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EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE PNC FINANCIAL SERVICES GROUP, INC.
(as of May 15, 2000)
FIRST. The name of the corporation is The PNC Financial Services
Group, Inc.
SECOND. The address of the corporation's registered office in the
Commonwealth of Pennsylvania is One PNC Plaza, 249 Fifth Avenue, Pittsburgh,
Pennsylvania 15222-2707.
THIRD. The corporation is incorporated under the provisions of the
Business Corporation Law, the Act approved May 5, 1933, P.L. 364, as amended.
The purpose of the corporation is, and it shall have unlimited power to engage
in and to do any lawful act concerning any or all lawful business for which
corporations may be incorporated under such Act.
FOURTH. The term of the corporation's existence is perpetual.
FIFTH. The authority to make, amend and repeal the by-laws of the
corporation is hereby vested in the Board of Directors, subject always to the
power of the shareholders to change any such action.
SIXTH. The aggregate number of shares of capital stock which the
corporation shall have authority to issue is 470,000,000 shares divided into two
classes consisting of 20,000,000 shares of preferred stock of the par value of
$1.00 each ("Preferred Stock") and 450,000,000 shares of common stock of the par
value of $5.00 each ("Common Stock").
SEVENTH. The following is a statement of certain of the designations,
preferences, qualifications, privileges, limitations, restrictions, and special
or relative rights in respect of the Preferred Stock and the Common Stock and a
statement of the authority vested in the Board of Directors to fix by resolution
any designations, preferences, privileges, qualifications, limitations,
restrictions and special or relative rights of any series of Preferred Stock
which are not fixed hereby:
PREFERRED STOCK
1. Issuance in series. The shares of Preferred Stock may be issued from
time to time in series. Each series shall be so designated as to distinguish the
shares thereof from the shares of all other series. All shares of any particular
series shall be identical except, if entitled to cumulative dividends, as to the
date or dates from which dividends thereon shall be cumulative. The shares of
any one series need not be identical or rank equally with the shares of any
other series except as required by law or as provided hereby. The Board of
Directors is expressly vested with authority to establish and designate any one
or more series of Preferred Stock and to
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fix and determine by resolution any designations, preferences, qualifications,
privileges, limitations, restrictions or special or relative rights of
additional series which are not fixed hereby, including the following:
(a) The number of shares to constitute the series and the
distinctive designation thereof.
(b) The dividend rate, the dates for payment of dividends,
whether dividends shall be cumulative, and, if so, the date or dates
from which and the extent to which dividends shall be cumulative.
(c) The amount or amounts payable upon voluntary or
involuntary liquidation of the Corporation.
(d) The voting rights, if any, of the holders of shares of the
series.
(e) The redemption price or prices, if any, and the terms and
conditions on which shares may be redeemed.
(f) Whether the shares of the series shall be convertible into
or exchangeable for shares of capital stock of the Corporation or other
securities, and, if so, the conversion price or prices or the rate or
rates of conversion or exchange, any adjustments thereof, and any other
terms and conditions of conversion or exchange.
(g) Whether the shares of the series shall be entitled to the
benefit of any retirement or sinking fund to be applied to the purchase
or redemption of such shares, and, if so, the amount thereof and the
terms and conditions relative to the operation thereof.
(h) The rank of the shares of the series, as in dividends and
assets, in relation to the shares of any other class or series of
capital stock of the Corporation.
(i) Such other preferences, qualifications, privileges,
limitations, restrictions or special or relative rights of any series
as are not fixed hereby and as the Board of Directors may deem
advisable and state in such resolutions.
2. Dividends. The holders of shares of each series of Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
dividends at the rate which shall have been fixed hereby or by the Board of
Directors as authorized hereby with respect to such series, and no more except
as shall have been determined by the Board of Directors as authorized hereby. If
dividends on a particular series shall have been determined hereby or by the
Board of Directors as authorized hereby to be cumulative, no dividends shall be
paid or set apart for payment or declared on the Common Stock or on any class or
series of stock of the Corporation ranking as to dividends subordinate to such
series (other than dividends payable in Common Stock or in any class or series
of stock of the Corporation ranking as to dividends and assets subordinate to
such series) and no payment shall be made or set apart for the purchase,
redemption or other acquisition for value of any shares of Common Stock or of
any class or series of stock of the Corporation ranking as to dividends or
assets subordinate to such series, until dividends (to the extent cumulative)
for all past dividend periods on all outstanding shares of such series have been
paid, or declared and set apart for payment, in full. In case dividends for any
dividend period are not paid in full on all shares of Preferred Stock ranking
equally as to dividends, all such shares shall participate ratably in the
payment of dividends for such period in proportion to the full amounts of
dividends to which they are respectively entitled.
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3. Liquidation of the Corporation. In the event of voluntary or
involuntary liquidation of the Corporation the holders of shares of each series
of Preferred Stock shall be entitled to receive from the assets of the
Corporation (whether capital or surplus), prior to any payment to the holders of
Common Stock or of any class or series of stock of the Corporation ranking as to
assets subordinate to such series, the amount fixed hereby or by the Board of
Directors as authorized hereby for such series, plus, in case dividends on such
series shall have been determined hereby or by the Board of Directors as
authorized hereby to be cumulative, an amount equal to the accrued and unpaid
dividends thereon (to the extent cumulative) computed to the date on which
payment thereof is made available, whether or not earned or declared. After such
payment to the holders of shares of such series, any remaining balance shall be
paid to the holders of Common Stock or of any class or series of stock of the
Corporation ranking as to assets subordinate to such series, as they may be
entitled. If, upon liquidation of the Corporation, its assets are not sufficient
to pay in full the amounts so payable to the holders of shares of all series of
Preferred Stock ranking equally as to assets, all such shares shall participate
ratably in the distribution of assets in proportion to the full amounts to which
they are respectively entitled. Neither a merger nor a consolidation of the
Corporation into or with any other corporation nor a sale, transfer or lease of
all or part of the assets of the Corporation shall be deemed a liquidation of
the Corporation within the meaning of this paragraph.
4. Voting rights. (a) Except as otherwise required by law, holders of
shares of Preferred Stock shall have only such voting rights, if any, as shall
have been fixed and determined hereby or by the Board of Directors as authorized
hereby. Except as otherwise required by law or as otherwise provided hereby or
by the Board of Directors as authorized hereby, holders of Preferred Stock
having voting rights and holders of Common Stock shall vote together as one
class.
(b) If the Corporation shall have failed to pay, or declare and
set apart for payment, dividends on all outstanding shares of Preferred Stock in
an amount equal to six quarterly dividends at the rates payable upon such shares
(whether or not such dividends are cumulative), the number of directors of the
Corporation shall be increased by two at the first annual meeting of the
shareholders of the Corporation held thereafter, and at such meeting and at each
subsequent annual meeting until cumulative dividends payable for all past
dividend periods and continuous noncumulative dividends for at least one year on
all outstanding shares of Preferred Stock entitled thereto shall have been paid,
or declared and set apart for payment, in full, the holders of shares of
Preferred Stock of all series shall have the right, voting as a class, to elect
such two additional members of the Board of Directors to hold office for a term
of one year. Upon such payment, or such declaration and setting apart for
payment, in full, the terms of the two additional directors so elected shall
forthwith terminate, and the number of directors of the Corporation shall be
reduced by two, and such voting right of the holders of shares of Preferred
Stock shall cease, subject to increase in the number of directors as aforesaid
and to revesting of such voting right in the event of each and every additional
failure in the payment of dividends in an amount equal to six quarterly
dividends as aforesaid.
5. Action by Corporation requiring approval of Preferred Stock. The
Corporation shall not, without the affirmative vote at a meeting, or the written
consent with or without a meeting,
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of the holders of at least two-thirds of the then outstanding shares of
Preferred Stock of all series (a) create or increase the authorized number of
shares of any class of stock ranking as to dividends or assets prior to the
Preferred Stock; or (b) change the preferences, qualifications, privileges,
limitations, restrictions or special or relative rights granted to or imposed
upon the shares of Preferred Stock in any material respect adverse to the
holders thereof, provided that if any such change will affect any particular
series materially and adversely as contrasted with the effect thereof upon any
other series, no such change may be made without, in addition, such vote or
consent of the holders of at least two-thirds of the then outstanding shares of
the particular series which would be so affected.
6. Redemption and acquisition. (a) Except as otherwise provided by
the Board of Directors as authorized hereby, the Corporation, at its option to
be exercised by its Board of Directors, may redeem the whole or any part of the
Preferred Stock or of any series thereof at such times and at the applicable
amount for each share which shall have been fixed and determined hereby or by
the Board of Directors as authorized hereby with respect thereto, plus, in case
dividends shall have been determined hereby or by the Board of Directors as
authorized hereby to be cumulative, an amount equal to the accrued and unpaid
dividends thereon (to the extent cumulative) computed to the date fixed for
redemption, whether or not earned or declared (hereinafter collectively called
the "redemption price"). If at any time less than all of the Preferred Stock
then outstanding is to be called for redemption, the Board may select one or
more series to be redeemed, and if less than all the outstanding Preferred Stock
of any series is to be called for redemption, the shares to be redeemed may be
selected by lot or by such other equitable method as the Board in its discretion
may determine. Notice of every redemption, stating the redemption date, the
redemption price, and the place of payment thereof, and, if less than all of the
Preferred Stock then outstanding is called for redemption, identifying the
shares to be redeemed, shall be published at least once in a newspaper printed
in the English language and of general circulation in the City of Philadelphia,
Pennsylvania, or in the Borough of Manhattan, the City of New York, New York,
the first publication to be not less than 30 nor more than 60 days prior to the
date fixed for redemption. Copies of such notice shall be mailed at least 30
days and not more than 60 days prior to the date fixed for redemption to the
holders of record of the shares to be redeemed at their addresses as the same
shall appear on the books of the Corporation, but failure to give such
additional notice by mail or any defect therein or failure of any addressee to
receive it shall not affect the validity of the proceedings for redemption. The
Corporation, upon publication of the first notice of redemption as aforesaid or
upon irrevocably authorizing the bank or trust company hereinafter mentioned to
publish such notice as aforesaid, may deposit or cause to be deposited in trust
with a bank or trust company in the City of Philadelphia, Pennsylvania, or in
the Borough of Manhattan, the City of New York, New York, an amount equal to the
redemption price of the shares to be redeemed, which amount shall be payable to
the holders thereof upon surrender of certificates therefor on or after the date
fixed for redemption or prior thereto if so directed by the Board of Directors.
Upon such deposit, or if no such deposit is made then from and after the date
fixed for redemption unless the Corporation shall default in making payment of
the redemption price upon surrender of certificates as aforesaid, the shares
called for redemption shall cease to be outstanding and the holders thereof
shall cease to be shareholders with respect to such shares and shall have no
interest in or claim against the Corporation with respect to such shares other
than the right to receive the redemption
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price from such bank or trust company or from the Corporation, as the case may
be, without interest thereon, upon surrender of certificates as aforesaid;
provided that conversion rights of shares called for redemption shall terminate
at the close of business on the date fixed for redemption or at such earlier
time as shall have been fixed by the Board of Directors as authorized hereby.
Any funds so deposited which shall not be required for such redemption because
of the exercise of conversion rights subsequent to the date of such deposit
shall be returned to the Corporation. In case any holder of shares called for
redemption shall not, within six years after the date of such deposit, have
claimed the amount deposited with respect to the redemption thereof, such bank
or trust company, upon demand, shall pay over to the Corporation such unclaimed
amount and shall thereupon be relieved of all responsibility in respect thereof
to such holder, and thereafter such holder shall look only to the Corporation
for payment thereof. Any interest which may accrue on funds so deposited shall
be paid to the Corporation from time to time.
(b) Except as otherwise provided by the Board of Directors as
authorized hereby, the Corporation shall have the right to acquire Preferred
Stock from time to time at such price or prices as the Corporation may
determine, provided that unless dividends (to the extent cumulative) payable for
all past quarterly dividend periods on all outstanding shares of Preferred Stock
entitled to cumulative dividends have been paid, or declared and set apart for
payment, in full, the Corporation shall not acquire for value any shares of
Preferred Stock except in accordance with an offer (which may vary as to terms
offered with respect to shares of different series but not with respect to
shares of the same series) made in writing or by publication (as determined by
the Board of Directors) to all holders of record of shares of Preferred Stock.
(c) Except as otherwise provided by the Board of Directors as
authorized hereby, Preferred Stock redeemed or acquired by the Corporation
otherwise than by conversion shall not be cancelled or retired except by action
of the Board and shall have the status of authorized and unissued Preferred
Stock which may be reissued by the Board as shares of the same or any other
series until cancelled and retired by action of the Board, but, at the option of
the Board, Preferred Stock acquired otherwise than by redemption or conversion
may be held as treasury shares which may be reissued by the Board until
cancelled and retired by action of the Board.
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A
7. Designation. A series of Preferred Stock designated $1.80 Cumulative
Convertible Preferred Stock, Series A (Redeemable) (herein called "Series A
Preferred Stock") is hereby established, consisting of 98,583 shares subject to
increase or decrease in the number of shares in accordance with law.
8. Dividends. The dividend rate of shares of this series shall be $1.80
per share per year, payable quarterly on the tenth day of each March, June,
September and December. Dividends shall be cumulative from the March 10, June
10, September 10 or December 10 next preceding the date of issue of each share,
unless the date of issue is a quarterly dividend payment date or a date between
the record date for the determination of holders of $1.80 Cumulative
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Convertible Preferred Stock of Provident National Corporation, a predecessor of
the Corporation (such stock having been converted into the Series A Preferred
Stock), entitled to receive a quarterly dividend and the date of payment of such
quarterly dividend, in either of which events such dividends shall be cumulative
from such quarterly dividend payment date.
9. Liquidation. The amount payable upon shares of Series A Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series A
Preferred Stock, shall be $40.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
10. Redemption. Shares of Series A Preferred Stock shall be redeemable
at any time at $40.00 per share plus an amount equal to accrued and unpaid
dividends thereon computed to the date fixed for redemption, whether or not
earned or declared.
11. Voting Rights. Each holder of record of Series A Preferred Stock
shall have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series A Preferred Stock standing
in his name on the books of the Corporation are at the time convertible.
12. Conversion provisions. (a) Shares of Series A Preferred Stock may,
at the option of the holder, be converted into Common Stock of the Corporation
(as such stock may be constituted on the conversion date) at the rate of two
shares of Common Stock for each share of Series A Preferred Stock, subject to
adjustment as provided herein; provided that, as to any shares of Series A
Preferred Stock which shall have been called for redemption, the conversion
right shall terminate at the close of business on the date fixed for redemption.
(b) The holder of a share or shares of Series A Preferred Stock
may exercise the conversion right as to any thereof by delivering to the
Corporation, during regular business hours, at its principal office or at the
office of any of its transfer agents for the Series A Preferred Stock or at such
other place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed or assigned in blank
or to the Corporation (if required by it), accompanied by written notice stating
that the holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common Stock are to
be issued. Conversion shall be deemed to have been effected on the date when
such delivery is made, and such date is referred to herein as the "conversion
date." As promptly as practicable thereafter the Corporation shall issue and
deliver to or upon the written order of such holder, at such office or other
place designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which he is entitled and a check, cash,
scrip certificate or other adjustment in respect of any fraction of a share as
provided in Section 12(d) below. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become a
holder of such Common Stock of record on the conversion date unless the transfer
books of the Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common
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Stock of record on the next succeeding date on which the transfer books are
open, but the conversion rate shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued
on any shares of Series A Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of
a share upon conversion of any share or shares of Series A Preferred Stock. If
more than one share of Series A Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
total number of shares of Series A Preferred Stock so surrendered. If any
fractional interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in cash unless its
Board of Directors shall have determined to adjust fractional interests by
issuance of scrip certificates or in some other manner. Adjustment in cash shall
be made on the basis of the current market value of one share of Common Stock,
which shall be taken to be the last reported sale price of the Corporation's
Common Stock on the principal stock exchange on which the Common Stock is then
listed on the last business day before the conversion date or, if there was no
reported sale on that date, the average of the closing bid and asked quotations
on that exchange on that day or, if the Common Stock is not then listed on any
stock exchange, the average of the lowest bid and the highest asked quotations
in the over-the-counter market on that day.
(e) The issuance of Common Stock on conversion of Series A
Preferred Stock shall be without charge to the converting holder of Series A
Preferred Stock for any tax in respect of the issuance thereof, but the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of shares in any name
other than that of the holder of record on the books of the Corporation of the
shares of Series A Preferred Stock converted, and the Corporation shall not be
required to issue or deliver any certificate for shares of Common Stock unless
and until the person requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
(f) The conversion rate provided in Section 12(a) shall be subject
to the following adjustments, which shall be made to the nearest one-hundredth
of a share of Common Stock or, if none, to the next lower one-hundredth:
(1) If the Corporation shall pay to the holders of
its Common Stock a dividend in shares of Common Stock, the
conversion rate in effect immediately prior to the record date
fixed for the determination of the holders of Common Stock
entitled to such dividend shall be proportionately increased,
effective at the opening of business on the next following
full business day.
(2) If the Corporation shall split the outstanding
shares of its Common Stock into a greater number of shares or
combine the outstanding shares into a smaller
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number, the conversion rate in effect immediately prior to
such action shall be proportionately increased in the case of
a split or decreased in the case of a combination, effective
at the opening of business on the full business day next
following the day such action becomes effective.
(3) If the Corporation shall issue to the holders of
its Common Stock rights or warrants to subscribe for or
purchase shares of its Common Stock at a price less than 90%
of the Current Market Price (as defined below in this
paragraph) of the Corporation's Common Stock at the record
date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion rate
in effect immediately prior to said record date shall be
increased, effective at the opening of business on the next
following full business day, to an amount determined by
multiplying such conversion rate by a fraction the numerator
of which is the number of shares of Common Stock of the
Corporation outstanding immediately prior to said record date
plus the number of additional shares of its Common Stock
offered for subscription or purchase and the denominator of
which is said number of shares outstanding immediately prior
to said record date plus the number of shares of Common Stock
of the Corporation which the aggregate subscription or
purchase price of the total number of shares so offered would
purchase at the Current Market Price of the Corporation's
Common Stock at said record date. The term "Current Market
Price" at said record date shall mean the average of the daily
last reported sale prices per share of the Corporation's
Common Stock on the principal stock exchange on which the
Common Stock is then listed during the 20 consecutive full
business days commencing with the 30th full business day
before said record date, provided that if there was no
reported sale on any such day or days there shall be
substituted the average of the closing bid and asked
quotations on that exchange on that day, and provided further
that if the Common Stock was not listed on any stock exchange
on any such day or days there shall be substituted the average
of the lowest bid and the highest asked quotations in the
over-the-counter market on that day.
(g) No adjustment of the conversion rate provided in Section 12(a)
shall be made by reason of the issuance of Common Stock for cash except as
provided in Section 12(f)(3), or by reason of the issuance of Common Stock for
property or services. Whenever the conversion rate is adjusted pursuant to
Section 12(f), the Corporation shall (1) promptly place on file at its principal
office and at the office of each of its transfer agents for the Series A
Preferred Stock a statement signed by the Chairman of the Board, the President
or a Vice President of the Corporation and by its Treasurer or an Assistant
Treasurer showing in detail the facts requiring such adjustment and the
conversion rate after such adjustment, and shall make such statement available
for inspection by shareholders of the Corporation, and (2) cause a notice to be
published at least once in a newspaper printed in the English language and of
general circulation in the City of Philadelphia, Pennsylvania, or in the Borough
of Manhattan, the City of New York, New York, stating that such adjustment has
been made and the adjusted conversion rate.
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(h) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its Common Stock
or any other security, or if the Corporation shall distribute to the holders of
its Common Stock any evidences of indebtedness or any other assets (excluding
dividends and distributions in cash), the Corporation shall mail to each holder
of record of a share or shares of Series A Preferred Stock, at his address as it
shall appear on the books of the Corporation, a notice stating the record date
fixed or to be fixed for the determination of the holders of Common Stock of
record entitled to such issuance or distribution. Such notice shall be mailed at
least 10 days before such record date. Failure to mail such notice or any defect
therein or failure of any addressee to receive it shall not affect the validity
of such issuance or distribution or any vote thereon.
(i) In case of any reclassification or change in the outstanding
shares of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the Corporation is a
party (except a merger in which the Corporation is the surviving corporation and
which does not result in any reclassification of or change in the outstanding
Common Stock of the Corporation except a split or combination of shares) or in
case of any sale or conveyance to another corporation of all or substantially
all of the property of the Corporation, effective provision shall be made by the
Corporation or by the successor or purchasing corporation (1) that the holder of
each share of Series A Preferred Stock then outstanding shall thereafter have
the right to convert such share into the kind and amount of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock of the Corporation into which such share of Series A Preferred
Stock might have been converted immediately prior thereto, and (2) that there
shall be subsequent adjustments of the conversion rate which shall be
equivalent, as nearly as practicable, to the adjustments provided for in Section
12(f). The provisions of this Section 12(i) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales or conveyances.
(j) Shares of Common Stock issued on conversion of shares of
Series A Preferred Stock shall be issued as fully paid shares and shall be
nonassessable by the Corporation. The Corporation shall at all times reserve and
keep available for the purpose of effecting the conversion of Series A Preferred
Stock, such number of its duly authorized shares of Common Stock as shall be
sufficient to effect the conversion of all outstanding shares of Series A
Preferred Stock.
(k) Shares of Series A Preferred Stock converted as provided
herein shall not be reissued.
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES B
13. Designation. A series of Preferred Stock designated $1.80
Cumulative Convertible Preferred Stock, Series B (Nonredeemable) (herein called
"Series B Preferred Stock") is hereby established consisting of 38,542 shares
subject to increase or decrease in the number of shares in accordance with law.
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14. Dividends. The dividend rate of shares of Series B Preferred Stock
shall be $1.80 per share per year, payable quarterly on the tenth day of each
March, June, September and December. Dividends shall be cumulative from the
March 10, June 10, September 10 or December 10 next preceding the date of issue
of each share, unless the date of issue is a quarterly dividend payment date or
a date between the record date for the determination of holders of $1.80
Cumulative Convertible Preferred Stock, 1971 Series, of Provident National
Corporation, a predecessor of the Corporation (such stock having been converted
into the Series B Preferred Stock), entitled to receive a quarterly dividend and
the date of payment of such quarterly dividend, in either of which events such
dividends shall be cumulative from such quarterly dividend payment date.
15. Liquidation. The amount payable upon shares of Series B Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series B
Preferred Stock, shall be $40.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
16. Rank. The Series B Preferred Stock shall rank, as to dividends and
assets, equally with the series of Preferred Stock of the Corporation designated
$1.80 Cumulative Convertible Preferred Stock, Series A (Redeemable).
17. Redemption. Shares of Series B Preferred Stock shall not be
redeemable.
18. Voting rights. Each holder of record of Series B Preferred Stock
shall have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series B Preferred Stock standing
in his name on the books of the Corporation are at the time convertible.
19. Conversion provisions. (a) Shares of Series B Preferred Stock may,
at the option of the holder, be converted into Common Stock of the Corporation
(as such stock may be constituted on the conversion date) at the rate of two
shares of Common Stock for each share of Series B Preferred Stock, subject to
adjustment as provided herein.
(b) The holder of a share or shares of Series B Preferred Stock
may exercise the conversion right as to any thereof by delivering to the
Corporation during regular business hours, at its principal office or at the
office of any of its transfer agents for the Series B Preferred Stock or at such
other place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed or assigned in blank
or to the Corporation (if required by it), accompanied by written notice stating
that the holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common Stock are to
be issued. Conversion shall be deemed to have been effected on the date when
such delivery is made, and such date is referred to herein as the "conversion
date." As promptly as practicable thereafter, the Corporation shall issue and
deliver to or upon the written order of such holder, at such office or other
place designated by the Corporation, a certificate or certificates for
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the number of full shares of Common Stock to which he is entitled and a check,
cash, scrip certificate or other adjustment in respect of any fraction of a
share as provided in Section 19(d) below. The person in whose name the
certificate or certificates for Common Stock are to be issued shall be deemed to
have become a holder of such Common Stock of record on the conversion date
unless the transfer books of the Corporation are closed on that date, in which
event he shall be deemed to have become a holder of such Common Stock of record
on the next succeeding date on which the transfer books are open, but the
conversion rate shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued
on any shares of Series B Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of
a share upon conversion of any share or shares of Series B Preferred Stock. If
more than one share of Series B Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
total number of shares of Series B Preferred Stock so surrendered. If any
fractional interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in cash unless its
Board of Directors shall have determined to adjust fractional interests by
issuance of scrip certificates or in some other manner. Adjustment in cash shall
be made on the basis of the current market value of one share of Common Stock,
which shall be taken to be the last reported sale price of the Corporation's
Common Stock on the principal stock exchange on which the Common Stock is then
listed on the last business day before the conversion date or, if there was no
reported sale on that date, the average of the closing bid and asked quotations
on that exchange on that day or, if the Common Stock is not then listed on any
stock exchange, the average of the lowest bid and the highest asked quotations
in the over-the-counter market on that day.
(e) The issuance of Common Stock on conversion of Series B
Preferred Stock shall be without charge to the converting holder of Series B
Preferred Stock for any tax in respect of the issuance thereof, but the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of shares in any name
other than that of the holder of record on the books of the Corporation of the
shares of Series B Preferred Stock converted, and the Corporation shall not be
required to issue or deliver any certificate for shares of Common Stock unless
and until the person requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
(f) The conversion rate provided in Section 19(a) above shall be
subject to the following adjustments, which shall be made to the nearest
one-hundredth of a share of Common Stock or, if none, to the next lower
one-hundredth:
(1) If the Corporation shall pay to the holders of
its Common Stock a dividend in shares of Common Stock, the
conversion rate in effect immediately prior to the
12
record date fixed for the determination of the holders of
Common Stock entitled to such dividend shall be
proportionately increased, effective at the opening of
business on the next following full business day.
(2) If the Corporation shall split the outstanding
shares of its Common Stock into a greater number of shares or
combine the outstanding shares into a smaller number, the
conversion rate in effect immediately prior to such action
shall be proportionately increased in the case of a split or
decreased in the case of a combination, effective at the
opening of business on the full business day next following
the day such action becomes effective.
(3) If the Corporation shall issue to the holders of
its Common Stock rights or warrants to subscribe for or
purchase shares of its Common Stock at a price less than 90%
of the Current Market Price (as defined below in this
paragraph) of the Corporation's Common Stock at the record
date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion rate
in effect immediately prior to said record date shall be
increased, effective at the opening of business on the next
following full business day, to an amount determined by
multiplying such conversion rate by a fraction the numerator
of which is the number of shares of Common Stock of the
Corporation outstanding immediately prior to said record date
plus the number of additional shares of its Common Stock
offered for subscription or purchase and the denominator of
which is said number of shares outstanding immediately prior
to said record date plus the number of shares of Common Stock
of the Corporation which the aggregate subscription or
purchase price of the total number of shares so offered would
purchase at the Current Market Price of the Corporation's
Common Stock at said record date. The term "Current Market
Price" at said record date shall mean the average of the daily
last reported sale prices per share of the Corporation's
Common Stock on the principal stock exchange on which the
Common Stock is then listed during the 20 consecutive full
business days commencing with the 30th full business day
before said record date, provided that if there was no
reported sale on any such day or days there shall be
substituted the average of the closing bid and asked
quotations on that exchange on that day, and provided further
that if the Common Stock was not listed on any stock exchange
on any such day or days there shall be substituted the average
of the lowest bid and the highest asked quotations in the
over-the-counter market on that day.
(g) No adjustment of the conversion rate provided in Section 19(a)
above shall be made by reason of the issuance of Common Stock for cash except as
provided in Section 19(f)(3) above, or by reason of the issuance of Common Stock
for property or services. Whenever the conversion rate is adjusted pursuant to
Section 19(f) above the Corporation shall (1) promptly place on file at its
principal office and at the office of each of its transfer agents for the Series
B Preferred Stock a statement signed by the Chairman of the Board, the President
or a Vice President of the Corporation and by its Treasurer or an Assistant
Treasurer showing in detail the facts requiring such adjustment and the
conversion rate after such adjustment, and shall make
13
such statement available for inspection by shareholders of the Corporation, and
(2) cause a notice to be published at least once in a newspaper printed in the
English language and of general circulation in the City of Philadelphia,
Pennsylvania, or in the Borough of Manhattan, the City of New York, New York,
stating that such adjustment has been made and the adjusted conversion rate.
(h) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its Common Stock
or any other security, or if the Corporation shall distribute to the holders of
its Common Stock any evidences of indebtedness or any other assets (excluding
dividends and distributions in cash), the Corporation shall mail to each holder
of record of a share or shares of Series B Preferred Stock, at his address as it
shall appear on the books of the Corporation, a notice stating the record date
fixed or to be fixed for the determination of the holders of Common Stock of
record entitled to such issuance or distribution. Such notice shall be mailed at
least 10 days before such record date. Failure to mail such notice or any defect
therein or failure of any addressee to receive it shall not affect the validity
of such issuance or distribution or any vote thereon.
(i) In case of any reclassification or change of the outstanding
shares of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the Corporation is a
party (except a merger in which the Corporation is the surviving corporation and
which does not result in any reclassification of or change in the outstanding
Common Stock of the Corporation except a split or combination of shares) or in
case of any sale or conveyance to another corporation of all or substantially
all of the property of the Corporation, effective provision shall be made by the
Corporation or by the successor or purchasing corporation (1) that the holder of
each share of Series B Preferred Stock then outstanding shall thereafter have
the right to convert such share into the kind and amount of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock of the Corporation into which such share of Series B Preferred
Stock might have been converted immediately prior thereto, and (2) that there
shall be subsequent adjustments of the conversion rate which shall be
equivalent, as nearly as practicable, to the adjustments provided for in Section
19(f) above. The provisions of this Section 19(i) shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales or
conveyances.
(j) Shares of Common Stock issued on conversion of shares of
Series B Preferred Stock shall be issued as fully paid shares and shall be
nonassessable by the Corporation. The Corporation shall at all times reserve and
keep available for the purpose of effecting the conversion of Series B Preferred
Stock, such number of its duly authorized shares of Common Stock as shall be
sufficient to effect the conversion of all outstanding shares of Series B
Preferred Stock.
(k) Shares of Series B Preferred Stock converted as provided
herein shall not be reissued.
14
20. Retirement or sinking fund. The shares of Series B Preferred Stock
shall not be entitled to the benefit of any retirement or sinking fund to be
applied to the purchase or redemption of such shares.
$1.60 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C
21. Designation. A series of Preferred Stock designated "$1.60
Cumulative Convertible Preferred Stock, Series C" (herein called "Series C
Preferred Stock") is hereby established, consisting of 1,433,935 shares subject
to increase or decrease in the number of shares in accordance with law.
22. Rank. Series C Preferred Stock shall rank, as to dividends and
assets, equally with the Series A Preferred Stock and the Series B Preferred
Stock and every other share of capital stock from time to time outstanding which
is not Common Stock of the Corporation and which is not specifically made senior
or subordinate to the Series C Preferred Stock as to dividends or assets.
23. Dividends. The dividend rate of shares of this series shall be
$1.60 per share per year, payable in equal quarterly installments on the first
day of each January, April, July and October. Dividends shall be cumulative from
the January 1, April 1, July 1 and October 1 next preceding the date of issue of
each share, unless the date of issue is a quarterly dividend payment date or a
date between the record date for the determination of holders of record of
Series C Preferred Stock entitled to receive a quarterly dividend and the date
of payment of such quarterly dividend, in either of which events such dividends
shall be cumulative from such dividend payment date.
24. Liquidation. The amount payable upon shares of Series C Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series C
Preferred Stock, shall be $20.00 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
25. Redemption. Shares of Series C Preferred Stock shall be redeemable
at any time after February 1, 1989 at $20.00 per share plus an amount equal to
accrued and unpaid dividends thereon computed to the date fixed for redemption,
whether or not earned or declared.
26. Voting rights. Each holder of record of Series C Preferred Stock
shall have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series C Preferred Stock standing
in his name on the books of the Corporation are at the time convertible.
27. Conversion provisions. (a) Shares of Series C Preferred Stock may,
at the option of the holder, be converted into Common Stock of the Corporation
(as such stock may be constituted on the conversion date) at the conversion
price, determined as hereinafter provided,
15
in effect at the time of conversion, subject to adjustment as provided herein;
provided that, as to any shares of Series C Preferred Stock which shall have
been called for redemption, the conversion right shall terminate at the close of
business on the date fixed for redemption. The value of each share of Series C
Preferred Stock for the purpose of such conversion shall be $20.00. The price at
which shares of Common Stock of the Corporation shall be delivered upon
conversion (herein called the "conversion price") shall initially be $48.00 per
share of Common Stock of the Corporation.
(b) The holder of a share or shares of Series C Preferred Stock
may exercise the conversion right as to any thereof by delivering to the
Corporation, during regular business hours, at its principal office or at the
office of any of its transfer agents for the Series C Preferred Stock or at such
other place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed or assigned in blank
or to the Corporation (if required by it), accompanied by written notice stating
that the holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common Stock are to
be issued. Conversion shall be deemed to have been effected on the date when
such delivery is made, and such date is referred to herein as the "conversion
date." As promptly as practicable thereafter the Corporation shall issue and
deliver to or upon the written order of such holder, at such office or other
place designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which he is entitled and cash, scrip
certificate or other adjustment in respect of any fraction of a share as
provided in Section 27(d) below. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become a
holder of such Common Stock of record on the conversion date unless the transfer
books of the Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common Stock of record on the next
succeeding date on which the transfer books are open, but the conversion price
shall be that in effect on the conversion date.
(c) No payment or adjustment shall be made for dividends accrued
on any shares of Series C Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of
a share upon conversion of any share or shares of Series C Preferred Stock. If
more than one share of Series C Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
total number of shares of Series C Preferred Stock so surrendered. If any
fractional interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in cash unless its
Board of Directors shall have determined to adjust fractional interests by
issuance of scrip certificates or in some other manner. Adjustment in cash shall
be made on the basis of the current market value of one share of Common Stock,
which shall be taken to be the last reported sale price of the Corporation's
Common Stock on the principal stock exchange on which the Common Stock is then
listed (or if not so listed, on the over-the-counter market) for the last
business day before the conversion date or, if there was no
16
reported sale on that day, the last reported sales price on the first preceding
day for which such price is available.
(e) The issuance of Common Stock on conversion of Series C
Preferred Stock shall be without charge to the converting holder of Series C
Preferred Stock for any tax in respect of the issuance thereof, but the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of shares in any name
other than that of the holder of record on the books of the Corporation of the
shares of Series C Preferred Stock converted, and the Corporation shall not be
required to issue or deliver any certificate for shares of Common Stock unless
and until the person requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
(f) The conversion rate provided in Section 27(a) shall be subject
to the following adjustments, which shall be made to the nearest cent:
(1) If the Corporation shall pay to the holders of
its Common Stock a dividend in shares of Common Stock, the
conversion price in effect immediately prior to the record
date fixed for the determination of the holders of Common
Stock entitled to such dividend shall be proportionately
decreased, effective at the opening of business on the next
following full business day.
(2) If the Corporation shall split the outstanding
shares of its Common Stock into a greater number of shares or
combine the outstanding shares into a smaller number, the
conversion price in effect immediately prior to such action
shall be proportionately decreased in the case of a split or
increased in the case of a combination, effective at the
opening of business on the full business day next following
the day such action becomes effective.
(3) If the Corporation shall issue to the holders of
its Common Stock rights or warrants to subscribe for or
purchase shares of its Common Stock at a price less than 90%
of the Current Market Price (as defined below in this
paragraph) of the Corporation's Common Stock at the record
date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion
price in effect immediately prior to said record date shall be
adjusted, effective at the opening of business on the next
following full business day, to an amount determined by
multiplying such conversion price by a fraction the numerator
of which is the number of shares of Common Stock of the
Corporation outstanding immediately prior to said record date
plus the number of shares of Common Stock of the Corporation
which the aggregate subscription or purchase price of the
total number of shares so offered would purchase at the
Current Market Price of the Corporation's Common Stock at said
record date and the denominator of which is said number of
shares outstanding immediately prior to said record date plus
the number of additional shares of its Common Stock offered
for subscription or purchase. The term "Current Market Price"
at said record date shall mean the
17
average of the daily last reported sale prices per share of
the Corporation's Common Stock on the principal stock exchange
on which the Common Stock is then listed (or if not so listed,
then on the over-the-counter market) during the 20 consecutive
full business days commencing with the 30th full business day
before said record date, provided that if there was no
reported sale on any such day or days there shall be
substituted the average of the closing bid and asked
quotations on that day obtained from the market specialist
assigned to the Corporation (or a market maker in the case of
the over-the-counter market).
(4) The Corporation may make such reductions in the
conversion price, in addition to those required by the
foregoing provisions, as it considers to be advisable in order
that any event treated for federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to the
recipients.
(g) No adjustment of the conversion price provided in Section
27(a) shall be made by reason of the issuance of Common Stock for cash except as
provided in Section 27(f)(3), or by reason of the issuance of Common Stock for
property or services. Whenever the conversion price is adjusted pursuant to
Section 27(f), the Corporation shall (1) promptly place on file at its principal
office and at the office of each of its transfer agents for the Series C
Preferred Stock a statement signed by the Chairman of the Board, the President
or a Vice President of the Corporation and by its Treasurer or an Assistant
Treasurer showing in detail the facts requiring such adjustment and the
conversion price after such adjustment, and shall make such statement available
for inspection by shareholders of the Corporation, and (2) cause a notice to be
published at least once in a newspaper printed in the English language and of
general circulation in the City of Erie, Pennsylvania, or in the Borough of
Manhattan, the City of New York, New York, stating that such adjustment has been
made and the adjusted conversion price.
(h) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its Common Stock
or any other security, or if the Corporation shall distribute to the holders of
its Common Stock any evidences of indebtedness or any other assets (excluding
dividends and distributions in cash), the Corporation shall mail to each holder
of record of a share or shares of Series C Preferred Stock, at his address as it
shall appear on the books of the Corporation, a notice stating the record date
fixed or to be fixed for the determination of the holders of Common Stock of
record entitled to such issuance or distribution. Such notice shall be mailed at
least 10 days before such record date. Failure to mail such notice or any defect
therein or failure of any addressee to receive it shall not affect the validity
of such issuance or distribution or any vote thereon.
(i) In case of any reclassification or change in the outstanding
shares of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the Corporation is a
party (except a merger in which the Corporation is the surviving corporation and
which does not result in any reclassification of or change in the outstanding
Common Stock of the Corporation except an increase in the number of outstanding
shares or a split or combination of shares) or in case of any sale or conveyance
to another corporation of all or substantially all of the property of the
Corporation, effective provision shall
18
be made by the Corporation or by the successor or purchasing corporation (1)
that the holder of each share of Series C Preferred Stock then outstanding shall
thereafter have the right to convert such share into the kind and amount of
stock and other securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock of the Corporation into which such share of Series C
Preferred Stock might have been converted immediately prior thereto, and (2)
that there shall be subsequent adjustments of the conversion price which shall
be equivalent, as nearly as practicable, to the adjustments provided for in
Section 27(f). The provisions of this Section 27(i) shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales or
conveyances.
(j) Shares of Common Stock issued on conversion of shares of
Series C Preferred Stock shall be issued as fully paid shares and shall be
non-assessable by the Corporation. The Corporation shall at all times reserve
and keep available for the purpose of effecting the conversion of Series C
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall be sufficient to effect the conversion of all outstanding shares of Series
C Preferred Stock.
(k) Shares of Series C Preferred Stock converted as provided
herein shall not be reissued.
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D
28. Designation. A series of Preferred Stock designated "$1.80
Cumulative Convertible Preferred Stock, Series D" (herein called "Series D
Preferred Stock") is hereby established, consisting of 1,766,140 shares subject
to increase or decrease in the number of shares in accordance with law.
29. Rank. Series D Preferred Stock shall rank, as to dividends and
assets, equally with the Series A Preferred Stock, the Series B Preferred Stock
and the Series C Preferred Stock and every other share of capital stock from
time to time outstanding which is not Common Stock of the Corporation and which
is not specifically made senior or subordinate to the Series D Preferred Stock
as to dividends or assets.
30. Dividends. The dividend rate of shares of this series shall be
$1.80 per share per year, payable in equal quarterly installments on the first
day of each January, April, July and October. Dividends shall be cumulative from
the January 1, April 1, July 1 and October 1 next preceding the date of issue of
each share, unless the date of issue is a quarterly dividend payment date or a
date between the record date for the determination of holders of record of
Series D Preferred Stock entitled to receive a quarterly dividend and the date
of payment of such quarterly dividend, in either of which events such dividends
shall be cumulative from such dividend payment date.
31. Liquidation. The amount payable upon shares of Series D Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the
19
holders of Common Stock or of any class or series of stock of the Corporation
ranking as to assets subordinate to the Series D Preferred Stock, shall be
$20.00 per share plus an amount equal to accrued and unpaid dividends thereon
computed to the date on which payment thereof is made available, whether or not
earned or declared.
32. Redemption. Shares of Series D Preferred Stock shall be redeemable
at any time after February 1, 1990 at $20.00 per share plus an amount equal to
accrued and unpaid dividends thereon computed to the date fixed for redemption,
whether or not earned or declared.
33. Voting rights. Each holder of record of Series D Preferred Stock
shall have the right to a number of votes equal to the number of full shares of
Common Stock into which the share or shares of Series D Preferred Stock standing
in his name on the books of the Corporation are at the time convertible.
34. Conversion provisions. (a) Shares of Series D Preferred Stock may,
at the option of the holder, be converted into Common Stock of the Corporation
(as such stock may be constituted on the conversion date) at the conversion
price, determined as hereinafter provided, in effect at the time of conversion,
subject to adjustment as provided herein; provided that, as to any shares of
Series D Preferred Stock which shall have been called for redemption, the
conversion right shall terminate at the close of business on the date fixed for
redemption. The value of each share of Series D Preferred Stock for the purpose
of such conversion shall be $20.00. The price at which shares of Common Stock of
the Corporation shall be delivered upon conversion (herein called the
"conversion price") shall initially be $48.00 per share of Common Stock of the
Corporation.
(b) The holder of a share or shares of Series D Preferred Stock
may exercise the conversion right as to any thereof by delivering to the
Corporation, during regular business hours, at its principal office or at the
office of any of its transfer agents for the Series D Preferred Stock or at such
other place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed or assigned in blank
or to the Corporation (if required by it), accompanied by written notice stating
that the holder elects to convert such shares and stating the name or names
(with address) in which the certificate or certificates for Common Stock are to
be issued. Conversion shall be deemed to have been effected on the date when
such delivery is made, and such date is referred to herein as the "conversion
date". As promptly as practicable thereafter the Corporation shall issue and
deliver to or upon the written order of such holder, at such office or other
place designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which he is entitled and cash, scrip
certificate or other adjustment in respect of any fraction of a share as
provided in Section 34(d) below. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become a
holder of such Common Stock of record on the conversion date unless the transfer
books of the Corporation are closed on that date, in which event he shall be
deemed to have become a holder of such Common Stock of record on the next
succeeding date on which the transfer books are open, but the conversion price
shall be that in effect on the conversion date.
20
(c) No payment or adjustment shall be made for dividends accrued
on any shares of Series D Preferred Stock converted or for dividends on any
shares of Common Stock issuable on conversion.
(d) The Corporation shall not be required to issue any fraction of
a share upon conversion of any share or shares of Series D Preferred Stock. If
more than one share of Series D Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
total number of shares of Series D Preferred Stock so surrendered. If any
fractional interest in a share of Common Stock would be deliverable upon
conversion, the Corporation shall make an adjustment therefor in cash unless its
Board of Directors shall have determined to adjust fractional interests by
issuance of scrip certificates or in some other manner. Adjustment in cash shall
be made on the basis of the current market value of one share of Common Stock,
which shall be taken to be the last reported sale price of the Corporation's
Common Stock on the principal stock exchange on which the Common Stock is then
listed (or if not so listed, on the over-the-counter market) for the last
business day before the conversion date or, if there was no reported sale on
that day, the last reported sales price on the first preceding day for which
such price is available.
(e) The issuance of Common Stock on conversion of Series D
Preferred Stock shall be without charge to the converting holder of Series D
Preferred Stock for any tax in respect of the issuance thereof, but the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of shares in any name
other than that of the holder of record on the books of the Corporation of the
shares of Series D Preferred Stock converted, and the Corporation shall not be
required to issue or deliver any certificate for shares of Common Stock unless
and until the person requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
(f) The conversion price provided in Section 34(a) shall be
subject to the following adjustments, which shall be made to the nearest cent:
(1) If the Corporation shall pay to the holders of
its Common Stock a dividend in shares of Common Stock, the
conversion price in effect immediately prior to the record
date fixed for the determination of the holders of Common
Stock entitled to such dividend shall be proportionately
decreased, effective at the opening of business on the next
following full business day.
(2) If the Corporation shall split the outstanding
shares of its Common Stock into a greater number of shares or
combine the outstanding shares into a smaller number, the
conversion price in effect immediately prior to such action
shall be proportionately decreased in the case of a split or
increased in the case of a combination, effective at the
opening of business on the full business day next following
the day such action becomes effective.
21
(3) If the Corporation shall issue to the holders of
its Common Stock rights or warrants to subscribe for or
purchase shares of its Common Stock at a price less than 90%
of the Current Market Price (as defined below in this
paragraph) of the Corporation's Common Stock at the record
date fixed for the determination of the holders of Common
Stock entitled to such rights or warrants, the conversion
price in effect immediately prior to said record date shall be
adjusted, effective at the opening of business on the next
following full business day, to an amount determined by
multiplying such conversion price by a fraction the numerator
of which is the number of shares of Common Stock of the
Corporation outstanding immediately prior to said record date
plus the number of shares of Common Stock of the Corporation
which the aggregate subscription or purchase price of the
total number of shares so offered would purchase at the
Current Market Price of the Corporation's Common Stock at said
record date and the denominator of which is said number of
shares outstanding immediately prior to said record date plus
the number of additional shares of its Common Stock offered
for subscription or purchase. The term "Current Market Price"
at said record date shall mean the average of the daily last
reported sale prices per share of the Corporation's Common
Stock on the principal stock exchange on which the Common
Stock is then listed (or if not so listed, then on the
over-the-counter market) during the 20 consecutive full
business days commencing with the 30th full business day
before said record date, provided that if there was no
reported sale on any such day or days there shall be
substituted the average of the closing bid and asked
quotations on that day obtained from the market specialist
assigned to the Corporation (or a market maker in the case of
the over-the-counter market).
(4) The Corporation may make such reductions in the
conversion price, in addition to those required by the
foregoing provisions, as it considers to be advisable in order
that any event treated for federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to the
recipients.
(g) No adjustment of the conversion price provided in Section
34(a) shall be made by reason of the issuance of Common Stock for cash except as
provided in Section 34(f)(3), or by reason of the issuance of Common Stock for
property or services. Whenever the conversion price is adjusted pursuant to
Section 34(f) the Corporation shall (1) promptly place on file at its principal
office and at the office of each of its transfer agents for the Series D
Preferred Stock a statement signed by the Chairman of the Board, the President
or a Vice President of the Corporation and by its Treasurer or an Assistant
Treasurer showing in detail the facts requiring such adjustment and the
conversion price after such adjustment, and shall make such statement available
for inspection by shareholders of the Corporation, and (2) cause a notice to be
published at least once in a newspaper printed in the English language and of
general circulation in the City of Scranton, Pennsylvania, or in the Borough of
Manhattan, the City of New York, New York, stating that such adjustment has been
made and the adjusted conversion price.
(h) If the Corporation shall issue to the holders of its Common
Stock rights or warrants to subscribe for or purchase shares of its Common Stock
or any other security, or if the
22
Corporation shall distribute to the holders of its Common Stock any evidences of
indebtedness or any other assets (excluding dividends and distributions in
cash), the Corporation shall mail to each holder of record of a share or shares
of Series D Preferred Stock, at his address as it shall appear on the books of
the Corporation, a notice stating the record date fixed or to be fixed for the
determination of the holders of Common Stock of record entitled to such issuance
or distribution. Such notice shall be mailed at least 10 days before such record
date. Failure to mail such notice or any defect therein or failure of any
addressee to receive it shall not affect the validity of such issuance or
distribution or any vote thereon.
(i) In case of any reclassification or change in the outstanding
shares of Common Stock of the Corporation (except a split or combination of
shares) or in case of any consolidation or merger to which the Corporation is a
party (except a merger in which the Corporation is the surviving corporation and
which does not result in any reclassification of or change in the outstanding
Common Stock of the Corporation except an increase in the number of outstanding
shares or a split or combination of shares) or in case of any sale or conveyance
to another corporation of all or substantially all of the property of the
Corporation, effective provision shall be made by the Corporation or by the
successor or purchasing corporation (1) that the holder of each share of Series
D Preferred Stock then outstanding shall thereafter have the right to convert
such share into the kind and amount of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock of the
Corporation into which such share of Series D Preferred Stock might have been
converted immediately prior thereto, and (2) that there shall be subsequent
adjustments of the conversion price which shall be equivalent, as nearly as
practicable, to the adjustments provided for in Section 34(f). The provisions of
this Section 34(i) shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales or conveyances.
(j) Shares of Common Stock issued on conversion of shares of
Series D Preferred Stock shall be issued as fully paid shares and shall be
non-assessable by the Corporation. The Corporation shall at all times reserve
and keep available for the purpose of effecting the conversion of Series D
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall be sufficient to effect the conversion of all outstanding shares of Series
D Preferred Stock.
(k) Shares of Series D Preferred Stock converted as provided
herein shall not be reissued.
$2.60 CUMULATIVE NONVOTING PREFERRED STOCK, SERIES E
35. Designation. A series of Preferred Stock designated "$2.60
Cumulative Nonvoting Preferred Stock, Series E" (herein called "Series E
Preferred Stock") is hereby established, consisting of 338,100 shares subject to
increase or decrease in the number of shares in accordance with law.
23
36. Rank. Series E Preferred Stock shall rank, as to dividends and
assets, equally with the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock and the Series D Preferred Stock and every other
share of capital stock from time to time outstanding which is not Common Stock
of the Corporation and which is not specifically made senior or subordinate to
the Series E Preferred Stock as to dividends or assets.
37. Dividends. The dividend rate of shares of this series shall be
$2.60 per share per year, payable in equal quarterly installments on the first
day of each January, April, July and October. Dividends shall be cumulative from
the January 1, April 1, July 1 and October 1 next preceding the date of issue of
each share, unless the date of issue is a quarterly dividend payment date or a
date between the record date for the determination of holders of record of
Series E Preferred Stock entitled to receive a quarterly dividend and the date
of payment of such quarterly dividend, in either of which events such dividends
shall be cumulative from such dividend payment date.
38. Liquidation. The amount payable upon shares of Series E Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinate to the Series E
Preferred Stock, shall be $27.75 per share plus an amount equal to accrued and
unpaid dividends thereon computed to the date on which payment thereof is made
available, whether or not earned or declared.
39. Redemption. Shares of Series E Preferred Stock shall be redeemable
at any time after February 1, 1990 at $27.75 per share plus an amount equal to
accrued and unpaid dividends thereon computed to the date fixed for redemption,
whether or not earned or declared.
40. Voting rights. The holder of Series E Preferred Stock shall not be
entitled to vote on any matter, except as otherwise required by law.
41. Conversion rights. The holders of Series E Preferred Stock shall
have no right to convert shares of Series E Preferred Stock into any other
security of the Corporation.
FIXED/ADJUSTABLE RATE NONCUMULATIVE PREFERRED STOCK, SERIES F
42. Designation. A series of Preferred Stock designated
"Fixed/Adjustable Rate Noncumulative Preferred Stock, Series F" (herein called
"Series F Preferred Stock") is hereby established, consisting of 6,000,000
shares subject to increase or decrease in the number of shares in accordance
with law.
43. Rank. Series F Preferred Stock shall rank, as to dividends and
assets, equally with the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock, the Series D Preferred Stock and every other share
of capital stock from time to time outstanding which is not Common Stock of the
Corporation and which is not specifically made senior to or subordinate to the
Series F Preferred Stock as to dividends or assets.
24
44. Dividends. (a) Through September 29, 2001, the dividend rate per
share of Series F Preferred Stock shall be 6.05% or $3.025 per annum, payable
quarterly on March 31, June 30, September 30 and December 31 of each year (each
a "Dividend Payment Date"), commencing December 31, 1996. The initial dividend
for the dividend period commencing on October 9. 1996 to (but not including)
December 31, 1996, shall be $.6806 per share and shall be payable on December
31, 1996. On and after September 30, 2001, dividends on the Series F Preferred
Stock shall be payable quarterly on each Dividend Payment Date at the Applicable
Rate (as defined in subsection (c) of this Section 44) per share from time to
time in effect. If a Dividend Payment Date is not a business day, dividends (if
declared) on the Series F Preferred Stock shall be paid on the immediately
preceding business day. A dividend period with respect to a Dividend Payment
Date is the period commencing on the immediately preceding Dividend Payment Date
and ending on the day immediately prior to the next succeeding Dividend Payment
Date. Each such dividend shall be payable to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 30 nor
less than 15 days preceding the payment dates thereof, as will be fixed by the
Corporation's Board of Directors or a duly authorized committee thereof.
(b) Dividends on the Series F Preferred Stock shall not be
cumulative and no rights shall accrue to the holders of the Series F Preferred
Stock by reason of the fact that the Corporation may fail to declare or pay
dividends on the Series F Preferred Stock in any amount in any year, whether or
not the earnings of the Corporation in any year were sufficient to pay such
dividends in whole or in part.
(c) Except as provided below in this subsection c of this Section
44, the "Applicable Rate" per annum for any dividend period beginning on or
after September 30, 2001 shall be equal to .35% plus the Effective Rate (as
hereinafter defined), but not less than 6.55% nor greater than 12.55% (without
taking into account any adjustments as described in subsection (d) of this
Section 44). The "Effective Rate" for any dividend period beginning on or after
September 30, 2001 shall be equal to the highest of the Treasury Bill Rate, the
Ten Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate (each
as hereinafter defined) for such dividend period. In the event that the
Corporation determines in good faith that for any reason: (i) any one of the
Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year
Constant Maturity Rate cannot be determined for any dividend period, then the
Effective Rate for such dividend period shall be equal to the higher of
whichever two of such rates can be so determined; (ii) only one of the Treasury
Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any dividend period, then the Effective Rate
for such dividend period shall be equal to whichever such rate can be so
determined; or (iii) none of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any dividend period, then the Effective Rate for the preceding dividend period
shall be continued for such dividend period.
25
Except as described in this subsection (c) of this Section 44, the "Treasury
Bill Rate" for each dividend period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during the relevant
Calendar Period (as hereinafter defined)) for three-month U.S. Treasury bills,
as published weekly by the Federal Reserve Board (as hereinafter defined) during
the Calendar Period immediately preceding the last 10 calendar days preceding
the dividend period for which the dividend rate on the Series F Preferred Stock
is being determined. In the event that the Federal Reserve Board does not
publish such a weekly per annum market discount rate during any such Calendar
Period, then the Treasury Bill Rate for such dividend period shall be the
arithmetic average of the two most recent weekly per annum market discount rates
(or the one weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period) for three-month U.S. Treasury
bills, as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the Corporation.
In the event that a per annum market discount rate for three-month U.S. Treasury
bills is not published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such dividend period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate is published
during the relevant Calendar Period) for all of the U.S. Treasury bills then
having remaining maturities of not less than 80 nor more than 100 days, as
published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board does not publish such rates, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason no
such U.S. Treasury bill rates are published as provided above during such
Calendar Period, then the Treasury Bill Rate for such dividend period shall be
the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
non-interest-bearing U.S. Treasury securities with a remaining maturity of not
less than 80 nor more than 100 days from the date of each such quotation, as
chosen and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to the Corporation
by at least three recognized dealers in U.S. Government securities selected by
the Corporation. In the event that the Corporation determines in good faith that
for any reason the Corporation cannot determine the Treasury Bill Rate for any
dividend period as provided in this paragraph, the Treasury Bill Rate for such
dividend period shall be the arithmetic average of the per annum market discount
rates based upon the closing bids during such Calendar Period for each of the
issues of marketable interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 or more than 100 days, as chosen and quoted daily
for each business day in New York City (or less frequently if daily quotations
are not generally available) to the Corporation by at least three recognized
dealers in U.S. Government securities selected by the Corporation.
26
Except as described in this subsection (c) of this Section 44, the "Ten Year
Constant Maturity Rate" for each dividend period shall be the arithmetic average
of the two most recent weekly per annum Ten Year Average Yields (as hereinafter
defined) (or the one weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as published weekly by
the Federal Reserve Board during the Calendar Period immediately preceding the
last 10 calendar days preceding the dividend period for which the dividend rate
on the Series F Preferred Stock is being determined. In the event that the
Federal Reserve Board does not publish such a weekly per annum Ten Year Average
Yield during such Calendar Period, then the Ten Year Constant Maturity Rate for
such dividend period shall be the arithmetic average of the two most recent
weekly per annum Ten Year Average Yields (or the one weekly per annum Ten Year
Average Yield, if only one such yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the Corporation.
In the event that a per annum Ten Year Average Yield is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten Year Constant
Maturity Rate for such dividend period shall be the arithmetic average of the
two most recent weekly per annum average yields to maturity (or the one weekly
per annum average yield to maturity, if only one such yield is published during
the relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities (as
hereinafter defined)) then having remaining maturities of not less than eight
nor more than 12 years, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such yields, by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that the Corporation determines in good faith
that for any reason the Corporation cannot determine the Ten Year Constant
Maturity Rate for any dividend period as provided above in this paragraph, then
the Ten Year Constant Maturity Rate for such dividend period shall be the
arithmetic average of the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than eight nor more than
12 years from the date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if daily quotations are
not generally available) to the Corporation by at least three recognized dealers
in U.S. Government securities selected by the Corporation.
Except as described in this subsection (c) of this Section 44, the "Thirty Year
Constant Maturity Rate" for each dividend period shall be the arithmetic average
of the two most recent weekly per annum Thirty Year Average Yields (as
hereinafter defined) (or the one weekly per annum Thirty Year Average Yield, if
only one such yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the last 10 calendar days preceding the dividend period
for which the dividend rate on the Series F Preferred Stock is being determined.
In the event that the Federal Reserve Board
27
does not publish such a weekly per annum Thirty Year Average Yield during such
Calendar Period, then the Thirty Year Constant Maturity Rate for such dividend
period shall be the arithmetic average of the two most recent weekly per annum
Thirty Year Average Yields (or the one weekly per annum Thirty Year Average
Yield, if only one such yield is published during the relevant Calendar Period),
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum Thirty Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Thirty Year Constant
Maturity Rate for such dividend period shall be the arithmetic average of the
two most recent weekly per annum average yields to maturity (or the one weekly
per annum average yield to maturity, if only one such yield is published during
the relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) then
having remaining maturities of not less than 28 nor more than 30 years, as
published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board does not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason the
Corporation cannot determine the Thirty Year Constant Maturity Rate for any
dividend period as provided above in this paragraph, then the Thirty Year
Constant Maturity Rate for such dividend period shall be the arithmetic average
of the per annum average yields to maturity based upon the closing bids during
such Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) with a
final maturity date not less than 28 nor more than 30 years from the date of
each such quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations are not generally available)
to the Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Thirty Year
Constant Maturity Rate shall each be rounded to the nearest five hundredths of a
percent, with .025% being rounded upward.
The Applicable Rate with respect to each dividend period beginning on or after
September 30, 2001 shall be calculated as promptly as practicable by the
Corporation according to the appropriate method described in this subsection (c)
of this Section 44. The Corporation shall cause notice of each Applicable Rate
to be enclosed with the dividend payment checks next mailed to the holders of
Series F Preferred Stock.
For the purposes of this subsection (c) of this Section 44, the following terms
shall have the following meanings: (i) "Calendar Period" means a period of 14
calendar days; (ii) "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor agency; (iii) "Special Securities" means
securities which can, at the option of the holder, be
28
surrendered at face value in payment of any Federal estate tax or which provide
tax benefits to the holder and are priced to reflect such tax benefits or which
were originally issued at a deep or substantial discount; (iv) the term "Ten
Year Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to constant
maturities of 10 years); and (v) "Thirty Year Average Yield" means the average
yield to maturity for actively traded Treasury fixed interest rate securities
(adjusted to constant maturities of 30 years).
(d) If one or more amendments to the Internal Revenue Code of 1986, as
amended (the "Code"), are enacted that change the percentage of the dividends
received deduction (70% as of October 4, 1996) as specified in Section 243(a)(l)
of the Code or any successor provision (the "Dividends Received Percentage"), as
applicable to the Series F Preferred Stock, the amount of each dividend payable
per share of the Series F Preferred Stock for dividend payments made on or after
the later of the date of enactment or the effective date of such change shall be
adjusted by multiplying the amount of the dividend payable determined as
described under subsection (a) of this Section 44 (before adjustment) by a
factor, which shall be the number determined in accordance with the following
formula (the "DRD Formula"), and rounding the result to the nearest cent:
l - [.35 (l - .70)]
- ---------------------
l - [.35 (l - DRP)]
For purposes of the DRD Formula. "DRP" means the Dividends Received Percentage
applicable to the dividend in question. No amendment to the Code, other than a
change in the dividends received deduction set forth in Section 243(a)(l) of the
Code or any successor provision, as applicable to the Series F Preferred Stock,
shall give rise to an adjustment. Notwithstanding the foregoing provisions of
this subsection (d) of this Section 44, in the event that, with respect to any
such amendment, the Corporation shall receive an unqualified opinion of
nationally recognized independent tax counsel selected by the Corporation and
approved by Cravath, Swaine & Moore (which approval shall not be unreasonably
withheld) or a private letter ruling or similar form of authorization from the
Internal Revenue Service to the effect that such an amendment would not apply to
dividends payable on the Series F Preferred Stock, then any such amendment shall
not result in the adjustment provided for pursuant to the DRD Formula. The
opinion referenced in the previous sentence shall be based upon a specific
provision in the legislation or upon a published pronouncement of the Internal
Revenue Service addressing such legislation. The Corporation's calculation of
the dividends payable as so adjusted and as certified accurate as to calculation
and reasonable as to method by the independent certified public accountants then
regularly engaged by the Corporation, shall be final and not subject to review.
If any amendment to the Code which reduces the Dividends Received Percentage, as
applicable to the Series F Preferred Stock, is enacted and becomes effective
after a dividend payable on a Dividend Payment Date has been declared, the
amount of dividend payable on such Dividend
29
Payment Date shall not be increased; but instead, an amount, equal to the excess
of (x) the product of the dividends paid by the Corporation on such Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be
equal to the reduced Dividends Received Percentage) and (y) the dividends paid
by the Corporation on such Dividend Payment Date, shall be payable to holders of
record on the next succeeding Dividend Payment Date in addition to any other
amounts payable on such date.
If prior to April 1, 1997, an amendment to the Code is enacted that reduces the
Dividends Received Percentage, as applicable to the Series F Preferred Stock,
and such reduction retroactively applies to a Dividend Payment Date as to which
the Corporation previously paid dividends on the Series F Preferred Stock (each
an "Affected Dividend Payment Date"), the Corporation shall pay (if declared)
additional dividends (the "Additional Dividends") on the next succeeding
Dividend Payment Date (or if such amendment is enacted after the dividend
payable on such Dividend Payment Date has been declared, on the second
succeeding Dividend Payment Date following the date of enactment) to holders of
record on such succeeding Dividend Payment Date in an amount equal to the excess
of (x) the product of the dividends paid by the Corporation on each Affected
Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula
would be equal to the Dividends Received Percentage applicable to each Affected
Dividend Payment Date) over (y) the dividends paid by the Corporation on each
Affected Dividend Payment Date.
Additional Dividends shall not be paid in respect of the enactment of any
amendment to the Code on or after April 1, 1997 which retroactively reduces the
Dividends Received Percentage, or if prior to April l, 1997, such amendment
would not result in an adjustment due to the Corporation having received either
an opinion of counsel or tax ruling referred to in the third preceding
paragraph. The Corporation shall only make one payment of Additional Dividends.
In the event that the amount of dividend payable per share of the Series F
Preferred Stock shall be adjusted pursuant to the DRD Formula and/or Additional
Dividends are to be paid, the Corporation will cause notice of each such
adjustment and, if applicable, any Additional Dividends, to be sent to the
holders of the Series F Preferred Stock.
In the event that the Dividends Received Percentage, applicable to the Series F
Preferred Stock, is reduced to 40% or less, the Corporation may at its option,
redeem the Series F Preferred Stock as a whole, but not in part, as described in
Section 46 below.
45. Liquidation. The amount payable upon shares of Series F Preferred
Stock in the event of voluntary or involuntary liquidation of the Corporation,
prior to any payment to the holders of Common Stock or of any class or series of
stock of the Corporation ranking as to assets subordinated to the Series F
Preferred Stock, shall be $50.00 per share plus an amount equal to accrued and
unpaid dividends, whether or not earned or declared, computed thereon from the
immediately preceding Dividend Payment Date (but without cumulation for unpaid
30
dividends for prior dividend periods on the Series F Preferred Stock) to the
date on which payment thereof is made available.
46. Redemption. (a) Prior to September 30, 2001, shares of Series F
Preferred Stock shall not be redeemable, except under the circumstances
described in subsection (b) of this Section 46. Shares of Series F Preferred
Stock shall be redeemable by the Corporation, in whole or in part, at any time
and from time to time on and after September 30, 2001 at $50.00 per share plus
an amount equal to accrued and unpaid dividends, whether or not earned or
declared, computed thereon from the immediately preceding Dividend Payment Date
(but without cumulation for unpaid dividends for prior dividend periods on the
Series F Preferred Stock) to the date fixed for redemption, including any
changes in dividends payable due to changes in the Dividends Received Percentage
and Additional Dividends, if any (each as defined in subsection (d) of Section
44).
(b) Notwithstanding anything to the contrary in subsection (a) of
this Section 46, if the Dividends Received Percentage is equal to or less than
40% and, as a result, the amount of dividends on the Series F Preferred Stock on
any Dividend Payment Date will be or is adjusted upwards as described in
subsection (d) of Section 44 above, the Corporation, at its option, may redeem
all, but not less than all, of the outstanding shares of Series F Preferred
Stock; provided, however, that within 60 days of the date on which an amendment
to the Code is enacted which reduces the Dividends Received Percentage to 40
percent or less, the Corporation sends notice to the holders of the Series F
Preferred Stock of such redemption. Any redemption of Series F Preferred Stock
in accordance with this Section 46(b) shall take place on the date specified in
the notice, which shall not be less than 30 days nor more than 60 days from the
date such notice is sent to holders of Series F Preferred Stock. Any redemption
of Series F Preferred Stock in accordance with this Section 46(b) shall be on
notice as aforesaid at the applicable redemption price set forth in the
following table, in each case plus accrued and unpaid dividends computed thereon
from the immediately preceding Dividend Payment Date (but without any cumulation
for unpaid dividends for prior dividend periods on Series F Preferred Stock) to
the date fixed for redemption, including any changes in dividends payable due to
changes in the Dividends Received Percentage and Additional Dividends, if any,
whether or not earned or declared.
Redemption Period Redemption Price Per Share
- ----------------- --------------------------
October 9, 1996 through September 29, 1997 $52.50
September 30, 1997 through September 29, 1998 52.00
September 30, 1998 through September 29, 1999 51.50
September 30, 1999 through September 29, 2000 51.00
September 30, 2000 through September 29, 2001 50.50
On or after September 30, 2001 50.00
31
(c) Holders of Series F Preferred Stock shall have no right to
require the redemption of shares of Series F Preferred Stock.
47. Voting Rights. Holders of Series F Preferred Stock shall have no
voting rights except as set forth in Section 4 and Section 5 of ARTICLE SEVENTH
of the Corporation's Articles of Incorporation or as otherwise required from
time to time by law.
48. Conversion Rights. Shares of Series F Preferred Stock shall not be
convertible into shares of Common Stock or any other security of the
Corporation.
JUNIOR PARTICIPATING PREFERRED STOCK, SERIES G
49. Designation and Amount. The shares of such series shall be
designated as "Series G Junior Participating Preferred Stock" (the "Series G
Preferred Stock") and the number of shares constituting the Series G Preferred
Stock initially shall be 450,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series G Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series G Preferred Stock.
50. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series G Preferred Stock with respect to dividends, the holders of shares of
Series G Preferred Stock, in preference to the holders of Common Stock, par
value $5.00 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series G Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $0.10 or (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series G Preferred Stock. In the event the
32
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series G Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount 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 that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series G Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.10 per share on the
Series G Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series G Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series G Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series G Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series G Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
51. Voting Rights. The holders of shares of Series G Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series G Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a
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greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series G Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying
such number 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 that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in any other Statement
with Respect to Shares pursuant to Section 1522 of the Business Corporation Law
or amendment to the Corporation's Amended and Restated Articles of Incorporation
creating a series of Preferred Stock or any similar stock, or by law, the
holders of shares of Series G Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series G 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 taking any corporate
action.
52. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series G Preferred Stock as provided in
Section 50 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series G Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series G Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series G Preferred Stock, except
dividends paid ratably on the Series G Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series G Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
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dividends or upon dissolution, liquidation or winding up) to
the Series G Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series G Preferred Stock, or any
shares of stock ranking on a parity with the Series G
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 52, purchase or otherwise acquire such shares at such time and in
such manner.
53. Reacquired Shares. Except as otherwise provided by action of the
Board of Directors, any shares of Series G Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever (other than by
conversion) shall not be retired or cancelled but shall become authorized but
unissued shares of Preferred Stock and may be reissued as part of the same or a
new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Amended and Restated Articles of Incorporation
of the Corporation, or in any other Statement with Respect to Shares pursuant to
Section 1522 of the Business Corporation Law creating a series of Preferred
Stock or any similar stock or as otherwise required by law.
54. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series G Preferred Stock unless,
prior thereto, the holders of shares of Series G Preferred Stock shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series G Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series G Preferred Stock,
except distributions made ratably on the Series G Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series G
35
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount 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 that were outstanding immediately prior to
such event.
55. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination, division or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series G Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series G Preferred Stock shall be adjusted by
multiplying such amount 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 that were
outstanding immediately prior to such event.
56. No Redemption. The shares of Series G Preferred Stock shall not be
redeemable.
57. Rank. The Series G Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
58. Amendment. If any shares of Series G Preferred Stock are then
outstanding, the Amended and Restated Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series G Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series G Preferred Stock, voting
together as a single class.
COMMON STOCK
59. Each holder of record of Common Stock shall have the right to one
vote for each share of Common Stock standing in his name on the books of the
Corporation.
PROVISIONS APPLICABLE TO ALL CLASSES OF CAPITAL STOCK
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60. No holder of any class of capital stock of the Corporation shall be
entitled to cumulate his votes for the election of directors.
61. No holder of any class of capital stock of the Corporation shall
have preemptive rights, and the Corporation shall have the right to issue and to
sell to any person or persons any shares of its capital stock or any option
rights or any securities having conversion or option rights, without first
offering such shares, rights or securities to any holders of any class of
capital stock of the Corporation.