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Exhibit 99.1
ARTICLES OF INCORPORATION
OF
PNC BANK CORP.
[Composite, includes amendments through April 27, 1993.]
FIRST. The name of the Corporation is PNC BANK CORP.
SECOND. The location and post office address of its initial registered
office in this Commonwealth is One PNC Plaza, Fifth Avenue and Wood Street,
Pittsburgh, Pennsylvania 15222.
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 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 each ("Preferred Stock") and 450,000,000 shares of common stock of the
par value of $5 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 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.
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(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 to 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.
3. Liquidation of the Corporation. In the event of voluntary or
involuntary liquidation of the Corporation the holders of shares if 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.
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(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 the Corporation requiring approval of Preferred Stock. The
Corporation shall not, without the affirmative vote at a meeting, or at the
written consent with or without a meeting, 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
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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 the 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 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 canceled 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 canceled 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
canceled 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 the 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
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.
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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 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 day, 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.
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(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 the 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 the 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 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 of 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
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to be published at lease 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 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.
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 if 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
in 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.
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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 as $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 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 day, 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.
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(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 or
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 the 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 the 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 of 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 of 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
converson 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 such statement available for inspection
by shareholders of the Corporation,
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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 of
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 shalll
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 of 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 Seres 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.
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.
COMMON STOCK
21. 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
22. No holder of any class of capital stock of the Corporation shall be
entitled to cumulate his votes for the election of directors.
23. 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
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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.
[The following text contains resolutions of the Corporation's Board of
Directors relating to additional authorized and outstanding series of Preferred
Stock.]
RESOLVED, that a third series of Preferred Stock, par value $1.00 of the
Corporation is hereby established and that the shares of said series shall
have, in addition to the preferences, qualifications, privileges, limitations,
restrictions and special or relative rights in respect of Preferred Stock
granted or created by law and by the Corporation's Articles of Incorporation,
the following preferences, qualifications, privileges, limitations,
restrictions and special or relative rights which are hereby fixed and
determined:
1. 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 the law.
2. 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.
3. 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.
4. 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.
5. Redemption. Shares of Series C Preferred Stock shall be redeemable at
any time after [insert the first day of the month following the fifth
anniversary of the Effective Date of the Merger] 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.
6. 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.
7. 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, 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 on 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.
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(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 is
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 7(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 suceeding 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 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 price provided in section 7(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 the 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 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
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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 of 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 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 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 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 rate provided in section 7(a) shall
be made by reason of the issuance of Common Stock for cash except as
provided in section 7(f)(3), or by reason of the issuance of Common
Stock for property or services. Whenever the conversion rate is
adjusted pursuant to section 7(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 on 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, and 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 of
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 of 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 an increase in the number of outstanding shares
or a split or combination of shares) or in case of
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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 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
7(f). The provisions of this section 7(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
nonassessable 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.
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RESOLVED, that a fourth series of Preferred Stock, par value $1.00 of the
Corporation is hereby established and that the shares of said series shall
have, in addition to the preferences, qualifications, privileges, limitations,
restrictions and special or relative rights in respect of Preferred Stock
granted or created by law and by the Corporation's Articles of Incorporation,
the following preferences, qualifications, privileges, limitations,
restrictions and special or relative rights which are hereby fixed and
determined.
1. 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 the law.
2. 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.
3. 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 the
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.
4. 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 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.
5. Redemption. Shares of Series D Preferred Stock shall be redeemable at
any time after [insert the first day of the month following the fifth
anniversary of the Effective Date of the Merger] at $20.00 per share plus an
amount equal to the accrued and unpaid dividends thereon computed to the date
fixed for redemption, whether or not earned or declared.
6. 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.
7. 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 on 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
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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 7(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 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 the section 7(a) shall be subject to
the following adjustments, which shall be made to the 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 of 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
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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 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 7(a) shall
be made by reason of the issuance of Common Stock for cash except as
provided in section 7(f)(3), or by reason of the issuance of Common
Stock for property or services. Whenever the conversion price is
adjusted pursuant to section 7(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, and 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 of
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 of 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 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
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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 7(f). The provisions of this
section 7(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
nonassessable 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.
[References to a former series of Preferred Stock, designated as $2.60
Cumulative Non-Voting Preferred Stock, Series E have been deleted, since all
such shares have been redeemed and restored to the status of authorized but
unissued Preferred Stock.]
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