be
deemed to have been converted pursuant to the first sentence of Section 5(A)
hereof immediately prior to the consummation of such merger, consolidation,
combination or similar business combination transaction into the number of
shares of Common Stock into which such shares of Class A Preferred Stock could
have been converted pursuant to the first sentence of Section 5(A) hereof at
such time so that each share of Class A Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, be
converted into or exchanged for the aggregate amount of stock, securities, cash
or other property (payable in like kind and proportion) receivable by a holder
of the number of shares of Common Stock into which such share of Class A
Preferred Stock could have been converted pursuant to the first sentence of
Section 5(A) hereof immediately prior to such transaction; provided, however,
-------- -------
that if by virtue of the structure of such transaction, a holder of Common Stock
is required to make an election with respect to the nature and kind of
consideration to be received in such transaction, the holder of Class A
Preferred Stock shall be entitled to make an equivalent election as to the kind
of consideration it shall receive, and if such election cannot practicably be
made by the holders of the Class A Preferred Stock, then the shares of Class A
Preferred Stock shall, by virtue of such transaction and on the same terms as
apply to the holders of Common Stock, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property (payable in like
kind and proportion) receivable by a holder of the number of shares of Common
Stock into which such shares of Class A Preferred Stock could have been
converted immediately prior to such transaction if such holder of Common Stock
failed to exercise any rights of election as to the kind or amount of stock,
securities, cash or other property receivable upon such transaction (provided
--------
that, if the kind or amount of stock, securities, cash or other property
- - - - - - - - - - - - - - - - ----
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of stock, securities, cash or other property receivable
upon such transaction for each such non-electing share shall be the kind and
amount so receivable per share by a plurality of the non-electing shares).
(C) In the event the Corporation shall enter into any agreement
providing for any consolidation, combination, merger or substantially similar
transaction described in Section 8(B), then the Corporation shall as soon as
practicable thereafter (and in any event at least twenty (20) Business Days
before consummation of such transaction) give notice of such agreement and the
material terms thereof to each holder of Class A Preferred Stock and each holder
shall have the right to elect, by written notice to the Corporation, to receive,
upon consummation of such transaction (if and when such transaction is
consummated), from the Corporation or the successor of the Corporation, in
redemption and retirement of such Class A Preferred Stock, a cash payment equal
to the amount payable in respect of shares of Class A Preferred Stock upon
redemption pursuant to Section 6(A) hereof as if the date of the consummation of
such transaction was the Redemption Date. No such notice of redemption shall be
effective unless given to the Corporation prior to the close of business on the
second Business Day prior to consummation of such transaction, unless the
Corporation or the successor of the Corporation shall waive such prior notice,
but any notice of redemption so given prior to such time may be withdrawn by
notice of withdrawal given to the Corporation prior to the close of business on
the second Business Day prior to consummation of such transaction.
15
Section 9. Anti-dilution Adjustments.
--------- -------------------------
(A) In the event the Corporation shall, at any time or from time to
time while any of the shares of the Class A Preferred Stock are outstanding, (i)
pay a dividend or make a distribution in respect of the Common Stock in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
in each case whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or consolidation
to which Section 8 hereof does not apply) or otherwise, the Conversion Ratio in
effect immediately prior to such action shall be adjusted by multiplying such
Conversion Ratio by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock outstanding immediately before
such event. An adjustment made pursuant to this Section 9(A) shall be given
effect, upon payment of such a dividend or distribution, as of the record date
for the determination of shareholders entitled to receive such dividend or
distribution (on a retroactive basis) and in the case of a subdivision or
combination shall become effective immediately as of the effective date thereof.
(B) In the event the Corporation shall, at any time or from time to
time while any shares of Class A Preferred Stock are outstanding, issue rights,
options or warrants to all holders of its outstanding Common Stock, without any
charge to such holders, entitling them (for a period expiring within forty-five
(45) days after the record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share which is more than 2% lower at the
record date mentioned below than the then Current Market Price per share of
Common Stock, the Conversion Ratio in effect immediately prior to such action
shall, subject to paragraphs (D) and (E) of this Section 9, be adjusted by
multiplying such Conversion Ratio by a fraction (i) the numerator of which shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of additional shares of Common
Stock issued upon exercise thereof, and (ii) the denominator of which shall be
the number of shares of Common Stock outstanding on the date of issuance of such
rights, options or warrants plus the number of shares which the aggregate
offering price of the total number of shares of Common Stock so issued would
purchase at the then Current Market Price per share of Common Stock. Such
adjustment shall be made whenever such rights, options or warrants have expired,
and shall become effective retroactively immediately after the record date for
the determination of shareholders entitled to receive such rights, options or
warrants on the basis of the number of rights, options or warrants actually
exercised.
(C) In the event the Corporation shall, at any time or from time to
time while any of the shares of Class A Preferred Stock are outstanding, make an
Extraordinary Distribution (as defined in Section 9(F)(ii)) in respect of the
Common Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (other than a recapitalization or
reclassification effected by a merger, combination or consolidation to which
Section 8 hereof applies), the Conversion Ratio in effect immediately prior to
such Extraordinary Distribution shall, subject to paragraphs (D) and (E) of this
Section 9, be adjusted by multiplying such Conversion Ratio by a fraction, the
numerator of which shall be the product of (i) the number of shares of Common
Stock outstanding immediately before such Extraordinary Distribution and (ii)
the Fair Market Value of a share of Common Stock on the Valuation Date (as
defined in Section 9(F)(vi)) with respect to an Extraordinary Distribution, and
the
16
denominator of which shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Extraordinary Distribution and
(y) the Fair Market Value of a share of Common Stock on the Valuation Date with
respect to an Extraordinary Distribution, minus (ii) the Fair Market Value of
-----
the Extraordinary Distribution on the Valuation Date. The Corporation shall
send each holder of Class A Preferred Stock notice of its intent to make any
Extraordinary Distribution at the same time as, or as soon as practicable after,
such intent is first communicated (including by announcement of a record date in
accordance with the rules of the principal stock exchange on which the Common
Stock is listed or admitted to trading) to holders of Common Stock. Such notice
shall indicate the intended record date and the amount and nature of such
dividend or distribution, and the Conversion Ratio in effect at such time.
(D) Notwithstanding any other provisions of this Section 9, the
Corporation shall not be required to make any adjustment of the Conversion Ratio
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Conversion Ratio. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and together with, the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least one percent
(1%) in the Conversion Ratio.
(E) The Corporation shall be entitled to make such additional
adjustments in the Conversion Ratio, in addition to those required by the
foregoing provisions of this Section 9, as shall be necessary in order that any
dividend or distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of stock of the
Corporation or any recapitalization of the Corporation shall not be taxable to
holders of the Common Stock.
(F) For purposes of this Exhibit A, the following definitions shall
apply:
(i) "Business Day" shall mean each day that is not a Saturday,
Sunday or a day which state or federally chartered banking institutions in
New York are required or authorized to be closed.
(ii) "Extraordinary Distribution" shall mean any dividend or
other distribution (effected while any of the shares of Class A Preferred
Stock are outstanding) of (x) cash to the extent that such dividend or
distribution when added to the amount of all cash dividends and
distributions paid during the preceding period of twelve (12) calendar
months exceeds fifteen percent (15%) of the aggregate Fair Market Value of
all shares of Common Stock outstanding on the declaration date for such
Extraordinary Distribution and/or (y) any shares of capital stock of the
Corporation (other than shares of Common Stock), other securities of the
Corporation, evidences of indebtedness of the Corporation or any other
person or any other property (including shares of any subsidiary of the
Corporation), or any combination thereof, but excluding rights, options or
warrants to which Section 9(B) refers (without regard to the subscription
or purchase price provided for therein).
(iii) "Fair Market Value" shall mean, as to shares of Common
Stock or any other class of publicly traded capital stock or securities of
the Corporation or any other issuer which are publicly traded, the average
of the Current Market Prices of such shares or securities for each day of
the Adjustment Period. The "Fair Market Value" of any security which is
not publicly traded or of any other property shall mean the fair
17
value thereof as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities or property,
which firm shall be selected in good faith by the Board of Directors of the
Corporation or a committee thereof, or, if no such investment banking or
appraisal firm is in the good faith judgment of the Board of Directors or
such committee available to make such determination, as determined in good
faith by the Board of Directors of the Corporation or such committee.
(iv) "Current Market Price" of publicly traded shares of Common
Stock or any other class of capital stock or other security of the
Corporation or any other issuer shall mean (I) the last reported sales
price, regular way, or, if no sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, in either case as
reported on the Composite Tape for New York Stock Exchange transactions
(the "Composite Tape") or, (II) if such security is not listed or admitted
to trading on the New York Stock Exchange (the "NYSE"), on the principal
national securities exchange on which such security is listed or admitted
to trading or, (III) if not listed or admitted to trading on any national
securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ
National Market System") or, (IV) if such security is not quoted on the
NASDAQ National Market System, the average of the closing bid and asked
prices on each such day in the over-the-counter market as reported by
NASDAQ or, (V) if bid and asked prices for such security on each such day
shall not have been reported through NASDAQ, the average of the bid and
asked prices for such day as furnished by any NYSE member firm regularly
making a market in such security selected for such purposes by the Board of
Directors of the Corporation or a committee thereof, in each case, on each
trading day during the Adjustment Period; provided, however, in determining
-------- -------
the Current Market Price, the value (as reasonably determined by the Board
of Directors of the Corporation or a committee thereof) of any "due-bill"
or similar instrument which is then associated with a share of Common Stock
or any other class of capital stock or other security, shall be deducted.
(v) "Adjustment Period" shall mean the period of five (5)
consecutive trading days preceding, and including, the date as of which the
Fair Market Value of a security is to be determined.
(vi) "Valuation Date" with respect to an Extraordinary
Distribution shall mean the date that is five (5) Business Days prior to
the record date for such Extraordinary Distribution.
(vii) "Plan" shall mean collectively the Corporation's Thrift
and ESOP plans and its Thrift and ESOP Trust.
(G) Whenever an adjustment to the Conversion Ratio and the related
voting rights of the Class A Preferred Stock is required pursuant hereto, the
Corporation shall forthwith deliver to the transfer agent(s) for the Common
Stock and the Class A Preferred Stock and file with the Secretary of the
Corporation, a statement signed by an officer of the Corporation stating the
adjusted Conversion Ratio determined as provided herein, and the voting rights
(as appropriately adjusted), of the Class A Preferred Stock. Such statement
shall set forth in reasonable detail such facts as shall be necessary to show
the reason and the manner of computing such adjustment including any
determination of Fair Market Value involved in such
18
computation. Promptly after each adjustment to the Conversion Ratio and the
related voting rights of the Class A Preferred Stock, the Corporation shall mail
a notice thereof and of the then prevailing Conversion Ratio to each holder of
Class A Preferred Stock.
Section 10. Ranking; Cancellation of Shares.
---------- -------------------------------
(A) The Class A Preferred Stock shall rank senior to the Common Stock
as to the payment of dividends and senior to the Common Stock as to the
distribution of assets on liquidation, dissolution and winding-up of the
Corporation, and, unless otherwise provided in the Certificate of Incorporation,
as the same may be amended, the Class A Preferred Stock shall rank on a parity
with all other classes or series of the Corporation's preferred stock, as to
payment of dividends and the distribution of assets on liquidation, dissolution
or winding-up.
(B) Any shares of Class A Preferred Stock acquired by the Corporation
by reason of the conversion or redemption of such shares as provided hereby, or
otherwise so acquired, shall be cancelled as shares of Class A Preferred Stock
and restored to the status of authorized but unissued shares of preferred stock
of the Corporation, undesignated as to classes or series, and may thereafter be
reissued as part of a new class or series of such preferred stock as permitted
by law.
Section 11. Miscellaneous.
---------- -------------
(A) All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have been given upon the earlier of receipt
thereof or three (3) Business Days after the mailing thereof if sent by
registered mail (unless first class mail shall be specifically permitted for
such notice under the terms of this Exhibit A) with postage prepaid, addressed:
(i) if to the Corporation, to its office at 5959 Las Colinas Boulevard, Irving,
TX 75039 (Attention: Treasurer) or to the transfer agent (if any) for the Class
A Preferred Stock or (ii) if to any holder of the Class A Preferred Stock or the
Common Stock, as the case may be, to such holder at the address of such holder
as listed in the stock record books of the Corporation (which may include the
records of any transfer agent for the Class A Preferred Stock or the Common
Stock, as the case may be) or (iii) to such other address as the Corporation
shall have designated by notice similarly given.
(B) In the event that, at any time as a result of an adjustment made
pursuant to Section 8 or 9, the holder of any share of the Class A Preferred
Stock upon thereafter surrendering such shares for conversion shall become
entitled to receive any shares or other securities of the Corporation other than
shares of Common Stock, the Conversion Ratio in respect of such other shares or
securities so receivable upon conversion of shares of Class A Preferred Stock
shall thereafter be adjusted, and shall be subject to further 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 Sections 8 or 9, and
the provisions of each of the other Sections hereof with respect to the Common
Stock shall apply on like or similar terms to any such other shares or
securities. Any determination in good faith by the Corporation as to any
adjustment of the Conversion Ratio pursuant to this Section 11 (B) shall be
conclusive.
(C) The Corporation shall pay any and all issuance, stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Class A Preferred Stock or Common Stock or other
securities issued upon conversion of Class A
19
Preferred Stock pursuant hereto or certificates representing such shares or
securities. The Corporation shall not, however, be required to pay any such tax
which may be payable in respect of any transfer involved in the issuance or
delivery of shares of Common Stock or other securities in a name other then that
in which the shares of Class A Preferred Stock with respect to which such shares
or other securities are issued or delivered were registered, or in respect of
any payment to any person with respect to any such shares or securities other
than a payment to the registered holder thereof, and shall not be required to
make any such issuance, delivery or payment unless and until the person
otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax for issuance, transfer or documentary
stamp taxes or has established, to the satisfaction of the Corporation, that
such tax has been paid or is not payable.
(D) In the event that a holder of shares of Class A Preferred Stock
shall not by written notice designate the name in which (i) shares of Common
Stock or (ii) any other securities in accordance with this Exhibit A, to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of Class A Preferred Stock should be made or the
address to which the certificate or certificates representing such shares, or
such payment, should be sent, the Corporation shall be entitled to register such
shares, and make such payment, in the name of the holder of such Class A
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(E) Unless otherwise provided in the Certificate of Incorporation, as
the same may be amended, all payments of (x) dividends upon the shares of any
class of stock and upon any other class of stock ranking on a parity with such
first class of stock with respect to such dividends shall be made pro rata, so
that amounts paid per share on such first class of stock and such other class of
stock shall in all cases bear to each other the same ratio that the required
dividends then payable per share on the shares of such first class of stock and
such other class of stock bear to each other and (y) distributions on voluntary
or involuntary dissolution, liquidation or winding-up or otherwise made upon the
shares of any class of stock and upon any other class of stock ranking on a
parity with such first class of stock with respect to such distributions shall
be made pro rata, so that amounts paid per share on such first class of stock
and such other class of stock shall in all cases bear to each other the same
ratio that the required distributions then payable per share on the shares of
such first class of stock and such other class of stock bear to each other.
(F) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Class A Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first class mail, postage prepaid, to each holder of record of Class
A Preferred Stock. So long as there is a transfer agent for a class of stock, a
holder thereof shall give any notices to the Corporation required hereunder to
the transfer agent at the address of the transfer agent last given by the
Corporation.
(G) If the Corporation and the holder so agree, any shares of Class A
Preferred Stock or any shares of Common Stock into which the shares of Class A
Preferred Stock shall be converted, may be uncertificated shares, provided that
--------
the names of the holders of all uncertificated shares and the number of such
shares held by each holder shall be registered at the offices of the Corporation
or the transfer agent for such shares. In the event that any shares shall
20
be uncertificated, all references herein to the surrender or issuance of stock
certificates shall have no application to such uncertificated shares.
21
PART II
Class B Preferred Stock
1. Designation and Issuance
(A) The shares of such class shall be designated CLASS B PREFERRED
STOCK (hereinafter referred to as "Class B Preferred Stock") and the number of
shares constituting such class shall be 165,800. Such number of shares may be
increased or decreased by resolution of the Board of Directors, but no such
decrease shall reduce the number of shares of Class B Preferred Stock to a
number less than that of the shares then outstanding plus the number of shares
issuable upon exercise of any rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation. All shares of Class B
Preferred Stock redeemed or purchased by the Corporation shall be retired and
shall be restored to the status of authorized but unissued shares of preferred
stock without designation.
(B) Shares of Class B Preferred Stock shall be issued only to a
trustee or trustees acting on behalf of an employee stock ownership trust or
plan or other employee benefit plan ("Plan") of Mobil Corporation or Mobil Oil
Corporation (collectively, "Mobil Oil"). In the event of any sale, transfer or
other disposition (hereinafter a "transfer") of shares of Class B Preferred
Stock to any person other than (x) any trustee or trustees of the Plan and (y)
any pledgee of such shares acquiring such shares as security for any loan or
loans made to the Plan or to any trustee or trustees acting on behalf of the
Plan, the shares of Class B Preferred Stock so transferred, upon such transfer
and without any further action by the Corporation or the holder shall be
automatically converted into shares of the Common Stock (as defined in Section
10) at the Conversion Price (as hereinafter defined) and on the terms otherwise
provided for the conversion of shares of Class B Preferred Stock into shares of
Common Stock pursuant to Section 5 hereof and no such transferee shall have any
of the voting powers, preferences and relative, participating, optional or
special rights ascribed to shares of Class B Preferred Stock hereunder but,
rather, only the powers and rights pertaining to the Common Stock into which
such shares of Class B Preferred Stock shall be so converted, provided, however,
that in the event of a foreclosure or other realization upon shares of Class B
Preferred Stock pledged as security for any loan or loans made to the Plan or to
the trustee or the trustees acting on behalf of the Plan, the pledged shares so
foreclosed or otherwise realized upon shall (subject to the holder's right of
redemption set forth in Section 7(B) hereof) be automatically converted into
shares of Common Stock at the Conversion Price and on the terms otherwise
provided for conversions of shares of Class B Preferred Stock into shares of
Common Stock pursuant to Section 5 hereof. In the event of such a conversion,
such transferee shall be treated for all purposes as the record holder of the
shares of Common Stock into which the Class B Preferred Stock shall have been
converted as of the date of such conversion. Certificates representing shares
of Class B Preferred Stock shall be legended to reflect such restrictions on
transfer. Notwithstanding the foregoing provisions of this Section 1, shares of
Class B Preferred Stock (i) may be converted into shares of Common Stock as
provided by Section 5 hereof and the shares of Common Stock issued upon such
conversion may be transferred by the holder thereof as permitted by law and (ii)
shall be redeemable by the Corporation upon the terms and conditions provided by
Sections 6, 7 and 8 hereof.
22
2. Dividends and Distributions.
(A)(1) Subject to the provisions for adjustment hereinafter set forth,
the holders of shares of Class B Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors out of funds legally available
therefor, cash dividends ("Regular Preferred Dividends") in an amount per share
initially equal to $300 per share per annum, subject to adjustment from time to
time as hereinafter provided, and no more, except as provided in Section 2(A)(2)
(such amount, as adjusted from time to time, being hereinafter referred to as
the "Regular Preferred Dividend Rate"), payable semiannually in arrears, one-
half on the last day of February, and one-half on the last day of August of each
year (each a "Dividend Payment Date") to holders of record at the start of
business on such Dividend Payment Date. The first dividend payable on each
share of Class B Preferred Stock shall accrue from the date of original issuance
thereof, except that the first dividend payable on shares of Class B Preferred
Stock issued on conversion of Mobil Corporation Series B ESOP Convertible
Preferred Stock ("Mobil Series B Stock") shall accrue and be cumulative from the
last dividend payment date of the Mobil Series B Stock and shall include any
arrearage on the Mobil Series B Stock. Regular Preferred Dividends shall accrue
on a daily basis, based on the Regular Preferred Dividend Rate in effect on such
date, whether or not the Corporation shall have earnings or surplus at the time,
computed on the basis of a 360-day year of 30-day months in case of any period
less than a full semiannual period. Accrued but unpaid Regular Preferred
Dividends, shall cumulate as of the Dividend Payment Date on which they first
become payable, but no interest shall accrue on accumulated but unpaid Regular
Preferred Dividends.
(2) In the event that for any period of six (6) months preceding
any Dividend Payment Date (each such period, a "Dividend Period") the aggregate
fair value (as determined by the Board of Directors) of all dividends and other
distributions declared per share of Common Stock during such Dividend Period
multiplied by the number of shares of Common Stock into which a share of Class B
Preferred Stock was convertible on the appropriate dividend payment date for the
Common Stock shall exceed the amount of the Regular Preferred Dividends accrued
on a share of Class B Preferred Stock during such Dividend Period, the holders
of shares of the Class B Preferred Stock shall be entitled to receive, when and
as declared by the Board of Directors out of funds legally available therefor,
cash dividends (the "Supplemental Preferred Dividends") in an amount per share
(with appropriate adjustments to reflect any stock split or combination of
shares or other adjustment provided for in Section 9) equal to the amount of
such excess up to but not exceeding (x) the product of twelve and one-half per
cent (12.5%) times the average of the Fair Market Values of the number of shares
of Common Stock into which a share of Class B Preferred Stock was convertible on
the day next preceding the ex-dividend date for each such dividend and the
distribution date for each such distribution on the Common Stock of the
Corporation minus (y) such amount of accrued Regular Preferred Dividends. The
calculation of each Supplemental Preferred Dividend shall be subject to
adjustment corresponding to the adjustments provided in Section 9 hereof.
Supplemental Preferred Dividends shall accrue and cumulate as of the close of
each relevant Dividend Period and shall be payable on the Dividend Payment Date
next following the close of any such Dividend Period, but no interest shall
accrue on accumulated but unpaid Supplemental Preferred Dividends and no
Supplemental Preferred Dividends shall accrue in respect of any period of less
than six months.
(B)(1) No full dividends shall be declared or paid or set apart for
payment on any shares ranking, as to dividends, on a parity with or junior to
the Class B Preferred Stock, for any
23
period unless full cumulative dividends (which for all purposes of this
resolution shall include Regular Preferred Dividends and Supplemental Preferred
Dividends) have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for such payment on the Class
B Preferred Stock for all Dividend Payment Dates occurring on or prior to the
date of payment of such full dividends. When dividends are not paid in full, as
aforesaid, upon the shares of Class B Preferred Stock and any other shares
ranking, as to dividends, on a parity with Class B Preferred Stock, all
dividends declared upon shares of Class B Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share on Class B Preferred
Stock and such other parity shares shall in all cases bear to each other the
same ratio that accumulated dividends per share on the shares of Class B
Preferred Stock and such other parity shares bear to each other. Except as
otherwise provided herein, holders of shares of Class B Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or shares,
in excess of full cumulative dividends, as herein provided, on Class B Preferred
Stock.
(2) So long as any shares of Class B Preferred Stock are outstanding,
no dividend (other than dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Common Stock
or other shares ranking junior to Class B Preferred Stock as to dividends and
upon liquidation and other than as provided in Section 2(B)(1)) shall be
declared or paid or set aside for payment or other distribution declared or made
upon the Common Stock or upon any other shares ranking junior to or on a parity
with Class B Preferred Stock as to dividends or upon liquidation, nor shall any
Common Stock or any other shares of the Company ranking junior to or on a parity
with Class B Preferred Stock as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any such shares) by
the Corporation (except by conversion into or exchange for shares of the
Corporation ranking junior to Class B Preferred Stock as to dividends and upon
liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of Class B Preferred Stock shall have been paid.
(3) Any dividend payment made on shares of Class B Preferred Stock
shall first be credited against the earliest accumulated but unpaid dividend due
with respect to shares of Class B Preferred Stock.
3. Liquidation Preference
(A) In the event of any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of any series or classes of stock of the
Corporation ranking junior to Class B Preferred Stock upon liquidation,
dissolution or winding-up, the holders of Class B Preferred Stock shall be
entitled to receive the Liquidation Price (as hereinafter defined) per share in
effect at the time of liquidation, dissolution or winding-up plus an amount
equal to all dividends accrued (whether or not accumulated) and unpaid thereon
to the date of final distribution to such holders, but such holders shall not be
entitled to any further payments. The Liquidation Price per share which holders
of Class B Preferred Stock shall receive upon liquidation, dissolution or
winding-up shall be $3,887.50, subject to adjustment as hereinafter provided.
If, upon any liquidation, dissolution or winding-up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders
of Class B Preferred Stock shall be insufficient to pay in full the preferential
24
amount aforesaid and liquidating payments on any other shares ranking as to
liquidation, dissolution or winding-up, on a parity with Class B Preferred
Stock, then such assets, or the proceeds thereof, shall be distributed among the
holders of Class B Preferred Stock and any such other shares ratably in
accordance with the respective amounts which would be payable on such shares of
Class B Preferred Stock and any such other shares if all amounts payable thereon
were paid in full. For the purposes of this Section 3, a consolidation or
merger of the Corporation with one or more corporations shall not be deemed to
be a liquidation, dissolution or winding-up, voluntary and involuntary.
(B) Subject to the rights of the holders of shares of any series or
class or classes of stock ranking on a parity with or prior to Class B Preferred
Stock upon liquidation, dissolution or winding-up, upon any liquidation,
dissolution or winding-up of the Corporation, after payment shall have been made
in full to the holders of Class B Preferred Stock as provided in this Section 3,
but not prior thereto, any other series or class or classes of stock ranking
junior to Class B Preferred Stock upon liquidation, dissolution or winding-up
shall, subject to the respective terms and provisions (if any) applying thereto,
be entitled to receive any and all assets remaining to be paid or distributed,
and the holders of Class B Preferred Stock shall not be entitled to share
therein.
4. Ranking and Voting of Shares.
(A) Any shares of the Corporation shall be deemed to rank:
(1) prior to Class B Preferred Stock as to dividends or as to
distribution of assets upon liquidation, dissolution or winding-up, if the
holders of such class shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding-up, as the case
may be, in preference or priority to the holders of Class B Preferred Stock,
(2) on a parity with Class B Preferred Stock as to dividends or as to
distribution of assets upon liquidation, dissolution or winding-up, whether or
not the dividend rates, dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of Class B Preferred Stock, if
the holders of such class of stock and Class B Preferred Stock shall be entitled
to the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding-up, as the case may be, in proportion to their respective
dividend or liquidation amounts, as the case may be, without preference or
priority one over the other, and
(3) junior to Class B Preferred Stock as to dividends or as to the
distribution of assets upon liquidation, dissolution or winding-up, if such
shares shall be Common Stock or if the holders of Class B Preferred Stock shall
be entitled to receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding-up, as the case may be, in preference or
priority to the holders of such shares. Unless otherwise provided in the
Restated Certificate of Incorporation of the Corporation, as the same may be
amended, including an amendment relating to any subsequent class or series of
preferred stock, the Class B Preferred Stock shall rank junior to all classes or
series of the Corporation's preferred stock as to dividends and the distribution
of assets upon liquidation, dissolution or winding-up.
(B) The holders of shares of Class B Preferred Stock shall have the
following voting rights:
25
(1) The holders of Class B Preferred Stock shall be entitled to vote
on all matters submitted to a vote of the shareholders of the Corporation,
voting together with the holders of Common Stock as one class. The holder of
each share of Class B Preferred Stock shall be entitled to a number of votes
equal to the number of shares of Common Stock into which such Class B Preferred
Stock could be converted on the record date for determining the shareholders
entitled to vote; it being understood that whenever the "Conversion Price" (as
defined in Section 5 hereof) is adjusted as provided in Section 9 hereof, the
number of votes of the Class B Preferred Stock shall also be correspondingly
adjusted.
(2) Except as otherwise required by law or set forth herein, holders
of Class B Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any corporate
action, including the issuance of any preferred stock now or hereafter
authorized, provided, however, that the vote of at least 66-2/3% of the
outstanding shares of Class B Preferred Stock, voting separately as a class,
shall be necessary to approve any alteration, amendment or repeal of any
provision of the Restated Certificate of Incorporation or any alteration,
amendment or repeal of any provision of the resolutions relating to the
designation, preferences and rights of Class B Preferred Stock (including any
such alteration, amendment or repeal effected by any merger or consolidation in
which the Corporation is the surviving or resulting corporation), if such
amendment, alteration or repeal would alter or change the powers, preferences,
or special rights of the Class B Preferred Stock so as to affect them adversely.
5. Conversion into Common Stock.
(A) A holder of shares of Class B Preferred Stock shall be entitled,
at any time prior to the close of business on the date fixed for redemption of
such shares pursuant to Sections 6, 7 or 8 hereof, to cause any or all of such
shares to be converted into shares of Common Stock. The number of shares of
Common Stock into which each share of the Class B Preferred Stock may be
converted shall be determined by dividing the Liquidation Price in effect at the
time of conversion by the Conversion Price (as hereinafter defined) in effect at
the time of conversion. The Conversion Price per share at which shares of
Common Stock shall be initially issuable upon conversion of any shares of Class
B Preferred Stock shall be $29.447411 subject to adjustment as hereinafter
provided; that is, a conversion rate initially equivalent to 132.015 shares of
Common Stock for each share of Class B Preferred Stock, which is subject to
adjustment as hereinafter provided.
(B) Any holder of shares of Class B Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender, if
certificated, the certificate or certificates representing the shares of Class B
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), or
if uncertificated, a duly executed stock power relating thereto, at the
principal executive office of the Corporation or the offices of the transfer
agent for the Class B Preferred Stock or such office or offices in the
continental United States of an agent for conversion as may from time to time be
designated by notice to the holders of the Class B Preferred Stock by the
Corporation or the transfer agent for the Class B Preferred Stock, accompanied
by written notice of conversion. Such notice of conversion shall specify (i)
the number of shares of Class B Preferred Stock to be converted and the name or
names in which such holder wishes the Common Stock and any shares of Class B
Preferred Stock not to be so converted to be issued, and (ii) the address to
26
which such holder wishes delivery to be made of a confirmation of such
conversion, if uncertificated, or any new certificate which may be issued upon
such conversion if certificated.
(C) Upon surrender, if certificated, of a certificate representing a
share or shares of Class B Preferred Stock for conversion, or if uncertificated,
of a duly executed stock power relating thereto, the Corporation shall issue and
send by hand delivery (with receipt to be acknowledged) or by first class mail,
postage prepaid, to the holder thereof or to such holder's designee, at the
address designated by such holder, if certificated, a certificate or
certificates for, or if uncertificated, confirmation of, the number of shares of
Common Stock to which such holder shall be entitled upon conversion. In the
event that there shall have been surrendered shares of Class B Preferred Stock,
only part of which are to be converted, the Corporation shall issue and deliver
to such holder or such holder's designee, if certificated, a new certificate or
certificates representing the number of shares of Class B Preferred Stock which
shall not have been converted, or if uncertificated, confirmation of the number
of shares of Class B Preferred Stock which shall not have been converted.
(D) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Class B Preferred Stock into shares of Common Stock made
at the option of the holder thereof shall be effective as of the earlier of (i)
the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion thereof if
certificated or confirmation if uncertificated or (ii) the commencement of
business on the second business day after the surrender of the certificate or
certificates, if certificated, or a duly executed stock power, if
uncertificated, for the shares of Class B Preferred Stock to be converted. On
and after the effective date of conversion, the person or persons entitled to
receive Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock, but no
allowance or adjustment shall be made in respect of dividends payable to holders
of Common Stock of record on any date prior to such effective date. The
Corporation shall not be obligated to pay any dividends which shall have been
declared and shall be payable to holders of shares of Class B Preferred Stock on
a Dividend Payment Date if such Dividend Payment Date for such dividend shall be
on or subsequent to the effective date of conversion of such shares.
(E) The Corporation shall not be obligated to deliver to holders of
Class B Preferred Stock any fractional share or shares of Common Stock issuable
upon any conversion of such shares of Class B Preferred Stock, but in lieu
thereof may make a cash payment in respect thereof in any manner permitted by
law.
(F) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock or treasury Common Stock, solely for
issuance upon the conversion of shares of Class B Preferred Stock as herein
provided, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of Class B Preferred Stock then
outstanding.
6. Redemption at the Option of the Corporation.
(A) The Class B Preferred Stock shall be redeemable, in whole or in
part, at the option of the Corporation, out of funds legally available therefor,
at any time after November 22, 1999 at 100% of the Liquidation Price per share
in effect on the date fixed for redemption, plus an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon
27
to the date fixed for redemption. The Class B Preferred Stock shall be
redeemable, in whole or in part, out of funds legally available therefor, on or
before November 22, 1999 only if permitted by Section 6 (C) or (D) at a price
per share equal to, (i) if pursuant to Section 6(C), the redemption price set
forth therein, or (ii) if pursuant to Section 6(D), 100.775% of the Liquidation
Price in effect on the date fixed for redemption, plus, in each case, an amount
equal to all accrued (whether or not accumulated) and unpaid dividends thereon
to the date fixed for redemption. Payment of the redemption price shall be made
by the Corporation in cash or shares of Common Stock, or a combination thereof,
as permitted by Section 6(E). From and after the date fixed for redemption,
dividends on shares of Class B Preferred Stock called for redemption will cease
to accrue, such shares will no longer be deemed to be outstanding and all rights
in respect of such shares of the Corporation shall cease, except for the right
to receive the redemption price. If less than all of the outstanding shares of
Class B Preferred Stock are to be redeemed, the Corporation shall either redeem
a portion of the shares of each holder determined pro rata based on the number
of shares held by each holder or shall select the shares to be redeemed by lot,
as may be determined by the Board of Directors of the Corporation.
(B) Unless otherwise required by law, notice of redemption will be
sent to the holders of Class B Preferred Stock at the address shown on the books
of the Corporation or any transfer agent for Class B Preferred Stock by first
class mail, postage prepaid, mailed not less than twenty (20) days nor more than
sixty (60) days prior to the redemption date. Each notice shall state: (i) the
redemption date; (ii) the total number of shares of the Class B Preferred Stock
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates, if certificated,
for such shares are to be surrendered for payment of the redemption price; (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date; (vi) the conversion rights of the shares to be redeemed, the
period within which such conversion rights may be exercised, and the Conversion
Price and number of shares of Common Stock issuable upon conversion of a share
of Class B Preferred Stock at the time. Upon surrender of the certificates, if
certificated, for any shares so called for redemption, or upon the date fixed
for redemption if uncertificated such shares if not previously converted shall
be redeemed by the Corporation on the date fixed for redemption and at the
redemption price set forth in this Section 6.
(C) In the event (i) of a change in the federal tax law or
regulations of the United States of America or of an interpretation or
application of such law or regulations or of a determination by a court of
competent jurisdiction, which in any case has the effect of precluding the
Corporation from claiming (other than for purposes of calculating any
alternative minimum tax) any of the tax deductions for dividends paid on the
Class B Preferred Stock when such dividends are used as provided under Section
404(k)(2) of the Internal Revenue Code of 1986, as amended (the "Code") as in
effect on the date shares of Class B Preferred Stock are initially issued, or
(ii) that the Corporation certifies to the holders of the Class B Preferred
Stock that the Corporation has determined in good faith that the Plan either is
not qualified within the meaning of Section 401(a) of the Code or is not an
"employee stock ownership plan" within the meaning of 4975(e)(7) of the Code,
the Corporation may, in its sole discretion and notwithstanding anything to the
contrary in Section 6(A), at any time within one year of the occurrence of such
event, elect either to (a) redeem any or all of such Class B Preferred Stock for
cash or, if the Corporation so elects, in shares of Common Stock, or a
combination of such shares of Common Stock and cash, as permitted by Section
6(B), at a redemption price equal to the higher of (x) the
28
Liquidation Price per share on the date fixed for redemption or (y) the Fair
Market Value (as defined in Section 9(G)(2)) of the number of shares of Common
Stock into which each share of Class B Preferred Stock is convertible at the
time the notice of such redemption is given, plus in either case an amount equal
to accrued (whether or not accumulated) and unpaid dividends thereon to the date
fixed for redemption, or (b) exchange any or all of such shares of Class B
Preferred Stock for securities of comparable value (as determined by an
independent appraiser) that constitute "qualifying employer securities" with
respect to a holder of Class B Preferred Stock within the meaning of Section
409(1) of the Code and Section 407(d)(5) of the Employment Retirement Income
Security Act of 1974, as amended ("ERISA") or any successor provisions of law.
(D) Notwithstanding anything to the contrary in Section 6(A), in the
event that the Employees Savings Plan of Mobil Oil is terminated or the Employee
Stock Ownership Plan incorporated therein is terminated or eliminated from such
Plan, the Corporation may, in its sole discretion, call for redemption of any or
all of the then outstanding Class B Preferred Stock at a redemption price
calculated on the basis of the redemption prices provided in Section 6(A),
increased by 50% of the amount thereof in excess of 100% of the Liquidation
Price in effect on the date fixed for redemption.
(E) The Corporation, at its option, may make payment of the
redemption price required upon redemption of shares of Class B Preferred Stock
in cash or in shares of Common Stock, or in a combination of such shares and
cash, any such shares of Common Stock to be valued for such purpose at their
Fair Market Value (as defined in Section 9(G)(2)); provided, however, that in
calculating their Fair Market Value the Adjustment Period shall be deemed to be
the five (5) consecutive trading days preceding the date of redemption.
7. Redemption at the Option of the Holder.
(A) Unless otherwise provided by law, shares of Class B Preferred
Stock shall be redeemed by the Corporation out of funds legally available
therefor for cash or, if the Corporation so elects, in shares of Common Stock,
or a combination of such shares and cash, any such shares of Common Stock to be
valued for such purpose as provided by Section 6(E), at a redemption price equal
to the higher of (x) the Liquidation Price per share in effect on the date fixed
for redemption or (y) the Fair Market Value of the number of shares of Common
Stock into which each share of Class B Preferred Stock is convertible at the
time the notice of such redemption is given plus in either case an amount equal
to accrued (whether or not accumulated) and unpaid dividends thereon to the date
fixed for redemption, at the option of the holder, at any time and from time to
time upon notice to the Corporation given not less than five (5) business days
prior to the date fixed by the holder in such notice of redemption, when and to
the extent necessary for such holder to provide for distributions required to be
made under, or to satisfy an investment election provided to participants in
accordance with, the Employee Stock Ownership Plan incorporated in the Employees
Savings Plan of Mobil Oil, or any successor plan or when the holder elects to
redeem shares of Class B Preferred Stock in respect of any Regular or
Supplemental Preferred Dividend (a "Dividend Redemption"). In the case of any
Dividend Redemption, such holder shall give the notice specified above within
five (5) business days after the related Dividend Payment Date and such
redemption shall be effective as to such number of shares of Class B Preferred
Stock as shall equal (x) the aggregate amount of such Regular or Supplemental
Preferred Dividend with respect to shares of Class B Preferred Stock allocated
or credited to the accounts of participants in the Employee Stock Ownership Plan
incorporated in
29
the Employees Savings Plan of Mobil Oil, or any successor plan divided by (y)
the redemption price specified above.
(B) Shares of Class B Preferred Stock shall be redeemed by the
Corporation out of funds legally available therefor for cash or, if the
Corporation so elects, in shares of Common Stock, or a combination of such
shares of Common Stock and cash, any such shares of Common Stock to be valued
for such purpose as provided by Section 6(E), at a redemption price equal to the
Liquidation Price plus an amount equal to accrued and unpaid dividends thereon
to the date fixed for redemption, at the option of the holder, at any time and
from time to time upon notice to the Corporation given not less than five (5)
business days prior to the date fixed by the holder in such notice for such
redemption, upon certification by such holder to the Corporation of the
following events: (i) when and to the extent necessary for such holder to make
any payments of principal, interest or premium due and payable (whether as
scheduled, upon acceleration or otherwise) upon any obligations of the trust
established under the Employee Stock Ownership Plan incorporated in the
Employees Savings Plan of Mobil Oil in connection with the acquisition of Class
B Preferred Stock or any indebtedness, expenses or costs incurred by the holder
for the benefit of the Plan; or (ii) when and if it shall be established to the
satisfaction of the holder that the Plan has not initially been determined by
the Internal Revenue Service to be qualified as a stock bonus plan and an
employee stock ownership plan within the meaning of Sections 401(a) or
4975(e)(7) of the Code, respectively.
8. Consolidation, Merger, etc.
(A) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named, pursuant to which
the outstanding shares of Common Stock are by operation of law exchanged solely
for or changed, reclassified or converted solely into shares of any successor or
resulting company (including the Corporation) that constitute "qualifying
employer securities" that are common stock with respect to a holder of Class B
Preferred Stock within the meanings of Section 409(1) of the Code and Section
407(d)(5) of ERISA, or any successor provision of law, and, if applicable, for a
cash payment in lieu of fractional shares, if any, then, in such event, the
terms of such consolidation or merger or similar transaction shall provide that
the shares of Class B Preferred Stock of such holder shall be converted into or
exchanged for and shall become preferred shares of such successor or resulting
company, having in respect of such company insofar as possible the same powers,
preferences and relative, participating, optional or other special rights
(including the redemption rights provided by Sections 6, 7, and 8 hereof), and
the qualifications, limitations or restrictions thereon, that the Class B
Preferred Stock had immediately prior to such transaction; provided, however,
that after such transaction each share of stock into which the Class B Preferred
Stock is so converted or for which it is exchanged shall be convertible,
pursuant to the terms and conditions provided by Section 5 hereof, into the
number and kind of qualifying employer securities receivable by a holder of the
number of shares of Common Stock into which such shares of Class B Preferred
Stock could have been converted pursuant to Section 5 hereof immediately prior
to such transaction and provided, further, that if by virtue of the structure of
such transaction, a holder of Common Stock is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, which election cannot practicably be made by the holders of the
Class B Preferred Stock, then such election shall be deemed to be solely for
"qualifying employer securities" (together, if applicable, with a cash payment
in lieu of fractional shares) with the effect provided above on the basis of the
number
30
and kind of qualifying employer securities receivable by a holder of the number
of shares of Common Stock into which the shares of Class B Preferred Stock could
have been converted pursuant to Section 5 hereof immediately prior to such
transaction (it being understood that if the kind or amount of qualifying
employer securities receivable in respect of each share of Common Stock upon
such transaction is not the same for each such share, then the kind and amount
of qualifying employer securities deemed to be receivable in respect of each
share of Common Stock for purposes of this proviso shall be the kind and amount
so receivable per share of Common Stock by a plurality of such shares). The
rights of the Class B Preferred Stock as preferred shares of such successor
resulting company shall successively be subject to adjustments pursuant to
Section 9 hereof after any such transaction as nearly equivalent to the
adjustments provided for by such Section prior to such transaction. The
Corporation shall not consummate any such merger, consolidation or similar
transaction unless all the terms of this Section 8(A) are complied with.
(B) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named, pursuant to which
the outstanding shares of Common Stock are by operation of law exchanged for or
changed, reclassified or converted into other shares or securities or cash or
any other property, or any combination thereof, other than any such
consideration which is constituted solely of qualifying employer securities that
are common stock (as referred to in Section 8(A)) and cash payments, if
applicable, in lieu of fractional shares, outstanding shares of Class B
Preferred Stock shall, without any action on the part of the Corporation or any
holder thereof (but subject to Section 8(C)), be automatically converted
immediately prior to the consummation of such merger, consolidation or similar
transaction into shares of Common Stock at the conversion rate then in effect so
that each share of Class B Preferred Stock shall, by virtue of such transaction
and on the same terms as apply to the holders of Common Stock, be converted into
or exchanged for the aggregate amount of shares, securities, cash or other
property (payable in like kind) receivable by a holder of the number of shares
of Common Stock into which such shares of Class B Preferred Stock could have
been converted immediately prior to such transaction if such holder of Common
Stock failed to exercise any rights of election as to the kind or amount of
shares, securities, cash or other property receivable upon such transaction
(provided that, if the kind or amount of shares, securities, cash or other
property receivable upon such transaction is not the same for each non-electing
share, then the kind and amount of shares, securities, cash or other property
receivable upon such transaction for each non-electing share shall be the kind
and amount so receivable per share by a plurality of non-electing shares).
(C) In the event the Corporation shall enter into any agreement
providing for any consolidation or merger or similar transaction described in
Section 8(B), then the Corporation shall as soon as practicable thereafter (and
in any event at least ten (10) business days before consummation of such
transaction) give notice of such agreement and the material terms thereof to
each holder of Class B Preferred Stock and each such holder shall have the right
to elect, by written notice to the Corporation, to receive, upon consummation of
such transaction (if and when such transaction is consummated), out of funds
legally available therefor, from the Corporation or the successor of the
Corporation, in redemption and retirement of such Class B Preferred Stock, in
lieu of any cash or other securities which such holder would otherwise be
entitled to receive under Section 8(B) hereof, a cash payment equal to the
redemption price specified in Section 6(A) in effect on the date of the
consummation of such transaction plus an amount equal to all accrued (whether or
not accumulated) and unpaid dividends. No such notice
31
of redemption shall be effective unless given to the Corporation prior to the
close of business of the fifth business day prior to consummation of such
transaction, unless the Corporation or the successor of the Corporation shall
waive such prior notice, but any notice of redemption so given prior to such
time may be withdrawn by notice of withdrawal given to the Corporation prior to
the close of business on the fifth business day prior to consummation of such
transaction.
9. Anti-dilution Adjustments.
(A)(1) Subject to the provisions of Section 9(E), in the event the
Corporation shall, at any time or from time to time while any of the shares of
the Class B Preferred Stock are outstanding, (i) pay a dividend or make a
distribution in respect of the Common Stock in shares of Common Stock or (ii)
subdivide the outstanding shares of Common Stock into a greater number of
shares, in each case whether by reclassification of shares, recapitalization of
the Corporation (excluding a recapitalization or reclassification effected by a
merger or consolidation to which Section 8 hereof applies) or otherwise, then,
in such event, the Board of Directors shall, to the extent legally permissible,
declare a dividend in respect of the Class B Preferred Stock in shares of Class
B Preferred Stock (a "Special Dividend") in such a manner that a holder of Class
B Preferred Stock will become a holder of that number of shares of Class B
Preferred Stock equal to the product of the number of such shares held prior to
such event times a fraction (the "Sec. 9(A) Non-Dilutive Share Fraction"), the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock outstanding immediately before such event. A Special
Dividend declared pursuant to this Section 9(A)(1) shall be effective, upon
payment of such dividend or distribution in respect of the Common Stock, as of
the record date for the determination of shareholders entitled to receive such
dividend or distribution (on a retroactive basis), and in the case of a
subdivision shall become effective immediately as of the effective date thereof.
Concurrently with the declaration of the Special Dividend pursuant to this
Section 9(A)(1), the Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate of all shares of Class B Preferred Stock shall be
adjusted by dividing the Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate, respectively, in effect immediately before such event
by the Sec. 9(A) Non-Dilutive Share Fraction.
(2) The Corporation and the Board of Directors shall each use its best
efforts to take all necessary steps or to take all actions as are reasonably
necessary or appropriate for declaration of the Special Dividend provided in
Section 9(A)(1) but shall not be required to call a special meeting of
shareholders in order to implement the provisions thereof. If for any reason
the Board of Directors is precluded from giving full effect to the Special
Dividend provided in Section 9(A)(1), then no such Special Dividend shall be
declared, but instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately before the event by the Sec.
9(A) Non-Dilutive Share Fraction and the Liquidation Price and the Regular
Preferred Dividend Rate will not be adjusted. An adjustment to the Conversion
Price made pursuant to this Section 9(A)(2) shall be given effect, upon payment
of such a dividend or distribution, as of the record date for the determination
of holders entitled to receive such dividend or distribution (on a retroactive
basis), and in the case of a subdivision shall become effective immediately as
of the effective date thereof. If subsequently the Board of Directors is able
to give full effect to the Special Dividend as provided in Section 9(A)(1), then
such Special Dividend will be declared and other adjustments will be made in
accordance with the provisions
32
of Section 9(A)(1) and the adjustment in the Conversion Price as provided in
this Section 9(A)(2) will automatically be reversed and nullified prospectively.
(3) Subject to the provisions of Section 9(E) hereof, in the event the
Corporation shall, at any time or from time to time while any of the shares of
the Class B Preferred Stock are outstanding, combine the outstanding shares of
Common Stock into a lesser number of shares, whether by reclassification of
shares, recapitalization of the Corporation (excluding a recapitalization or
reclassification effected by a merger, consolidation or other transaction to
which Section 8 hereof applies) or otherwise, then, in such event, the
Conversion Price shall automatically be adjusted by dividing the Conversion
Price in effect immediately before such event by the Sec. 9(A) Non-Dilutive
Share Fraction and the Liquidation Price and the Regular Preferred Dividend Rate
will not be adjusted. An adjustment to the Conversion Price made pursuant to
this Section 9(A)(3) shall be given effect immediately as of the effective date
of such combination.
(B)(1) Subject to the provisions of Section 9(E), in the event the
Corporation shall, at any time or from time to time while any of the shares of
Class B Preferred Stock are outstanding issue to holders of shares of Common
Stock as a dividend or distribution, including by way of reclassification of
shares or a recapitalization of the Corporation, any right or warrant to
purchase shares of Common Stock (but not including as a right or warrant for
this purpose any security convertible into or exchangeable for shares of Common
Stock) for a consideration having a Fair Market Value (as defined in Section 9
(G)(2) hereof) per share less than the Fair Market Value of a share of Common
Stock on the date of issuance of such right or warrant, then, in such event, the
Board of Directors shall, to the extent legally permissible, declare a Special
Dividend in such a manner that a holder of Class B Preferred Stock will become a
holder of that number of shares of Class B Preferred Stock equal to the product
of the number of such shares held prior to such event times a fraction (the
"Sec. 9(B) Non-Dilutive Share Fraction"), the numerator of which is the number
of shares of Common Stock outstanding immediately before such issuance of rights
or warrants plus the maximum number of shares of Common Stock that could be
acquired upon exercise in full of all such rights and warrants and the
denominator of which is the number of shares of Common Stock outstanding
immediately before such issuance of warrants or rights plus the number of shares
of Common Stock which could be purchased at the Fair Market Value of a share of
Common Stock at the time of such issuance for the maximum aggregate
consideration payable upon exercise in full of all such rights and warrants. A
Special Dividend declared pursuant to this Section 9(B)(1) shall be effective
upon such issuance of rights or warrants. Concurrently with the declaration of
the Special Dividend pursuant to this Section 9(B)(1), the Conversion Price, the
Liquidation Price and the Regular Preferred Dividend Rate of all shares of Class
B Preferred Stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Regular Preferred Dividend Rate, respectively, in
effect immediately before such event by the Sec. 9(B) Non-Dilutive Share
Fraction.
(2) The Corporation and the Board of Directors shall each use its best
efforts to take all necessary steps or to take all actions as are reasonably
necessary or appropriate for declaration of the Special Dividend provided in
Section 9(B)(1) but shall not be required to call a special meeting of
shareholders in order to implement the provisions thereof. If for any reason
the Board of Directors is precluded from giving full effect to the Special
Dividend provided in Section 9(B)(1), then no such Special Dividend shall be
declared, but instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately
33
before the event by the Sec. 9(B) Non-Dilutive Share Fraction and the
Liquidation Price and the Preferred Dividend Rate will not be adjusted. An
adjustment to the Conversion Price made pursuant to this Section 9(B)(2) shall
be given effect upon issuance of rights or warrants. If subsequently the Board
of Directors is able to give full effect to the Special Dividend as provided in
Section 9(B)(1), then such Special Dividend will be declared and other
adjustments will be made in accordance with the provisions of Section 9(B)(1)
and the adjustment in the Conversion Price as provided in this Section 9(B)(2)
will automatically be reversed and nullified prospectively.
(C)(1)(i) Subject to the provisions of Section 9(E), in the event the
Corporation shall, at any time or from time to time while any of the shares of
Class B Preferred Stock are outstanding, issue, sell or exchange shares of
Common Stock (other than pursuant to (x) any right or warrant to purchase or
acquire shares of Common Stock (including as such a right or warrant any
security convertible into or exchangeable for shares of Common Stock), or (y)
any employee or director incentive, compensation or benefit plan or arrangement
of the Corporation or any subsidiary of the Corporation heretofore or hereafter
adopted) at a purchase price per share less than the Fair Market Value of a
share of Common Stock on the date of such issuance, sale or exchange, then, in
such event, the Board of Directors shall, to the extent legally permissible,
declare a Special Dividend in such a manner that a holder of Class B Preferred
Stock will become the holder of that number of shares of Class B Preferred Stock
equal to the product of the number of such shares held prior to such event times
a fraction (the "Sec. 9(C)(1)(i) Non-Dilutive Share Fraction"), the numerator of
which is the number of shares of Common Stock outstanding immediately before
such issuance, sale or exchange plus the number of shares of Common Stock so
issued, sold or exchanged and the denominator of which is the number of shares
of Common Stock outstanding immediately before such issuance, sale or exchange
plus the number of shares of Common Stock which could be purchased at the Fair
Market Value of a share of Common Stock at the time of such issuance, sale or
exchange for the maximum aggregate consideration paid therefor.
(ii) In the event that the Corporation shall, at any time or from time
to time while any Class B Preferred Stock is outstanding, issue, sell or
exchange any right or warrant to purchase or acquire shares of Common Stock
(including as such a right or warrant any security convertible into or
exchangeable for shares of Common Stock other than pursuant to (x) any employee
or director incentive, compensation or benefit plan or arrangement of the
Corporation or any subsidiary of the Corporation heretofore or hereafter adopted
and (y) any dividend or distribution on shares of Common Stock contemplated in
Section 9(A)(1)) for a consideration having a Fair Market Value, on the date of
such issuance, sale or exchange, less than the Non-Dilutive Amount (as defined
in Section 9(G)(3) hereof), then, in such event, the Board of Directors shall,
to the extent legally permissible, declare a Special Dividend in such a manner
that a holder of Class B Preferred Stock will become the holder of that number
of shares of Class B Preferred Stock equal to the product of the number of such
shares held prior to such event times a fraction (the "Sec. 9(C)(1)(ii) Non-
Dilutive Share Fraction"), the numerator of which is the number of shares of
Common Stock outstanding immediately before such issuance of rights or warrants
plus the maximum number of shares of Common Stock that could be acquired upon
exercise in full of all such rights and warrants and the denominator of which is
the number of shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the number of shares of Common Stock which
could be purchased at the Fair Market Value of a share of Common Stock at the
time of such issuance for the total of (x) the maximum
34
aggregate consideration payable at the time of the issuance, sale or exchange of
such right or warrant and (y) the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants.
(iii) A Special Dividend declared pursuant to this Section 9(C)(1)
shall be effective upon the effective date of such issuance, sale or exchange.
Concurrently with the declaration of the Special Dividend pursuant to this
Section 9(C)(1), the Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate of all shares of Class B Preferred Stock shall be
adjusted by dividing the Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate, respectively, in effect immediately before such event
by the Sec. 9(C)(1)(i) or Sec. 9(C)(1)(ii) Non-Dilutive Share Fraction, as the
case may be.
(2) The Corporation and the Board of Directors shall each use its best
efforts to take all necessary steps or to take all actions as are reasonably
necessary or appropriate for declaration of the Special Dividend provided in
Section 9(C)(1)(i) or (ii) but shall not be required to call a special meeting
of shareholders in order to implement the provisions thereof. If for any reason
the Board of Directors is precluded from giving full effect to any Special
Dividend provided in Section 9(C)(1), then no such Special Dividend shall be
declared, but instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately before the event by the Sec.
9(C)(1)(i) or Sec. 9(C)(1)(ii) Non-Dilutive Share Fraction, as the case may be,
and the Liquidation Price and the Regular Preferred Dividend Rate will not be
adjusted. An adjustment to the Conversion Price made pursuant to this Section
9(C)(2) shall be given effect upon the effective date of such issuance, sale or
exchange. If subsequently the Board of Directors is able to give full effect to
the Special Dividend as provided in Section 9(C)(1), then such Special Dividend
will be declared and other adjustments will be made in accordance with the
provisions of Section 9(C)(1) and the adjustment in the Conversion Price as
provided in this Section 9(C)(2) will automatically be reversed and nullified
prospectively.
(D)(1) Subject to the provisions of Section 9(E), in the event the
Corporation shall, at any time or from time to time while any of the shares of
Class B Preferred Stock are outstanding, make an Extraordinary Distribution (as
defined in Section 9(G)(1) hereof) in respect of the Common Stock, whether by
dividend, distribution, reclassification of shares or recapitalization of the
Corporation (including capitalization or reclassification effected by a merger
or consolidation to which Section 8 hereof does not apply) or effect a Pro Rata
Repurchase (as defined in Section 9(G)(4) hereof) of Common Stock, then, in such
event, the Board of Directors shall, to the extent legally permissible, declare
a Special Dividend in such a manner that a holder of Class B Preferred Stock
will become a holder of that number of shares of Class B Preferred Stock equal
to the product of the number of such shares held prior to such event times a
fraction (the "Sec. 9(D) Non-Dilutive Share Fraction"), the numerator of which
is the product of (a) the number of shares of Common Stock outstanding
immediately before such Extraordinary Distribution or Pro Rata Repurchase minus,
in the case of a Pro Rata Repurchase, the number of shares of Common Stock
repurchased by the Corporation multiplied by (b) the Fair Market Value of a
share of Common Stock on the day before the ex-dividend date with respect to an
Extraordinary Distribution which is paid in cash and on the distribution date
with respect to an Extraordinary Distribution which is paid other than in cash,
or on the applicable expiration date (including all extensions thereof) of any
tender offer which is a Pro Rata Repurchase or on the date of purchase with
respect to any Pro Rata Repurchase which is not a
35
tender offer, as the case may be, and the denominator of which is (i) the
product of (x) the number of shares of Common Stock outstanding immediately
before such Extraordinary Distribution or Pro Rata Repurchase multiplied by (y)
the Fair Market Value of a share of Common Stock on the day before the ex-
dividend date with respect to an Extraordinary Distribution which is paid in
cash and on the distribution date with respect to an Extraordinary Distribution
which is paid other than in cash, or on the applicable expiration date
(including all extensions thereof) of any tender offer which is a Pro Rata
Repurchase, or on the date of purchase with respect to any Pro Rata Repurchase
which is not a tender offer, as the case may be, minus (ii) the Fair Market
Value of the Extraordinary Distribution or the aggregate purchase price of the
Pro Rata Repurchase, as the case may be. The Corporation shall send each holder
of Class B Preferred Stock (i) notice of its intent to make an Extraordinary
Distribution and (ii) notice of any offer by the Corporation to make a Pro Rata
Repurchase, in each case at the same time as, or as soon as practicable after,
such offer is first communicated to holders of Common Stock or, in the case of
an Extraordinary Distribution, the announcement of a record date in accordance
with the rules of any stock exchange on which the Common Stock is listed or
admitted to trading. Such notice shall indicate the intended record date and
the amount and nature of such dividend or distribution, or the number of shares
subject to such offer for a Pro Rata Repurchase and the purchase price payable
by the Corporation pursuant to such offer, as well as the Conversion Price and
the number of shares of Common Stock into which a share of Class B Preferred
Stock may be converted at such time. Concurrently with the Special Dividend
paid pursuant to this Section 9(D)(1), the Conversion Price, the Liquidation
Price and the Regular Preferred Dividend Rate of all shares of Class B Preferred
Stock shall be adjusted by dividing the Conversion Price, the Liquidation Price
and the Regular Preferred Dividend Rate, respectively, in effect immediately
before such Extraordinary Distribution or Pro Rata Repurchase by the Sec. 9(D)
Non-Dilutive Share Fraction determined pursuant to this Section 9(D)(1).
(2) The Corporation and the Board of Directors shall each use its best
efforts to take all necessary steps or to take all actions as are reasonably
necessary or appropriate for declaration of the Special Dividend provided in
Section 9(D)(1) but shall not be required to call a special meeting of
shareholders in order to implement the provisions thereof. If for any reason
the Board of Directors is precluded from giving full effect to the Special
Dividend provided in Section 9(D)(1), then no such Special Dividend shall be
declared, but instead the Conversion Price shall automatically be adjusted by
dividing the Conversion Price in effect immediately before the event by the Sec.
9(D) Non-Dilutive Share Fraction, and the Liquidation Price and the Regular
Preferred Dividend Rate will not be adjusted. If subsequently the Board of
Directors is able to give full effect to the Special Dividend as provided in
Section 9(D)(1), then such Special Dividend will be declared and other
adjustments will be made in accordance with the provisions of Section 9(D)(1)
and the adjustment in the Conversion Price as provided in this Section 9(D)(2)
will automatically be reversed and nullified prospectively.
(E) Notwithstanding any other provision of this Section 9, the
Corporation shall not be required to make (i) any Special Dividend or any
adjustment of the Conversion Price, the Liquidation Price or the Regular
Preferred Dividend Rate unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of shares of Class B
Preferred Stock outstanding, or, (ii) if no additional shares of Class B
Preferred Stock are issued, any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Conversion Price. Any lesser adjustment
36
shall be carried forward and shall be made no later than the time of, and
together with, the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an increase or
decrease of at least one percent (1%) of the number of shares of Class B
Preferred Stock outstanding or, if no additional shares of Class B Preferred
Stock are being issued, an increase or decrease of at least one percent (1%) of
the Conversion Price, whichever the case may be.
(F) If the Corporation shall make any dividend or distribution on the
Common Stock or issue any Common Stock, other capital stock or other security of
the Corporation or any rights or warrants to purchase or acquire any such
security, which transaction does not result in an adjustment to the number of
shares of Class B Preferred Stock outstanding or the Conversion Price pursuant
to the foregoing provisions of this Section 9, the Board of Directors of the
Corporation may, in its sole discretion, consider whether such action is of such
a nature that some type of equitable adjustment should be made in respect of
such transaction. If in such case the Board of Directors of the Corporation
determines that some type of adjustment should be made, an adjustment shall be
made effective as of such date as determined by the Board of Directors of the
Corporation. The determination of the Board of Directors of the Corporation as
to whether some type of adjustment should be made pursuant to the foregoing
provisions of this Section 9(F), and, if so, as to what adjustment should be
made and when, shall be final and binding on the Corporation and all
shareholders of the Corporation. The Corporation shall be entitled to make such
additional adjustments, in addition to those required by the foregoing
provisions of this Section 9, as shall be necessary in order that any dividend
or distribution in shares of capital stock of the Corporation, subdivision,
reclassification or combination of shares of the Corporation or any
recapitalization of the Corporation shall not be taxable to holders of the
Common Stock.
(G) For purposes hereof, the following definitions shall apply:
(1) "Extraordinary Distribution" shall mean any dividend or other
distribution to holders of Common Stock effected while any of the shares of
Class B Preferred Stock are outstanding of (i) cash or (ii) any shares of
capital stock of the Corporation (other than shares of Common Stock), other
securities of the Corporation (other than securities of the type referred to in
Section 9(B)), evidences of indebtedness of the Corporation or any other person
or any other property (including shares of any subsidiary of the Corporation),
or any combination thereof, where the aggregate amount of such cash dividend or
other distribution together with the amount of all cash dividends and other
distributions made during the preceding period of twelve (12) months, when
combined with the aggregate amount of all Pro Rata Repurchases (for this
purpose, including only that portion of the aggregate purchase price of such Pro
Rata Repurchase which is in excess of the Fair Market Value of the Common Stock
repurchased as determined on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer which is a Pro Rata
Repurchase, or the date of purchase with respect to any other Pro Rata
Repurchase which is not a tender offer or exchange offer) made during such
period, exceeds twelve and one-half percent (12.5%) of the aggregate Fair Market
Value of all shares of Common Stock outstanding on the day before the ex-
dividend date with respect to such Extraordinary Distribution which is paid in
cash and on the distribution date with respect to an Extraordinary Distribution
which is paid other than in cash. The Fair Market Value of an Extraordinary
Distribution for purposes of Section 9(D) shall be the sum of the Fair Market
Value of such Extraordinary Distribution plus the aggregate amount of any cash
dividends or
37
other distributions which are not Extraordinary Distributions made during such
twelve month period and not previously included in the calculation of an
adjustment pursuant to Section 9(D), but shall exclude the aggregate amount of
regular quarterly dividends declared by the Board of Directors and paid by the
Corporation in such twelve month period.
(2) "Fair Market Value" shall mean, as to shares of Common Stock or
any other class of capital stock or securities of the Corporation or any other
issuer which are publicly traded, the average of the Current Market Prices (as
hereinafter defined) of such shares or securities for each day of the Adjustment
Period (as hereinafter defined). "Current Market Price" of publicly traded
shares of Common Stock or any other class of capital stock or other security of
the Corporation or any other issuer for a day shall mean the last reported sales
price, regular way, or, in case no sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, in either case as
reported on the New York Stock Exchange Composite Tape or, if such security is
not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the NASDAQ National Market System or, if such security
is not quoted on such National Market System, the average of the closing bid and
asked prices on each such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on each such day shall not
have been reported through NASDAQ, the average of the bid and asked prices for
such day as furnished by any New York Stock Exchange member firm regularly
making a market in such security selected for such purpose by the Board of
Directors of the Corporation on each trading day during the Adjustment Period.
"Adjustment Period" shall mean the period of five consecutive trading days,
selected by the Board of Directors of the Corporation, during the twenty (20)
trading days preceding, and including, the date as of which the Fair Market
Value of a security is to be determined. The "Fair Market Value" of any
security which is not publicly traded or of any other property shall mean the
fair value thereof as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the Corporation, or, if no
such investment banking or appraisal firm is in the good faith judgment of the
Board of Directors available to make such determination, as determined in good
faith by the Board of Directors of the Corporation.
(3) "Non-Dilutive Amount" in respect of an issuance, sale or exchange
by the Corporation of any right or warrant to purchase or acquire shares of
Common Stock (including any security convertible into or exchangeable for shares
of Common Stock) shall mean the difference between (i) the product of the Fair
Market Value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock which could be acquired on such date upon the exercise
in full of such rights or warrants (including upon the conversion or exchange of
all such convertible or exchangeable securities), whether or not exercisable (or
convertible or exchangeable) at such date, and (ii) the aggregate amount payable
pursuant to such right or warrant to purchase or acquire such maximum number of
shares of Common Stock; provided, however, that in no event shall the Non-
Dilutive Amount be less than zero. For purposes of the foregoing sentence, in
the case of a security convertible into or exchangeable for shares of Common
Stock, the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common Stock shall be the Fair Market Value of such security on the
date of the issuance, sale or exchange of such security by the Corporation.
38
(4) "Pro Rata Repurchase" shall mean any purchase of shares of Common
Stock by the Corporation or any subsidiary thereof, whether for cash, shares of
capital stock of the Corporation, other securities of the Corporation, evidences
of indebtedness of the Corporation or any other person or any other property
(including shares of a subsidiary of the Corporation ), or any combination
thereof, effected while any of the shares of Class B Preferred Stock are
outstanding, pursuant to any tender offer or exchange offer subject to Section
13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock, provided, however, that no purchase
of shares by the Corporation or any subsidiary thereof made in open market
transactions shall be deemed a Pro Rata Repurchase. For purposes of this
Section 9(G), shares shall be deemed to have been purchased by the Corporation
or any subsidiary thereof "in open market transactions" if they have been
purchased substantially in accordance with the requirements of Rule 10b-18 as in
effect under the Exchange Act on the date shares of Class B Preferred Stock are
initially issued by the Corporation or on such other terms and conditions as the
Board of Directors of the Corporation shall have determined are reasonably
designed to prevent such purchases from having a material effect on the trading
market for the Common Stock.
(H) Whenever an adjustment increasing the number of shares of Class B
Preferred Stock outstanding is required pursuant hereto, the Board of Directors
shall take action as is necessary so that a sufficient number of shares of Class
B Preferred Stock are designated with respect to such increase resulting from
such adjustment. Whenever an adjustment to the Conversion Price, the
Liquidation Price or the Regular Preferred Dividend Rate of the Class B
Preferred Stock is required pursuant hereto, the Corporation shall forthwith
place on file with the transfer agent for the Common Stock and the Class B
Preferred Stock, if there be one, and with the Treasurer of the Corporation, a
statement signed by the Treasurer or any Assistant Treasurer of the Corporation
stating the adjusted Conversion Price, Liquidation Price and Regular Preferred
Dividend Rate determined as provided herein. Such statement shall set forth in
reasonable detail such facts as shall be necessary to show the reason and the
manner of computing such adjustment, including any determination of Fair Market
Value involved in such computation. Promptly after each adjustment to the
number of shares of Class B Preferred Stock outstanding, the Conversion Price,
the Liquidation Price or the Regular Preferred Dividend Rate, the Corporation
shall mail a notice thereof and of the then prevailing number of shares of Class
B Preferred Stock outstanding, the Conversion Price, the Liquidation Price and
the Regular Preferred Dividend Rate to each holder of shares of Class B
Preferred Stock.
10. Miscellaneous.
(A) All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have been given upon the earlier of receipt
thereof or three (3) business days after the mailing thereof if sent by
registered mail (unless first-class mail shall be specifically permitted for
such notice under the terms hereof) with postage prepaid, addressed: (i) if to
the Corporation, to its office at 5959 Las Colinas Boulevard, Irving, Texas
75039 (Attention: Treasurer) or to the transfer agent for the Class B Preferred
Stock, or other agent of the Corporation designated as permitted hereby or (ii)
if to any holder of the Class B Preferred Stock or Common Stock, as the case may
be, to such holder at the address of such holder as listed in the stock record
books of the Corporation (which may include the records of any transfer agent
for the Class B Preferred Stock or Common Stock, as the case may be) or (iii) to
such other
39
address as the Corporation or any such holder, as the case may be, shall have
designated by notice similarly given.
(B) The term "Common Stock" as used herein means the Corporation's no
par value common stock, as the same exists at the Effective Date, or 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
without par value, or from without par value to par value. In the event that,
at any time as a result of an adjustment made pursuant to Section 9 hereof, the
holder of any shares of the Class B Preferred Stock upon thereafter surrendering
such shares for conversion shall become entitled to receive any shares or other
securities of the Corporation other than shares of Common Stock, the anti-
dilution provisions contained in Section 9 hereof shall apply in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock, and the provisions of Sections 1 through 8 and 10 hereof with
respect to the Common Stock shall apply on like or similar terms to any such
other shares of securities.
(C) The term "Effective Date" shall mean the date of effectiveness of
the Certificate of Merger of Lion Acquisition Subsidiary Corporation with and
into Mobil Corporation filed in the office of the Secretary of State of the
State of Delaware.
(D) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Class B Preferred Stock or shares of Common Stock or other
securities issued on account of Class B Preferred Stock pursuant thereto or
certificate representing such shares or securities. The Corporation shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of shares of Class B Preferred
Stock or Common Stock or other securities in a name other than that in which the
shares of Class B Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than a payment
to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable.
(E) In the event that a holder of shares of Class B Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Class B Preferred Stock should be made or
the address to which the certificate or certificates representing such shares,
or such payment, should be sent, the Corporation shall be entitled to register
such shares, and make such payment, in the name of the holder of such Class B
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates or other documentation representing such shares, or
such payment, to the address of such holder shown on the records of the
Corporation.
(F) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Class B Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of Class
B Preferred Stock.
40
(G) Any shares of Common Stock into which the shares of Class B
Preferred Stock shall be converted, may be uncertificated shares, provided that
--------
the names of the holders of all uncertificated shares and the number of such
shares held by each holder shall be registered at the offices of the Corporation
or the transfer agent for such shares. In the event that any shares shall be
uncertificated, all references herein to surrender or issuance of stock
certificates shall have no application to such uncertificated shares.
41