DELAWRE PAGE 1
---------------
The First State
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC. ", FILED IN THIS OFFICE ON THE
TWENTIETH DAY OF DECEMBER, A.D. 2004, AT 5:24 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SEAL]
/s/ Harriet Smith Windsor, Secretary of State
---------------------------------------------
Harriet Smith Windsor, Secretary of State
AUTHENTICATION: 3567562
DATE: 12-21-04
THE WILLIAMS COMPANIES, INC.
CERTIFICATE OF INCREASE OF AUTHORIZED NUMBER OF SHARES
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE
STATE OF DELAWARE
The Williams Companies, Inc., a corporation organized and existing under
the General Corporation Law of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Restated Certificate of Incorporation of said Corporation
was filed in the office of the Secretary of State of Delaware on April 27,
1987, and was filed for recording in the office of the Recorder of Deeds of New
Castle County, Delaware, on April 27, 1987, and the Certificate of the
Designations, Preferences and Rights of the Series A Junior Participating
Preferred Stock was included in said Restated Certificate of Incorporation.
SECOND: That Certificates of Increase of Authorized Number of Shares of
Series A Junior Participating Preferred Stock were filed in the office of the
Secretary of State of Delaware on February 7, 1989, February 6, 1996, and
January 6, 1998, respectively, and were filed for recording in the office of the
Recorder of Deeds of New Castle County, Delaware, on February 7, 1989, February
6, 1996, and January 6, 1998, respectively.
THIRD: That the Board of Directors of said Corporation at a meeting held
on November 17, 2004, duly adopted a resolution authorizing and directing an
increase in the authorized number of shares of Series A Participating Preferred
Stock of the Corporation, from 1,600,000 shares to 4,800,000 shares.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by James J, Bender, its Senior Vice President and
General Counsel, and attested by Brian K. Shore, its Secretary, this 17th day of
December, 2004.
THE WILLIAMS COMPANIES, INC.
By : /s/ James J. Bender
-----------------------------
Name : James J.Bender
Title: Senior Vice President
and General Counsel
ATTEST: State of Delaware
Secretary of State
/s/ Brian K. Shore Division of Corporations
----------------- Delivered 05:31 PM 12/20/2004
Name : Brian K. Shore FILED 05:24 PM 12/20/2004
Title: Secretary SRV 040923835 - 2116534 FILE
DELAWARE PAGE 1
The First State
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RETIREMENT OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE THIRD
DAY OF AUGUST, A.D. 2004, AT 10:07 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SEAL]
/s/ Harriet Smith Windsor, Secretary of State
---------------------------------------------
Harriet Smith Windsor, Secretary of State
AUTHENTICATION: 3273874
DATE: 08-03-04
State OF Delaware
Secretary of State
Division of Corporations
Delivered 10:07 PM 08/03/2004
FILED 10:07 PM 08/03/2004
SRV 040563917 - 2116534 FILE CERTIFICATE OF RETIREMENT
OF THE
MARCH 2001 MANDITORILY CONVERTIBLE SINGLE RESET PREFERRED
STOCK
($1,00 PAR VALUE)
PURSUANT TO SECTION 243
OF THE GENERAL CORPORATION LAW OF DELAWARE
The Williams Companies, Inc., a corporation organized and existing under
the General Corporation Law of the state of Delaware,
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of said Company, as
subsequently amended, was filed in the office of the Secretary of State of
Delaware on April 27, 1987, and was filed For recording in the office of the
Recorder of Deeds for New Castle County, Delaware on April 27, 1987, and that
the Certificate of Designation for the March 2001 Manditorily Convertible Single
Reset Preferred Stock, $1.00 par value (the "Preferred Stock"), was filed in the
office of the Secretary of State of Delaware on March 28, 2001;
That the Company has reacquired all of the issued shares of the Preferred
Stock;
That the Board of Directors of said Company at a meeting duly called and
convened on July 16, 2004, adopted a resolution to the effect that none of the
authorized shares of the Preferred Stock remain outstanding, and that no
additional stock of such series will be issued subject to the Certificate of
Designation filed with respect to such series of Preferred Stock; and
That when this Certificate is executed, acknowledged, filed and recorded
in accordance with Section 103 of the General Corporation Law of Delaware and,
when the certificate becomes effective, it shall have the effect of eliminating
from the Company's Restated Certificate of Incorporation all matters set forth
in the Certificate of Designation with respect to such series of Preferred Stock
in the amount of 14,000 shares.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by James J. Bender, Senior Vice President and General
Counsel, and attested by Brian K. Shore, its Secretary, this 3rd day of August,
2004.
THE WILLIAMS COMPANIES, INC.
By: /s/ James J. Bender
-------------------------
James J. Bender
Senior Vice President and
General Counsel
ATTEST:
By: /s/ Brian K. Shore
------------------
Brian K. Shore
Secretary
Delaware
The First State
PAGE 1
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RETIREMENT OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE EIGHTH
DAY OF DECEMBER, A.D. 2003, AT 6:59 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ Harriet Smith Windsor
-----------------------------------------
Harriet Smith Windsor, Secretary of State
AUTHENTICATION: 2796815
DATE: 12-09-03
4
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:18 PM 12/08/2003
030786861 -- 2116534
CERTIFICATE OF RETIREMENT
OF THE
9-7/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK
($1.00 PAR VALUE)
PURSUANT TO SECTION 243
OF THE GENERAL CORPORATION LAW OF DELAWARE
The Williams Companies, Inc., a corporation organized and existing
under the General Corporation Law of the state of Delaware,
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of said Company, as
subsequently amended, was filed in the office of the Secretary of State of
Delaware on April 27, 1987, and was filed for recording in the office of the
Recorder of Deeds for New Castle County, Delaware on April 27, 1987, and that
the Certificate of Designation for the 9-7/8% Cumulative Convertible Preferred
Stock, $1.00 par value (the "Preferred Stock"), was filed in the office of the
Secretary of State of Delaware on March 27, 2002;
That the Company has reacquired all of the issued shares of the
Preferred Stock;
5
That the Certificate of Incorporation prohibits the reissuance of
preferred stock, thereby reducing the total number of authorized shares.
That the Board of Directors of said Company at a meeting duly called
and convened on November 20, 2003, adopted a resolution to the effect that none
of the authorized shares of the Preferred Stock remain outstanding, and that no
additional stock of such series will be issued subject to the Certificate of
Designation filed with respect to such series of Preferred Stock; and
That when this Certificate is executed, acknowledged, filed and
recorded in accordance with Section 103 of the General Corporation Law of
Delaware and, when the certificate becomes effective, it shall have the effect
of eliminating from the Company's Restated Certificate of Incorporation all
matters set forth in the Certificate of Designation with respect to such series
of Preferred Stock in the amount of 1,466,667 shares.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by James J. Bender, Senior Vice President and General
Counsel, and attested by Brian K. Shore, its Secretary, this 8th day of
December, 2003.
THE WILLIAMS COMPANIES, INC.
By: /s/ James J. Bender
-----------------------------------
James J. Bender
Senior Vice President and
General Counsel
ATTEST:
By: /s/ Brian K. Shore
-----------------------------
Brian K. Shore
Secretary
6
EXHIBIT 3.1
Delaware
The First State
PAGE 1
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RETIREMENT OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-FIRST DAY OF NOVEMBER, A.D. 2003, AT 3:42 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
AND I DO HERBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID
CERTIFICATE OF RETIREMENTS IS THE TWENTY-THIRD DAY OF NOVEMBER, A.D. 2003.
/s/ Harriet Smith Windsor
-----------------------------------------
Harriet Smith Windsor, Secretary of State
AUTHENTICATION: 2768747
DATE: 11-24-03
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 03:42 PM 11/21/2003
030752133 -- 2116534
CERTIFICATE OF RETIREMENT
OF THE
DECEMBER 2000 CUMULATIVE CONVERTIBLE PREFERRED STOCK
($1.00 PAR VALUE)
PURSUANT TO SECTION 243
OF THE GENERAL CORPORATION LAW OF DELAWARE
The Williams Companies, Inc., a corporation organized and existing
under the General Corporation Law of the state of Delaware,
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of said Company, as
subsequently amended, was filed in the office of the Secretary of State of
Delaware on April 27, 1987, and was filed for recording in the office of the
Recorder of Deeds for New Castle County, Delaware on April 27, 1987, and that
the Certificate of Designation for the December 2000 Cumulative Convertible
Preferred Stock, $1.00 par value (the "Preferred Stock"), was filed in the
office of the Secretary of State of Delaware on December 28, 2000;
That the Company has reacquired all of the issued shares of the
Preferred Stock;
2
That the Certificate of Incorporation prohibits the reissuance of
preferred stock, thereby reducing the total number of authorized shares.
That the Board of Directors of said Company at a meeting duly called
and convened on September 17, 2003, adopted a resolution to the effect that none
of the authorized shares of the Preferred Stock remain outstanding, and that no
additional stock of such series will be issued subject to the Certificate of
Designation filed with respect to such series of Preferred Stock; and
That when this Certificate is executed, acknowledged, filed and
recorded in accordance with Section 103 of the General Corporation Law of
Delaware and, when the certificate becomes effective, it shall have the effect
of eliminating from the Company's Restated Certificate of Incorporation all
matters set forth in the Certificate of Designation with respect to such series
of Preferred Stock in the amount of 400,000 shares.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by James J. Bender, Senior Vice President and General
Counsel, and attested by Brian K. Shore, its Secretary, this 31st day of
October, 2003.
THE WILLIAMS COMPANIES, INC.
By: /s/ James J. Bender
---------------------------------
James J. Bender
Senior Vice President and
General Counsel
ATTEST:
By: /s/ Brian K. Shore
----------------------
Brian K. Shore
Secretary
3
Delaware
The First State
PAGE 1
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-SEVENTH DAY OF MARCH, A.D. 2002, AT 11:30 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ Harriet Smith Windsor
-----------------------------------------
Harriet Smith Windsor, Secretary of State
AUTHENTICATION: 1690674
DATE: 03-27-02
7
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 11:30 A& 03/27/2002
020199809 -- 2116534
CERTIFICATE OF DESIGNATION
OF THE
9-7/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
THE WILLIAMS COMPANIES, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors of The Williams Companies,
Inc., a Delaware corporation (hereinafter called the "Corporation"), with the
rights, powers and preferences set forth therein relating to dividends,
conversion, redemption, dissolution and distribution of assets of the
Corporation having been fixed by the Board of Directors pursuant to authority
wanted to it under Article FOURTH of the Corporation's Restated Certificate of
Incorporation and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware:
RESOLVED that pursuant to authority expressly granted to and
vested in the Board of Directors by provisions of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"), the
issuance of a series of Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), which shall consist of up to 1,466,667 of the 30,000,000
shares of Preferred Stock which the Corporation now has authority to issue, be,
and the saint hereby is, authorized, and the powers, designations, preferences
and relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the shares (in addition
to the powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation which may be Applicable
to the Preferred Stock) are fixed as follows:
1. DESIGNATION MID AMOUNT. The designation of such series of
the Preferred Stock authorized by this resolution shall be the 9-7/8% Cumulative
Convertible Preferred Stock (the "9-7/8% Preferred Stock"). The total number of
shares of the 9-7/8% Preferred Stock shall be 1,466,667.
2. RANKING. The 9-7/8% Preferred Stock shall rank senior, with
respect to dividends and with respect to distributions upon the liquidation,
winding up or dissolution of the Corporation, as to the Common Stock and any
other stock of the Corporation ranking junior to the 9-7/8% Preferred Stock
(collectively, the "Junior Stock"). All series of stock of the Corporation with
which the 9-7/8% Preferred Stock ranks on a parity, with respect to dividends or
distributions upon the liquidation, winding up or dissolution of the Corporation
shall constitute "Parity Stock" and the 9-7/8% Preferred Stock shall rank, as to
dividends and distributions upon the liquidation, winding up or dissolution of
the Corporation, on a parity with such Parity Stock, which shall include the
Existing Parity Preferred Stock. For purposes of this Certificate of
Designation, the term "Existing Parity Preferred Stock" shall mean the December
2000 Cumulative Convertible Preferred Stock of the Corporation, par value $1.00
per share or the March 2001 Mandatorily Convertible Single Reset Preferred Stock
of the Corporation, par value $1.00 per share (the "March 2001 Preferred
Stock"), as applicable.
3. DIVIDENDS.
(a) The holders of 9-7/8% Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation
(the "Board of Directors"), out of the assets of the Corporation legally
available for payment, cumulative cash dividends per share equal to 9-7/8% per
annum of the Stated Value (as herein defined) of such 9-7/8% Preferred Stock.
All dividends declared upon the 9-7/8% Preferred Stock shall be declared pro
rata per share. For purposes hereof, the term "Stated Value" shall mean $187.50
per share, subject to appropriate adjustment in the event of any stock dividend,
stock split, stock distribution or combination with respect to the 9-7/8%
Preferred Stock.
(b) Dividends on the 9-7/8% Preferred Stock will be payable in
equal quarterly installments (except as provided below) in arrears on each
January 1, April 1, July 1 and October 1, commencing on July 1, 2002 (each such
date being referred to hereinafter as a "Dividend Payment Date") provided, that
if such Dividend Payment Date is not a business day, then any payment with
respect to such Dividend Payment Date shall be payable on the next succeeding
business day. Each such payment shall be payable to holders of record as they
appear on the stock books of the Corporation on the record date established by
the Corporation for each dividend declared, which record date shall not be more
than 60 days nor less than 10 days preceding the payment dates thereof, as shall
be fixed by the Board of Directors. Dividends on the 9-7/8% Preferred Stock
shall accrue on a daily basis commencing on and including the date of issuance,
and accrued dividends for each dividend period or portion thereof shall
cumulate, to the extent not paid, as of the date on which such dividends were to
have been paid. A dividend period shall commence on a Dividend Payment Date and
continue to the day next preceding the next succeeding Dividend Payment Date.
Accumulated unpaid dividends shall not accrue interest. Dividends payable on the
9-7/8% Preferred Stock for any period less than or more than a full quarterly
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any period less than one month.
Dividends on the 9-7/8% Preferred Stock shall accrue whether or not the
Corporation has earnings, whether or not there are assets legally available for
the payment of such dividends and whether or not such dividends are declared.
The holders of the 9-7/8% Preferred Stock shall not be entitled to any dividends
in excess of the cumulative dividends provided herein. Dividends in arrears for
any past dividend periods or portions thereof may be declared and paid at any
time witlxut reference to any regular Dividend Payment Date to holders of record
on such date as shall be fixed by the Board of Directors subject to applicable
law, Dividends on the 9-7/8% Preferred Stock shall cease to accrue on the day
immediately preceding the date of conversion in the event of an Optional
Conversion, the Mandatory Conversion Date in the event of a Mandatory
Conversion, or the Redemption Date in the event of an Optional Redemption
(provided, in the event of any conversion or an Optional Redemption, the shares
of 9-7/8% Preferred Stock are actually converted or redeemed on the terms
provided herein, as applicable). In the case of an Optional Conversion of the
9-7/8% Preferred Stock, the payment of accrued and unpaid dividends shall be
subject to Section 6(e).
2
(c) Dividends or other distributions for any dividend period
may not be paid on any outstanding shares of Parity Stock unless any such
dividends are declared and paid pro raw so that the amounts of any dividends
declared and paid per share on outstanding 9-7/8% Preferred Stock and each share
of such Parity Stock will in all cases bear to each other the same ratio that
accrued and unpaid dividends (including any accumulation with respect to unpaid
dividends for prior dividend periods, if such dividends are cumulative) per
share of outstanding 9-7/8% Preferred Stock and such outstanding shares of
Parity Stock bear to each other.
If dividends on any shares of 9-7/8% Preferred Stock are in
arrears: (i) no dividends (in cash, stock or other property) may be declared,
paid or set aside for payment or any other distribution made on any Parity Stock
(except as set forth, above) or Junior Stock (other than dividends or
distributions in shares of Junior Stock or options, warrants or rights to
subscribe for Junior Stock) and (ii) no Parity Stock oi- Junior Stock nay be
redeemed, purchased or otherwise acquired by the Corporation or any subsidiary,
except by conversion of such stock into, or exchange of such stock for shares of
Junior Stock or options, warrants or rights to subscribe for Junior Stock and
cash in lieu of fractional shares of such Junior Stock in connection therewith.
(d) Any dividend payment made on the 9-7/8% Preferred Stock
shall first be credited against the earliest scented but unpaid dividend due
with respect to the 9-7/8% Preferred Stock.
(e) For the purposes of this Certificate of Designation,
"business day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law to close.
4. LIQUIDATION.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of 9-7/8% Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any payment
shall be made to the holders of Common Stock or any other class or series of
Junior Stock, an amount in cash equal to the Stated Value per share plus any
dividends (whether or not declared) accrued and unpaid, on the shares of 9-7/8%
Preferred Stock to the date of final distribution (the "Liquidation
Preference"). After payment of the full amount of the Liquidation Preference,
the holders of shares of 9-7/8% Preferred Stock will not be entitled to any
further participation in any distribution in the assets of the Corporation. If,
upon any such liquidation, dissolution or winding up of the affairs of the
Corporation, the assets of the Corporation, or proceeds thereof. available for
the distribution among the holders of shares of 9-7/8% Preferred Stock and
Parity Stock shall be insufficient to pay the holders of shares of 9-7/8%
Preferred Stock and any Parity Stock the fill amount to which they shall be
entitled, the holders of shares of 9-7/8% Preferred Stock and Parity Stock shall
share ratably in any distribution of the remaining assets and funds of the
Corporation in proportion to the respective amounts which would otherwise be
payable in respect to the shares held by them upon such distribution if all
amounts payable on or with respect to said shares were paid in full. For the
purposes hereof, neither a consolidation nor merger of the Corporation with or
into any other corporation, nor a merger of any corporation
3
with or into the Corporation, nor a sale or exchange or transfer of all or any
part of the Corporation's assets for cash, shares of stock, securities or other
consideration shall be considered a liquidation, dissolution or winding up of
the affair of the Corporation.
(b) After the payment of all preferential amounts required to
be paid to the holders of 9-7/8% Preferred Stock and any other Parity Stock, the
holders of shares of Junior Liquidation Stock then outstanding shall be entitled
to receive the remaining assets and funds of the Corporation available for
distribution to its stockholders.
5. VOTING RIGHTS. The holders of 9-7/8% Preferred Stock shall
have no right to vote except as otherwise specifically provided herein, in the
Certificate of Incorporation or as required by statute.
(a) in The event the holders of 9-7/8% Preferred Stock shall
become entitled to exercise the right to vote as a separate class together with
other shares of Preferred Stock then entitled to vote on such matter with the
9-7/8% Preferred Stock, if any, as provided in Section 5(c), each share of
9-7/8% Preferred Stock shall be entitled to one vote.
(b) So long as any shares of 9-7/8% Preferred Stock are
outstanding, in addition to any other vote or consent of shareholders required
in the Certificate of Incorporation or by law, the affirmative vote of the
holders of at least a majority of the shares of 9-7/8% Preferred Stock entitled
to vote, given in person or by proxy, either pursuant to a consent in writing
without a meeting (if permitted by law and the Certificate of incorporation) or
by vote at any meeting called for the purpose, shall be necessary for effecting
or validating:
(i) any amendment, alteration or repeal of any of the
provisions of the Certificate of Incorporation which alters or changes
the rights, powers or preferences of the shares of 9-7/8% Preferred
Stock so as to affect them adversely. Without limiting the foregoing,
the amendment of the provisions of the Certificate of Incorporation so
as to authorize or create, or to increase the authorized amount of
Junior Stock shall not require approval by the holders of the 9-7/8%
Preferred Stock and such holders shall not be entitled to vote thereon
to the fullest extent permitted by law;
(ii) the authorization, creation or issuance of, or the
increase in the authorized amount of, any stock of any class or series,
or any security convertible into stock of any. class or series, ranking
senior to, or on parity with (including the Existing Parity Preferred
Stock), the 9-7/8% Preferred Stock with respect to (A) dividends,
and/or (B) distributions upon the liquidation, winding up or
dissolution of the Corporation;
(iii) the merger or consolidation of the Corporation with or
into any other corporation or other entity in any case where (A) such
merger or consolidation would affect adversely the rights, powers or
preferences of the 9-7/8% Preferred Stock, or (B) each holder of shares
of 9-7/8% Preferred Stock immediately preceding such merger or
consolidation shall not receive or continue to hold in the surviving or
resulting corporation or other entity the same number of shares, with
substantially the same rights, powers amid preferences (except for
those rights, powers and preferences that could be affected without the
vote of the holders of the 9-7/-% Preferred. Stock, such as the
4
authorization and issuance of Junior Stock), as correspond to the
shares of 9-7/8% Preferred Stock held immediately prior to such merger
or consolidation (and if neither (A) nor (B) is applicable, then, and
in such event, such merger or consolidation shall, not be subject to
approval by the holders of the 9-7/8% Preferred Stock and such holders
shall not be entitled to vote thereon);
(iv) any reclassification of the 9-7/8% Preferred Stock; and
(v) any amendment of Section I(5)(b) of Article FOURTH or
Section H of Article FIFTH of the Certificate of Incorporation (other
than any amendment that does not limit or restrict the right of holders
of 9-7/8% Preferred Stock to act by written consent to the extent
permitted by Section I(5)(b) of Article FOURTH and Section H of Article
FIFTH of the Certificate of Incorporation).
(c) (i) In the event that (i) full cumulative dividends on the
9-7/8% Preferred Stock are not paid and are in arrears for four
quarterly dividend periods (whether or not consecutive) or (ii) The
holders of shares of any other series of Parity Stock have the then
present right to elect one or more directors for any reason, the number
of directors of the Corporation constituting the entire Board of
Directors shall be increased by two persons and the holders of shares
of the 9-7/8% Preferred Stock, voting together as a single class with
the holders of shares of all other series of Parity Stock of the
Corporation having the then present right to elect one or more
directors (herein referred to as "Class Voting Stock"), shall have the
right to elect such additional two directors to fill such positions at
any regular meeting of shareholders or special meeting held in place
thereof, or at a special meeting called as provided in Section
5(c)(ii.). Whenever (i) all arrearages of dividends on the 9-7/8%
Preferred Stock then outstanding shall have been paid or declared and
irrevocably set apart for payment and (ii) the holders of shares of any
other series of Parity Stock no longer have the present right to elect
one or more directors for any reason (clause (i) and (ii) hereinafter
referred to collectively as a "Special Director Termination Event"),
then the right of the holders of shares of the 9-7/8% Preferred Stock
to elect such additional two directors shall cease (but subject always
to the same provisions for the vesting of such voting rights in the
case of any similar future arrearages in dividends or in the case of
the vesting of voting rights in the holders of shares of any other
series of Parity Stock), and the terms of office of all persons
previously elected as directors by the holders of shares of the 9-7/8%
Preferred Stock and such other Class Voting Stock shall forthwith
terminate and the number of the Board of Directors shall be reduced
accordingly.
(ii) At any time after the voting power referred to in Section
5(c)(i) shall have been so vested, in the holders of shares of the
9-7/8% Preferred Stock, the Secretary of the Corporation may, and upon
the written request of any holder or the holders of at least 10% of the
number of shares of 9-7/8% Preferred Stock then outstanding (addressed
to the Secretary at the principal executive office of the Corporation)
shall, call a special meeting of the. holders of shares of the 9-7/8%
Preferred Stock and all other Class Voting Stock for the election of
the directors to be elected by them pursuant to Section 5(c)(i);
provided that the Secretary shall not be required. to call such special
meeting if the request for such meeting is received less than 45
calendar days before the date fixed for
5
the next ensuing annual meeting of shareholders. Such call shall be
made by notice similar to that provided in the bylaws of the
Corporation for a special meeting of the shareholders or as required by
law. Subject to the foregoing provisions, if any such special meeting
required to be called as above provided shall not be called by the
Secretary within 20 calendar days after receipt of an appropriate
request, then any holder of shares of 9-7/8% Preferred Stock may call
such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books and records of the Corporation.
Except as otherwise provided by law, at any such meeting, the holders
of a majority of the number of shares of 9-7/8% Preferred Stock and
such other Class Voting Stock then outstanding shall constitute a
quorum for the purpose of electing directors as contemplated in Section
5(c)(i). If at any such meeting or adjournment thereof, a quorum of
such holders of 9-7/8% Preferred Stock and, if applicable, such other
Class Voting Stock shall not be present, no election of directors by
the 9-7/8% Preferred Stock and, if applicable, such other Class Voting
Stock shall take place, and any such meeting may be adjourned from time
to time for periods not exceeding 30 calendar days until a quorum of
the 9-7/8% Preferred Stock and, if applicable, the Class Voting Stock
is present at such adjourned meeting. Unless otherwise provided by law
or the Certificate of Incorporation, directors to be elected by the
holders of shares of 9-7/8% Preferred Stock and, if applicable, such
other Class Voting Stock shall be elected by a plurality of the votes
cast by such holders at a meeting at which a quorum is present.
Notwithstanding the foregoing, the absence of a quorum of the 9-7/8%
Preferred Stock and, if applicable, such other Class Voting Stock shall
not prevent the voting of, including the election of, directors by the
holders of Common Stock and other classes of capital stock at such
meeting.
(iii) Any director who shall have been elected by holders of
shares of 9-7/8% Preferred Stock voting together, if applicable, as a
single class with the holders of one or more other series of Class
Voting Stock, or any director so elected as provided below, may be
removed at any time during the period in which the holders of shares of
the 9-7/8% Preferred Stock voting together, if applicable, as a single
class with the holders of one or more other series of Class Voting
Stock are entitled to elect directors (such period being referred to
herein as a "class voting period"), either for or without cause, by,
and only by, the affirmative vote of the holders of a majority of the
number of shares of 9-7/8% Preferred Stock (and, if applicable, one or
more other series of Class Voting Stock) then outstanding, voting
together, if applicable, as a single class with the holders of all
other series of Class Voting Stock then outstanding, given at a special
meeting of such shareholders called for such. purpose, and any vacancy
thereby created may be filled during such class voting period only by
the holder of shares of 9-7/8% Preferred Stock and, if applicable the
other series, if any, of Class Voting Stock; provided, however, that a
Special Director Termination Event has not occurred at the time of such
class voting period. In case any vacancy (other than as provided in the
preceding sentence) shall occur among the directors elected by the
holder of shares of the 9-7/8% Preferred Stock (and, if applicable,
such other Class Voting Stock), and provided that a Special Director
Termination Event has not occurred, a successor shall be elected by the
Board of Directors to serve until the next annual meeting of the
shareholders or special meeting held in place thereof upon the
nomination of the then remaining director elected by the
6
holders of the 9-7/8% Preferred Stock (and, if applicable, such. other
Class Voting Stock) or the successor of such remaining director.
(d) So long as any shares of 9-7/8% Preferred Stock remain
outstanding, the unanimous vote or consent of the shares of the 9-7/8% Preferred
Stock outstanding (voting separately as a class) given in person or by Proxy,
either by written consent or at any special or annual meeting called for the
purpose, shall be necessary to effect any amendment to these resolutions that
would (i) except as otherwise permitted by Section 7, increase the Conversion
Price or (ii) reduce the annual cash dividends payable on the shares of the
Preferred Stock.
(e) Holders of 9-7/8% Preferred Stock shall not be entitled to
receive notice of any meeting of shareholders at which they are not entitled to
vote or consent except as otherwise provided by applicable law.
6. OPTIONAL CONVERSION. Each share of 9-7/8% Preferred Stock
may be converted at any time, at the option of the holder thereof ("Optional
Conversion"), into the number of fully-paid and non-assessable shares of Common
Stock obtained by dividing the Stated Value by the Conversion Price then in
effect (the "Conversion Rate") provided, however, that on any Optional
Redemption of the 9-7/8% Preferred Stock pursuant to Section 10 or any
liquidation of the Corporation, the right of conversion shall terminate at the
close of business on the business day next preceding the date fixed for such
redemption or for the payment of any amounts distributable on liquidation to the
holders of 9-7/8% Preferred Stock; provided, further, however, that in the event
the Company fails to redeem any of the 9-7/8% Preferred Stock in accordance with
Section 10 hereof, the right of conversion hereunder with respect to the shares
of 9-7/% Preferred Stock not so redeemed shall continue in full force and
effect.
(a) The initial conversion price, subject to adjustment as
provided herein, is equal to $18.75 (the "Conversion Price"). The applicable
Conversion Price from time to time in effect is subject to adjustment as
hereinafter provided.
(b) The Corporation shall not issue fractions of shares of
Common Stock upon conversion of 9-7/8% Preferred Stock or scrip in lieu thereof
If any fraction of a share of Common Stock would, except for the provisions of
this Section 6(b), be issuable upon conversion of any 9-7/8% Preferred Stock,
the Corporation shall in lieu thereof pay to the person entitled thereto an
amount in cash equal to the current value of such fraction, calculated to the
nearest one-hundredth (1/100) of a share, to be computed (i) if the Common Stock
is quoted or listed or admitted to trading on any national securities exchange
or quotation system, on the basis of the last sales price of the Common Stock on
such exchange or quotation system (or the quoted closing bid price if there
shall have been no sales) on the last business day immediately preceding the
date of conversion, or (ii) if the Common Stock shall not be listed, on the
basis of the fair market value per share as determined by the Board of
Directors.
(c) In order to exercise the conversion privilege, the holder
of any 9-7/8% Preferred Stock to be converted shall surrender its certificate or
certificates therefore to the Corporation at its principal office, and shall
give written notice to the Corporation at such office that the holder elects to
convert the 9-7/8% Preferred Stock represented by such certificates, or any
number thereof. Such notice shall also state the name or names (with address) in
which the
7
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, subject to any restrictions on transfer
relating to shares of Common Stock upon conversion thereof. If so required by
the Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly authorized in writing. The date of receipt
by the Corporation of the certificates and notice shall be the conversion date.
As soon as practicable after receipt of such notice and the surrender of the
certificate or certificates for 9-7/8% Preferred Stock as aforesaid, the
Corporation shall cause to be issued and delivered at such office to such
holder, or on its written order, a certificate or certificates for the number of
full shares of Common Stock issuable on such conversion in accordance with the
provisions hereof, cash as provided in Section 6(b) hereof in respect of any
fraction of a share of Common Stock otherwise issuable upon such conversion and,
if less than all shares of 9-7/8% Preferred Stock represented by the certificate
or certificates so surrendered are being converted., a residual certificate or
certificates representing the shares of 9-7/8% Preferred Stock not converted.
(d) The Corporation shall at all times when the 9-7/8%
Preferred Stock shall be outstanding reserve and keep available out of its
authorized but unissued stock, for the purposes of effecting the conversion of
the 9-7/8% Preferred Stock, such number of its duly authorized shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding 9-7/8% Preferred Stock. Before taking any action that would cause an
adjustment reducing the Conversion Price below the then par value of the shares
of Common Stock issuable upon conversion of the 9-7/8% Preferred Stock, the
Corporation will lake any corporate action that may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully-paid arid non-assessable shares of such Common Stock at such
adjusted Conversion Price.
(e) Upon any conversion, all accrued and unpaid. dividends on
the 9-7/8% Preferred Stock surrendered for conversion shall be paid at the
election of the Corporation, in cash or in shares of Common Stock. In the event
such dividends are paid in additional shares of Common Stock, the number of
shares of Common Stock to be issued in payment of the dividend with respect to
each outstanding share of Common Stock shall be determined by dividing the
amount of the dividend that would have been payable had such dividend been paid
in cash by an amount equal to the Conversion Price, To the extent that any such
dividend would result in the issuance of a fractional share of Common Stock
(which shall be determined with respect to the aggregate number of shares of
Common Stock held of record by each holder), then the amount of such fraction
multiplied by the Conversion Price shall be paid in cash (unless there are no
legally available funds with which to make such cash payment, in which event
such cash payment shall be made as soon as possible). Notwithstanding the
foregoing, holders of shares of 9-7/8% Preferred Stock whose shares are
converted following the record date for the payment of a quarterly dividend and
prior to the Dividend Payment Date with respect to such record date shall not be
entitled to the quarterly dividend, payment for the quarterly dividend period
ending on such Dividend Payment Date if such conversion is an Optional
Conversion, but shall be entitled to such quarterly dividend payment if such
conversion is a Mandatory Conversion. A holder of shares of 9-7/8% Preferred
Stock surrendered for Optional Conversion in the circumstances described in the
preceding sentence shall pay the Corporation a cash amount equal to the amount
of such quarterly dividend at the time such holder surrenders its shares for
conversion and such holder shall be entitled to retain the quarterly dividend
payment received from the Corporation;
8
provided, however, that in the event the Corporation shall fail to pay such
quarterly dividend payment, the Corporation shall promptly refund the cash
amount paid by the holder to the Corporation at the time such holder surrendered
its shares for conversion.
(f) All shares of 9-7/8% Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall forthwith cease and terminate except
only the right of the holder thereof to receive shares of Common Stock in
exchange therefore and payment of any accrued and unpaid dividends thereon. Any
shares of 9-7/8% Preferred Stock so converted, shall be retired and canceled and
shall not be reissued, and the Corporation may from time to time take such
appropriate action as may be necessary to reduce the authorized 9-7/8% Preferred
Stock accordingly.
(g) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock on conversion of shares of Preferred Stock pursuant to
this Section 6. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involving the issue and delivery
of shares of Common Stock in the name other than that in which the shares of
9-7/8% Preferred Stock so converted were registered and no such issue and
delivery shall be made unless and until the person. requesting such issue has
paid to the Corporation the amount of any tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid,
7. ANTI-DILUTION PROVISIONS. The Conversion Price shall be
adjusted from time to time by the Corporation as follows:
(a) In case the Corporation shall hereafter pay a dividend or
make a distribution on any class of capital stock of the Corporation in shares
of Common Stock, the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect at the
opening of business on the date following the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination,
and the denominator of which shall be the sum of such number of shares and the
total number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 7(a) is declared but not so
paid or made, the Conversion Price shall again be adjusted to the Conversion
Price that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Corporation shall issue rights or warrants to
all holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the record date for determination of the
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction, the
9
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for determination of stockholders
entitled to receive such rights or warrants plus the number of shares that the
aggregate offering price of the total number of shares so offered for
subscription or purchase (pursuant to such rights or warrants) would purchase at
such Current Market Price, and the denominator of which shall be the number of
shares of Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the total number
of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants. Such reduction shall be successively made
whenever any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the date fixed
for determination of stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock are not delivered after the expiration
of such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. If such rights or
warrants are not so issued, the Conversion Price shall again be adjusted to be
the Conversion Price that would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Corporation for such rights or warrants and the minimum
aggregate amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board in good faith
as described in a resolution of the Board.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, stmh reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Corporation (other than any dividends or distributions to which
Section 7(a) applies) or evidences of its indebtedness or assets (including
securities of the Corporation or any subsidiary, including rights or warrants,
but excluding any rights or warrants referred to in Section 7(b), and excluding
any dividend paid exclusively in cash (any of the foregoing hereinafter in this
Section 7(d) called the "Securities")), then, in each such case (unless the
Corporation elects to reserve such Securities for distribution to the holders of
9-7/8% Preferred Stock upon conversion so that any holder converting will
receive upon such conversion, in addition to the shares of Common Stock to which
such holder is entitled, the amount and kind of such Securities which such
holder would have received if such holder had converted its 9-7/8% Preferred
Stock into Common Stock immediately prior to the Record Date (as defined in
Section 7(g)(iv)) for such distribution of the Securities), the
10
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect on the Record Date with
respect to such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of the Common Stock on such Record Date less the
fair market value (as determined by the Board in good faith, whose determination
shall be conclusive, and described in a resolution of the Board a copy of which
will be provided to the holders of the 9-7/8% Preferred Stock) on the Record
Date of the portion of the Securities distributed applicable to one share of
Common Stock and the denominator of which shall be the Current Market Price per
share of the Common Stock on such Record Date, such reduction to become
effective immediately prior to the opening of business on the day following such
Record Date; provided, however, that in the event the then fair market value (as
so determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder of 9-7/8% Preferred Stock
shall have the right to receive upon conversion the amount of Securities such
holder would have received had such holder converted its 9-7/8% Preferred Stock
into Common Stock immediately prior to the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such,
dividend or distribution had not been declared. If the Board determines the fair
market value of any distribution for purposes of this Section 7(d) by reference
to the actual or when issued trading market for any Securities, it must in doing
so consider the prices in such market over the same period used in computing the
Current Market Price of the Common Stock.
Rights or warrants distributed by the Corporation to all
holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Corporation's capital stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be transferred
with such shares of Common Stock; (ii) are not immediately exercisable; and
(iii) are also issued in respect of future issuances of Common Stock, shall be
deemed not to have been distributed for purposes of this Section 7 (and no
adjustment to the Conversion Price under this Section 7 will be required) until
the occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment (if any
is required) to the Conversion Price shall be made under this Section 7(d). If
any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Certificate of Designation, are subject to
events, upon the occurrence of which such rights or warrants become exercisable
to purchase different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be deemed to be
the date of distribution and Record Date with respect to new rights or warrants
with such rights (and a termination or expiration of the existing rights or
warrants without exercise by any of the holders thereof). In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or any
Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto, that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under this
Section 7 was made, (1) in the case of any such rights or warrants that shall
all have been redeemed or repurchased without exercise by any holders thereof,
the Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a
11
holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants that shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
No adjustment of the Conversion Price shall be made pursuant to
this Section 7(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event or other event of the type described in the
preceding paragraph to the extent that such rights or warrants are actually
distributed, or reserved by the Corporation for distribution, to holders of
9-7/8% Preferred Stock upon conversion by such holders of 9-7/8% Preferred Stock
to Common Stock. For purposes of this Section 7(d) and Sections 7(a) and (b),
any dividend or distribution to which this Section 7(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 7(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections 7(a)
and (b) with respect to such dividend or distribution shall then be made),
except (A) the Record Date of such dividend or distribution shall be substituted
as "the date fixed for the determination of stockholders entitled to receive
such dividend or other distribution," "the date fixed for the deter of
stockholders entitled to receive such rights or warrants" and "the date fixed
for such determination" within the meaning of Sections 7(a) and (b), and (B) any
shares of Common Stock included in such. dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 7(a).
(e) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any regular
quarterly cash dividend on the Common Stock payable from the earnings of the
Company to the extent the annualized rate of such cash dividend does not exceed
the Maximum Permitted Dividend Rate (as defined below), and (y) any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary), then, in such case, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on such Record Date by a fraction, the numerator of which
shall be the Current Market Price of the Common Stock on the Record Date less
the amount of cash so distributed (and not excluded as provided above or as set
forth in the last two sentences of this paragraph) applicable to one share of
Common Stock, and the denominator of which shall be such Current Market Price of
the Common Stock, such reduction to be effective immediately prior to the
opening of business on the day following the Record Date; provided, however,
that if the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price of the Common Stock
on the Record Date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each holder of 9-7/8% Preferred Stock shall have the right
to receive upon conversion, out of funds legally available therefore, the amount
of cash such holder would have received had such holder converted such 9-7/8%
Preferred Stock or the Record Date. If such dividend or distribution is not so
paid or made, the Conversion Price shill again be adjusted to be the Conversion
Price that
12
would then be in effect if such dividend or distribution had not been declared.
If any adjustment is required to be made as set forth in this Section 7(e) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto, If an
adjustment is required to be made as set forth in this Section 7(e) above as a
result of a distribution that is not a quarterly dividend, such. adjustment
shall be based upon the full amount of the distribution.
The "Maximum Permitted Dividend Rate" shall mean an annualized
dividend rate of $0.80 per share of Common Stock (as adjusted to appropriately
reflect any of the events referred to in Sections 7(a) or 7(c)) (the "Current
Rate"). The Maximum Permitted Dividend Rate will be adjusted to a rate in excess
of the Current Rate only on the following terms:
(i) if the regular dividend mate on the Common Stock is reduced
to a rate less than the Current Rate, the regular dividend rate may
thereafter be increased but (except as provided in clause (ii) below)
not to an annualized rate exceeding the Current Rate.
(ii) Having been reduced as contemplated by clause (i), if the
annualized dividend rate on the Common Stock is increased to the
Current Rate, it may not thereafter be increased to a rate greater than
the Current Rate for a period of four consecutive quarters. Thereafter,
the Maximum Permitted Dividend Rate shall increase annually at a rate
of increase of 10% per annum.
(iii) If the regular dividend rate on the Common Stock is not
reduced as contemplated in clause (i), the Maximum Dividend Rate shall
increase annually at a rate of increase of 10% per annum for the
dividend period commencing October 1, 2002.
(f) In case a tender or exchange offer made by the Corporation
or any Subsidiary for all or any portion of the Common Stock shall expire and
such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to stockholders of consideration per share of Common Stock
having a fair market value (as determined by the Board, whose determination
shall be conclusive and described in a resolution of the Board) that as of the
last time (the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it may be amended) exceeds the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration.
Time, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the Expiration Time by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied, by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time and the
denominator of which shall be the sum of (x) the fair market value (determined,
as aforesaid) of the aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the tenns of the tender or
exchange offer) of all shares validly tendered or exchanged and not withdrawn as
of the Expiration Time (the shares deemed so accepted, upto any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the number
of shares of Common Stock outstanding (less any Purchased Shares) at the
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time,
13
such reduction to become effective immediately prior to the opening of business
on the Trading Day following the Expiration Time, If the Corporation is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Corporation is permanently prevented by applicable law from effecting any
such purchases or all such purchases are rescinded, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such tender or exchange offer had not been made.
(g) For purposes of this Section 7, the following terms shall
have the meaning indicated:
(i) "Closing Price" with respect to any security on any day
shall mean the closing sale price, regular way, on such day or, in case
no such sale takes place on such day, the average of the reported
closing bid arid asked prices, regular way, in each case as quoted on
the New York Stock Exchange or, if such security is not quoted or
listed or admitted to trading on such New York Stock Exchange, on the
principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading or, if not
quoted or listed or admitted to trading on any national securities
exchange or quotation system, the average of the closing bid and asked
prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or
a similar generally accepted reporting service, or if not so available,
in such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board for that purpose, or a price
determined in good faith by the Board.
(ii) "Current Market Price" shall mean the arithmetic average
of the daily Closing Prices per share of Common Stock for the 10
consecutive Trading Days immediately prior to the date in question.
(iii) "Fair Market Value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.
(iv) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is
exchanged for or converted into any combination of cash, securities or
other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board or by statute, contract or otherwise).
(v) "Trading Day" shall mean (x) if the applicable security is
quoted or listed or admitted for trading on the New York Stock Exchange
or another national securities exchange or quotation system, a day on
which the New York Stock Exchange or such other national securities
exchange or quotation system is open for business or (y) if the
applicable security is not so quoted, listed or admitted for trading,
any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
14
(h) In case the Corporation shall agree or resolve to issue,
or issue or sell, or shall be deemed to have issued or sold, within nine months
after the date of issuance of the 9-7/8% Preferred Stock:
(i) any shares of Common Stock without consideration
or for consideration per share less than the Conversion Price in effect
on the date of and immediately prior to such agreement, resolution,
issuance or sale;
(ii) any options, warrants or other rights to
subscribe for or purchase shares of Common Stock with an exercise or
purchase price per share less than the Conversion Price in effect on
the date of and immediately prior to such agreement, resolution,
issuance or sale; or
(iii) any securities convertible into or exchangeable
for Common Stock or otherwise entitling the holder thereof to acquire
(whether for consideration or otherwise) or requiring the Corporation
to issue in respect thereof, Common Stock with a conversion or exchange
price per share of Common Stock less than the Conversion Price in
effect on the date of and immediately prior to such agreement,
resolution, issuance or sale,
then the Conversion Price shall be reduced to a price equal to the amount of
such consideration or price (as applicable), effective from the date of such
issuance or sale. The foregoing provisions shall not apply to the issuance of
options pursuant to the Corporation's stock option or employee benefit plans, or
the exercise of any options issued pursuant to such plans. In determining (I)
the aggregate offering price of such shares of Common Stock, (II) whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a purchase price per share less than the Conversion Price in
effect on the date of and immediately prior to such issuance or sale and (III)
whether any securities are convertible into or exchangeable for, or otherwise
entitling the holder thereof to acquire, Common Stock with a conversion or
exchange price per share of Common Stock less than the Conversion Price in
effect on the dare of and immediately prior to such issuance or sale, in each
such case, there shall be taken into account any consideration received by the
Corporation in connection with such issuance or sale of Common Stock, rights,
warrants or other securities and the minimum aggregate amount payable on
exercise or conversion thereof, the value of such consideration, if other than
cash, to be determined by the Board in good faith as described in a resolution
of the Board.
(i) If, on or after the successful completion of the
remarketing of the March 2001 Preferred Stock, conducted in accordance with the
terms of the Williams Preferred Stock Remarketing Registration Rights and
Support Agreement, dated as of March 28, 2001, by and among the Corporation,
Williams Share Trust, WCG Note Trust, United. States Trust Company of New York
and Credit Suisse First Boston Corporation (or any successor agreement), the
conversion price per share of Common Stock for the March 2001 Preferred Stock
(as measured by the amount of liquidation preference or stated value required to
be surrendered per share of Common Stock) is less than the Conversion Price then
in effect, the Conversion Price shall be reduced so as to equal such conversion
price per share of Common Stock of the March 2001 Preferred Stock. The reduction
of the Conversion Price hereunder shall be effective as and from the date the
conversion price of the March 2001 Preferred Stock is established.
15
(j) The Corporation may (but is not obligated to) make such
reductions in the Conversion Price, in addition to those required by this
Certificate of Designation as the Board considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Corporation from
time to time may (but is not obligated to) reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days, the reduction
is irrevocable during the period and the Board shall have made a determination
that such reduction would be in the best interests of the Corporation, which
determination shall, be conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Corporation shall mail to holders of
record of the 9-7(8% Preferred Stock a notice of the reduction at least 15 days
prior to the date the reduced Conversion Price takes effect, and such notice
shall state the reduced Conversion Price and the period during which it will be
in effect.
(k) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments that by
reason of this Section 7(k) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 7 shall be made by the Corporation and shall be made to the nearest cent
or to the nearest one-hundredth (1/100) of a share, as the case may be. No
adjustment need be made pursuant to any provision of this Section 7 for rights
to purchase Common Stock pursuant to a Corporation plan for reinvestment of
dividends or interest. To the extent the 9-7/8% Preferred Stock becomes
convertible into cash, assets, property or securities (other than capital stock
of the Corporation), no adjustment need be made thereafter as to the cash,
assets, property or such securities. Interest will not accrue on the cash into
which shares of 9-7/8% Preferred Stock may be convertible.
(1) Whenever the Conversion Price shall be adjusted as herein
provided, the Corporation shall forthwith file at each office designated for the
conversion of 9-7/8% Preferred Stock., a statement, signed by the Chairman of
the Board, the President, any Vice President or Treasurer of the Corporation,
showing in reasonable detail the facts requiring such adjustment and the
Conversion Rate that will be effective after such adjustment. The Corporation
shall also cause a notice setting forth any such adjustments to be sent by mail,
first class, postage prepaid, to each record holder of 9-7/8% Preferred Stock at
his or its address appearing on the stock register. Failure to deliver such.
notice shall not affect the legality or validity of any such adjustment.
(m) In any case in Which this Section 7 provides that an
adjustment shall become effective immediately after (1) a record date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 7(a), or (3) a date fixed
for the determination of stockholders entitled to receive rights or warrants
pursuant to Section 7(b) or (4) the Expiration Time for any tender or exchange
offer pursuant to Section 7(f), (each a "Determination Date"), the Corporation
may elect to defer until the occurrence of the relevant Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any share of 9-7/8% Preferred
Stock converted after such Determination Date and before the
16
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities or assets issuable upon such conversion by reason of the
adjustment required by such Adjustment Event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such holder any amount in cash in lieu, of any fraction pursuant to
Section 6(b) or Section 6(e). For purposes of this Section 7(m), the term
"Adjustment Event" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the date
any such dividend or distribution is paid Or made,
(iii) in any case referred to in clause (3) hereof, the date
of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the date a
sale or exchange of Common Stock pursuant to such tender or exchange
offer is consummated and becomes irrevocable.
(n) For purposes of this Section 7, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Corporation but shall include shares issuable in respect of
outstanding scrip certificates, if any, issued by the Corporation in lieu of
fractions of shares of Common Stock. The Corporation will not pay any dividend
or make any distribution on shares of Common Stock held in the treasury of the
Corporation.
(o) If any event occurs as to which, in the opinion of the
Board of Directors, the provisions of this Section 7 arc not strictly applicable
or if strictly applicable would not fairly protect the rights of the holders of
the 9-7/8% Preferred Stock in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make an
adjustment in the application of such, provisions, in accordance with such
essential intent and principles, so as to protect such rights as aforesaid, but
in no event shall any adjustment have the effect of increasing the Conversion.
Price as otherwise determined pursuant to any of the provisions of this Section
7 except in the case of a combination of shares of a type contemplated in
Section 7(e) hereof and then in no event to an amount larger than the Conversion
Price as adjusted pursuant to Section 7(c) hereof. The determination of the
Board of Directors as to whether an adjustment should be made pursuant to the
provisions of this Section 7(o), and if so, as to what adjustment should be made
and when, shall be conclusive, final and binding on the Corporation and all
stockholders of the Corporation..
8. RECLASSIFICATIONS, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 7(c) applies), (ii) any consolidation, merger or
combination of the Corporation with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or Conveyance of all or substantially all of the
properties and assets of the
17
Corporation to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common. Stock, then the
9-7/8% Preferred Stock shall be convertible into The kind and amount of shares
of stock, other securities or other property or assets (including cash) that the
holder of a share of 9-7/8% Preferred Stock would have received upon such
reclassification, change, consolidation., merger, combination, sale or
conveyance had such holder converted such share of 9-7/8% Preferred Stock into
the number of shares of Common Stock issuable upon such conversion (assuming,
for such purposes, a sufficient number of authorized shares of Common Stock are
available for such conversion) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance (but after giving
effect to the adjustment of the Conversion Price required in Section 10(a)),
assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of stock, other securities or other property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination., sale or conveyance (provided that, if the
kind or amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change; consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 8 the kind and
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares),
The Corporation shall not enter into any transaction governed
by this Section 8 unless (I) if the Corporation is not the entity surviving any
such merger, consolidation or combination, the 9-7/8% Preferred Stock is
converted into share's of preferred stock or equivalent equity securities of the
entity surviving or resulting from such merger or consolidation having terms and
conditions substantially similar to the terms and conditions of the 9-7/8%
Preferred Stock in effect immediately prior to such merger or consolidation, but
giving effect to the conversion adjustments contemplated in this Section 8 or
(II) if the Corporation survives such consolidation, merger or sale, the entity
into whose securities or assets the 9-7/8% Preferred Stock becomes convertible
pursuant to this Section 8, if other than the Corporation shall agree to honor
the conversion rights provided in this Section 8.
The above provisions of this Section 8 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 8 applies to any event or occurrence, Section 7
shall not apply.
9. MANDATORY CONVERSION. On or alter March 27,2017, the
Corporation may, by giving notice to the holders of 9-7/8% Preferred Stock (the
"Forced Conversion Notice"), convert each share of 9-7/8% Preferred Stock held
by such holder (the "Mandatory Conversion") into the number of shares of the
Common Stock (the "Mandatory Conversion Rate") equal to the Stated Value plus
all accrued and unpaid dividends to the date of conversion (whether or not
declared) divided by the Conversion Price then in effect; provided that in order
to be allowed to exercise this right to compel Mandatory Conversion, the average
of the last reported Closing Prices (as defined in Section 7(g)) for the Common
Stock for the 20 day
18
period ending not more than 10 days prior to the date of the giving of the
Forced Conversion Notice must be greater Than 1 28% of the Conversion Price then
in effect. Such conversion shall be effective as of the date (the "Mandatory
Conversion Date") the Forced Conversion Notice is given by the Corporation and
the holders of 9-7/8% Preferred Stock shall promptly surrender their
certificates evidencing their ownership of 9-7/8% Preferred Stock for Common
Stock certificates. The provisions of Section 6 shall be applicable to any
Mandatory Conversion.
10. OPTIONAL REDEMPTION
(a) Upon a Merger (as defined below), the Corporation may, upon
written notice (the "Redemption Notice") to the holders of 9-7/8% Preferred
Stock, redeem all, but not less than all, of the then outstanding shares of
9-7/8% Preferred Stock (the "Optional Redemption") for cash at a redemption
price per share equal to 120% of the Stated Value plus accrued and unpaid
dividends (whether or not declared) (the "Redemption Price"). The Redemption
Notice shall be given no later than 10 business days following the consummation
of the Merger. In the event the value of the consideration paid per share to
holders of Common Stock in such Merger (the "Merger Consideration") is less than
the Conversion Price in effect on the date of and immediately prior to such
Merger, then the Conversion Price shall be reduced to a price equal to the value
of the Merger Consideration. In the event the Merger Consideration payable to
holders of Common. Stock is not entirely in cash, the value to be ascribed to
the Merger Consideration per share for purposes of this Section 10 shall be the
Current Market Price of the Common Stock on the date the Merger occurs. "Merger"
shall be deemed to have occurred when the Corporation consolidates with or
merges into any other person or any other person merges into the Corporation or
conveys, transfers or leases all or substantially all of its assets to any
person other than a subsidiary or subsidiaries, and the outstanding Common Stock
of the Corporation is changed or exchanged into other assets or securities as a
result, unless the shareholders of the Corporation immediately before such
transaction owns directly or indirectly immediately following such transaction,
more than 50% of the combined voting power of the outstanding voting securities
of the person resulting from such transaction or the transferee person.
(b) The Corporation shall mail the Redemption Notice, postage
prepaid, to each bolder of record of 9-7/8% Preferred Stock to be redeemed, at
his or its post office address last shown on the books of the Corporation,
notifying such holder of the date of the Optional Redemption, which shall be at
least 30 days but not more than 45 days alter such notice (the "Redemption
Date"), the Redemption Price and the date on which such holder's conversion
rights (pursuant to Section 6 hereof) as to such shares terminate and calling
upon such holder to surrender to the Corporation, in the manner and at the place
designated, his or its certificate or certificates representing the shares to be
redeemed. On or prior to the Redemption Date, each holder of 9-7/8% Preferred
Stock to be Seemed shall surrender its certificate or certificates representing
such shares to the Corporation, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be
canceled. From and after the Redemption Date, unless there shall have been a
default in payment of the Redemption Price, all rights of the holders of the
9-7/8% Preferred Stock designated for redemption in the Redemption Notice as
holders of 9-7/8% Preferred Stock (except the right to receive the Redemption
Price without interest upon
19
surrender of their certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on the books of the
Corporation or be deemed to be outstanding for any purpose whatsoever.
(c) If the Corporation is unable on the Redemption Date to
redeem all of the shares of 9-7/8% Preferred Stock then to be redeemed because
such redemption would violate the applicable laws of the State of Delaware, then
the Corporation shall be permitted to redeem only as many shares of 9-7/8%
Preferred Stock as it may legally redeem, ratably from the holders thereof in
proportion to the number of shares held by them.
(d) Except as provided in Section 10(a) hereof, the Corporation
shall have no right to redeem the shares of 9-7/8% Preferred Stock, Any shares
of 9-7/8% Preferred Stock so redeemed shall be permanently retired, shall no
longer be deemed outstanding and shall not under any circumstances be reissued.
Nothing herein contained shall prevent or restrict the purchase by the
Corporation, from time to time either at public or private sale, of the whole or
any part of the 9-7/8% Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of applicable law.
11. ACTIONS NOT Requiring CONSENT. No consent of the holders of
the 9-7/8% Preferred Stock shall be required for (a) the creation of any
indebtedness of any kind of the Corporation, (b) subject to Section S, the
creation, or increase or decrease in the amount, of any class or series of stock
of the Corporation not ranking prior upon liquidation or as to the payment of
dividends to the 9-7/8% Preferred Stock or (c) any increase or decrease in the
amount of authorized shares of Common Stock or blank check Preferred Stock or
any increase, decrease or change in the par value thereof or in any other terms
thereof.
12. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by
law, shares of this series of Preferred Stock shall not have any relative
rights, powers or preferences or other special rights other than those
specifically set forth in this Certificate of Designation or otherwise in the
Certificate of Incorporation.
20
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Designation of 9-7/8% Cumulative Convertible Preferred Stock to be duly
executed by its President this 27th day of March, 2002.
THE WILLIAMS COMPANIES, INC.
By: /s/ Steven J. Malcolm
------------------------------------
Name: Steven J. Malcolm
Title: President
21
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE PAGE 1
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-EIGHTH DAY OF MARCH, A.D. 2001, AT 9 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SEAL] /s/ Harriet Smith Windsor, Secretary Of State
----------------------------------------------
Harriet Smith Windsor, Secretary Of State
AUTHENTICATION: 1049179
DATE: 03-28-01
EXHIBIT 3(I)(a)
Execution Version
CERTIFICATE OF DESIGNATION
OF THE
MARCH 2001 MANDATORILY CONVERTIBLE SINGLE RESET PREFERRED STOCK
($1.00 Par Value)
OF
THE WILLIAMS COMPANIES, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted on March 22, 2001, by a duly appointed Special
Committee of the Board of Directors of The Williams Companies, Inc., a Delaware
corporation (hereinafter called the "Corporation"), acting pursuant to the
provisions of Section 141(c) of the General Corporation Law of the State of
Delaware and pursuant to authority granted to such Committee in a resolution of
such Board of Directors duly adopted on March 14, 2001:
RESOLVED that pursuant to authority expressly granted to and
vested in the Board of Directors by provisions of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"), the
issuance of a series of Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), which initially shall consist of 14,000 of the 30,000,000
shares of Preferred Stock which the Corporation now has authority to issue, be,
and the same hereby is, authorized, and the powers, designations, preferences
and relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the shares (in addition
to the powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation which may be applicable
to the Preferred Stock) are fixed as follows:
1. Designation. The designation of such series of the Preferred Stock authorized
by this resolution shall be the March 2001 Mandatorily Convertible Single Reset
Preferred Stock (the "March 2001 Preferred Stock"). The total number of shares
of the March 2001 Preferred Stock initially shall be 14,000. Such number of
shares may be increased by resolution of the Board of Directors to the extent
necessary to fulfill the Corporation's
1
obligations to issue additional shares of March 2001 Preferred Stock pursuant to
the Remarketing Agreement (as defined in Section 2 hereof). Such number of
shares may be decreased by resolution of the Board of Directors, provided that
no decrease shall reduce the number of shares of March 2001 Preferred Stock to a
number less than that of the number of shares then outstanding.
2. Definitions. The following terms shall have the following meanings when used
herein:
"Anti-Dilution Adjustment Ratio" shall have the meaning
specified in Subsection 6(3) hereof.
"Average Trading Price" for a security for any given period
means an amount equal to (i) the sum of the Closing Price for such security on
each Trading Day in such period divided by (ii) the total number of Trading Days
in such period.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any duly authorized committee thereof.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banking institutions in the State of New
York or the State of Oklahoma are authorized or obligated by law or executive
order to close.
"Closing Price" for a security means the closing price for
such security on the Trading Day in question (or if such day is not a Trading
Day then as of the Trading Day next preceding such day) as reported by Bloomberg
L.P., or if not so reported by Bloomberg L.P., as reported by another recognized
source selected by the Board of Directors.
"Common Stock" shall have the meaning specified in Subsection
6(9) hereof.
"Conversion Price" shall have the meaning specified in
Subsection 6(1) hereof.
"Distribution Adjustment Ratio" shall have the meaning
specified in Subsection 6(3) hereof.
"Dividend Payment Date" shall have the meaning specified in
Subsection 3(1) hereof.
"Failed Remarketing" shall have the meaning ascribed to such
term in Annex A of the Participation Agreement.
"Final Sale Date" shall have the meaning ascribed to such term
in the Remarketing Agreement.
2
"Indenture" shall mean the Indenture, dated as of March 28,
2001, among WCG Note Trust, WCG Note Corp., Inc. and United States Trust Company
of New York, as indenture trustee.
"Junior Stock" shall mean (and references to shares ranking
"junior to" the March 2001 Preferred Stock shall refer to), with respect to
Sections 3 and 7 hereof, the Common Stock and any other class or series of stock
of the Corporation which by its terms is not entitled to receive any dividends
unless all dividends required to have been paid or declared and set apart for
payment on the March 2001 Preferred Stock shall have been so paid or declared
and, with respect to Sections 4 and 7 hereof, the Common Stock and any other
class or series of stock of the Corporation which by its terms is not entitled
to receive any assets upon the liquidation, dissolution or winding up of the
affairs of the Corporation until holders of the March 2001 Preferred Stock shall
have received the entire amount to which such holders are entitled upon
liquidation, dissolution or winding up.
"Mandatory Conversion" shall have the meaning specified in
Subsection 6(1) hereof.
"Mandatory Conversion Date" shall have the meaning specified
in Subsection 6(1) hereof.
"Mandatory Conversion Rate" shall have the meaning specified
in Subsection 6(1) hereof.
"Maximum Reserved Shares" shall have the meaning specified in
Subsection 6(7) hereof.
"Optional Conversion" shall have the meaning specified in
Subsection 6(2) hereof.
"Optional Conversion Rate" shall have the meaning specified in
Subsection 6(2) hereof.
"Ordinary Cash Dividends" shall have the meaning specified in
Subsection 6(3) hereof.
"Parity Stock" shall mean (and references to shares ranking
"on a parity with" the March 2001 Preferred Stock shall refer to), with respect
to Sections 3 and 7 hereof, any class or series of stock of the Corporation
which by its terms is entitled to receive payment of dividends on a parity with
the March 2001 Preferred Stock and, with respect to Sections 4 and 7 hereof, any
class or series of stock of the Corporation the holders of which by its terms
are entitled to receive assets upon the liquidation, dissolution or winding up
of the affairs of the Corporation on a parity with the holders of March 2001
Preferred Stock.
3
"Participation Agreement" shall mean the Participation
Agreement, dated as of March 22, 2001, among the Corporation, Williams
Communications Group, Inc.,Williams Communications, LLC, WCG Note Trust, WCG
Note Corp., Inc., Williams Share Trust, United States Trust Company of New York
and Wilmington Trust Company.
"Permitted Senior Stock" shall mean, with respect to Section 7
hereof, any class or series of Senior Stock which is issued during any Trigger
Period and until such time as Williams Share Trust has sold (i) all of the March
2001 Preferred Stock issued by the Corporation to Williams Shares Trust on March
28, 2001, and (ii) any additional shares of March 2001 Preferred Stock or Common
Stock issued by the Corporation to Williams Share Trust pursuant to the
Remarketing Agreement; provided that the proceeds of the issuance and sale of
such Senior Stock are applied in accordance with the terms of the Indenture and
the Remarketing Agreement.
"Principal Market" shall have the meaning ascribed to such
term in Annex A of the Participation Agreement.
"Publicly Traded Security" shall have the meaning specified in
Subsection 6(4) hereof.
"Recapitalization Adjustment Ratio" shall have the meaning
specified in Subsection 6(3) hereof.
"Redemption Event" shall mean the occurrence of any of the
following: (i) any consolidation or merger of the Corporation with or into
another corporation or entity, unless in connection with such consolidation or
merger the outstanding shares of Common Stock immediately preceding the
consummation of such consolidation or merger are converted into, exchanged for
or otherwise represent a majority of the outstanding shares of common stock of
the surviving or resulting corporation or entity immediately succeeding the
consummation of such consolidation or merger or (ii) the Corporation sells or
conveys to another entity (other than a Subsidiary) all or substantially all of
the assets of the Corporation; provided, that the foregoing shall not include a
sale, exchange, distribution to stockholders or other disposition of Williams
Communications Group, Inc. capital stock owned by the Corporation.
"Redemption Price" shall have the meaning specified in Section
5 hereof.
"Remarketing Agent" shall have the meaning ascribed to such
term in the Remarketing Agreement.
"Remarketing Agreement" shall mean the Williams Preferred
Stock Remarketing, Registration Rights and Support Agreement, dated as of March
28, 2001, among the Corporation, Williams Share Trust, WCG Note Trust, United
States Trust Company of New York, as indenture trustee, and Credit Suisse First
Boston Corporation, as initial remarketing agent.
4
"Reserved Shares" shall have the meaning specified in
Subsection 6(7) hereof.
"Reset Common Yield" shall mean the quotient of (i) the
product of (x) four and (y) the amount of the ordinary quarterly cash dividend
on one share of Common Stock most recently declared prior to the Trigger Date
(as appropriately adjusted for the events referred to in Subsection 6(3)(a)),
unless subsequent to such declaration and prior to the Trigger Date, the
Corporation has publicly announced a change to, or elimination of, its ordinary
quarterly cash dividend, in which case clause (y) above shall be the amount of
such proposed ordinary quarterly cash dividend (or $0.00 if such dividend has
been or is to be eliminated), divided by (ii) the Reset Price (provided,
however, that if as of the Trigger Date there is more than one class of Common
Stock, then the Reset Common Yield shall be calculated with respect to each then
outstanding class of Common Stock, and the Reset Common Yield (as used herein)
shall be the amount calculated with respect to the class of Common Stock
resulting in the greatest Reset Common Yield).
"Reset Date" means the earlier to occur of (A) the
consummation of the remarketing of the Initial Shares (as such term is defined
in the Remarketing Agreement), which is expected to be on or about the third
Trading Day following the Successful Repricing Date, and (B) the date of a
Failed Remarketing.
"Reset Dividend Rate" shall mean an amount per annum per share
equal to the product of (i) the sum of (x) the Reset Common Yield (expressed as
a percentage), plus (y) 7% and (ii) $100,000.00 (rounded to the nearest cent).
"Reset Price" shall mean the higher of (i) the Closing Price
of a share of Common Stock on the Trigger Date or (ii) the quotient (rounded up
to the nearest cent) of the Share Trust Amount divided by the number, as of the
Trigger Date, of the authorized but unissued shares of Common Stock that have
not been reserved as of the Trigger Date by the Board of Directors for other
purposes, subject to adjustment as provided in Subsection 6(3)(a) hereof.
"Rights" means rights or warrants distributed by the
Corporation under a shareholder rights plan or agreement to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Corporation's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Rights Events"), (i) are deemed to be transferred with such
shares of Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock.
"Rights Events" shall have the meaning ascribed to such term
in the definition of Rights.
"Senior Stock" shall mean (and references to shares ranking
"senior to" or "prior to" the March 2001 Preferred Stock shall refer to), with
respect to Sections 3 and 7 hereof, any class or series of stock of the
Corporation by its terms ranking senior to the March 2001
5
Preferred Stock in respect of the right to receive dividends and, with respect
to Sections 4 and 7 hereof, any class or series of stock of the Corporation by
its terms ranking senior to the March 2001 Preferred Stock with respect to the
right of the holders thereof to receive assets upon the liquidation, dissolution
or winding up of the affairs of the Corporation.
"Share Trust Agreement" shall mean the Amended and Restated
Trust Agreement, dated as of March 28, 2001, among the Corporation, Williams
Share Trust and Wilmington Trust Company, as share trustee.
"Share Trust Amount" shall have the meaning ascribed to such
term in Annex A of the Participation Agreement.
"Subsidiary" means any corporation or other entity of which
the Corporation owns, directly or indirectly sufficient securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other individuals performing similar functions.
"Successful Repricing Date" shall have the meaning ascribed to
such term in the Remarketing Agreement.
"Threshold Appreciation Price" means the product of (i) the
Reset Price as of the time in question and (ii) 1.10.
"Trading Day" shall have the meaning ascribed to such term in
Annex A of the Participation Agreement.
"Transaction" shall have the meaning specified in Subsection
6(5) hereof.
"Trigger Date" shall mean the earlier to occur of (A) the
Successful Repricing Date and (B) the date of a Failed Remarketing.
"Trigger Event" shall have the meaning ascribed to such term
in Annex A of the Participation Agreement.
"Trigger Period" shall have the meaning ascribed to such term
in the Share Trust Agreement.
3. Dividends.
(1) The holders of the March 2001 Preferred Stock shall not be entitled to
receive any dividends (nor shall dividends commence to accrue) prior to, or with
respect to any period ending prior to, the Reset Date. The holders of the March
2001 Preferred Stock, in preference to the rights of holders of any Junior Stock
but subject to the rights of holders of any Senior Stock and Parity Stock, shall
be entitled to receive, when, as and if declared by the Board
6
of Directors out of the assets of the Corporation legally available therefor,
cumulative cash dividends from the Reset Date at the Reset Dividend Rate, and no
more, payable on the dates as set forth in this Section 3. Dividends shall
accrue on the March 2001 Preferred Stock from the Reset Date. Dividends shall be
payable quarterly in arrears on each January 1, April 1, July 1 and October 1
commencing on the first such date following the Reset Date and on the Mandatory
Conversion Date (each such date being hereinafter referred to as a "Dividend
Payment Date"); provided, that if any such Dividend Payment Date is not a
Business Day, then any payment with respect to such Dividend Payment Date shall
be payable on the next succeeding Business Day. Each such dividend shall be
payable to holders of record as they appear on the books of the Corporation or
any transfer agent for the March 2001 Preferred Stock on such record dates as
shall be fixed by the Board of Directors subject to applicable law (which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof). Dividends on the March 2001 Preferred Stock shall accrue on a daily
basis commencing on and including the Reset Date, and accrued dividends for each
dividend period or portion thereof shall cumulate, to the extent not paid, as of
the date on which such dividends were to have been paid. A dividend period shall
commence on a Dividend Payment Date or the Reset Date, as the case may be, and
continue to the day next preceding the next succeeding Dividend Payment Date.
Accumulated unpaid dividends shall not accrue interest. Dividends (or cash
amounts equal to accrued and unpaid dividends) payable on the March 2001
Preferred Stock for any period less than or more than a full quarterly period
shall be computed on the basis of a 360-day year of twelve 30-day months and the
actual number of days elapsed in any period less than one month. Dividends on
the March 2001 Preferred Stock shall accrue whether or not the Corporation has
earnings, whether or not there are assets legally available for the payment of
such dividends and whether or not such dividends are declared. Dividends in
arrears for any past dividend periods or portions thereof may be declared and
paid at any time without reference to any regular Dividend Payment Date to
holders of record on such date as shall be fixed by the Board of Directors
subject to applicable law. As provided in Subsection 6(1), dividends on the
March 2001 Preferred Stock shall cease to accrue on the day immediately
preceding the Mandatory Conversion Date and, in the case of an Optional
Conversion of the March 2001 Preferred Stock, dividends shall accrue only to the
extent provided in Subsection 6(2).
(2) As long as any March 2001 Preferred Stock is outstanding, dividends or other
distributions for any dividend period may not be paid on any outstanding shares
of Parity Stock unless any such dividends are declared and paid pro rata so that
the amounts of any dividends declared and paid per share on outstanding March
2001 Preferred Stock and each share of such Parity Stock will in all cases bear
to each other the same ratio that accrued and unpaid dividends (including any
accumulation with respect to unpaid dividends for prior dividend periods, if
such dividends are cumulative) per share of outstanding March 2001 Preferred
Stock and such outstanding shares of Parity Stock bear to each other.
In addition, as long as any March 2001 Preferred Stock is
outstanding, no shares of any Parity Stock may be purchased, redeemed or
otherwise acquired by the Corporation or any Subsidiary (except with any Parity
Stock, Junior Stock and cash in lieu of fractional shares of such Parity Stock
or Junior Stock in connection therewith and except for the acquisition of
7
shares of any Parity Stock pursuant to contractual obligations binding against
the Corporation or any Subsidiary that were entered into prior to the date of
the first issuance of shares of March 2001 Preferred Stock or pursuant to
contractual obligations that are entered into at a time subsequent thereto when
such acquisitions of shares could be made pursuant to this Subsection 3(2))
unless: (i) full dividends, if any, on all outstanding shares of Senior Stock,
Parity Stock and March 2001 Preferred Stock have been paid, or declared and set
aside for payment, for all dividend periods terminating on or prior to the date
of such purchase, redemption or other acquisition, to the extent dividends on
such Senior Stock, Parity Stock or March 2001 Preferred Stock are cumulative;
(ii) the Corporation has paid or set aside all amounts, if any, then or
theretofore required to be paid or set aside for all purchase, retirement and
sinking funds, if any, for any outstanding shares of Senior Stock or Parity
Stock; and (iii) the Corporation is not in default on any of its obligations to
redeem any outstanding shares of Senior Stock or Parity Stock.
(3) Any dividend payment made on the March 2001 Preferred Stock shall first be
credited against the earliest accrued but unpaid dividend due with respect to
the March 2001 Preferred Stock.
(4) All dividends paid with respect to the March 2001 Preferred Stock shall be
paid pro rata to the holders entitled thereto.
4. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, then,
before any distribution or payments shall be made to the holders of any Junior
Stock, but subject to the rights of any Senior Stock and Parity Stock, the
holders of the March 2001 Preferred Stock shall be entitled to be paid in full
in cash the amount of $100,000.00 per share, together with, to the extent of
assets legally available therefor, accrued dividends to the date of such
distribution or payment, whether or not earned or declared. If such payment
shall have been made in full to the holders of the March 2001 Preferred Stock
and all preferential payments or distributions to be made with respect to Senior
Stock and Parity Stock have been made in full, the remaining assets and funds of
the Corporation shall be distributed among the holders of the Junior Stock,
according to their respective rights and preferences and in each case according
to their respective shares. If, upon any liquidation, dissolution or winding up
of the affairs of the Corporation, the amounts so payable are not paid in full
to the holders of all shares of the March 2001 Preferred Stock and Parity Stock,
the holders of the March 2001 Preferred Stock, together with holders of Parity
Stock, shall share ratably in any distribution of assets in proportion to the
full amounts to which they would otherwise be respectively entitled. Neither the
consolidation or merger of the Corporation with another entity, nor the sale,
lease, transfer, exchange or conveyance of all or a part of its assets, shall be
deemed a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of the foregoing provisions of this Section 4.
5. Redemption. The Corporation shall have the right to redeem all, but not less
than all, of the outstanding March 2001 Preferred Stock (x) at any time
following a Redemption Event and prior to a Trigger Date and (y) at any time
prior to a Trigger Event, in
8
each case in cash at the redemption price of $100,000.00 per share (the
"Redemption Price"). Except as set forth in the preceding sentence and to the
extent contemplated by Section 6(1)(y), the Corporation shall not have the right
to redeem any or all of the March 2001 Preferred Stock at any other time. Notice
of a redemption of the March 2001 Preferred Stock shall be provided in writing
to the holders of record of such shares at their respective addresses as they
shall appear on the books of the Corporation at least two Business Days and not
more than 60 calendar days prior to the date fixed for redemption. Each such
notice of redemption shall specify the date fixed for redemption and the
Redemption Price. On or after the date fixed for redemption as stated in such
notice, each holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation and shall thereupon be
entitled to receive payment of the Redemption Price. If, on the date fixed for
redemption, funds necessary for the redemption shall be available therefor and
shall have been irrevocably deposited or set aside, then, notwithstanding that
the certificates evidencing any shares so called for redemption shall not have
been surrendered, the shares shall no longer be deemed outstanding, and all
rights whatsoever with respect to the shares so called for redemption (except
the right of the holders to receive the Redemption Price without interest upon
surrender of their certificates therefor) shall terminate.
6. Conversion.
(1) Unless previously converted at the option of the holder in accordance with
the provisions hereof, on the third anniversary of the Reset Date, or if such
date is not a Business Day, the next succeeding day that is a Business Day (the
"Mandatory Conversion Date"), each outstanding share of March 2001 Preferred
Stock shall, without additional notice to holders thereof, convert automatically
(the "Mandatory Conversion") into (x) a number of fully paid and non-assessable
shares of Common Stock at the Mandatory Conversion Rate (as defined herein) in
effect on the Mandatory Conversion Date; and (y) the right to receive an amount
in cash equal to all accrued and unpaid dividends on such share of March 2001
Preferred Stock (other than previously declared dividends payable to a holder of
record as of a prior date) to and including the day immediately prior to the
Mandatory Conversion Date, whether or not earned or declared, out of assets
legally available therefor (and if sufficient assets are not then legally
available therefor, the Corporation shall pay such amount, if any, pro rata
(based on the amounts so owing) to the holders of the March 2001 Preferred Stock
and any Parity Stock then entitled to similar payment as is then legally
available therefor and shall pay any deficiency thereafter as soon as assets are
legally available therefor). The "Mandatory Conversion Rate" is equal to the
following number of shares of Common Stock per share of March 2001 Preferred
Stock: (a) if the Conversion Price is greater than or equal to the Threshold
Appreciation Price, the quotient of (i) $100,000.00 divided by (ii) the
Threshold Appreciation Price, (b) if the Conversion Price is less than the
Threshold Appreciation Price but is greater than the Reset Price, the quotient
of $100,000.00 divided by the Conversion Price and (c) if the Conversion Price
is less than or equal to the Reset Price, the quotient of $100,000.00 divided by
the Reset Price, subject to adjustment as provided in this Section 6.
"Conversion Price" shall mean the Average Trading Price per share of Common
Stock for the 20 consecutive Trading Days immediately prior to, but not
including, the Mandatory Conversion Date; provided, however, that if an event
occurs during
9
such 20 consecutive Trading Days that would require an adjustment to the
Mandatory Conversion Rate pursuant to Subsections 6(3) or 6(5), the Board of
Directors may make such adjustments to the Average Trading Price for shares of
Common Stock for such 20 Trading Day period as it reasonably deems appropriate
to effectuate the intent of the adjustments in Subsections 6(3) and 6(5), in
which case any such determination by the Board of Directors shall be set forth
in a resolution of the Board of Directors and shall be conclusive absent
manifest error.
Dividends on the March 2001 Preferred Stock shall cease to
accrue on the day immediately preceding, and the March 2001 Preferred Stock
shall cease to be outstanding on, the Mandatory Conversion Date. The Corporation
shall make arrangements as it deems appropriate for the issuance of certificates
representing Common Stock and for the payment of cash in respect of such accrued
and unpaid dividends, if any, or cash in lieu of fractional shares, if any, in
exchange for and contingent upon surrender of certificates representing the
March 2001 Preferred Stock, and the Corporation may defer the payment of
dividends on such Common Stock and the voting thereof until, and make such
payment and voting contingent upon, the surrender of such certificates
representing the March 2001 Preferred Stock, provided that the Corporation shall
give the holders of the March 2001 Preferred Stock such notice of any such
actions as the Corporation deems appropriate and upon such surrender such
holders shall be entitled to receive such dividends declared and paid on such
Common Stock subsequent to the Mandatory Conversion Date. Amounts payable in
cash in respect of the March 2001 Preferred Stock or in respect of such Common
Stock shall not bear interest.
(2) Shares of March 2001 Preferred Stock shall be convertible, at the option of
the holders thereof ("Optional Conversion") at any time on or after the Reset
Date and before the Mandatory Conversion Date, into Common Stock at a rate equal
to the number of shares of Common Stock per share of March 2001 Preferred Stock
(the "Optional Conversion Rate") equal to the quotient of (i) $100,000.00
divided by (ii) the Threshold Appreciation Price, subject to adjustment as set
forth in this Section 6. Prior to the Reset Date, the Optional Conversion Rate
shall be 2,316.10 shares of Common Stock for each share of March 2001 Preferred
Stock, subject to adjustment as set forth in this Section 6. Optional Conversion
of shares of March 2001 Preferred Stock may be effected by delivering
certificates evidencing such shares of March 2001 Preferred Stock, together with
written notice of conversion and, if required by the Corporation, a proper
assignment of such certificates to the Corporation or in blank (and, if
applicable as provided in the following paragraph, cash payment of an amount
equal to the dividends attributable to the current dividend period payable on
such shares), to the office of the transfer agent for the shares of March 2001
Preferred Stock or to any other office or agency maintained by the Corporation
for that purpose and otherwise in accordance with Optional Conversion procedures
established by the Corporation. Each Optional Conversion shall be deemed to have
been effected immediately before the close of business on the date on which the
foregoing requirements shall have been satisfied. Such Optional Conversion shall
be at the Optional Conversion Rate in effect at such time and on such date.
10
Holders of shares of March 2001 Preferred Stock at the close
of business on a record date for any payment of declared dividends shall be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date or other date fixed for payment of dividends
notwithstanding the Optional Conversion of such shares following such record
date and on or prior to such Dividend Payment Date or other date fixed for
payment of dividends. However, shares of March 2001 Preferred Stock surrendered
for Optional Conversion after the close of business on a record date for any
payment of declared dividends and before the opening of business on the next
succeeding Dividend Payment Date or other date fixed for payment of dividends
must be accompanied by payment in cash of an amount equal to the dividends
attributable to the current dividend period payable on such shares on such next
succeeding Dividend Payment Date or other date fixed for payment of dividends.
Except as provided in this Subsection 6(2), upon any Optional Conversion, the
Corporation shall make no payment of or allowance for unpaid dividends, whether
or not in arrears, on such converted shares of March 2001 Preferred Stock as to
which Optional Conversion has been effected or for previously declared dividends
or distributions on the shares of Common Stock issued upon such Optional
Conversion.
(3) The Optional Conversion Rate shall be adjusted from time to time and the
Mandatory Conversion Rate shall be adjusted from time to time after the Reset
Date in respect of events occurring after the Reset Date, as follows:
(a) In case the Corporation shall (i) pay a dividend on its Common Stock in
other Common Stock, (ii) subdivide or split its outstanding Common Stock into a
greater number of shares, (iii) combine its outstanding Common Stock into a
smaller number of shares or (iv) issue by reclassification of its Common Stock
any other Common Stock (including in connection with a merger in which the
Corporation is a surviving corporation), then, in any such event, (1) the
Mandatory Conversion Rate in effect immediately prior to such event shall be
adjusted such that the Reset Price shall be adjusted by multiplying it by a
fraction (which fraction and all other fractions referred to herein may be
improper fractions), the numerator of which is one and the denominator of which
is the number of shares of Common Stock that a holder of one share of Common
Stock prior to any event described above would hold after such event (assuming
the issuance of fractional shares) (the "Recapitalization Adjustment Ratio"),
and (2) the Optional Conversion Rate in effect immediately prior to such event
shall be adjusted by multiplying it by a fraction, the numerator of which is one
and the denominator of which is the Recapitalization Adjustment Ratio. Such
adjustment shall become effective immediately after the effective date of any
such event (or the earlier record date in the case of any such dividend)
whenever any of the events listed above shall occur.
(b) In case the Corporation shall issue rights or warrants to all holders of its
Common Stock entitling them (for a period, except in the case of Rights,
expiring within 45 days after the record date for determination of the
shareholders entitled to receive such rights or warrants) to subscribe for or
purchase Common Stock at a price per share of Common Stock less than the current
market price per share of Common Stock (as defined in Subsection 6(4)) on such
record date, then in each such case the Mandatory Conversion Rate on the date of
such
11
issuance shall be adjusted such that the Reset Price shall be adjusted by
multiplying it by a fraction the numerator of which shall be the sum of (x) the
number of shares of Common Stock outstanding immediately prior to such issuance,
plus (y) the number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at the Average Trading Price for a share
of Common Stock on the record date for such issuance, and the denominator of
which shall be the sum of (x) the number of shares of Common Stock outstanding
immediately prior to such issuance, plus (y) the number of additional shares of
Common Stock offered for subscription or purchase pursuant to such rights or
warrants (the "Anti-Dilution Adjustment Ratio"); and the Optional Conversion
Rate in effect on the record date described below shall be adjusted by
multiplying it by a fraction, the numerator of which is one and the denominator
of which is the Anti-Dilution Adjustment Ratio. For purposes of this Subsection
6(3)(b), the issuance of rights or warrants to subscribe for or purchase
securities exercisable for, convertible into, or exchangeable for, shares of
Common Stock shall be deemed to be the issuance of rights or warrants to
purchase the shares of Common Stock into which such securities are exercisable,
convertible or exchangeable at an aggregate offering price equal to the
aggregate offering price of such securities plus the minimum aggregate amount
(if any) payable upon the exercise, conversion or exchange of such securities.
Such adjustment shall become effective at the opening of business on the
Business Day next following the record date for such rights or warrants. To the
extent that any shares of Common Stock, or securities exercisable for,
convertible into, or exchangeable for, shares of Common Stock so offered for
subscription or purchase are not so subscribed or purchased by the expiration of
such rights or warrants, the Mandatory Conversion Rate and the Optional
Conversion Rate shall each be readjusted to the rates or amounts, respectively,
which would then be in effect, had the adjustment made upon the issuance of such
rights or warrants been made upon the basis of the issuance of rights or
warrants in respect of only the number of shares of Common Stock and securities
exercisable for, convertible into, or exchangeable for, shares of Common Stock
actually issued upon exercise of such rights or warrants.
(c) If the Corporation shall pay a dividend or make a distribution to all
holders of its Common Stock consisting of evidences of its indebtedness or other
assets (including capital shares of the Corporation other than Common Stock and
capital shares of any Subsidiary but excluding any Ordinary Cash Dividends (as
defined below)), or shall issue to all holders of its Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than those
referred to in Subsection 6(3)(b)), then in each such case the Mandatory
Conversion Rate in effect immediately prior to such event shall be adjusted such
that the Reset Price shall be adjusted by multiplying it by a fraction
(determined pursuant to Subsection 6(4)), the numerator of which shall be the
Average Trading Price for a share of Common Stock on such record date, minus the
fair market value as of such record date of the portion of evidences of
indebtedness or other assets so distributed, or of such subscription rights or
warrants, applicable to one share of Common Stock (provided that such numerator
shall never be less than $1.00) and the denominator of which shall be the
Average Trading Price for a share of Common Stock on such record date (the
"Distribution Adjustment Ratio"); and the Optional Conversion Rate in effect
immediately prior to such event shall be adjusted by multiplying it by a
fraction, the
12
numerator of which is one and the denominator of which is the Distribution
Adjustment Ratio. Such adjustment shall become effective on the opening of
business on the Business Day next following the record date for such dividend or
distribution or the determination of shareholders entitled to receive such
dividend or distribution or rights or warrants, as the case may be. "Ordinary
Cash Dividends" shall mean (i) any regular cash dividend on the Common Stock
that does not exceed the per share amount of the immediately preceding regular
cash dividend on the Common Stock (as adjusted to appropriately reflect any of
the events referred to in Subsection 6(3)(a)) by 10% and (ii) any other cash
dividend or distribution which, when combined on a per share basis with the per
share amount of all other cash dividends and distributions paid on the Common
Stock during the 365-day period ending on the date of declaration of such
dividend or distribution (as adjusted to appropriately reflect any of the events
referred to in Subsection 6(3)(a) and excluding cash dividends or distributions
that resulted in an adjustment to the Mandatory Conversion Rate or the Optional
Conversion Rate), does not exceed 10% of the current market price per share of
Common Stock (determined pursuant to Subsection 6(4)) on the Trading Day
immediately preceding the date of declaration of such dividend or distribution.
(4) For the purpose of any computation under Subsection 6(3), the "current
market price per share of Common Stock" on any date in question shall mean the
Average Trading Price for shares of Common Stock for the 15 consecutive Trading
Days ending on the earlier of the day in question and, if applicable, the day
before the "ex" date with respect to the issuance or distribution requiring such
computation; provided, however, that if another event occurs that would require
an adjustment pursuant to Subsection 6(3), the Board of Directors may make such
adjustments to the Average Trading Price for shares of Common Stock during such
15 Trading Day period as it reasonably deems appropriate to effectuate the
intent of the adjustments in Subsection 6(3), in which case any such
determination by the Board of Directors shall be set forth in a resolution of
the Board of Directors and shall be conclusive absent manifest error. For
purposes of this Subsection, the term "ex" date, when used with respect to any
issuance or distribution, means the first date on which the shares of Common
Stock trade regular way on the relevant exchange or in the relevant market from
which the Average Trading Price was obtained without the right to receive such
issuance or distribution. For the purpose of any computation under Subsection
6(3), the "fair market value" of any assets, evidences of indebtedness,
subscription rights or warrants on any date in question: (i) in the event any
such item is a publicly traded security ("Publicly Traded Security"), shall be
determined for such date pursuant to the provisions of this Subsection 6(4) for
determination of the "current market price per share of Common Stock", except
that (x) each reference therein to "Common Stock" shall be deemed to mean such
Publicly Traded Security, and (y) if such Publicly Traded Security does not
trade on a "when issued" basis for the 15 consecutive Trading Days preceding the
"ex" date, such determination shall be made for the period of 15 consecutive
Trading Days commencing on the "ex" date; and (ii) in the event any such item is
not a Publicly Traded Security, shall be reasonably determined in good faith for
such date by the Board of Directors, as evidenced by a resolution of the Board
of Directors, whose determination shall be conclusive absent manifest error. For
the purpose of any computation under Subsection 6(3) specifically with respect
to a distribution to all holders of the Corporation's Common Stock of any
capital shares of Williams Communications Group, Inc., the "Average Trading
Price for a share of Common Stock on such
13
record date" in both the numerator and the denominator shall be determined for
such date pursuant to the provisions of this Subsection 6(4) for determination
of the "current market price per share of Common Stock", except that if there
are less than 15 consecutive Trading Days between the public announcement of
such distribution and such record date, the "current market price per share of
Common Stock" shall be determined based on such number of Trading Days between
such public announcement and such record date.
(5) In any case of any reclassification of Common Stock (other than a
reclassification of the Common Stock referred to in Subsection 6(3)(a)); any
consolidation or merger of the Corporation with or into another company or other
entity (other than a merger resulting in a reclassification of the Common Stock
referred to in Subsection 6(3)(a)); or any sale or conveyance to another entity
(other than a Subsidiary) of all or substantially all of the assets of the
Corporation (any such event referred to herein as a "Transaction"), then the
Optional Conversion Rate and Mandatory Conversion Rate shall be adjusted so that
after consummation of such a Transaction the holders of shares of March 2001
Preferred Stock will receive, in lieu of the number of shares of Common Stock
which such holder would have received upon conversion but for such Transaction,
the kind and amount of securities, cash and other property receivable upon
consummation of such Transaction by a holder of such number of shares of Common
Stock, subject to further adjustment as provided in this Section 6, including
without limitation, an adjustment to the Optional Conversion Rate on the Reset
Date if such Transaction occurs prior to the Reset Date. On and after the
consummation of any such Transaction, the Conversion Price, which shall be used
for purposes of the determination as to which of clauses (a), (b) or (c) of the
definition of Mandatory Conversion Rate applies, shall mean the sum of (i) the
product of the Average Trading Price of any Publicly Traded Security received
upon consummation of such Transaction for the 20 consecutive Trading Days
immediately prior to, but not including, the Mandatory Conversion Date
multiplied by the fraction of such security received in such Transaction per
share of Common Stock (assuming the issuance of fractional shares) plus (ii) the
fair market value of the cash and other property received upon consummation of
such Transaction per share of Common Stock as of the day preceding the Mandatory
Conversion Date as determined in accordance with Subsection 6(4). In determining
the kind and amount of securities, cash or other property receivable upon
consummation of such Transaction by a holder of shares of Common Stock, it shall
be assumed that such holder is not a person or entity with which the Corporation
consolidated or into which the Corporation was merged or which merged into the
Corporation, as the case may be, or an affiliate of any such person or entity
and that such holder of Common Stock failed to exercise rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon consummation of such transaction (provided that, if the kind or amount of
securities, cash or other property receivable upon consummation of such
Transaction is not the same for each non-electing share, then the kind and
amount of securities, cash or other property receivable upon consummation of
such transaction for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). In
the event of such a reclassification, consolidation, merger, sale or conveyance,
effective provisions shall be made in the certificate of incorporation or
similar document of the resulting or surviving company or entity so that the
conversion rate applicable to any securities or property into which the shares
of the March 2001 Preferred Stock
14
shall then be convertible shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Subsections 6(3)(a), 6(3)(b) and
6(3)(c) inclusive, and the other provisions of this Section 6 with respect to
the Common Stock shall apply on terms as nearly equivalent as practicable to any
such other securities and property deliverable upon conversion of shares of
March 2001 Preferred Stock.
(6) Whenever any adjustments are required in the shares of Common Stock into
which each share of March 2001 Preferred Stock is convertible, the Corporation
shall forthwith (a) compute the adjusted Mandatory Conversion Rate and Optional
Conversion Rate in accordance herewith and prepare a certificate signed by an
officer of the Corporation setting forth the adjusted Mandatory Conversion Rate
and the Optional Conversion Rate, describing in reasonable detail the method of
calculation used and the facts requiring such adjustment and upon which such
adjustment is based, which certificate shall be conclusive, final and binding
evidence of the correctness of the adjustment and file with the transfer agent
of the March 2001 Preferred Stock such certificate and (b) cause a copy of such
certificate to be mailed to each holder of record of the March 2001 Preferred
Stock as of or promptly after the effective date of such adjustment and, with
respect to adjustments applicable after the Reset Date, make a prompt public
announcement of such adjustment.
(7) The Corporation shall at all times reserve and keep available, free from
preemptive rights out of its authorized but unissued shares of Common Stock for
the purpose of issuance upon conversion of the March 2001 Preferred Stock a
number of shares of Common Stock (the "Reserved Shares") equal to the product of
(i) the number of shares of Common Stock then deliverable at such time upon an
Optional Conversion of all shares of the March 2001 Preferred Stock multiplied
by (ii) 1.10. Notwithstanding the foregoing, the Corporation shall not be
obligated to reserve, at any time, a number of shares of Common Stock (the
"Maximum Reserve Shares") greater than the difference between the number of
authorized shares of Common Stock, less the number of shares of Common Stock
then issued and outstanding; provided, however, that, so long as the March 2001
Preferred Stock is issued and outstanding, in the event that the number of
Reserved Shares exceeds the number of Maximum Reserve Shares, the Corporation
shall use its best efforts to take all actions required to increase the number
of authorized shares of Common Stock so that there shall be sufficient
authorized shares of Common Stock to reserve the entire amount of Reserved
Shares, including, without limitation, calling a special meeting of the
Corporation's stockholders for the purpose of seeking approval of an amendment
to the Corporation's Certificate of Incorporation increasing the number of
authorized shares of Common Stock.
(8) The Corporation will pay any and all documentary stamp or similar issue or
transfer taxes that may be payable in respect of the issuance or delivery of
shares of Common Stock on conversion of shares of the March 2001 Preferred Stock
pursuant to this Section 6. The Corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involving the issue
and delivery of shares of Common Stock in the name other than that in which the
shares of March 2001 Preferred Stock so converted were registered and no such
15
issue and delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax, or has established
to the satisfaction of the Corporation, that such tax has been paid.
(9) For the purpose of this Section 6, the term "Common Stock" shall include any
shares of the Corporation of any class or series which has no preference or
priority in the payment of dividends or in the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and which is not subject to redemption by the Corporation. However,
Common Stock issuable upon conversion of the March 2001 Preferred Stock shall
include only shares of the class designated as Common Stock as of the original
date of issuance of the March 2001 Preferred Stock, or shares of the Corporation
of any classes or series resulting from any reclassification or
reclassifications thereof (including reclassifications referred to in clause
(iv) of Subsection 6(3)(a)) and which have no preference or priority in the
payment of dividends or in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and which
are not subject to redemption by the Corporation, provided that, if at any time,
there shall be more than one such resulting class or series, the shares of such
class and series then so issuable shall be in the same proportion, if possible,
or if not possible, in substantially the same proportion which the total number
of shares of such class and series resulting from all such reclassifications
bears to the total number of shares of all classes and series resulting from all
such reclassifications.
(10) No fractional shares or scrip representing fractional shares shall be
issued upon the conversion of the March 2001 Preferred Stock. If any such
conversion would otherwise require the issuance of a fractional share, an amount
equal to such fraction multiplied by the current market price per share of
Common Stock (determined as provided in Subsection 6(4)) of the Common Stock on
the date of conversion shall be paid to the holder in cash by the Corporation.
If on such date there is no current market price per share of Common Stock, the
fair market value of a share of Common Stock (determined as provided in
Subsection 6(4)) on such date, shall be used. If more than one share of March
2001 Preferred Stock shall be surrendered for conversion at one time or for the
same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
March 2001 Preferred Stock so surrendered.
(11) All shares of the March 2001 Preferred Stock purchased or otherwise
acquired by the Corporation (including shares surrendered for conversion) shall
be canceled and thereupon restored to the status of authorized but unissued
shares of Preferred Stock undesignated as to series.
(12) No adjustment in the Mandatory Conversion Rate and the Optional Conversion
Rate shall be required unless such adjustment (plus any adjustments not
previously made by reason of this Subsection 6(12)) would require an increase or
decrease of at least 1% in the number of shares of Common Stock into which each
share of the March 2001 Preferred Stock is then convertible; provided, however,
that any adjustments which by reason of this Subsection 6(12) are not required
to be made shall be carried forward and taken into account in
16
any subsequent adjustment and provided further that any adjustment shall be
required and made in accordance with the provisions of Subsection 6(3) not later
than such time as may be required in order to preserve the tax free nature of a
distribution to the holders of shares of Common Stock. If any action or
transaction would require adjustment to the Mandatory Conversion Rate or the
Optional Conversion Rate pursuant to this Section 6, only one adjustment shall
be made and such adjustment shall be the amount of the adjustment that has the
highest absolute value. All calculations under this Section 6 shall be made to
the nearest one-hundredth of a share of Common Stock.
(13) The Board of Directors may make such upward adjustments in the Mandatory
Conversion Rate and the Optional Conversion Rate, in addition to those required
by this Section 6, as shall be determined by the Board of Directors, as
evidenced by a resolution of the Board of Directors, to be advisable in order
that any stock dividends, subdivisions of shares, distribution of rights to
purchase stock or securities, or distribution of securities convertible into or
exchangeable for stock (or any transaction that could be treated as any of the
foregoing transactions pursuant to Section 305 of the Internal Revenue Code of
1986, as amended) made by the Corporation to its stockholders after the Reset
Date shall not be taxable. The determination of the Board of Directors as to
whether an adjustment should be made pursuant to the provisions of this
Subsection 6(13), and if so, as to what adjustment should be made and when,
shall be conclusive, final and binding on the Corporation and all stockholders
of the Corporation.
(14) In any case in which this Section 6 shall require that an adjustment as a
result of any event become effective at the opening of business on the Business
Day next following a record date and the date fixed for conversion occurs after
such record date, but before the occurrence of such event, the Corporation may,
in its sole discretion, elect to defer (A) issuing to the holder of any
converted March 2001 Preferred Stock the additional shares of Common Stock
issuable upon such conversion over the shares of Common Stock issuable before
giving effect to such adjustments and (B) paying to such holder any amount in
cash in lieu of a fractional share of Common Stock pursuant to Subsection 6(10),
in each case until after the occurrence of such event.
(15) Notwithstanding the foregoing provisions of this Section 6, no adjustment
of the Optional Conversion Rate or the Mandatory Conversion Rate shall be
required to be made upon the issuance of any shares of Common Stock pursuant to
any present or future plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of optional
amounts in shares of Common Stock under any such plan or upon the issuance of
shares of Common Stock (or securities, rights, warrants, options or similar
rights, which are convertible or exercisable for shares of Common Stock)
pursuant to any compensatory plan of the Corporation or its Subsidiaries.
(16) Notwithstanding any other provision of this Section 6, the issuance or
distribution of Rights shall not be deemed to constitute an issuance or a
distribution or dividend
17
of rights, warrants or other securities to which any of the adjustment
provisions described above applies until the occurrence of the earliest Rights
Event.
(17) For purposes of this Section 6, shares of Common Stock owned by, or held
for the account of, the Corporation, a Subsidiary or another entity of which a
majority of the common stock or common equity interests are owned, directly or
indirectly, by the Corporation shall be deemed to be not outstanding.
7. Voting Rights. The holders of March 2001 Preferred Stock shall have no right
to vote except as otherwise specifically provided herein, in the Certificate of
Incorporation or as required by statute.
(1) So long as any shares of March 2001 Preferred Stock are outstanding, in
addition to any other vote or consent of shareholders required in the
Certificate of Incorporation by law, the affirmative vote of the holders of at
least a majority of the shares of March 2001 Preferred Stock entitled to vote,
given in person or by proxy, either pursuant to a consent in writing without a
meeting (if permitted by law and the Certificate of Incorporation) or by vote at
any meeting called for the purpose, shall be necessary for effecting or
validating:
(a) any amendment, alteration or repeal of any of the provisions of the
Certificate of Incorporation which alters or changes the powers, rights or
preferences of the shares of March 2001 Preferred Stock so as to affect them
adversely or reduces the minimum time required for any notice to which holders
of March 2001 Preferred Stock then outstanding may be entitled. Without limiting
the foregoing, the amendment of the provisions of the Certificate of
Incorporation so as to authorize or create, or to increase the authorized amount
of any Permitted Senior Stock, Junior Stock or Parity Stock (including
additional shares of March 2001 Preferred Stock) shall not require approval by
the holders of the March 2001 Preferred Stock and such holders shall not be
entitled to vote thereon to the fullest extent permitted by law;
(b) the authorization, creation or issuance of, or the increase in the
authorized amount of, any stock of any class or series, or any security
convertible into stock of any class or series, ranking senior to the March 2001
Preferred Stock (other than the authorization, creation or issuance of, or the
increase in the authorized amount of, any Permitted Senior Stock, or any
security convertible into Permitted Senior Stock); or
(c) the merger or consolidation of the Corporation with or into any other
corporation or other entity, unless in connection with such merger or
consolidation each holder of shares of March 2001 Preferred Stock immediately
preceding such merger or consolidation shall either (I) with respect to a merger
or consolidation consummated prior to, on or after the Reset Date, receive or
continue to hold in the surviving or resulting corporation or other entity the
same number of shares, with substantially the same rights and preferences
(except as contemplated by Subsection 6(5) and except for those rights and
preferences that could be affected without the vote of the holders of the March
2001 Preferred Stock, such as the authorization and issuance of Parity Stock or
Junior Stock), as correspond to the shares of March
18
2001 Preferred Stock held immediately prior to such merger or consolidation or
(II) with respect to a merger or consolidation consummated after the Reset Date,
receive the kind and amount of securities, cash and other property that would
have been receivable upon consummation of such merger or consolidation by such
holder (subject to the assumptions set forth in Subsection 6(5)) if the
Mandatory Conversion Date had occurred immediately prior to the consummation of
such merger or consolidation and the Mandatory Conversion Rate was determined as
of such time (and if clause (I) or (II) is applicable, then such merger or
consolidation shall not be subject to approval by the holders of the March 2001
Preferred Stock and such holders shall not be entitled to vote thereon).
(d) In the event that (i) full cumulative dividends on the March 2001 Preferred
Stock are not paid and are in arrears for six consecutive quarterly dividend
periods following the Reset Date or (ii) the holders of shares of any other
series of Parity Stock of the Corporation have the then present right to elect
one or more directors for any reason, the number of directors of the Corporation
constituting the entire Board of Directors shall be increased by two persons and
the holders of shares of the March 2001 Preferred Stock, voting together as a
single class with the holders of shares of all other series of Parity Stock of
the Corporation having the then present right to elect one or more directors
(herein referred to as "Class Voting Stock"), shall have the right to elect such
additional two directors to fill such positions at any regular meeting of
shareholders or special meeting held in place thereof, or at a special meeting
called as provided in Subsection 7(2)(c). Whenever (i) all arrearages of
dividends on the March 2001 Preferred Stock then outstanding shall have been
paid or declared and irrevocably set apart for payment and (ii) the holders of
shares of any other series of Parity Stock of the Corporation no longer have the
present right to elect one or more directors for any reason, then the right of
the holders of shares of the March 2001 Preferred Stock to elect such additional
two directors shall cease (but subject always to the same provisions for the
vesting of such voting rights in the case of any similar future arrearages in
dividends or in the case of the vesting of voting rights in the holders of
shares of any other series of Parity Stock of the Corporation), and the terms of
office of all persons previously elected as directors by the holders of shares
of the March 2001 Preferred Stock and such other Class Voting Stock shall
forthwith terminate and the number of the Board of Directors shall be reduced
accordingly.
(e) At any time after the voting power referred to in Subsection 7(2)(a) shall
have been so vested in the holders of shares of the March 2001 Preferred Stock,
the Secretary of the Corporation may, and upon the written request of any holder
or the holders of at least 10% of the number of shares of March 2001 Preferred
Stock then outstanding (addressed to the Secretary at the principal executive
office of the Corporation) shall, call a special meeting of the holders of
shares of the March 2001 Preferred Stock and all other Class Voting Stock for
the election of the directors to be elected by them pursuant to Subsection
7(2)(a); provided that the Secretary shall not be required to call such special
meeting if the request for such meeting is received less than 45 calendar days
before the date fixed for the next ensuing annual meeting of shareholders. Such
call shall be made by notice similar to that provided in the bylaws of the
Corporation for a special meeting of the shareholders or as required by law.
Subject to the foregoing provisions, if any such special meeting required to be
called as above provided shall
19
not be called by the Secretary within 20 calendar days after receipt of an
appropriate request, then any holder of shares of March 2001 Preferred Stock may
call such meeting, upon the notice above provided, and for that purpose shall
have access to the stock books and records of the Corporation. Except as
otherwise provided by law, at any such meeting, the holders of a majority of the
number of shares of March 2001 Preferred Stock and such other Class Voting Stock
then outstanding shall constitute a quorum for the purpose of electing directors
as contemplated in Subsection 7(2)(a). If at any such meeting or adjournment
thereof, a quorum of such holders of March 2001 Preferred Stock and, if
applicable, such other Class Voting Stock shall not be present, no election of
directors by the March 2001 Preferred Stock and, if applicable, such other Class
Voting Stock shall take place, and any such meeting may be adjourned from time
to time for periods not exceeding 30 calendar days until a quorum of the March
2001 Preferred Stock and, if applicable, the Class Voting Stock is present at
such adjourned meeting. Unless otherwise provided by law or the Certificate of
Incorporation, directors to be elected by the holders of shares of March 2001
Preferred Stock and, if applicable, such other Class Voting Stock shall be
elected by a plurality of the votes cast by such holders at a meeting at which a
quorum is present. Notwithstanding the foregoing, the absence of a quorum of the
March 2001 Preferred Stock and, if applicable, such other Class Voting Stock
shall not prevent the voting of, including the election of, directors by the
holders of Common Stock and other classes of capital stock at such meeting.
(f) Any director who shall have been elected by holders of shares of March 2001
Preferred Stock voting together, if applicable, as a single class with the
holders of one or more other series of Class Voting Stock, or any director so
elected as provided below, may be removed at any time during a class voting
period, either for or without cause, by, and only by, the affirmative vote of
the holders of a majority of the number of shares of March 2001 Preferred Stock
then outstanding, voting together, if applicable, as a single class with the
holders of all other series of Class Voting Stock then outstanding, given at a
special meeting of such shareholders called for such purpose, and any vacancy
thereby created may be filled during such class voting period only by the holder
of shares of March 2001 Preferred Stock and, if applicable the other series, if
any, of Class Voting Stock. In case any vacancy (other than as provided in the
preceding sentence) shall occur among the directors elected by the holders of
shares of the March 2001 Preferred Stock (and, if applicable, such other Class
Voting Stock), a successor shall be elected by the Board of Directors to serve
until the next annual meeting of the shareholders or special meeting held in
place thereof upon the nomination of the then remaining director elected by the
holders of the March 2001 Preferred Stock (and, if applicable, such other Class
Voting Stock) or the successor of such remaining director.
(2) Holders of March 2001 Preferred Stock shall not be entitled to receive
notice of any meeting of shareholders at which they are not entitled to vote or
consent except as otherwise provided by applicable law.
8. Other Rights. Shares of March 2001 Preferred Stock shall not have any
relative, participating, optional or other special rights or powers other than
as set forth herein, in the Certificate of Incorporation or as required by law.
20
9. Notices. Subsequent to the Reset Date, at any time while any shares of March
2001 Preferred Stock are outstanding, (i) the Corporation shall declare a
dividend (or any other distribution) on its Common Stock, excluding any cash
dividends, (ii) the Corporation shall authorize the issuance to all holders of
its Common Stock of rights or warrants to subscribe for or purchase shares of
Common Stock or of securities exercisable for, convertible into, or exchangeable
for, shares of Common Stock or (iii) the Corporation shall authorize any
reclassification of its Common Stock (other than a subdivision or combination
thereof) or any consolidation or merger to which the Corporation is a party and
for which approval of any stockholders of the Corporation is required, or the
sale or transfer to another corporation of the property of the Corporation as an
entirety or substantially as an entirety, then the Corporation shall cause to be
filed at each office or agency maintained for the purpose of conversion of the
March 2001 Preferred Stock, and shall cause to be mailed to the holders of March
2001 Preferred Stock at their last addresses as they shall appear on the stock
register, at least 10 days before the date hereinafter specified (or the earlier
of the dates hereinafter specified, in the event that more than one date is
specified), a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend or distribution of rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend or distribution of rights or warrants are
to be determined, or (B) the date on which any such reclassification,
consolidation, merger, sale or transfer is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
(including cash), if any, deliverable upon such reclassification, consolidation,
merger, sale or transfer. The failure to give or receive the notice required
hereby or any defect therein shall not affect the legality or validity of such
dividend or distribution of rights or warrants or other action.
IN WITNESS WHEREOF, The Williams Companies, Inc. has caused
this Certificate to be signed by Deborah S. Fleming, an Assistant Treasurer,
this 28th day of March, 2001.
THE WILLIAMS COMPANIES, INC.
By: /s/ Deborah S. Fleming
--------------------------------------
Name: Deborah S. Fleming
Title: Assistant Treasurer
21
EXHIBIT 3(I)(a)
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2000, AT 2 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 0883450
001655107 DATE: 12-28-00
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:00 PM 12/28/2000
001655107 -- 2116534
CERTIFICATE OF DESIGNATION
OF THE
DECEMBER 2000 CUMULATIVE CONVERTIBLE PREFERRED STOCK
($1.00 Par Value)
OF
THE WILLIAMS COMPANIES, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted on December 28, 2000, by a duly appointed Special
Committee of the Board of Directors of The Williams Companies, Inc., a Delaware
Corporation (hereinafter called the "Corporation"), acting pursuant to the
provisions of Section 141(c) of the General Corporation Law of the State of
Delaware and pursuant to authority granted to such Committee in a resolution of
such Board of Directors (the "Board") duly adopted on November 16, 2000
(capitalized terms used herein but not otherwise defined shall have the meanings
set forth in Exhibit A to the Amended and Restated Company Agreement of Snow
Goose Associates, L.L.C., dated as of December 28, 2000, among Arctic Fox
Assets, L.L.C., and Prairie Wolf Investors, L.L.C., the "Joint Venture Company
Agreement"):
RESOLVED that pursuant to authority expressly granted to and
vested in the Board by provisions of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"),
the issuance of a series of Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), which shall consist of up to 400,000 of the
30,000,000 shares of Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is, authorized, and the
powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or
restrictions thereof, of the shares (in addition to the powers,
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof, set forth in the Certificate of Incorporation
which may be applicable to the Preferred Stock) are fixed as follows:
1. Designation. The designation of such series of the
Preferred Stock authorized by this resolution shall be the
December 2000 Cumulative Convertible Preferred Stock (the
"December 2000 Preferred Stock"). The total number of shares
of the December 2000 Preferred Stock shall be 400,000.
2. Preferred Dividends. Holders of shares of December
2000 Preferred Stock will be entitled to receive, when, as and
if declared by the Board out of assets of the Corporation
legally available for payment, an annual cash dividend,
payable with respect to each Fiscal Quarter in arrears on the
fifth Business Day of each of January, April, July and
October, commencing on April 6, 2001 (each a "dividend payment
date" and each period in respect to which such dividend
payment date relates, a "Dividend Period"), equal to the yield
for the most recently issued U.S. Treasury Bill with a
maturity at issue of three months (as quoted at the close of
business on Bloomberg Page PX2 (or such other page as may
replace that page on that service) two Business Days before
the first day of such Dividend Period) plus three percent (3%)
on the Liquidation Preference of each share of December 2000
Preferred Stock; provided that, upon a Liquidating Event (such
date, the "Rate Reset Date"), the dividend rate (or the
formula therefor) on the December 2000 Preferred Stock shall
be reset so as to enable such holders to sell the December
2000 Preferred Stock to a third party at the Liquidation
Preference (as defined herein) plus accrued and unpaid
dividends. The rate or formula shall be reset by the Board
based on the opinion of an investment banking firm of
recognized national standing selected by the holders of
December 2000 Preferred Stock subject to the approval of the
Board, not to be unreasonably withheld. Accumulated but unpaid
dividends will not bear interest.
Dividends will accrue on the December 2000 Preferred
Stock whether or not declared and will be cumulative from the
date of initial issuance of shares of December 2000 Preferred
Stock, but holders of December 2000 Preferred Stock shall not
be entitled to any dividends in excess of the cumulative
dividends provided herein. Dividends will be payable to
holders of record as they appear on the stock books of the
Corporation on the record date established by the Corporation
for each dividend declared, which record date shall not be
more than 60 days nor less than 10 days preceding the payment
dates thereof, as shall be fixed by the Board. When dividends
are not paid in full upon the December 2000 Preferred Stock
and any other Parity Preferred Stock (as defined in Section 10
below), all dividends declared upon shares of Parity Preferred
Stock will be declared pro rata so that in all cases the
amount of dividends declared per share on the December 2000
Preferred Stock and such other Parity Preferred Stock shall
bear to each other the same ratio that accumulated and unpaid
dividends per share on the shares of December 2000 Preferred
Stock and such other Parity Preferred Stock bear to each
other. Except as set forth in the preceding sentence, unless
full cumulative dividends on the December 2000 Preferred Stock
have been paid (or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set
apart for such payment) for all dividend periods terminating
on or prior to the date of determination, no dividends (other
than dividends paid in shares of (or options, warrants or
rights to subscribe for or purchase shares of) Junior Stock
(as defined herein)) may be paid or declared, nor may a sum
sufficient for the payment thereof be set apart for such
payment made upon the Common Stock or on any other stock of
the Corporation ranking junior to or on a
2
parity with the December 2000 Preferred Stock as to dividends,
nor may any Common Stock or any other stock of the Corporation
ranking junior to the December 2000 Preferred Stock as to the
payment of dividends (collectively, "Junior Dividend Stock") be
redeemed, purchased or otherwise acquired by the Corporation
for any consideration other than in exchange for Junior Stock
and cash in lieu of fractional shares, if any, upon such an
exchange (or any payment made to or available for a sinking
fund for the redemption of any shares of such stock) by the
Corporation (except by conversion into or exchange for Junior
Stock). Dividends shall be calculated on the basis of a 360-day
year of 12 30-day months.
3. Liquidation Preference. The shares of December 2000
Preferred Stock shall rank prior to shares of Common Stock
(such junior stock is referred to herein collectively as
"Junior Liquidation Stock", and collectively with the Junior
Dividend Stock, the "Junior Stock"), so that in the event of
any liquidation, dissolution or winding up of the affairs of
the Corporation, whether voluntary or involuntary, the holders
of the December 2000 Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus
or earnings, before any distribution is made to holders of
shares of Junior Liquidation Stock, an amount equal to
$1,000.00 per share (the "Liquidation Preference" of a share of
December 2000 Preferred Stock) plus an amount equal to all
dividends (whether or not earned or declared) accumulated and
unpaid on the shares of December 2000 Preferred Stock to the
date of final distribution. After payment of the full amount of
the Liquidation Preference and such dividends, the holders of
shares of December 2000 Preferred Stock will not be entitled to
any further participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or winding
up of the affairs of the Corporation, the assets of the
Corporation, or proceeds thereof, available for distribution
among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the amount payable on all such
Parity Preferred Stock upon such liquidation, dissolution or
winding up, then such assets, or the proceeds thereof, shall be
distributed among such holders of Parity Preferred Stock
equally and ratably in accordance with the respective amounts
which would be payable on such shares if all amounts payable
thereon were payable in full. For the purposes hereof, neither
a consolidation nor merger of the Corporation with or into any
other corporation, nor a merger of any other corporation with
or into the Corporation, nor a sale, exchange or transfer of
all or any part of the Corporation's assets for cash, shares of
stock, securities or other consideration shall be considered a
liquidation, dissolution or winding up of the affairs of the
Corporation.
4. Voting Rights. (a) The holders of shares of
December 2000 Preferred Stock shall have the voting rights set
forth in the Certificate of Incorporation, as otherwise
permitted under the laws of the State of Delaware, or as set
forth in this Section 4. The holders of shares of December
2000 Preferred Stock shall have no voting rights permitting
them to vote as a class except as
3
required by law and as set forth in clauses (d), (e) and (f)
below and the second paragraph of Section 8.
(b) On any matter for which the holders of December
2000 Preferred Stock shall have the right to vote as a
separate class, together with other shares of Preferred Stock
then entitled to vote on such matter with the December 2000
Preferred Stock, if any, each share of December 2000 Preferred
Stock shall be entitled to one vote.
(c) So long as shares of the December 2000 Preferred
Stock are outstanding, upon the proposal of a merger or
consolidation of the Corporation with or into any Person where
the Corporation would not be the surviving entity (a "Proposed
Merger") and with respect to which holders of December 2000
Preferred Stock do not have the right under applicable law or
the Certificate of Incorporation including this Certificate of
Designation, to vote as a separate class (together with any
other shares of Preferred Stock so entitled to vote thereon as
a class with the December 2000 Preferred Stock) on such merger
or consolidation, the holders of December 2000 Preferred Stock
shall have full voting power on all matters with respect to
such Proposed Merger upon which holders of Common Stock are
entitled to vote with respect to such Proposed Merger, voting
together as a class with the Common Stock and any other class
or series of stock entitled to vote together with the Common
Stock with respect to such Proposed Merger, with each holder
of December 2000 Preferred Stock having the same number of
votes per share of December 2000 Preferred Stock as represents
the number of shares of Common Stock into which one share of
December 2000 Preferred Stock would be convertible at the time
of the vote with respect to the Proposed Merger.
(d) Upon the accumulation of accrued and unpaid
dividends on the outstanding December 2000 Preferred Stock in
an amount equal to six full quarterly dividends (whether or
not consecutive) (a "Voting Rights Triggering Event"), the
number of members of the Board will be immediately and
automatically increased by two, and the holders of a majority
of the outstanding shares of December 2000 Preferred Stock,
will be entitled to elect two members to the Board. Voting
rights of the December 2000 Preferred Stock arising as a
result of a Voting Rights Triggering Event will continue until
such time as all dividends in arrears on the December 2000
Preferred Stock are paid in full. If the right of the holders
of December 2000 Preferred Stock to elect directors pursuant
to this Section 4(d) become exercisable, the Board shall take
all actions as may be necessary or appropriate (including
increasing the size of the Board or, if the number of members
of the Board is at its maximum, seeking the resignation of
then current members) to permit the holders to exercise their
rights in full as contemplated pursuant to this Section 4(d).
In accordance with Section D of Article FIFTH of the
Certificate of Incorporation, any persons elected as directors
of the Corporation pursuant to this Section 4(d) shall not be
a member of any class of the Board and such persons or their
duly elected successors shall serve until the
4
first annual meeting after all arrears on the December 2000
Preferred Stock are paid in full or until their earlier
resignation or removal.
(e) So long as shares of the December 2000 Preferred
Stock are outstanding, the Corporation shall not, without the
affirmative vote or written consent of the holders of at least
a majority of the outstanding shares of December 2000
Preferred Stock, voting as a class, authorize, create or issue
to any Person (other than the holders of the December 2000
Preferred Stock) any Preferred Stock (the "Additional
Preferred Stock") or authorize, create or issue any obligation
or security convertible into shares of Preferred Stock,
provided that the Corporation may authorize, create and issue
any Preferred Stock to a Person other than the holders of the
December 2000 Preferred Stock without such consent if the
following conditions are satisfied: (a) prior to the
completion of the sale or other transfer of all or
substantially all of the direct or indirect equity interests
in, or all or substantially all of the assets of Williams
Communications Group, Inc. and its Subsidiaries, in each case
as in existence on the date hereof (the "WCG Spin-Off"),
following the issuance of the Additional Preferred Stock the
total Preferred Stock issued by the Corporation shall not
represent more than 37.5% of the total shareholders' equity of
the Corporation as of its most recently filed balance sheet
prepared in accordance with GAAP and (b) upon the completion
of the WCG Spin-Off, following the issuance of the Additional
Preferred Stock the total Preferred Stock issued by the
Corporation shall not represent more than 50% of the total
shareholders' equity of the Corporation as of its most
recently filed balance sheet prepared in accordance with GAAP.
(f) So long as shares of the December 2000 Preferred
Stock are outstanding, the Corporation shall not, without the
affirmative vote or written consent of the holders of at least
a majority (or, in the case of Section 4(f)(ii), (iii), (iv)
and (v), 95%) of the outstanding shares of December 2000
Preferred Stock, voting as a class, take any of the following
actions:
(i) Merge or consolidate with or into any
Person, or sell, lease or otherwise transfer all or
substantially all of its assets, or permit any of its
material Subsidiaries to merge or consolidate with or
into any Person, or sell, lease or otherwise transfer
all or substantially all of its assets (except any
merger or sale associated with the WCG Spin-Off), in
any case where such merger, sale, lease or transfer
would affect adversely the preferences, special
rights or powers of the December 2000 Preferred
Stock;
(ii) Authorize any reclassification of the
December 2000 Preferred Stock.
(iii) Alter or change the rights, powers or
preferences of the December 2000 Preferred Stock so
as to affect them adversely;
5
(iv) Authorize, create or issue any other
shares of December 2000 Preferred Stock;
(v) Authorize, create, increase the number
of shares of or issue (A) any class or series of
capital stock which expressly provides that such
class or series of capital stock ranks senior to the
December 2000 Preferred Stock as to dividends or
distributions upon the liquidation, winding up or
dissolution of the Corporation (such class or series
of capital stock being referred to hereafter as
"Senior Stock"); or (B) any obligation or security
convertible into, or any rights or options entitling
the holder thereof to purchase, shares of Senior
Stock;
(vi) Authorize, create, increase the number
of shares of or issue (A) any class or series of
capital stock (other than Common Stock) with voting
rights (other than as required by the laws of the
State of Delaware or the Certificate of Incorporation
or similar to any one or more of those set forth in
Sections 4(a), 4(b), 4(c), 4(d), 4(e), 4(f) and
Section 8 hereof or any provision thereof) (such
class or series of capital stock being referred to
hereafter as "Additional Voting Stock") or (B) any
obligation or security convertible into, or any
rights or options entitling the holder thereof to
purchase, shares of Additional Voting Stock; or
(vii) Amend Section I(5)(b) of Article
FOURTH or Section H of Article FIFTH of the
Certificate of Incorporation (other than any
amendment that does not limit or restrict the right
of holders of December 2000 Preferred Stock to act by
written consent to the extent permitted by Section
I(5)(b) of Article FOURTH and Section H of Article
FIFTH of the Certificate of Incorporation.
5. Optional Redemption. At any time prior to the Rate
Reset Date, the Corporation shall have the right, exercisable
at any time at the option of the Board of Directors on any
date fixed by the Board of Directors (or any authorized
committee of the Board of Directors), to redeem, out of funds
legally available therefor, shares of the December 2000
Preferred Stock, in whole or in part, upon not less than 10
nor more than 60 days' prior notice, at a redemption price in
cash equal to $1,000 per share of the December 2000 Preferred
Stock to be redeemed, plus an amount equal to dividends
accrued and accumulated but unpaid to the redemption date with
respect to the shares to be so redeemed.
If less than all of the outstanding shares of
December 2000 Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a
substantially equivalent method.
If a notice of redemption has been given pursuant to
this Section 5 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from
6
its other funds, in trust for the pro rata benefit of the
holders of the shares so called for redemption, then,
notwithstanding that any certificates for such shares have not
been surrendered for cancellation, on the redemption date
dividends shall cease to accrue on the shares of December 2000
Preferred Stock to be redeemed, and at the close of business
on the redemption date the holders of such shares shall cease
to be stockholders with respect to such shares and shall have
no interest in or claims against the Corporation by virtue
thereof and shall have no voting or other rights with respect
to such shares, except the right to receive the moneys payable
upon such redemption, without interest thereon, upon surrender
(and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer
be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of
two years from the redemption date shall revert to the general
funds of the Corporation, after which reversion the holders of
such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the
amounts payable upon such redemption. Any interest that may
accrue on funds so deposited shall be paid to the Corporation
from time to time.
6. Optional Conversion. (a) Subject to and upon
compliance with the provisions of this Certificate of
Designation, the holder of any December 2000 Preferred Stock
shall have the right, exercisable at its option, at any time
after the original issuance of the December 2000 Preferred
Stock hereunder, to convert such December 2000 Preferred
Stock into that number of fully paid and non-assessable shares
of Common Stock (as such shares shall then be constituted)
obtained by dividing $1,000 by the Conversion Price in effect
at such time, in the manner provided in Section 6(b). As used
herein, the term "Conversion Price" means on the date hereof,
the "Initial Conversion Price" as defined in Section 6(f), and
subsequently the Conversion Price as adjusted from time to
time in accordance with Section 7.
(b) In order to exercise the conversion privilege
with respect to any December 2000 Preferred Stock in
certificated form, the holder of any such December 2000
Preferred Stock to be converted shall surrender such December
2000 Preferred Stock, duly endorsed, to the Corporation and
shall give written notice of conversion and, if fewer than all
the shares of December 2000 Preferred Stock evidenced by the
certificate so surrendered are to be converted, the holder
shall specify the number of shares to be so converted.
(c) As promptly as practicable after satisfaction of
the requirements for conversion set forth above, the
Corporation shall issue and shall deliver, a certificate or
certificates for the number of full shares of Common Stock
issuable upon conversion as determined by the Corporation in
accordance with the provisions of this Section 6 and a check
or cash in respect of any fractional interest in respect of a
share of Common Stock arising upon such conversion, calculated
by the Corporation, as provided in this Section 6.
7
(d) Each conversion shall be deemed to have been
effected on the date on which the requirements set forth above
in this Section 6 have been satisfied, and the Person in whose
name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed
to have become on said date the holder of record of the shares
represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the
Corporation shall be closed shall constitute the Person in
whose name the certificates are to be issued as the record
holder thereof for all purposes on the next succeeding day on
which such stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date of
conversion.
(e) No fractional shares of Common Stock or scrip
representing fractional shares shall be issued upon conversion
of December 2000 Preferred Stock. If any fractional share of
stock would be issuable upon the conversion of any December
2000 Preferred Stock, the Corporation shall make an adjustment
and payment therefor in cash at the current market price
thereof to the holder of December 2000 Preferred Stock. The
current market price of a share of Common Stock shall be the
Closing Price on the last Business Day immediately preceding
the day on which the conversion shall have occurred.
(f) The "Initial Conversion Price" shall be $31.8125
per share.
7. Adjustment of Conversion Price. The Conversion
Price shall be adjusted from time to time by the Corporation
as follows:
(a) In case the Corporation shall hereafter
pay a dividend or make a distribution to all holders
of the outstanding Common Stock in shares of Common
Stock, the Conversion Price shall be reduced so that
the same shall equal the price determined by
multiplying the Conversion Price in effect at the
opening of business on the date following the date
fixed for the determination of stockholders entitled
to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number
of shares of the Common Stock outstanding at the
close of business on the date fixed for such
determination, and the denominator of which shall be
the sum of such number of shares and the total number
of shares constituting such dividend or other
distribution, such reduction to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For
the purpose of this paragraph (a), the number of
shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the
Corporation. The Corporation will not pay any
dividend or make any distribution on shares of Common
Stock held in the treasury of the Corporation. If any
dividend or distribution of the type described in
this Section 7(a) is declared but not so paid or
made, the Conversion Price shall again be adjusted to
the Conversion Price that would then be in effect if
such dividend or distribution had not been declared.
8
(b) In case the Corporation shall issue
rights or warrants to all holders of its outstanding
shares of Common Stock entitling them (for a period
expiring within 45 days after the date fixed for
determination of stockholders entitled to receive
such rights or warrants) to subscribe for or purchase
shares of Common Stock at a price per share less than
the Current Market Price on the date fixed for
determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall
be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in
effect immediately prior to the date fixed for
determination of stockholders entitled to receive
such rights or warrants by a fraction, the numerator
of which shall be the number of shares of Common
Stock outstanding at the close of business on the
date fixed for determination of stockholders entitled
to receive such rights or warrants plus the number of
shares that the aggregate offering price of the total
number of shares so offered for subscription or
purchase (pursuant to such rights or warrants) would
purchase at such Current Market Price, and the
denominator of which shall be the number of shares of
Common Stock outstanding on the date fixed for
determination of stockholders entitled to receive
such rights or warrants plus the total number of
additional shares of Common Stock offered for
subscription or purchase pursuant to such rights or
warrants. Such adjustment shall be successively made
whenever any such rights or warrants are issued, and
shall become effective immediately after the opening
of business on the day following the date fixed for
determination of stockholders entitled to receive
such rights or warrants. To the extent that shares of
Common Stock are not delivered after the expiration
of such rights or warrants, the Conversion Price
shall be readjusted to the Conversion Price that
would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of
Common Stock actually delivered. If such rights or
warrants are not so issued, the Conversion Price
shall again be adjusted to be the Conversion Price
that would then be in effect if such date fixed for
the determination of stockholders entitled to receive
such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle
the holders to subscribe for or purchase shares of
Common Stock at less than such Current Market Price,
and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken
into account any consideration received by the
Corporation for such rights or warrants and any
amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to
be determined by the Board.
(c) In case outstanding shares of Common
Stock shall be subdivided into a greater number of
shares of Common Stock, the Conversion Price in
effect at the opening of business on the day
following the day upon which such subdivision becomes
effective shall be
9
proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the
Conversion Price in effect at the opening of business
on the day following the day upon which such
combination becomes effective shall be
proportionately increased, such reduction or
increase, as the case may be, to become effective
immediately after the opening of business on the day
following the day upon which such subdivision or
combination becomes effective.
(d) In case the Corporation shall, by
dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of capital stock
of the Corporation (other than any dividends or
distributions to which Section 7(a) applies) or
evidence of its indebtedness or assets (excluding
cash) (including securities, but excluding any rights
or warrants referred to in Section 7(b), and
excluding any dividend or distribution (x) paid
exclusively in cash or (y) referred to in Section
7(a) (any of the foregoing hereinafter in this
Section 7(d) called the "Securities")), then, in each
such case (unless the Corporation elects to reserve
such Securities for distribution to the holders of
December 2000 Preferred Stock upon conversion so that
any holder converting will receive upon such
conversion, in addition to the shares of Common Stock
to which such holder is entitled, the amount and kind
of such Securities which such holder would have
received if such holder had converted its December
2000 Preferred Stock into Common Stock immediately
prior to the Record Date (as defined in Section
7(h)(4)) for such distribution of the Securities),
the Conversion Price shall be reduced so that the
same shall be equal to the price determined by
multiplying the Conversion Price in effect on the
Record Date with respect to such distribution by a
fraction, the numerator of which shall be the Current
Market Price per share of the Common Stock on such
Record Date less the fair market value (as determined
by the Board, whose determination shall be
conclusive, and described in a resolution of the
Board) on the Record Date of the portion of the
Securities so distributed applicable to one share of
Common Stock and the denominator of which shall be
the Current Market Price per share of the Common
Stock on such Record Date, such reduction to become
effective immediately prior to the opening of
business on the day following such Record Date;
provided, however, that in the event the then fair
market value (as so determined) of the portion of the
Securities so distributed applicable to one share of
Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Record Date,
in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of
December 2000 Preferred Stock shall have the right to
receive upon conversion the amount of Securities such
holder would have received had such holder converted
its December 2000 Preferred Stock into Common Stock
immediately prior to the Record Date. If such
dividend or
10
distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion
Price that would then be in effect if such dividend
or distribution had not been declared. If the Board
determines the fair market value of any distribution
for purposes of this Section 7(d) by reference to the
actual or when issued trading market for any
Securities, it must in doing so consider the prices
in such market over the same period used in computing
the Current Market Price of the Common Stock.
Rights or warrants distributed by the
Corporation to all holders of Common Stock entitling
the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either
initially or under certain circumstances), which
rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are
deemed to be transferred with such shares of Common
Stock; (ii) are not immediately exercisable; and
(iii) are also issued in respect of future issuances
of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 7 (and no
adjustment to the Conversion Price under this Section
7 will be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and
warrants shall be deemed to have been distributed and
an appropriate adjustment (if any is required) to the
Conversion Price shall be made under this Section
7(d). If any such right or warrant, including any
such existing rights or warrants distributed prior to
the date of this Certificate of Designation, are
subject to events, upon the occurrence of which such
rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or
other assets, then the date of the occurrence of any
and each such event shall be deemed to be the date of
distribution and Record Date with respect to new
rights or warrants with such rights (and a
termination or expiration of the existing rights or
warrants without exercise by any of the holders
thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or
warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with
respect thereto, that was counted for purposes of
calculating a distribution amount for which an
adjustment to the Conversion Price under this Section
7 was made, (1) in the case of any such rights or
warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof,
the Conversion Price shall be readjusted upon such
final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per
share redemption or repurchase price received by a
holder or holders of Common Stock with respect to
such rights or warrants (assuming such holder had
retained such rights or warrants), made to all
holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such
rights or warrants that shall have expired or been
terminated without exercise by any holders thereof,
the Conversion Price shall be readjusted as if such
rights and warrants had not been issued.
11
No adjustment of the Conversion Price shall
be made pursuant to this Section 7(d) in respect of
rights or warrants distributed or deemed distributed
on any Trigger Event to the extent that such rights
or warrants are actually distributed, or reserved by
the Corporation for distribution, to holders of
December 2000 Preferred Stock upon conversion by such
holders of December 2000 Preferred Stock to Common
Stock. For purposes of this Section 7(d) and Sections
7(a) and (b), any dividend or distribution to which
this Section 7(d) is applicable that also includes
shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock (or
both), shall be deemed instead to be (1) a dividend
or distribution of the evidences of indebtedness,
assets or shares of capital stock other than such
shares of Common Stock or rights or warrants (and any
Conversion Price reduction required by this Section
7(d) with respect to such dividend or distribution
shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common
Stock or such rights or warrants (and any further
Conversion Price reduction required by Sections 7(a)
and (b) with respect to such dividend or distribution
shall then be made), except (A) the Record Date of
such dividend or distribution shall be substituted as
"the date fixed for the determination of stockholders
entitled to receive such dividend or other
distribution", "the date fixed for the determination
of stockholders entitled to receive such rights or
warrants" and "the date fixed for such determination"
within the meaning of Sections 7(a) and (b), and (B)
any shares of Common Stock included in such dividend
or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such
determination" within the meaning of Section 7(a).
(e) In case the Corporation shall, by
dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the
annualized rate of such cash dividend together with
any other cash dividend paid or payable during such
quarter does not exceed the greater of (A) the
annualized cash dividend rate per share of Common
Stock in effect during the next preceding quarter to
the extent that such preceding quarterly dividend did
not require any adjustment of the Conversion Price
pursuant to this Section 7(e) (as adjusted to reflect
subdivisions, or combinations of the Common Stock),
and (B) 3.75% of the Current Market Price determined
immediately prior to the date of declaration of such
dividend, and (y) any dividend or distribution in
connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion
Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion
Price in effect immediately prior to the close of
business on
12
such record date by a fraction, the numerator of
which shall be the Current Market Price of the Common
Stock on the record date less the amount of cash so
distributed (and not excluded as provided above or as
set forth in the last two sentences of this Section
7(e)) applicable to one share of Common Stock, and
the denominator of which shall be such Current Market
Price of the Common Stock, such reduction to be
effective immediately prior to the opening of
business on the day following the record date;
provided, however, that if the portion of the cash so
distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price
of the Common Stock on the record date, in lieu of
the foregoing adjustment, adequate provision shall be
made so that each holder of December 2000 Preferred
Stock shall have the right to receive upon
conversion, out of funds legally available therefor,
the amount of cash such holder would have received
had such holder converted such December 2000
Preferred Stock on the record date. If such dividend
or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such
dividend or distribution had not been declared. If
any adjustment is required to be made as set forth in
this Section 7(e) as a result of a distribution that
is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend
permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in
this Section 7(e) above as a result of a
distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the
distribution.
(f) In case a tender or exchange offer made
by the Corporation or any Subsidiary for all or any
portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to
stockholders of consideration per share of Common
Stock having a fair market value (as determined by
the Board, whose determination shall be conclusive
and described in a resolution of the Board) that as
of the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or
exchange offer (as it may be amended) exceeds the
Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the
Expiration Time by a fraction, the numerator of which
shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the
Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time and
the denominator of which shall be the sum of (x) the
fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based
on
13
the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of
the Expiration Time (the shares deemed so accepted,
up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number
of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the
Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to
the opening of business on the Trading Day following
the Expiration Time. If the Corporation is obligated
to purchase shares pursuant to any such tender or
exchange offer, but the Corporation is permanently
prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such
tender or exchange offer had not been made.
(g) For purposes of this Section 7, the
following terms shall have the meaning indicated:
(1) "Closing Price" with respect to
any security on any day shall mean the
closing sale price, regular way, on such day
or, in case no such sale takes place on such
day, the average of the reported closing bid
and asked prices, regular way, in each case
as quoted on the New York Stock Exchange or,
if such security is not quoted or listed or
admitted to trading on such New York Stock
Exchange, on the principal national
securities exchange or quotation system on
which such security is quoted or listed or
admitted to trading or, if not quoted or
listed or admitted to trading on any
national securities exchange or quotation
system, the average of the closing bid and
asked prices of such security on the
over-the-counter market on the day in
question as reported by the National
Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or if
not so available, in such manner as
furnished by any New York Stock Exchange
member firm selected from time to time by
the Board for that purpose, or a price
determined in good faith by the Board.
(2) "Current Market Price" shall
mean the arithmetic average of the daily
Closing Prices per share of Common Stock for
the 10 consecutive Trading Days immediately
prior to the date in question.
(3) "Fair Market Value" shall mean
the amount which a willing buyer would pay a
willing seller in an arm's-length
transaction.
14
(4) "Record Date" shall mean, with
respect to any dividend, distribution or
other transaction or event in which the
holders of Common Stock have the right to
receive any cash, securities or other
property or in which the Common Stock (or
other applicable security) is exchanged for
or converted into any combination of cash,
securities or other property, the date fixed
for determination of stockholders entitled
to receive such cash, securities or other
property (whether such date is fixed by the
Board or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if
the applicable security is listed or
admitted for trading on the New York Stock
Exchange or another national securities
exchange, a day on which the New York Stock
Exchange or such other national securities
exchange is open for business or (y) if the
applicable security is not so listed,
admitted for trading or quoted, any day
other than a Saturday or Sunday or a day on
which banking institutions in the State of
New York are authorized or obligated by law
or executive order to close.
(h) The Corporation may (but is not
obligated to) make such reductions in the Conversion
Price, in addition to those required by Sections
7(a), (b), (c), (d), (e) or (f) as the Board
considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or
from any event treated as such for income tax
purposes.
To the extent permitted by applicable law,
the Corporation from time to time may (but is not
obligated to) reduce the Conversion Price by any
amount for any period of time if the period is at
least 20 days, the reduction is irrevocable during
the period and the Board shall have made a
determination that such reduction would be in the
best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, the
Corporation shall mail to holders of record of the
December 2000 Preferred Stock a notice of the
reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and
the period during which it will be in effect.
(i) No adjustment in the Conversion Price
shall be required unless such adjustment would
require an increase or decrease of at least one
percent (1%) in such price; provided, however, that
any adjustments that by reason of this Section 7(i)
are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
All calculations under this Section 7 shall be made
by the Corporation and
15
shall be made to the nearest cent or to the nearest
one-hundredth (1/100) of a share, as the case may be.
No adjustment need be made pursuant to any provision
of this Section 7 for rights to purchase Common Stock
pursuant to a Corporation plan for reinvestment of
dividends or interest. To the extent the December
2000 Preferred Stock becomes convertible into cash,
assets, property or securities (other than capital
stock of the Company), no adjustment need be made
thereafter as to the cash, assets, property or such
securities. Interest will not accrue on the cash into
which shares of December 2000 Preferred Stock may be
convertible.
(j) Whenever the Conversion Price is
adjusted as herein provided, the Corporation shall
promptly prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted
Conversion Price and the date on which each
adjustment becomes effective and shall promptly mail
such notice of such adjustment of the Conversion
Price to each holder of a share of December 2000
Preferred Stock. Failure to deliver such notice shall
not affect the legality or validity of any such
adjustment.
(k) In any case in which this Section 7
provides that an adjustment shall become effective
immediately after (1) a record date for an event, (2)
the date fixed for the determination of stockholders
entitled to receive a dividend or distribution
pursuant to Section 7(a), (3) a date fixed for the
determination of stockholders entitled to receive
rights or warrants pursuant to Section 7(b) or (4)
the Expiration Time for any tender or exchange offer
pursuant to Section 7(f), (each a "Determination
Date"), the Corporation may elect to defer until the
occurrence of the relevant Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any
share of December 2000 Preferred Stock converted
after such Determination Date and before the
occurrence of such Adjustment Event, the additional
shares of Common Stock or other securities or assets
issuable upon such conversion by reason of the
adjustment required by such Adjustment Event over and
above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y)
paying to such holder any amount in cash in lieu of
any fraction pursuant to Section 6(e). For purposes
of this Section 7(k), the term "Adjustment Event"
shall mean:
(1) in any case referred to in
clause (1) hereof, the occurrence of such
event,
(2) in any case referred to in
clause (2) hereof, the date any such
dividend or distribution is paid or made,
(3) in any case referred to in
clause (3) hereof, the date of expiration of
such rights or warrants, and
16
(4) in any case referred to in
clause (4) or clause (5) hereof, the date a
sale or exchange of Common Stock pursuant to
such tender or exchange offer is consummated
and becomes irrevocable.
(l) For purposes of this Section 7, the
number of shares of Common Stock at any time
outstanding shall not include shares held in the
treasury of the Corporation but shall include shares
issuable in respect of outstanding scrip
certificates, if any, issued by the Corporation in
lieu of fractions of shares of Common Stock. The
Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the
treasury of the Company.
8. Reclassifications, Consolidation, Merger or Sale. If any of
the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 7(c) applies), (ii) any consolidation,
merger or combination of the Corporation with another Person as a
result of which holders of Common Stock shall be entitled to receive
stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, or (iii) any sale
or conveyance of all or substantially all of the properties and assets
of the Corporation to any other Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in
exchange for such Common Stock, then the December 2000 Preferred Stock
shall be convertible into the kind and amount of shares of stock, other
securities or other property or assets (including cash) that the holder
of a share of December 2000 Preferred Stock would have received upon
such reclassification, change, consolidation, merger, combination, sale
or conveyance had such holder converted such share of December 2000
Preferred Stock into the number of shares of Common Stock issuable upon
such conversion (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available for such conversion)
immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance, assuming such holder of Common
Stock did not exercise his rights of election, if any, as to the kind
or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance (provided that,
if the kind or amount of stock, other securities or other property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for
the purposes of this Section 8 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale
or conveyance for each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the
non-electing shares).
The Corporation shall not enter into any transaction governed
by this Section 8 unless (I) if the Corporation is not the entity
surviving any such merger, consolidation or
17
combination, (A) such merger, consolidation or combination has been
approved by the affirmative vote or written consent of the holders of
95% of the outstanding shares of December 2000 Preferred Stock or (B)
the December 2000 Preferred Stock is converted into shares of preferred
stock or equivalent equity securities of the entity surviving or
resulting from such merger or consolidation having terms and conditions
substantially similar to the terms and conditions of the December 2000
Preferred Stock in effect immediately prior to such merger or
consolidation, but giving effect to the conversion adjustments
contemplated in this Section 8 or (II) if the Corporation survives such
consolidation, merger or sale, the entity into whose securities or
assets the December 2000 Preferred Stock becomes convertible pursuant
to this Section 8, if other than the Corporation, shall agree to honor
the conversion rights provided in this Section 8.
The above provisions of this Section 8 shall similarly apply
to successive reclassifications, changes, consolidations, mergers,
combinations, sales and conveyances.
If this Section 8 applies to any event or occurrence, Section
7 shall not apply.
9. Actions Not Requiring Consent. No consent of the holders of
the December 2000 Preferred Stock shall be required for (a) the
creation of any indebtedness of any kind of the Corporation, (b)
subject to Section 4(e), the creation, or increase or decrease in the
amount, of any class or series of stock of the Corporation not ranking
prior upon liquidation or as to the payment of dividends to the
December 2000 Preferred Stock, (c) any increase or decrease in the
amount of authorized shares of Common Stock or blank check Preferred
Stock or any increase, decrease or change in the par value thereof or
in any other terms thereof or (d) the issuance of Preferred Stock for
which consent is not required pursuant to Section 4(e).
10. Ranking. Subject to the second sentence of this Section
10, the December 2000 Preferred Stock shall rank senior, with respect
to dividends, as to all shares of Junior Dividend Stock and shall rank
senior, with respect to distributions upon the liquidation, winding up
or dissolution of the Corporation, as to all shares of Junior
Liquidation Stock. All series of preferred stock of the Corporation
with which the December 2000 Preferred Stock ranks on a parity, with
respect to dividends or distributions upon the liquidation, winding up
or dissolution of the Corporation shall constitute "Parity Preferred
Stock" and the December 2000 Preferred Stock shall rank, as to
dividends or distributions upon the liquidation, winding up or
dissolution of the Corporation, on a parity with such Parity Preferred
Stock. The term "Parity Preferred Stock" as used in (a) Section 2 shall
be deemed to refer to preferred stock of the Corporation that
constitutes Parity Preferred Stock in respect of the payment of
dividends and (b) Section 3 shall be deemed to refer to preferred stock
of the Corporation that constitutes Parity Preferred Stock in respect
of the right to distributions upon the liquidation, winding up or
dissolution of the Corporation.
IN WITNESS WHEREOF, The Williams Companies, Inc. has caused
this Certificate to be signed by William G. von Glahn, a Senior Vice President,
this 28th day of December, 2000.
18
THE WILLIAMS COMPANIES, INC.
By: /s/ WILLIAM G. VON GLAHN
----------------------------
Name: William G. von Glahn
Title: Senior Vice President
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
MERGER, WHICH MERGES:
"WILLIAMS HOLDINGS OF DELAWARE, INC.", A DELAWARE CORPORATION,
WITH AND INTO "THE WILLIAMS COMPANIES, INC." UNDER THE NAME OF "THE
WILLIAMS COMPANIES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS
OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE THIRTIETH DAY
OF JULY, A.D. 1999, AT 10:30 O'CLOCK A.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE
AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF JULY, A.D. 1999.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100M AUTHENTICATION: 9896079
991315590 DATE: 07-30-99
CERTIFICATE OF MERGER
OF
WILLIAMS HOLDINGS OF DELAWARE, INC.
INTO
THE WILLIAMS COMPANIES, INC.
The Williams Companies, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of Delaware with its
principal office at One Williams Center, Tulsa, Oklahoma 74172, does hereby
certify as follows:
FIRST: The name and state of incorporation of each of the constituent
entities to the merger are as follows:
Name State of Organization
---- ---------------------
Williams Holdings of Delaware, Inc. Delaware
The Williams Companies, Inc. Delaware
SECOND: An Agreement of Merger between the parties to the merger has
been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the requirements of Section 251 of
the General Corporation Law of Delaware.
THIRD: The name of the surviving corporation of the merger is The
Williams Companies, Inc.
FOURTH: The Certificate of Incorporation of The Williams Companies,
Inc., a Delaware corporation, which will survive the merger, shall be the
Certificate of Incorporation of the surviving corporation.
FIFTH: The executed Agreement of Merger is on file at the office of the
surviving corporation, the address of which is One Williams Center, Tulsa,
Oklahoma 74172.
SIXTH: A copy of the Agreement of Merger will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of
Williams Holdings of Delaware, Inc. or any stockholder of The Williams
Companies, Inc.
SEVENTH: The merger of the constituent entities shall become effective
on July 31, 1999.
IN WITNESS WHEREOF, this Certificate of Merger has been duly executed
as of the 29th day of July, 1999 and is being filed in accordance with Section
103 of the General Corporation Law of the State of Delaware.
THE WILLIAMS COMPANIES, INC.
By: /s/ SHAWNA L. GEHRES
-------------------------------
Name: Shawna L. Gehres
Title: Secretary
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-SIXTH DAY OF FEBRUARY, A.D. 1998, AT 12 O'CLOCK P.M.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 8943311
981075195 DATE: 02-26-98
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
* * * * * * * *
THE WILLIAMS COMPANIES, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of The Williams Companies, Inc., at
a meeting of the Board of Directors duly called and held on November 23, 1997,
adopted a resolution proposing and declaring advisable the following amendment
to the Restated Certificate of Incorporation, as amended, of said Company:
RESOLVED that the Board of Directors of the Company hereby
declares it advisable to amend Article FOURTH of the Company's Restated
Certificate of Incorporation, as amended, to increase the authorized Common
Stock, $1.00 par value, so that, as amended, the first paragraph of Article
FOURTH shall be, and read, as follows:
"FOURTH: The total number of shares of capital stock which the
Company shall have authority to issue is 990,000,000 shares, consisting
of 960,000,000 shares of Common Stock, par value $1.00 per share (the
"Common
Stock") and 30,000,000 shares of Preferred Stock, par value $1.00 per
share (the "Preferred Stock")
SECOND: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Section 242 of the General Corporation Law of
Delaware.
IN WITNESS WHEREOF, The Williams Companies, Inc. has caused this
Certificate to be signed by William G. von Glahn, its Senior Vice President and
General Counsel, and attested by David M. Higbee, its Secretary, this 26th day
of February, 1998.
THE WILLIAMS COMPANIES, INC.
By: /s/ WILLIAM G. VON GLAHN
--------------------------------------
William G. von Glahn
Senior Vice President and
General Counsel
ATTEST:
By: /s/ DAVID M. HIGBEE
---------------------
David M. Higbee
Secretary
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE SIXTH
DAY OF JANUARY, A.D. 1998, AT 2:30 O'CLOCK P.M.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 8852182
981005956 DATE: 01-07-98
THE WILLIAMS COMPANIES, INC.
CERTIFICATE OF INCREASE
OF AUTHORIZED NUMBER OF SHARES
OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE
STATE OF DELAWARE
The Williams Companies, Inc., a corporation organized and existing
under the General Corporation Law of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Restated Certificate of Incorporation of said
Corporation was filed in the office of the Secretary of State of Delaware on
April 27, 1987, and was filed for recording in the office of the Recorder of
Deeds of New Castle County, Delaware, on April 27, 1987, and the Certificate of
the Designations, Preferences and Rights of the Series A Junior Participating
Preferred Stock was included in said Restated Certificate of Incorporation.
SECOND: That Certificates of Increase of Authorized Number of Shares of
Series A Junior Participating Preferred Stock were filed in the office of the
Secretary of State of Delaware on February 7, 1989, and February 6, 1996,
respectively, and were filed for recording in the office of the Recorder of
Deeds of New Castle County, Delaware, on February 7, 1989, and February 6, 1996,
respectively.
THIRD: That the Board of Directors of said Corporation at a meeting
held on November 23, 1997, duly adopted a resolution authorizing and directing
an increase in the authorized number of shares of Series A Participating
Preferred Stock of the Corporation, from 1,200,000 shares to 1,600,000 shares.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by Gary R. Belitz, its Controller and Chief Accounting
Officer, and attested by David M. Higbee, its Secretary, this 30th day of
December, 1997.
THE WILLIAMS COMPANIES, INC.
CORPORATE SEAL
By: /s/ GARY R. BELITZ
----------------------------------
Name: Gary R. Belitz
Title: Controller and
Chief Accounting
Officer
ATTEST:
/s/ DAVID M. HIGBEE
- ------------------------------
NAME: David M. Higbee
TITLE: Secretary
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE FIRST
DAY OF OCTOBER, A.D. 1997, AT 4:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 8697688
971332869 DATE: 10-10-97
Certificate of Elimination
OF
$2.21 CUMULATIVE PREFERRED STOCK
$1.00 PAR VALUE
(PURSUANT TO SECTION 151(g)
OF THE GENERAL CORPORATION LAW OF DELAWARE)
The Williams Companies, Inc., a corporation organized and existing
under the General Corporation Law of Delaware,
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of said Company, as
subsequently amended, was filed in the office of the Secretary of State of
Delaware on April 27, 1987, and was filed for recording in the office of the
Recorder of Deeds for New Castle County, Delaware on April 27, 1987, and that
the Certificate of Designation for the $2.21 Cumulative Preferred Stock, $1.00
par value (the "Preferred Stock"), was filed in the office of the Secretary of
State of Delaware on August 31, 1992;
That the Preferred Stock was called for redemption by the Company under
the terms and provisions of said Certificate of Designation on August 1, 1997,
and that all outstanding shares of the Preferred Stock were, in fact, redeemed
as of September 1, 1997;
PAGE 2
That the Board of Directors of said Company at a meeting duly called
and convened on September 18, 1997, adopted a resolution to the effect that none
of the authorized shares of the Preferred Stock remain outstanding, and that no
additional stock of such series will be issued subject to the Certificate of
Designation filed with respect to such series of Preferred Stock; and
That when this Certificate is executed, acknowledged, filed and
recorded in accordance with Section 103 of the General Corporation Law of
Delaware and, when the certificate becomes effective, it shall have the effect
of eliminating from the Company's Restated Certificate of Incorporation all
matters set forth in the Certificate of Designation with respect to such series
of Preferred Stock.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by William G. von Glahn, a Senior Vice President, and
attested by David N. Higbee, its Secretary, this 30th day of September, 1997.
THE WILLIAMS COMPANIES, INC.
By: /s/ WILLIAM G. VON GLAHN
------------------------------
William G. von Glahn
Senior Vice President
ATTEST:
By: /s/ DAVID M. HIGBEE
----------------------
David N. Higbee
Secretary
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
SIXTEENTH DAY OF MAY, A.D. 1997, AT 2:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 8471092
971161920 DATE: 05-19-97
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
* * * * * * * *
THE WILLIAMS COMPANIES, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of The Williams Companies, Inc., at a
meeting of the Board of Directors duly called and held on January 26, 1997,
adopted a resolution proposing and declaring advisable the following amendment
to the Restated Certificate of Incorporation, as amended, of said Company;
RESOLVED that the Board of Directors of the Company hereby declares it
advisable to amend Article FOURTH of the Company's Restated Certificate of
Incorporation, as amended, to increase the authorized Common Stock, $1.00 par
value, so that, as amended, the first paragraph of Article FOURTH shall be,
and read, as follows:
"FOURTH: The total number of shares of capital stock which the
Company shall have authority to issue is 510,000,000 shares,
consisting of 480,000,000 shares of Common Stock, par value $1.00 per
share (the "Common
Stock") and 30,000,000 shares of Preferred Stock, par value $1.00 per
share (the "Preferred Stock")."
SECOND: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Section 242 of the General Corporation Law of
Delaware.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
Certificate to be signed by William G. von Glahn, its Senior Vice President and
General Counsel, and attested by David M. Higbee, its Secretary, this 15th day
of May, 1997.
THE WILLIAMS COMPANIES, INC.
By: /s/ WILLIAM G. VON GLAHN
------------------------------
William G. von Glahn
Senior Vice President and
General Counsel
ATTEST:
By: /s/ DAVID M. HIGBEE
------------------------------
David M. Higbee
Secretary
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE SIXTH
DAY OF FEBRUARY, A.D. 1996, AT 10 O'CLOCK A.M.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 7844820
960057403 DATE: 02-28-96
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 02/06/1996
960034476 - 2116534
THE WILLIAMS COMPANIES, INC.
CERTIFICATE OF INCREASE
OF AUTHORIZED NUMBER OF SHARES
OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE
STATE OF DELAWARE
The Williams Companies, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Restated Certificate of Incorporation of said Corporation
was filed in the office of the Secretary of State of Delaware on April 27, 1987,
and was filed for recording in the office of the Recorder of Deeds of New Castle
County, Delaware on April 27, 1987, and the Certificate of the Designations,
Preferences and Rights of the Series A Junior Participating Preferred Stock was
included in said Restated Certificate of Incorporation.
SECOND: That a Certificate of Increase of Authorized Number of Shares of
Series A Junior Participating Preferred Stock was filed in the office of the
Secretary of State of Delaware on February 7, 1989, and was filed for recording
in the office of the Recorder of Deeds of New Castle County, Delaware on
February 7, 1989.
THIRD: That the Board of Directors of said Corporation at a meeting held on
January 21, 1996, duly adopted a resolution authorizing and directing an
increase in the authorized number of shares of Series A Participating Preferred
Stock of the Corporation, from 400,000 shares to 1,200,000 shares.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by Gary R. Belitz, its Controller and Chief Accounting
Officer, and attested by David M. Higbee, its Secretary, this 5th day of
February, 1996.
THE WILLIAMS COMPANIES, INC.
CORPORATE SEAL By: /s/ GARY R. BELITZ
-------------------------------
Name: Gary R. Belitz
Title: Controller and
Chief Accounting Officer
ATTEST:
/s/ DAVID M. HIGBEE
- -------------------------------
Name: David M. Higbee
Title: Secretary
2
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-FIRST DAY OF APRIL, A.D. 1995, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SECRETARY'S OFFICE SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2116534 8100 AUTHENTICATION: 7481187
950088208 DATE: 04-21-95
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 04/21/1995
950088208 - 2116534
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS
OF THE
CUMULATIVE CONVERTIBLE
PREFERRED STOCK, $3.50 SERIES
($1 Par Value)
OF
THE WILLIAMS COMPANIES, INC.
----------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------
The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted on December 11, 1994, by the Board of Directors (the "Board") of The
Williams Companies, Inc., a Delaware corporation (hereinafter called the
"Corporation"), in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware:
RESOLVED that pursuant to authority expressly granted to and vested in
the Board by provisions of the Restated Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $1 per share (the "Preferred Stock"), which
shall consist of up to 2,500,000 of the 30,000,000 shares of Preferred
Stock which the Corporation now has authority to issue, be, and the same
hereby is, authorized, and the powers, designations, preferences and
relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of the shares of such series (in
addition to the powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, set forth in the Certificate of
Incorporation which may be applicable to the Preferred Stock) are fixed as
follows:
(i) The designation of such series of the Preferred Stock authorized
by this resolution shall be the Cumulative Convertible Preferred Stock, $3.50
Series (the "$3.50 Preferred Stock"). The total number of shares of the $3.50
Preferred Stock shall be 2,500,000.
(ii) Holders of shares of $3.50 Preferred Stock will be entitled to
receive, when and as declared by the Board out of assets of the Corporation
legally available for payment, an annual cash dividend of $3.50 per share,
payable in quarterly installments on February 1, May 1, August 1 and November 1,
commencing August 1, 1995 (each a "dividend payment date"). Dividends on the
$3.50 Preferred Stock will be cumulative from the date of initial issuance of
shares of $3.50 Preferred Stock. Dividends will be payable to holders of record
as they appear on the stock books of the Corporation on such record dates, not
more than 60 days nor less than 10 days preceding the payment dates thereof, as
shall be fixed by the Board. When dividends are not paid in full upon the $3.50
Preferred Stock and any other Parity Preferred Stock (as defined in paragraph
(ix)), all dividends declared upon shares of Parity Preferred Stock will be
declared pro rata so that in all cases the amount of dividends declared per
share on the $3.50 Preferred Stock and such other Parity Preferred Stock shall
bear to each other the same ratio that accumulated and unpaid dividends per
share on the shares of $3.50 Preferred Stock and such other Parity Preferred
Stock bear to each other. Except as set forth in the preceding sentence, unless
full cumulative dividends on the $3.50 Preferred Stock have been paid, no
dividends (other than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation
ranking junior to or on a parity with the $3.50 Preferred Stock as to dividends,
nor may any Common Stock or any other stock of the Corporation ranking junior to
or on a parity with the $3.50 Preferred Stock as to dividends be redeemed,
purchased or otherwise acquired for any consideration (or any payment made to or
available for a sinking fund for the redemption of any shares of such stock;
provided, however, that any moneys theretofore deposited in any sinking fund
with respect to any Preferred Stock of the Corporation in compliance with the
provisions of such sinking fund may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund regardless of whether at the time of such application full cumulative
dividends upon shares of the $3.50 Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set apart for
payment) by the Corporation (except by conversion into or exchange for stock of
the Corporation ranking junior to the $3.50 Preferred Stock as to dividends).
Dividends payable on the $3.50 Preferred Stock for any period less than the full
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
(iii) The shares of $3.50 Preferred Stock shall rank prior to
the shares of Common Stock and of any other class of stock of the Corporation
ranking junior to the $3.50 Preferred Stock upon liquidation, so that in the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the $3.50 Preferred Stock shall be
entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $50 per share (the "Liquidation
Preference" of a share of $3.50 Preferred Stock) plus an amount equal to all
dividends (whether or not earned or declared) accumulated and unpaid on the
shares of $3.50 Preferred Stock to the date of final distribution. After payment
of the full amount of the Liquidation Preference and such dividends, the holders
of shares of $3.50 Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation. It, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable
3
among the holders of shares of Parity Preferred Stock shall be insufficient to
pay in full the preferential amount aforesaid, then such assets, or the proceeds
thereof, shall be distributable among such holders ratably in accordance with
the respective amounts which would be payable on such shares if all amounts
payable thereon were payable in full. For the purposes hereof, neither a
consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding up of the
Corporation.
(iv) The shares of the $3.50 Preferred Stock will not be
redeemable prior to November 1, 1999. On and after November 1, 1999, the $3.50
Preferred Stock will be redeemable, in whole at any time or from time to time in
part at the option of the Corporation, upon not less than 30 nor more than 60
days' notice, at the following redemption prices (the "Redemption Prices") per
share if redeemed during the twelve-month period beginning November 1 of the
year indicated below; plus, in each case, all dividends accrued and unpaid on
the $3.50 Preferred Stock up to the date fixed for redemption:
<Table>
<Caption>
Redemption
Price
Year Per Share
---- ----------
1999 ............................................. $ 51.40
2000 ............................................. 51.05
2001 ............................................. 50.70
2002 ............................................. 50.35
2003 and thereafter .............................. 50.00
</Table>
In the event that the Corporation determines to redeem fewer
than all of the outstanding shares of the $3.50 Preferred Stock, the shares to
be redeemed shall be determined by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to this
paragraph (iv) and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the
4
pro rata benefit of the holders of the shares so called for redemption, then,
notwithstanding that any certificates for such shares have not been surrendered
for cancellation, on the redemption date dividends shall cease to accrue on the
shares of $3.50 Preferred Stock to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon such
redemption, without interest thereon, upon surrender (and endorsement, if
required by the Corporation) of their certificates, and the shares evidenced
thereby shall no longer be outstanding. Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end of two years
from the redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption shall
look only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
(v) The holders of shares of $3.50 Preferred Stock shall have
no voting rights whatsoever, except for any voting rights to which they may be
entitled under the laws of the State of Delaware, and except as follows:
(I) If and whenever at any time or times dividends payable
on the $3.50 Preferred Stock or on any other Preferred Stock shall
have been in arrears and unpaid in an aggregate amount equal to or
exceeding the amount of dividends payable thereon for six
quarterly periods, then the holders of the Preferred Stock shall
have, in addition to the other voting rights set forth herein, the
exclusive right, voting separately as a class, to elect two
directors of the Corporation, such directors to be in addition to
the number of directors constituting the Board immediately prior
to the accrual of such right, the remaining directors to be
elected by the other class or classes of stock entitled to vote
therefor at each meeting of stockholders held for the purpose of
5
electing directors. Such voting right shall continue until such
time as all cumulative dividends accumulated on all the Preferred
Stock having cumulative dividends shall have been paid in full and
until any noncumulative dividends payable on all the Preferred
Stock having noncumulative dividends shall have been paid
regularly for at least one year, at which time such voting right
of the holders of the Preferred Stock shall terminate, subject to
revesting at such time as there shall occur each and every
subsequent event of default of the character indicated above.
Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the
holders of the Preferred Stock, called as hereinafter provided, or
at any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each successive annual
meeting.
At such time when such voting right shall have vested in
the holders of the Preferred Stock, and if such right shall not
already have been initially exercised, a proper officer of the
Corporation shall, upon the written request of the holders of
record of 10 percent in number of shares of the Preferred Stock
then outstanding, addressed to the Secretary of the Corporation,
call a special meeting of the holders of the Preferred Stock and
of any other class or classes of stock having voting power with
respect thereto for the purpose of electing directors. Such
meeting shall be held at the earliest practicable date upon the
notice required for annual meetings of stockholders at the place
for holding of annual meetings of stockholders of the Corporation,
or, if none, at a place designated by the Secretary of the
Corporation. If such meeting shall not be called by the proper
officers of the Corporation within 30 days after the personal
service of such written request upon the Secretary of the
Corporation, or within 30 days after mailing the same within the
United
6
States of America, by registered mail, addressed to the Secretary
of the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal
authorities), then the holders of record of 10 percent in number
of shares of the Preferred Stock then outstanding may designate in
writing one of their number to call such meeting at the expense of
the Corporation, and such meeting may be called by such person so
designated upon the notice required for annual meetings of
stockholders and shall be held at the same place as is elsewhere
provided for in this subparagraph (I). Any holder of the Preferred
Stock shall have access to the stock books of the Corporation for
the purpose of causing a meeting of stockholders to be called
pursuant to the provisions of this paragraph. Notwithstanding the
provisions of this paragraph, however, no such special meeting
shall be called during a period within 90 days immediately
preceding the date fixed for the next annual meeting of
stockholders.
At any meeting held for the purpose of electing directors
at which the holders of the Preferred Stock shall have the right
to elect directors as provided herein, the presence in person or
by proxy of the holders of 33-1/3 percent of the then outstanding
shares of the Preferred Stock shall be required and be sufficient
to constitute a quorum of the Preferred Stock for the election of
directors by the Preferred Stock. At any such meeting or
adjournment thereof (A) the absence of a quorum of the holders of
the Preferred Stock shall not prevent the election of directors
other than those to be elected by the holders of the Preferred
Stock and the absence of a quorum or quorums of the holders of
other classes of capital stock entitled to elect such other
directors shall not prevent the election of directors to be
elected by the holders of the Preferred Stock and (B) in the
absence of a quorum of the holders of any class of stock entitled
to vote for the election of directors, a majority of the holders
present in person or
7
by proxy of such class shall have the power to adjourn the meeting
for the election of directors which the holders of such class are
entitled to elect, from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
The directors elected pursuant to this subparagraph (I)
shall serve until the next annual meeting or until their
respective successors shall be elected and shall qualify;
provided, however, that when the right of the holders of the
Preferred Stock to elect directors as herein provided shall
terminate, the terms of office of all persons so elected by the
holders of the Preferred Stock shall terminate, and the number of
directors of the Corporation shall thereupon be such number as may
be provided in the By-laws of the Corporation irrespective of any
increase made pursuant to this subparagraph (I).
So long as any shares of $3.50 Preferred Stock are
outstanding, the By-laws of the Corporation shall contain
provisions ensuring that the number of directors of the
Corporation shall at all times be such that the exercise, by the
holders of shares of $3.50 Preferred Stock and the holders of
other Preferred Stock, of the right to elect directors under the
circumstances provided in this subparagraph (I) will not
contravene any provisions of the Corporation's Certificate of
Incorporation or By-laws.
(II) So long as any shares of the $3.50 Preferred Stock
remain outstanding, the Corporation will not, either directly or
indirectly or through merger or consolidation with any other
corporation, without the affirmative vote at a meeting or the
written consent with or without a meeting of the holders of at
least 66-2/3 percent in number of shares of the $3.50 Preferred
Stock then outstanding, (A) create any class or classes of stock
ranking prior to or on a parity with the $3.50 Preferred Stock
either as to dividends or
9
upon liquidation or increase the authorized number of shares of
any class or classes of stock ranking prior to or on a parity with
the $3.50 Preferred Stock either as to dividends or upon
liquidation, or create or authorize any obligation or security
convertible into shares of stock of any class ranking prior to or
on a parity with the Preferred Stock either as to dividends or
upon liquidation, but may, without such consent, create or
authorize obligations or securities convertible into shares of
Preferred Stock, or (B) amend, alter or repeal any of the
provisions of the Certificate of Incorporation (including this
resolution) so as to affect adversely the preferences, special
rights or powers of the $3.50 Preferred Stock or of the holders
thereof.
(vi) Except as provided in paragraph (v) (II), no consent of
the holders of the $3.50 Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior to or on a parity with to the $3.50 Preferred
Stock as to dividends or upon liquidation or (c) any increase or decrease in the
amount of authorized Common Stock or any increase, decrease or change in the par
value thereof or in any other terms thereof.
(vii) Subject to the provisions of paragraph (iv) hereof, the
Board reserves the right by subsequent amendment of this resolution from time to
time to increase or decrease the number of shares which constitute the $3.50
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.
(viii) At the option of the holder thereof and upon surrender
thereof for conversion to the Corporation at the office of the Transfer Agent
of the Corporation's Common Stock in the Borough of Manhattan, the City of New
York or in the City of Tulsa, each share of $3.50 Preferred Stock will be
convertible (or if such share is called or surrendered for redemption, then in
9
respect of such share to and including, but not after, the redemption date) into
fully paid and nonassessable shares of Common Stock at the initial conversion
rate of 1.5625 shares of Common Stock for each share of $3.50 Preferred
Stock,the conversion rate being subject to adjustment as hereinafter provided:
(I) In case the Corporation shall (A) pay a
dividend in shares of its capital stock, (B)
subdivide its outstanding shares of Common Stock into
a greater number of shares, (C) combine its
outstanding shares of Common Stock into a smaller
number of shares, or (D) issue by reclassification of
its shares of Common Stock any shares of its capital
stock, the conversion rate in effect immediately
prior thereto shall be adjusted so that the holder of
a share of $3.50 Preferred Stock surrendered for
conversion after the record date fixing stockholders
to be affected by such event shall be entitled to
receive upon conversion the number of such shares of
Common Stock which he would have been entitled to
receive after the happening of such event had such
share of $3.50 Preferred Stock been converted
immediately prior to such record date. Such
adjustment shall be made whenever any of such events
shall happen, but shall also be effective
retroactively as to shares of $3.50 Preferred Stock
converted between such record date and the date of
the happening of any such event.
(II) In case the Corporation shall issue
rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the
Current Market Price Per Share (as defined in
subparagraph (IV) below) of Common Stock at the
record date mentioned below, the number of shares of
Common Stock into which each share of $3.50 Preferred
Stock shall thereafter be convertible shall be
determined by multiplying the number of
10
shares of Common Stock into which such share of $3.50
Preferred Stock was theretofore convertible by a
fraction, the numerator of which shall be the number
of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for
subscription or purchase, and the denominator of
which shall be the number of the shares of Common
Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which
the aggregate offering price of the total number of
shares so offered would purchase at such Current
Market Price Per Share. Such adjustment shall be made
whenever such rights or warrants are issued, but
shall also be effected retroactively as to shares of
$3.50 Preferred Stock converted between the record
date for the determination of stockholders entitled
to receive such rights or warrants and the date such
rights or warrants are issued.
(III) In case the Corporation shall
distribute to all holders of its Common Stock
evidences of its indebtedness or assets (excluding
any cash dividend or distribution made out of current
or retained earnings) or rights to subscribe other
than as set forth in subparagraph (II) above, then in
each such case the number of shares of Common Stock
into which each share of $3.50 Preferred Stock shall
thereafter be convertible shall be determined by
multiplying the number of shares of Common Stock into
which such share was theretofore convertible by a
fraction, the numerator of which shall be the Current
Market Price Per Share of the Common Stock on the
record date fixed by the Board for such distribution,
and the denominator of which shall be such Current
Market Price Per Share of the Common Stock less the
then fair market value (as determined by the Board,
whose
11
determination shall be conclusive) of the portion of
the assets, evidences of indebtedness or subscription
rights so distributed applicable to one share of the
Common Stock. Such adjustment shall be made whenever
any such distribution is made, but shall also be
effective retroactively as to shares of $3.50
Preferred Stock converted between the record date for
the determination of stockholders entitled to receive
such distribution and the date such distribution is
made.
(IV) For the purpose of any computation
under subparagraphs (II) and (III) above and (VI)
below, the "Current Market Price Per Share" of Common
Stock at any date shall be deemed to be the average
of the daily closing prices for the 15 consecutive
trading days commencing 20 trading days before the
day in question. The closing price for each day shall
be reported on the New York Stock Exchange-Composite
Transactions Tape or as reported by any successor
central market System.
(V) No adjustment in the conversion rate
shall be required unless such adjustment would
require an increase or decrease of at least 1% in
such rate; provided, however, that any adjustments
which by reason of this subparagraph (V) are not
required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this paragraph (viii) shall be
made to the nearest one-hundredth of a share.
(VI) No fractional shares or scrip
representing fractional shares of Common Stock shall
be issued upon the conversion of any share of $3.50
Preferred Stock. If the conversion thereof results in
a fraction, an amount equal to such fraction
12
multiplied by the Current Market Price Per Share of
Common Stock (as defined in subparagraph (IV) above)
as of the conversion date shall be paid to such
holder in cash by the Corporation.
(VII) In case the Corporation shall enter
into any consolidation, merger 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 each such case
each share of $3.50 Preferred Stock remaining
outstanding at the time of consummation of such
transaction shall thereafter be convertible into the
kind and amount of such stock or securities, cash
and/or other property receivable upon consummation of
such transaction by a holder of the number of shares
of Common Stock into which such shares of $3.50
Preferred Stock might have been converted immediately
prior to consummation of such transaction, assuming
in each case that such holder of Common Stock failed
to exercise rights of election, if any, as to the
kind or amount of securities, cash or other property
receivable upon consummation of such transaction
(provided that if the kind or amount of securities,
cash or other property receivable upon consummation
of such transaction is not the same for each
non-electing share, then the kind and amount of
securities, cash or other property receivable upon
consummation of such transaction for each
non-electing share shall be deemed to be the kind and
amount as receivable per share by a plurality of the
non-electing shares)
(VIII) In the event of any Change in Control
(as hereinafter defined) of the Corporation, each
holder of $3.50 Preferred Stock shall have the right,
at the holder's option, to require the Corporation to
redeem all or any number of
13
such holder's shares of $3.50 Preferred Stock during
the period (the "Exercise Period") beginning on the
30th day and ending on the 90th day after the date of
such Change in Control at the Redemption Price, plus
accrued and unpaid dividends to the date fixed for
redemption; provided, however, that such redemption
right shall not be applicable in the case of any
Change in Control of the Corporation which shall have
been duly approved by the Continuing Directors (as
hereinafter defined) during the period (the "Approval
Period") prior to or within 21 days after the date on
which such Change in Control shall have occurred. As
used herein, (a) "Acquiring Person" means any Person
who is or becomes the Beneficial Owner, directly or
indirectly, of 10% or more of the outstanding Common
Stock, (b) "Beneficial Owner" has the meaning
ascribed to such term in Rule 13d-3 adopted pursuant
to the Securities Exchange Act of 1934, as amended,
(c) a "Change in Control" of the Corporation shall be
deemed to have occurred at such time as (i) any
Person is or becomes the Beneficial Owner, directly
or indirectly, of 30% or more of the outstanding
Common Stock or (ii) individuals who constitute the
Continuing Directors cease for any reason to
constitute at least a majority of the Board, (d)
"Continuing Director" means any member of the Board
who is not affiliated with an Acquiring Person and
who was a member of the Board immediately prior to
the time that the Acquiring Person became an
Acquiring Person and any successor to a Continuing
Director who is not affiliated with the Acquiring
Person and is recommended to succeed a Continuing
Director by a majority of Continuing Directors who
are then members of the Board, and (e) "Person" means
any individual, corporation, partnership, limited
partnership, association, joint-stock company, trust,
unincorporated
14
organization, syndicate or group (as such terms are
used in Section 13d-3 adopted pursuant to the
Securities Exchange Act of 1934, as amended) or
government or political subdivision thereof.
On or before the seventh day after the
termination of the Approval Period, the Corporation
shall mail to all holders of record of the $3.50
Preferred Stock as of the last day of the Approval
Period, at their respective addresses as the same
shall appear on the books of the Corporation as of
such date, a notice disclosing (i) the Change in
Control, (ii) whether or not the Continuing Directors
have approved the Change in Control, and (iii) if the
Continuing Directors have not approved the Change in
Control, the respective dates on which the Exercise
Period commences and ends, the redemption price per
share of the $3.50 Preferred Stock applicable
hereunder and the procedure which the holder must
follow to exercise the redemption right provided
above. The Corporation shall cause a copy of such
notice to be published in a newspaper of general
circulation in the Borough of Manhattan, New York. To
exercise such redemption right, a holder of the $3.50
Preferred Stock must deliver during the Exercise
Period written notice to the Corporation (or an agent
designated by the Corporation for such purpose) of
the holder's exercise of such redemption right, and,
to be valid, any such notice of exercise must be
accompanied by each certificate evidencing shares of
the $3.50 Preferred Stock with respect to which the
redemption right is being exercised, duly endorsed
for transfer. On or prior to the seventh day after
the close of the Exercise Period, the Corporation
shall accept for payment all shares of $3.50
Preferred Stock properly surrendered to the
Corporation (or an agent designated by the
Corporation for such purpose) during the
15
Exercise Period for redemption in connection with the
valid exercise of such redemption right and shall
cause payment to be made in cash for such shares of
$3.50 Preferred Stock.
(ix) For the purposes of this resolution, any stock of any
class or classes of the Corporation shall be deemed to rank:
(a) prior to shares of the $3.50 Preferred Stock,
either as to dividends or upon liquidation, if the holders of stock of such
class or classes shall be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of shares of
the $3.50 Preferred Stock;
(b) on a parity with shares of the $3.50 Preferred
Stock, either as to dividends or upon liquidation, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share
thereof be different from those of the $3.50 Preferred Stock, if the holders of
stock of such class or classes shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority of one over the
other as between the holders of such stock and the holders of shares of $3.50
Preferred Stock (the term "Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of $3.50 Preferred Stock, either as to
dividends or upon liquidation as the context may require); and
(c) junior to shares of the $3.50 Preferred Stock,
either as to dividends or upon liquidation, if such class shall be Common Stock
or if the holders of the $3.50 Preferred Stock shall be entitled to the receipt
of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
stock of such class or classes.
16
(x) The $3.50 Preferred Stock shall rank on a parity
with the $2.21 Cumulative Preferred Stock, par value $1 per share, of the
Corporation as to dividends and upon liquidation. The $3.50 Preferred Stock
shall rank prior to the Series A Junior Participating Preferred Stock, par value
$1 per share, and all other shares of capital stock of the Corporation
outstanding at the time of issuance of the $3.50 Preferred Stock.
17
IN WITNESS WHEREOF, The Williams Companies, Inc. has caused this
Certificate to be made under the seal of the Corporation and signed by J. Furman
Lewis, Senior Vice President and General Counsel, and attested by David M.
Higbee, Secretary, this 19th day of April, 1995.
THE WILLIAMS COMPANIES, INC.
[SEAL]
Attest:
By: /s/ J. FURMAN LEWIS
----------------------------
J. Furman Lewis
Senior Vice President
& General Counsel
/s/ DAVID M. HIGBEE
- --------------------
David M. Higbee
Secretary
18
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "THE WILLIAMS COMPANIES, INC.", FILED IN THIS OFFICE ON THE
TWENTIETH DAY OF MAY, A.D. 1994, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SECRETARY'S OFFICE SEAL]
/s/ WILLIAM T. QUILLEN
--------------------------------------
William T. Quillen, Secretary of State
2116534 8100 AUTHENTICATION: 7125786
944090114 DATE: 05-20-94
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
* * * * * * * *
THE WILLIAMS COMPANIES, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Williams Companies, Inc., at
a meeting of the Board of Directors duly called and held on January 23, 1994,
adopted a resolution proposing and declaring advisable the following amendment
to the Restated Certificate of Incorporation, as amended, of said Company:
RESOLVED that the Board of Directors of the Company hereby
declares it advisable to amend Article FOURTH of the Company's Restated
Certificate of Incorporation, as amended, to increase the authorized Common
Stock, $1.00 par value, so that, as amended, the first paragraph of Article
FOURTH shall be, and read, as follows:
"FOURTH: The total number of shares of capital stock which
the Company shall have authority to issue is 270,000,000 shares,
consisting of 240,000,000 shares of Common Stock, par value $1.00 per
share (the "Common
Stock") and 30,000,000 shares of Preferred Stock, par value $1.00 per share
(the "Preferred Stock")."
SECOND: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Section 242 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
Certificate to be signed by J. Furman Lewis, its Senior Vice President and
General Counsel, and attested by David M. Higbee, its Secretary, this 20th day
of May, 1994.
THE WILLIAMS COMPANIES, INC.
By: /s/ J. FURMAN LEWIS
----------------------------
J. Furman Lewis
Senior Vice President and
General Counsel
ATTEST:
By: /s/ DAVID M. HIGBEE
-------------------------
David M. Higbee
Secretary
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RETIREMENT OF STOCK OF "THE WILLIAMS COMPANIES, INC." FILED IN THIS OFFICE ON
THE TWENTY-EIGHTH DAY OF SEPTEMBER, A.D. 1993, AT 10 0'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
* * * * * * * * * *
[SECRETARY'S OFFICE SEAL]
/s/ WILLIAM T. QUILLEN
--------------------------------------
William T. Quillen, Secretary of State
AUTHENTICATION: *4075831
723271110 DATE: 09/28/1993
CERTIFICATE OF RETIREMENT
OF
$3.875 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
$1.00 PAR VALUE
(PURSUANT TO SECTION 243)
The Williams Companies, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of said Company was filed in
the office of the Secretary of State of Delaware on April 27, 1987, and was
filed for recording in the office of the Recorder of Deeds for New Castle
County, Delaware on April 27, 1987, and that the Certificate of Designation for
the $3.875 Convertible Exchangeable Preferred Stock, $1.00 par value (the
"Preferred Stock"), was filed in the office of the Secretary of State of
Delaware on May 1, 1989;
That the Preferred Stock was called for redemption by the Company under the
terms and provisions of said Certificate of Designation on June 10, 1993, and
that all outstanding shares of the Preferred Stock were, in fact, redeemed as of
June 10, 1993;
That the Board of Directors of said Company at a meeting duly called and
convened on September 19, 1993, adopted a
Page 2
resolution to the effect that none of the authorized shares of the Preferred
Stock remain outstanding, and that no additional stock of such series will be
issued subject to the Certificate of Designation filed with respect to such
series of Preferred Stock; and
That when this Certificate is executed, acknowledged, filed and recorded in
accordance with Section 103 of the General Corporation Law of the State of
Delaware and, when the certificate becomes effective, it shall have the effect
of eliminating from the Company's Restated Certificate of Incorporation all
matters set forth in the Certificate of Designation with respect to such series
of Preferred Stock.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by Jack D. McCarthy, a Senior Vice President, and
attested by David M. Higbee, its Secretary, this 20th day of September, 1993.
THE WILLIAMS COMPANIES, INC.
By: /s/ JACK D. MCCARTHY
-----------------------------
Jack D. McCarthy
Senior Vice President
ATTEST:
By: /s/ DAVID M. HIGBEE
-----------------------------
David M. Higbee
Secretary
PAGE 1
STATE OF DELAWARE
[LOGO]
OFFICE OF SECRETARY OF STATE
----------
I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
STOCK DESIGNATION OF "THE WILLIAMS COMPANIES, INC. FILED IN THIS OFFICE ON THE
THIRTY-FIRST DAY OF AUGUST, A.D. 1992, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
* * * * * * * * * *
[OFFICE OF THE SECRETARY OF STATE SEAL]
/s/ MICHAEL RATCHFORD
-----------------------------------------
MICHAEL RATCHFORD, SECRETARY OF STATE
722244066 AUTHENTICATION: *3575698
DATE: 08/31/1992
CERTIFICATE OF DESIGNATION
OF THE
$2.21 CUMULATIVE PREFERRED STOCK
($1 Par Value)
OF
THE WILLIAMS COMPANIES, INC.
---------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
---------
The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted on August 27, 1992, by a duly appointed Special Committee of the Board
of Directors of The Williams Companies, Inc., a Delaware corporation
(hereinafter called the "Corporation"), acting pursuant to the provisions of
Section 141(c) of the General Corporation Law of the State of Delaware and
pursuant to authority granted to such Committee in a resolution of such Board of
Directors (the "Board") duly adopted on July 10, 1992:
RESOLVED that pursuant to authority expressly granted to and
vested in the Board by provisions of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"),
the issuance of a series of Preferred Stock par value $1 per share
(the "Preferred Stock"), which shall consist of up to 4,000,000 of the
26,300,000 shares of Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is, authorized, and the
powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, of the shares of such series (in addition to
the powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, set forth in the Certificate of Incorporation
which may be applicable to the Preferred Stock) are fixed as follows:
(i) The designation of such series of the Preferred Stock
authorized by this resolution shall be the $2.21 Cumulative
Preferred Stock (the "$2.21 Preferred Stock").
The total number of shares of the $2.21 Preferred Stock shall be
4,000,000.
(ii) Holders of shares of $2.21 Preferred Stock will be
entitled to receive, when and as declared by the Board out of
assets of the Corporation legally available for payment, an
annual cash dividend of $2.21 per share, payable in quarterly
installments on March 1, June 1, September 1 and December 1,
commencing December 1, 1992 (each a "dividend payment date").
Dividends on the $2.21 Preferred Stock will be cumulative from
the date of initial issuance of shares of $2.21 Preferred Stock.
Dividends will be payable to holders of record as they appear on
the stock books of the Corporation on such record dates, not more
than 60 days nor less than 10 days preceding the payment dates
thereof, as shall be fixed by the Board. When dividends are not
paid in full upon the $2.21 Preferred Stock and any other Parity
Preferred Stock (as defined in paragraph (viii) below), all
dividends declared upon shares of Parity Preferred Stock will be
declared pro rata so that in all cases the amount of dividends
declared per share on the $2.21 Preferred Stock and such other
Parity Preferred Stock shall bear to each other the same ratio
that accumulated and unpaid dividends per share on the shares of
$2.21 Preferred Stock and such other Parity Preferred Stock bear
to each other. Except as set forth in the preceding sentence,
unless full cumulative dividends on the $2.21 Preferred Stock
have been paid, no dividends (other than in Common Stock of the
Corporation) may be paid or declared and set aside for payment or
other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with
the $2.21 Preferred Stock as to dividends, nor may any Common
Stock or any other stock of the Corporation ranking junior to or
on a parity with the $2.21 Preferred Stock as to dividends be
redeemed, purchased or otherwise acquired for any consideration
(or any payment made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that
any moneys theretofore deposited in any sinking fund with respect
to any Preferred Stock of the Corporation in compliance with the
provisions of such sinking fund may thereafter
-2-
be applied to the purchase or redemption of such Preferred Stock
in accordance with the terms of such sinking fund regardless of
whether at the time of such application full cumulative dividends
upon shares of the $2.21 Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set
apart for payment) by the Corporation (except by conversion into
or exchange for stock of the Corporation ranking junior to the
$2.21 Preferred Stock as to dividends). Dividends payable for any
partial dividend period shall be calculated on the basis of a
360-day year of 12 30-day months.
(iii) The shares of $2.21 Preferred Stock shall rank prior
to the shares of Common Stock and of any other class of stock of
the Corporation ranking junior to the $2.21 Preferred Stock upon
liquidation, so that in the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, the holders of the $2.21 Preferred Stock shall be
entitled to receive out of the assets of the Corporation
available for distribution to its stockholders, whether from
capital, surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior stock,
an amount equal to $25 per share (the "Liquidation Preference" of
a share of $2.21 Preferred Stock) plus an amount equal to all
dividends (whether or not earned or declared) accumulated and
unpaid on the shares of $2.21 Preferred Stock to the date of
final distribution. After payment of the full amount of the
Liquidation Preference and such dividends, the holders of shares
of $2.21 Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation.
If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred
Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof,
shall be distributable among such holders ratably in accordance
with the respective amounts which would be payable on such shares
if all amounts payable thereon were payable in full. For the
purposes hereof, neither a consolidation or
-3-
merger of the Corporation with or into any other corporation, nor
a merger of any other corporation with or into the Corporation,
nor a sale or transfer of all or any part of the Corporation's
assets for cash or securities shall be considered a liquidation,
dissolution or winding up of the Corporation.
(iv) The holders of shares of $2.21 Preferred Stock shall
have no voting rights whatsoever, except for any voting rights to
which they may be entitled under the laws of the State of
Delaware, and except as follows:
(I) If and whenever at any time or times dividends
payable on the $2.21 Preferred Stock or on any other
Preferred Stock shall have been in arrears and unpaid in an
aggregate amount equal to or exceeding the amount of
dividends payable thereon for six quarterly periods, then
the holders of the Preferred Stock shall have, in addition
to the other voting rights set forth herein, the exclusive
right, voting separately as a class, to elect two directors
of the Corporation, such directors to be in addition to the
number of directors constituting the Board immediately prior
to the accrual of such right, the remaining directors to be
elected by the other class or classes of stock entitled to
vote therefor at each meeting of stockholders held for the
purpose of electing directors. Such voting right shall
continue until such time as all cumulative dividends
accumulated on all the Preferred Stock having cumulative
dividends shall have been paid in full and until any
noncumulative dividends payable on all the Preferred Stock
having noncumulative dividends shall have been paid
regularly for at least one year, at which time such voting
right of the holders of the Preferred Stock shall terminate,
subject to revesting in the event of each and every
subsequent event of default of the character indicated
above.
Whenever such voting right shall have vested, such
right may be exercised initially either at a special meeting
of the holders of the Preferred Stock,
-4-
called as hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at each successive annual meeting.
At any time when such voting right shall have vested in
the holders of the Preferred Stock, and if such right shall
not already have been initially exercised, a proper officer
of the Corporation shall, upon the written request of the
holders of record of 10 percent in number of shares of the
Preferred Stock then outstanding, addressed to the Secretary
of the Corporation, call a special meeting of the holders of
the Preferred Stock and of any other class or classes of
stock having voting power with respect thereto for the
purpose of electing directors. Such meeting shall be held at
the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding of
annual meetings of stockholders of the Corporation, or, if
none, at a place designated by the Secretary of the
Corporation. If such meeting shall not be called by the
proper officers of the Corporation within 30 days after the
personal service of such written request upon the Secretary
of the Corporation, or within 30 days after mailing the same
within the United States of America, by registered mail,
addressed to the Secretary of the Corporation at its
principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the
holders of record of 10 percent in number of shares of the
Preferred Stock then outstanding may designate in writing
one of their number to call such meeting at the expense of
the Corporation, and such meeting may be called by such
person so designated upon the notice required for annual
meetings of stockholders and shall be held at the same place
as is elsewhere provided for in this subparagraph (I). Any
holder of the Preferred Stock shall have access to the stock
books of the Corporation for the purpose of causing a
-5-
meeting of stockholders to be called pursuant to the
provisions of this paragraph. Notwithstanding the provisions
of this paragraph, however, no such special meeting shall be
called during a period within 90 days immediately preceding
the date fixed for the next annual meeting of stockholders.
At any meeting held for the purpose of electing
directors at which the holders of the Preferred Stock shall
have the right to elect directors as provided herein, the
presence in person or by proxy of the holders of 33-1/3
percent of the then outstanding shares of the Preferred
Stock shall be required and be sufficient to constitute a
quorum of the Preferred Stock for the election of directors
by the Preferred Stock. At any such meeting or adjournment
thereof (A) the absence of a quorum of the holders of the
Preferred Stock shall not prevent the election of directors
other than those to be elected by the holders of the
Preferred Stock and the absence of a quorum or quorums of
the holders of other classes of capital stock entitled to
elect such other directors shall not prevent the election of
directors to be elected by the holders of the Preferred
Stock and (B) in the absence of a quorum of the holders of
any class of stock entitled to vote for the election of
directors, a majority of the holders present in person or by
proxy of such class shall have the power to adjourn the
meeting for the election of directors which the holders of
such class are entitled to elect, from time to time, without
notice other than announcement at the meeting, until a
quorum shall be present.
The directors elected pursuant to this subparagraph (I)
shall serve until the next annual meeting or until their
respective successors shall be elected and shall qualify;
provided, however, that when the right of the holders of the
Preferred Stock to elect directors as herein provided shall
terminate, the terms of office of all persons so elected
-6-
by the holders of the Preferred Stock shall terminate, and
the number of directors of the Corporation shall thereupon
be such number as may be provided in the By-laws of the
Corporation irrespective of any increase made pursuant to
this subparagraph (I).
So long as any shares of $2.21 Preferred Stock are
outstanding, the By-laws of the Corporation shall contain
provisions ensuring that the number of directors of the
Corporation shall at all times be such that the exercise, by
the holders of shares of $2.21 Preferred Stock and the
holders of other Preferred Stock, of the right to elect
directors under the circumstances provided in this
subparagraph (I) will not contravene any provisions of the
Corporation's Certificate of Incorporation or By--laws.
(II) So long as any shares of the $2.21 Preferred Stock
remain outstanding, the Corporation will not, either
directly or indirectly or through merger or consolidation
with any other corporation, without the affirmative vote at
a meeting or the written consent with or without a meeting
of the holders of at least 66-2/3 percent in number of
shares of the $2.21 Preferred Stock then outstanding, (A)
create any class or classes of stock ranking prior to the
$2.21 Preferred Stock either as to dividends or upon
liquidation or increase the authorized number of shares of
any class or classes of stock ranking prior to the $2.21
Preferred Stock either as to dividends or upon liquidation,
(B) amend, alter or repeal any of the provisions of the
Certificate of Incorporation (including this resolution) so
as to affect adversely the preferences, special rights or
powers of the $2.21 Preferred Stock or (C) authorize any
reclassification of the $2.21 Preferred Stock.
(v) The shares of the $2.21 Preferred Stock will not be
redeemable prior to September 1, 1997. On or after such date, the
$2.21 Preferred Stock will be redeemable at the option of the
Corporation, in whole or in
-7-
part, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to $25 per share of the $2.21 Preferred
Stock plus dividends accrued and accumulated but unpaid to the
redemption date.
If full cumulative dividends on the $2.21 Preferred Stock
have not been paid, the $2.21 Preferred Stock may not be redeemed
in part and the Corporation may not purchase or acquire any
shares of the $2.21 Preferred Stock otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders
of the $2.21 Preferred Stock. If less than all the outstanding
shares of $2.21 Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a
substantially equivalent method.
If a notice of redemption has been given pursuant to this
paragraph (v) and if, on or before the date fixed for redemption,
the funds necessary for such redemption shall have been set aside
by the Corporation, separate and apart from its other funds, in
trust for the pro rata benefit of the holders of the shares so
called for redemption, then, notwithstanding that any
certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease to
accrue on the shares of $2.21 Preferred Stock to be redeemed, and
at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such
shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other
rights with respect to such shares, except the right to receive
the moneys payable upon such redemption, without interest
thereon, upon surrender (and endorsement, if required by the
Corporation) of their certificates, and the shares evidenced
thereby shall no longer be outstanding. Subject to applicable
escheat laws, any moneys so set aside by the Corporation and
unclaimed at the end of two years from the redemption date shall
revert to the general funds of the Corporation, after which
reversion the holders of such shares so called for redemption
shall look only to the general funds of the Corporation for the
payment of the amounts payable upon such
-8-
redemption. Any interest accrued on funds so deposited shall be
paid to the Corporation from time to time.
(vi) No consent of the holders of the $2.21 Preferred Stock
shall be required for (a) the creation of any indebtedness of any
kind of the Corporation, (b) the creation, or increase or
decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation
to the $2.21 Preferred Stock or (c) any increase or decrease in
the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.
(vii) Subject to the provisions of paragraph (iv) hereof,
the Board reserves the right by subsequent amendment of this
resolution from time to time to increase or decrease the number
of shares which constitute the $2.21 Preferred Stock (but not
below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.
(viii) For the purposes of this resolution, any stock of any
class or classes of the Corporation shall be deemed to rank:
(a) prior to shares of the $2.21 Preferred Stock,
either as to dividends or upon liquidation, if the holders
of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up,
as the case may be, in preference or priority to the holders
of shares of the $2.21 Preferred Stock;
(b) on a parity with shares of the $2.21 Preferred
Stock, either as to dividends or upon liquidation, whether
or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be
different from those of the $2.21 Preferred Stock, if the
holders of stock of such class or classes
-9-
shall be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion
to their respective dividend rates or liquidation prices,
without preference or priority of one over the other as
between the holders of such stock and the holders of shares
of $2.21 Preferred Stock (the term "Parity Preferred Stock"
being used to refer to any stock on a parity with the shares
of $2.21 Preferred Stock, either as to dividends or upon
liquidation as the context may require); and
(c) junior to shares of the $2.21 Preferred Stock,
either as to dividends or upon liquidation, if such class
shall be Common Stock or if the holders of the $2.21
Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference
or priority to the holders of stock of such class or
classes.
The $2.21 Preferred Stock shall rank on a parity with
the $3.875 Convertible Exchangeable Preferred Stock, par
value $1 per share, and prior to the Series A Junior
Participating Preferred Stock, par value $1 per share, and
all other shares of capital stock of the Corporation
outstanding at the time of issuance of the $2.21 Preferred
Stock.
-10-
IN WITNESS WHEREOF, The Williams Companies, Inc. has caused this
Certificate to be made under the seal of the Corporation and signed by J. Furman
Lewis, a Senior Vice President, and attested by David M. Higbee, its Secretary,
this 28th day of August, 1992.
THE WILLIAMS COMPANIES, INC.
/s/ J. FURMAN LEWIS
-----------------------------------
J. Furman Lewis
Senior Vice President
[SEAL]
Attest:
/s/ DAVID M. HIGBEE
- ----------------------------------
David M. Higbee
Secretary
-11-
PAGE 1
STATE OF DELAWARE
[LOGO]
OFFICE OF SECRETARY OF STATE
----------
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
STOCK DESIGNATION OF THE WILLIAMS COMPANIES, INC. FILED IN THIS OFFICE ON THE
FIRST DAY OF MAY, A.D. 1989, AT 11:30 O'CLOCK A.M.
: : : : : : : : : :
[OFFICE OF THE SECRETARY OF STATE SEAL]
720200157 /s/ MICHAEL HARKINS
-----------------------------------------
Michael Harkins, Secretary of State
AUTHENTICATION: 12732083
DATE: 07/19/1990
CERTIFICATE OF DESIGNATION
OF THE
$3.875 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
($1 Par Value)
OF
THE WILLIAMS COMPANIES, INC.
----------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------
The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted on April 26, 1989, by a duly appointed Special Committee of the Board of
Directors of The Williams Companies, Inc., a Delaware corporation (hereinafter
called the "Corporation"), acting pursuant to the provisions of Section 141(c)
of the General Corporation law of the State of Delaware and pursuant to
authority granted to such Committee in a resolution of such Board of Directors
(the "Board") duly adopted on March 15, 1989:
RESOLVED that pursuant to authority expressly granted to and
vested in the Board by provisions of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"),
the issuance of a series of Preferred Stock par value $1 per share
(the "Preferred Stock"), which shall consist of up to 3,300,000 of the
30,000,000 shares of Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is, authorized, and the
Board hereby fixes the powers, designations, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the shares of
such series (in addition
to the powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, set forth in the Restated Certificate of
Incorporation which may be applicable to the Preferred Stock) as follows:
(i) The designation of such series of the Preferred Stock
authorized by this resolution shall be the $3.875 Convertible
Exchangeable Preferred Stock (the "Exchangeable Preferred Stock"). The
total number of shares of Exchangeable Preferred Stock shall be
3,300,000.
(ii) Holders of shares of Exchangeable Preferred Stock will be
entitled to receive, when and as declared by the Board out of assets
of the Corporation legally available for payment, an annual cash
dividend of $3.875 per share, payable in quarterly installments on
March 31, June 30, September 30 and December 31, commencing June 30,
1989 (each a "dividend payment date"). Dividends on the Exchangeable
Preferred Stock will be cumulative from the date of initial issuance
of shares of Exchangeable Preferred Stock. Dividends will be payable
to holders of record as they appear on the stock books of the
Corporation on such record dates, not more than 60 days nor less than
10 days preceding the payment dates thereof, as shall be fixed by the
Board. When dividends are not paid in full upon the Exchangeable
Preferred Stock and any other Parity Preferred Stock (as defined in
paragraph (xii) below), all dividends declared upon shares of Parity
Preferred Stock will be declared pro rata so that in all cases the
amount of dividends declared per share on the Exchangeable Preferred
Stock and such other Parity Preferred Stock shall bear to each other
the same ratio that accumulated and unpaid dividends per share on the
shares of Exchangeable Preferred Stock and such other Parity Preferred
Stock bear to each other. Except as set forth in the preceding
sentence, unless full cumulative dividends on the Exchangeable
Preferred Stock have been paid, no dividends (other than in Common
Stock of
-2-
the Corporation (as defined in subparagraph (iv)(I) below) may be paid
or declared and set aside for payment or other distribution made upon
the Common Stock or on any other stock of the Corporation ranking
junior to or on a parity with the Exchangeable Preferred Stock as to
dividends, nor may any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with the Exchangeable
Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment made to or available
for a sinking fund for the redemption of any shares of such stock;
provided, however, that any moneys theretofore deposited in any
sinking fund with respect to any preferred stock of the Corporation in
compliance with the provisions of such sinking fund may thereafter be
applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund regardless of whether
at the time of such application full cumulative dividends upon shares
of the Exchangeable Preferred Stock outstanding to the last dividend
payment date shall have been paid or declared and set apart for
payment) by the Corporation (except by conversion into or exchange for
stock of the Corporation ranking junior to the Exchangeable Preferred
Stock as to dividends). Dividends payable for any partial dividend
period shall be calculated on the basis of a 360-day year of 12 30-day
months.
(iii) The shares of Exchangeable Preferred Stock shall rank prior
to the shares of Common Stock and of any other class of stock of the
Corporation ranking junior to the Exchangeable Preferred Stock upon
liquidation, so that in the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the
holders of the Exchangeable Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or
earnings, before any distribution is made to holders of shares of
Common Stock or any other such junior stock, an amount equal to $50
per
-3-
share (the "Liquidation Preference" of a share of Exchangeable
Preferred Stock) plus an amount equal to all dividends (whether or not
earned or declared) accumulated and unpaid on the shares of
Exchangeable Preferred Stock to the date of final distribution. After
payment of the full amount of the Liquidation Preference and such
dividends, the holders of shares of Exchangeable Preferred Stock will
not be entitled to any further participation in any distribution of
assets by the Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of Parity
Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all
amounts payable thereon were payable in full. For the purposes hereof,
neither a consolidation or merger of the Corporation with or into any
other corporation, nor a merger of any other corporation with or into
the Corporation, nor a sale or transfer of all or any part of the
Corporation's assets for cash or securities shall be considered a
liquidation, dissolution or winding-up of the Corporation.
(iv) (I) Subject to and upon compliance with the provisions of
this paragraph (iv), the holder of a share of Exchangeable Preferred
Stock shall have the right, at his option, at any time, to convert
such share into that number of fully paid and non-assessable shares of
Common Stock (calculated as to each conversion to the nearest 1/100th
of a share) obtained by dividing the Liquidation Preference of such
share being converted by the Conversion Price (as defined below) and
by surrender of such share so to be converted, such surrender to be
made in the manner provided in subparagraph (II) of this paragraph
(iv); provided, however, that the right to convert shares called for
redemption pursuant to paragraph (viii) or for exchange
-4-
pursuant to paragraph (vii) shall terminate at the close of business
on the date fixed for such redemption or exchange, as the case may be,
unless the Corporation shall default in making payment of the amount
payable upon such redemption or in making the exchange and payment of
any amount payable upon such exchange.
The term "Applicable Price" means (i) in the event of a
Fundamental Change in which the holders of the Corporation's
Common Stock receive only cash, the amount of cash received by
the holder of one share of Common Stock and (ii) in the event of
any other Fundamental Change, the average of the last reported
sales price for the Corporation's Common Stock (determined as set
forth in subparagraph IV(d) of this paragraph (iv)) during the
ten Trading Days (as defined in subparagraph IV(d) of this
paragraph (iv)) prior to the record date for the determination of
the holders of Common Stock entitled to receive cash, securities,
property or other assets in connection with such Fundamental
Change, or, if there is no such record date, the date upon which
the holders of the Common Stock shall have the right to receive
such cash, securities, property or other assets.
The term "Common Stock" shall mean the Common Stock, $1.00
par value, of the Corporation as the same exists at the date of
this Certificate of Designation or as such stock may be
constituted from time to time, except that for the purpose of
subparagraph (V) of this paragraph (iv) the term "Common Stock"
shall also mean and include stock of the Corporation of any
class, whether now or hereafter authorized, which shall have the
right to participate in the distribution of either earnings or
assets of the Corporation without limit as to amount or
percentage.
The term "Common Stock Fundamental Change" means any
Fundamental Change in which more than 50% (by value as determined
in good faith by the Board) of the consideration received by
holders of Common Stock consists
-5-
of common stock that, for the ten Trading Days (as defined in
subparagraph IV (d) of this paragraph (iv)) prior to such Fundamental
Change, has been admitted for listing on a national securities exchange
or quoted on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotation System.
The term "Conversion Price" shall mean $39.25, as adjusted in
accordance with the provisions of this paragraph (iv).
The term "Fundamental Change" means the occurrence of any
transaction or event in connection with which all or substantially all
the Common Stock of the Corporation shall be exchanged for, converted
into, acquired for or constitute solely the right to receive cash or
securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise).
The term "Liquidation Preference" shall have the meaning
specified in paragraph (iii).
The term "Non-Stock Fundamental Change" means any Fundamental
Change other than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any
Common Stock Fundamental Change, the average of the last reported sales
price for the common stock received in such Common Stock Fundamental
Change (determined as set forth in subparagraph IV(d) of this paragraph
(iv) as if such subparagraph were applicable to such common stock)
during the ten Trading Days (as defined in subparagraph IV(d) of this
paragraph (iv)) prior to the record date for the determination of the
holders of Common Stock entitled to receive such common stock, or if
there is no such record date, the date upon which the holders of the
Common Stock shall have the right to receive such common stock.
-6-
The term "Reference Market Price" shall initially mean
$20.917, and in the event of any adjustment to the Conversion Price
pursuant to subparagraphs IV(a), IV(b) or IV(c) of this paragraph (iv),
the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the Conversion Price after giving
effect to any such adjustment shall always be the same as the ratio of
$20.917 to the Conversion Price set forth in this Certificate of
Designation (without regard to any adjustment thereto).
The term "Rights Agreement" shall have the meaning specified
in paragraph (ix).
The term "Rights" shall have the meaning specified in
paragraph (ix).
(II) In order to exercise the conversion privilege, the holder
of each share of Exchangeable Preferred Stock to be converted shall
surrender the certificate representing such share at the office of the
conversion agent for the Exchangeable Preferred Stock in the Borough of
Manhattan, City of New York, appointed for such purpose by the
Corporation, with the Notice of Election to Convert on the back of said
certificate completed and signed. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such
share of Exchangeable Preferred Stock is registered, each share
surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the
holder or his duly authorized attorney and an amount sufficient to pay
any transfer or similar tax.
The holders of shares of Exchangeable Preferred Stock at the
close of business on a dividend payment record date shall be entitled
to receive the dividend payable on such shares (except that holders of
shares called for redemption on a redemption date between such record
date and the dividend payment date shall not be entitled to receive
such dividend on such dividend payment date) on the corresponding
dividend payment date notwithstanding
-7-
the conversion thereof or the Corporation's default in payment of the
dividend due on such dividend payment date. However, shares of
Exchangeable Preferred Stock surrendered for conversion during the
period between the close of business on any dividend payment record
date and the opening of business on the corresponding dividend payment
date (except shares called for redemption on a redemption date during
such period) must be accompanied by payment of an amount equal to the
dividend payable on such shares on such dividend payment date. A holder
of shares of Exchangeable Preferred Stock on a dividend payment record
date who (or whose transferee) tenders any of such shares for
conversion into shares of Common Stock on a dividend payment date will
receive the dividend payable by the Corporation on such shares of
Exchangeable Preferred Stock on such date, and the converting holder
need not include payment in the amount of such dividend upon surrender
of shares of Exchangeable Preferred Stock for conversion. Except as
provided above, the Corporation shall make no payment or allowance for
unpaid dividends whether or not in arrears, on converted shares or for
dividends on the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of the
certificates for shares of Exchangeable Preferred Stock as aforesaid,
the Corporation shall issue and shall deliver at such office to such
holder, or on his written order, a certificate or certificates for the
number of full shares of Common Stock issuable upon the conversion of
such shares in accordance with the provisions of this paragraph (iv),
and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in
subparagraph (III) of this paragraph (iv).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of Exchangeable Preferred Stock shall have been
surrendered and such
-8-
notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall
be at the Conversion Price in effect at such time on such date, unless
the stock transfer books of the Corporation shall be closed on that
date, in which event such person or persons shall be deemed to have
become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but
such conversion shall be at the Conversion Price in effect on the date
upon which such shares shall have been surrendered and such notice
received by the Corporation. All shares of Common Stock delivered upon
conversions of the Exchangeable Preferred Stock will upon delivery be
duly and validly issued and fully paid and non-assessable, free of
all liens and charges and not subject to any preemptive rights.
(III) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the
Exchangeable Preferred Stock. Instead of any fractional interest in a
share of Common Stock which would otherwise be deliverable upon the
conversion of a share of Exchangeable Preferred Stock, the Corporation
shall pay to the holder of such share an amount in cash (computed to
the nearest cent) equal to the last reported sale price (as defined in
subparagraph (IV)(d) of this paragraph (iv)) thereof on the business
day next preceding the day of conversion. If more than one share 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 aggregate Liquidation Preference
of the shares of Exchangeable Preferred Stock so surrendered.
-9-
(IV) The Conversion Price shall be adjusted from time to time
as follows:
(a) In case the Corporation shall (i) pay a dividend
or make a distribution on its Common Stock in shares of its
Common Stock, (ii) subdivide its outstanding Common Stock into
a greater number of shares, or (iii) combine its outstanding
Common Stock into a smaller number of shares, the Conversion
Price in effect immediately prior thereto shall be adjusted so
that the holder of any share of Exchangeable Preferred Stock
thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock of the
Corporation which he would have owned or have been entitled to
receive after the happening of any of the events described
above had such share been converted immediately prior to the
happening of such event. An adjustment made pursuant to this
subparagraph (a) shall become effective immediately, except as
provided in subparagraph (g) below, after the record date in
the case of a dividend and shall become effective immediately
after the effective date in the case of subdivision or
combination.
(b) In case the Corporation shall issue rights (other
than the Rights) or warrants to all holders of its Common
Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or
purchase Common Stock at a price per share less than the
current market price per share of Common Stock (as defined in
subparagraph (d) below) at the record date for the
determination of stockholders entitled to receive such rights
or warrants, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to the date of issuance of such rights or
warrants by a fraction of which
-10-
the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants
plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at
such current market price, and of which the denominator shall
be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of
additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall be made successively whenever
any such rights or warrants are issued, and shall become
effective immediately, except as provided in subparagraph (g)
below, after such record date. In determining whether any
rights or warrants entitle the holders of the Exchangeable
Preferred Stock to subscribe for or purchase shares of Common
Stock at less than such current market price, and in
determining the aggregate offering price of such shares of
Common Stock, there shall be taken into account any
consideration received by the Corporation for such rights or
warrants, the value of such consideration, if other than cash,
to be determined by the Board.
(c) In case the Corporation shall distribute to all
holders of its Common Stock any shares of capital stock of the
Corporation (other than Common Stock) or evidences of its
indebtedness or assets (excluding cash dividends or
distributions paid from retained earnings of the Corporation)
or rights (other than the Rights) or warrants to subscribe for
or purchase any of its securities (excluding those referred to
in subparagraph (b) above) (any of the foregoing being
hereinafter in this subparagraph (c) called the "Securities"),
then in each such case, unless the Corporation elects to
reserve shares or other units of such Securities for
distribution to the holders of the Exchangeable Preferred
-11-
Stock upon the conversion of the shares of Exchangeable
Preferred Stock so that any such holder converting shares of
Exchangeable Preferred Stock will receive upon such
conversion, in addition to the shares of the Common Stock to
which such holder is entitled, the amount and kind of such
Securities which such holder would have received if such
holder had, immediately prior to the record date for the
distribution of the Securities, converted its shares of
Exchangeable Preferred Stock into Common Stock, the Conversion
Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a
fraction of which the numerator shall be the current market
price per share (as defined in subparagraph (d) below) of the
Common Stock on the record date mentioned below less the then
fair market value (as determined by the Board, whose
determination shall, if made in good faith, be conclusive)
of the portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock, and of which the
denominator shall be the current market price per share (as
defined in subparagraph (d) below) of the Common Stock. Such
adjustment shall become effective immediately, except as
provided in subparagraph (g) below, after the record date for
the determination of shareholders entitled to receive such
distribution.
(d) For the purpose of any computation under
subparagraphs (b) and (c) above, the current market price per
share of Common Stock on any date shall be deemed to be the
average of the last reported sales prices for the thirty
consecutive Trading Days (as defined below) commencing
forty-five Trading Days before the date in question. The last
-12-
reported sales price for each day shall be the last reported
sale price regular way on the New York Stock Exchange, or, if
not reported for such Exchange, on the Composite Tape, or, in
case no such reported sale takes place on such day, the
average of the reported closing bid and asked quotations on
the New York Stock Exchange, or, if the Common Stock is not
listed on such Exchange or no such quotations are available,
the average of the high bid and low asked quotations in the
over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or similar organization, or, if no such
quotations are available, the fair market value of such class
of stock as determined by a member firm of the New York Stock
Exchange, Inc. selected by the Corporation. As used herein the
term "Trading Days" with respect to Common Stock means (i) if
the Common Stock is listed or admitted for trading on the New
York Stock Exchange or any national securities exchange, days
on which the New York Stock Exchange or such national
securities exchange is open for business or (ii) if the Common
Stock is quoted on the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
System or any similar system of automated dissemination of
quotations of securities prices, days on which trades may be
made on such system.
(e) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this subsection (e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment; and provided, further,
that adjustment shall be required and made in accordance with
the provisions of this paragraph (iv) (other than this
subparagraph (e)) not later than such time as may be required
in
-13-
order to preserve the tax free nature of a distribution to the
holders of shares of Common Stock. All calculations under this
paragraph (iv) shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be. Anything
in this subparagraph (IV) to the contrary notwithstanding, the
Corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this
subparagraph (IV), as it in its discretion shall determine to
be advisable in order that any stock dividends, subdivision of
shares, distribution of rights or warrants to purchase stock
or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.
(f) Whenever the Conversion Price is adjusted, as
herein provided, the Corporation shall promptly file with any
conversion agent an officers' certificate setting forth the
Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of
such adjustment. Promptly after delivery of such certificate,
the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion
Price and the date on which such adjustment becomes effective
and shall mail such notice of such adjustment of the
Conversion Price to the holder of each share of Exchangeable
Preferred Stock at his last address as shown on the stock
books of the Corporation.
(g) In any case in which this subparagraph (IV)
provides that an adjustment shall become effective immediately
after a record date for an event, the Corporation may defer
until the occurrence of such event (i) issuing to the
-14-
holder of any share of Exchangeable Preferred Stock converted
after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such
conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction
pursuant to subparagraph (III) of this paragraph (iv).
(V) If:
(a) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock (other than in cash
out of retained earnings); or
(b) the Corporation shall authorize the granting to
the holders of the Common Stock of rights (other than the
Rights) or warrants to subscribe for or purchase any shares of
any class or any other rights or warrants; or
(c) there shall be any reclassification of the Common
Stock (other than a subdivision or combination of the
outstanding Common Stock and other than a change in the par
value, or from par value to no par value, or from no par value
to par value), or any consolidation, merger, or statutory
share exchange to which the Corporation is a party and for
which approval of any stockholders of the Corporation is
required, or any sale or transfer of all or substantially all
the assets of the Corporation as an entirety or any
Fundamental Change; or
(d) there shall be a voluntary or in involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the conversion agent,
and shall cause to
-15-
be mailed to the holders of shares of the Convertible Preferred Stock
at their addresses as shown on the stock books of the Corporation,
at least 15 days prior to the applicable date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution or rights
or warrants are to be determined or (ii) the date on which such
reclassification, consolidation, merger, statutory share exchange,
sale, transfer, Fundamental Change, dissolution, liquidation or
winding up is expected to become effective, and the date as of which
it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger,
statutory share exchange, sale, transfer, Fundamental Change,
dissolution, liquidation or winding up. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in subparagraph VIII of this paragraph (iv) or in
subparagraph V(a.), V(b), V(c) or V(d) of this paragraph (iv).
(VI) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or both, for the
purpose of effecting conversions of the Exchangeable Preferred Stock,
the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Exchangeable Preferred Stock
not theretofore converted. For purposes of this subparagraph (VI), the
number of shares of Common Stock which shall be deliverable upon the
conversion of all outstanding shares of Exchangeable Preferred Stock
shall be computed as if at the time of computation all such outstanding
shares were held by a single holder.
-16-
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value (if any) of the
shares of Common Stock deliverable upon conversion of the Exchangeable
Preferred Stock, the Corporation will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion
Price.
The Corporation will endeavor to list the shares of Common
Stock required to be delivered upon conversion of the Exchangeable
Preferred Stock prior to such delivery upon each national securities
exchange, if any, upon which the outstanding Common Stock is listed at
the time of such delivery.
Prior to the delivery of any securities which: the Corporation
shall be obligated to deliver upon conversion of the Exchangeable
Preferred Stock, the Corporation will endeavor to comply with all
federal and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or consent to
the delivery thereof by, any governmental authority.
(VII) The Corporation will pay any and all documentary stamp
or similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Common Stock on conversions of the Exchangeable
Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the
Exchangeable Preferred Stock to be converted and no such issue or
delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Corporation the amount of any such
tax or has established, to the satisfaction of the Corporation, that
such tax has been paid.
-17-
(VIII) Notwithstanding any other provision herein to the
contrary, if any of the following events occur, namely (a) any
reclassification or change of outstanding shares of Common Stock
issuable upon conversion of the Exchangeable Preferred Stock (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), (b) any consolidation, merger or combination of the
Corporation with another corporation as a result of which holders of
Common Stock issuable upon conversion of the Exchangeable Preferred
Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such
Common Stock or (c) any sale or conveyance of the properties and assets
of the Corporation as, or substantially as, an entirety to any other
entity as a result of which holders of Common Stock shall be entitled
to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, or (d) any
Fundamental Change (including any event in the foregoing clauses (a),
(b) and (c) which constitutes a Fundamental Change), then the holder of
each share of Exchangeable Preferred Stock then outstanding shall have
the right to convert such share into the kind and amount of shares of
stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale, conveyance or Fundamental Change (such amount to be
determined, in the case of a Fundamental Change, in accordance with the
following paragraph), by a holder of the number of shares of Common
Stock issuable upon conversion of such share of Exchangeable Preferred
Stock immediately prior to such reclassification, change,
consolidation, merger, sale, conveyance or Fundamental Change subject
to further adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in paragraph
-18-
(iv); provided, however, that if the event referred to in clauses (a)
through (d) above constitutes a Common Stock Fundamental Change, each
share of Exchangeable Preferred Stock shall be convertible solely into
common stock of the kind received by holders of Common Stock as the
result of such Common Stock Fundamental Change (the amount of such
common stock to be determined in accordance with the following
paragraph). If, in the case of any such consolidation, merger, sale,
conveyance or Fundamental Change, the stock or other securities and
property receivable thereupon by a holder of shares of Common Stock
includes shares of stock or other securities and property of an entity
other than the successor or purchasing entity, as the case may be, in
such consolidation, merger, sale, conveyance or Fundamental Change,
then the Corporation shall enter into an agreement with such other
entity for the benefit of the holders of the Exchangeable Preferred
Stock which shall contain such additional provisions to protect the
interests of such holders as the Board shall reasonably consider
necessary by reason of the foregoing.
For purposes of calculating any adjustment to be made pursuant to the
preceding paragraph in the event of a Fundamental Change, immediately prior to
such Fundamental Change:
(A) in the case of a Non-Stock Fundamental Change, (x) the
conversion price of the shares of Exchangeable Preferred Stock shall be
deemed to be the lower of (1) the then applicable Conversion Price
(after giving effect to any adjustments required pursuant to
subparagraphs IV(a), IV(b), or IV(c) of this paragraph (iv)) and (2)
the Applicable Price (provided however that in no event shall the
Conversion Price be lower than the Reference Market Price); and (y) if
such Non-Stock Fundamental Change occurs on or prior to March 30,
1999, the holder of each share of Exchangeable Preferred Stock shall be
deemed to have the right to convert a Liquidation Preference amount of
such share of Exchangeable Preferred Stock equal to the Liquidation
Preference
-19-
thereof multiplied by (i) in the case of periods after March 30 1992,
the percentage of such Liquidation Preference that such holder would
have been entitled to receive if such share of Exchangeable Preferred
Stock had been redeemed at the Corporation's option on the date of such
Non-Stock Fundamental Change, or (ii) in the case of periods prior to
March 31, 1992, the applicable percentage set forth in the following
table for the 12-month periods ending March 31 in each of the years
set forth therein.
<Table>
<Caption>
Year Percentage
---- ----------
1990 %107.750
1991 %106.975
1992 %106.200
</Table>
(B) in the case of a Common Stock Fundamental Change, the
Conversion Price shall be the then applicable Conversion Price after
giving effect to any adjustment required pursuant to subparagraphs
IV(a), IV(b) or IV(c) of this paragraph (iv) multiplied by a fraction,
the numerator of which is the Purchaser Stock Price and the denominator
of which is the Applicable Price.
The provisions of this subparagraph (VIII) shall similarly
apply to successive reclassifications, consolidations, mergers, sales,
conveyances or Fundamental Changes.
(v) Upon any conversion, exchange or redemption of shares of
Exchangeable Preferred Stock, the shares of Exchangeable Preferred
Stock so converted, exchanged or redeemed shall have the status of
authorized and unissued shares of Preferred Stock, and the number of
shares of Preferred Stock which the Corporation shall have authority to
issue shall not be decreased by the conversion, exchange or redemption
of shares of Exchangeable Preferred Stock.
(vi) The holders of shares of Exchangeable Preferred Stock
shall have no voting rights whatsoever, except for any voting rights to
-20-
which they may be entitled under the laws of the State of Delaware, and
except as follows:
(I) If and whenever at any time or times dividends
payable on the Exchangeable Preferred Stock or on any other
preferred stock shall have been in arrears and unpaid in an
aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly periods, then the holders of
the preferred stock shall have, in addition to the other
voting rights set forth herein, the exclusive right, voting
separately as a class, to elect two directors of the
Corporation, such directors to be in addition to the number of
directors constituting the Board immediately prior to the
accrual of such right, the remaining directors to be elected
by the other class or classes of stock entitled to vote
therefor at each meeting of stockholders held for the purpose
of electing directors. Such voting right shall continue until
such time as all cumulative dividends accumulated on all the
preferred stock having cumulative dividends shall have been
paid in full and until any noncumulative dividends payable on
all the preferred stock having noncumulative dividends shall
have been paid regularly for at least one year, at which time
such voting right of the holders of the preferred stock shall
terminate, subject to revesting in the event of each and
every subsequent event of default of the character indicated
above.
Whenever such voting right shall have vested, such
right may be exercised initially either at a special meeting
of the holders of the preferred stock, called as hereinafter
provided, or at any annual meeting of stockholders held for
the purpose of electing directors, and thereafter at each
successive annual meeting.
-21-
At any time when such voting right shall have vested
in the holders of the preferred stock, and if such right shall
not already have been initially exercised, a proper officer of
the Corporation shall, upon the written request of the holders
of record of 10% in number of shares of the preferred stock
then outstanding, addressed to the Secretary of the
Corporation, call a special meeting of the holders of the
preferred stock and of any other class or classes of stock
having voting power with respect thereto for the purpose of
electing directors. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings
of stockholders at the place for holding of annual meetings of
stockholders of the Corporation, or, if none, at a place
designated by the Secretary of the Corporation. If such
meeting shall not be called by the proper officers of the
Corporation within 30 days after the personal service of such
written request upon the Secretary of the Corporation, or
within 30 days after mailing the same within the United States
of America, by registered mail, addressed to the Secretary of
the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal
authorities), then the holders of record of 10% in number of
shares of the preferred stock then outstanding may designate
in writing one of their number to call such meeting at the
expense of the Corporation, and such meeting may be called by
such person so designated upon the notice required for annual
meetings of stockholders and shall be held at the same place
as is elsewhere provided for in this subparagraph (I). Any
holder of the preferred stock shall have access to the stock
books of the Corporation for the purpose of causing a meeting
of stockholders to be called pursuant to the provisions of
this paragraph. Notwithstanding the provi-
-22-
sions of this paragraph, however, no such special meeting
shall be called during a period within 90 days immediately
preceding the date fixed for the next annual meeting of
stockholders.
At any meeting held for the purpose of electing
directors at which the holders of the preferred stock shall
have the right to elect directors as provided herein, the
presence in person or by proxy of the holders of 33-1/3% of
the then outstanding shares of the preferred stock shall be
required and be sufficient to constitute a quorum of the
preferred stock for the election of directors by the
preferred stock. At any such meeting or adjournment thereof
(A) the absence of a quorum of the holders of the preferred
stock shall not prevent the election of directors other than
those to be elected by the holders of the preferred stock and
the absence of a quorum or quorums of the holders of other
classes of capital stock entitled to elect such other
directors shall not prevent the election of directors to be
elected by the holders of the preferred stock and (B) in the
absence of a quorum of the holders of any class of stock
entitled to vote for the election of directors, a majority of
the holders present in person or by proxy of such class shall
have the power to adjourn the meeting for the election of
directors which the holders of such class are entitled to
elect, from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
The directors elected pursuant to this subparagraph
(I) shall serve until the next annual meeting or until their
respective successors shall be elected and shall qualify;
provided, however, that when the right of the holders of the
preferred stock to elect directors as herein provided shall
terminate, the terms of office of all persons so elected
-23-
by the holders of the preferred stock shall terminate, and the
number of directors of the Corporation shall thereupon be
such number as may be provided in the By-laws of the
Corporation irrespective of any increase made pursuant to this
subparagraph (I).
So long as any shares of Exchangeable Preferred Stock
are outstanding, the By-laws of the Corporation shall contain
provisions ensuring that the number of Directors of the
Corporation shall at all times be such that the exercise, by
the holders of shares of Exchangeable Preferred Stock and the
holders of other preferred stock, of the right to elect
Directors under the circumstances provided in this
subparagraph (I) will not contravene any provisions of the
Corporation's Certificate of Incorporation or By-laws.
(II) So long as any shares of the Exchangeable Stock
remain outstanding, the Corporation will not, either directly
or indirectly or through merger or consolidation with any
other corporation, without the affirmative vote at a meeting
or the written consent with or without a meeting of the
holders of at least 66 2/3% in number of shares of the
Exchangeable Preferred Stock then outstanding, (A) create any
class or classes of stock ranking prior to the Exchangeable
Preferred Stock either as to dividends or upon liquidation or
increase the authorized number of shares of any class or
classes of stock ranking prior to the Exchangeable Preferred
Stock either as to dividends or upon liquidation, (B) amend,
alter or repeal any of the provisions of the Certificate of
Incorporation (including this resolution) so as to affect
adversely the preferences, special rights or powers of the
Exchangeable Preferred Stock or (C) authorize any
reclassification of the Exchangeable Preferred Stock.
-24-
(vii) The Exchangeable Preferred Stock is
exchangeable in whole at the option of the Corporation on any
dividend payment date beginning March 31, 1992, for the
Corporation's 7 3/4% Convertible Subordinated Debentures due
2014 (the "Debentures") as described in the Corporation's
Registration Statement on Form S-3 (Registration No.
33-27507), as filed with the Securities and Exchange
Commission. Holders of outstanding shares of Exchangeable
Preferred Stock will be entitled to receive $50 principal
amount of Debentures in exchange for each share of
Exchangeable Preferred Stock held by them at the time of
exchange; provided that the Debentures will be issuable in
denominations of $1,000 and integral multiples thereof and an
amount in cash shall be paid to such holders for any excess
principal amount otherwise issuable. The Corporation will mail
to each record holder of the Exchangeable Preferred Stock
written notice of its intention to exchange not less than 30
nor more than 60 days prior to the date of exchange. The
notice shall specify the effective date of the exchange, the
place where certificates for shares of Exchangeable Preferred
Stock are to be surrendered for Debentures and state that
dividends on Exchangeable Preferred Stock will cease to accrue
on such date of exchange. Prior to giving notice of intention
to exchange, the Corporation shall execute and deliver with a
bank or trust company selected by the Corporation an Indenture
substantially in the form filed as an Exhibit to such
Registration Statement with such changes as may be required by
law, stock exchange rule or usage. The Corporation will cause
the Debentures to be authenticated on the dividend payment
date on which the exchange is effective; at such time the
rights of the holders of Exchangeable Preferred Stock as
stockholders of the Corporation shall cease (except the right
to receive accumulated and unpaid dividends to the date of
exchange), and the shares of Exchangeable Preferred Stock
shall no longer be deemed outstanding and shall represent only
the right to receive the Debentures and such accumulated and
unpaid dividends. Notwithstanding the foregoing, if
-25-
notice of exchange has been given pursuant to this paragraph
(vii) and any holder of shares of Exchangeable Preferred
Stock shall, prior to the close of business on the Exchange
Date, give written notice to the Corporation pursuant to
paragraph (iv) of the conversion of any or all of the shares
held by such holder (accompanied by a certificate or
certificates for such shares, duly endorsed or assigned to
the Corporation), then such exchange shall not become
effective as to such shares to be converted and such
conversion shall become effective as provided in paragraph
(iv). The Debentures will be delivered to the persons
entitled thereto upon surrender to the Corporation or its
agent appointed for that purpose of the certificates for the
shares of Exchangeable Preferred Stock being exchanged
therefor. If the Corporation has not paid full cumulative
dividends on the Exchangeable Preferred Stock to the date of
exchange (or set aside a sum therefor) the Exchangeable
Preferred Stock may not be exchanged for the Debentures.
(viii) The shares of the Exchangeable Preferred Stock
may be redeemed at the option of the Corporation, as a
whole, or from time to time, in part, at any time after
March 31, 1992, upon not less than 30 nor more than 60 days'
prior notice mailed to the holders of the shares to be
redeemed at their addresses as shown on the stock books of
the Corporation, at the following redemption prices:
If redeemed during the 12-month period beginning March
31,
<Table>
<Caption>
Year Price Year Price
---- -------- ----------- --------
1992 $52.7125 1997 $50.7750
1993 $52.3250 1998 $50.3875
1994 $51.9375 1999
1995 $51.5500 and there- $ 50
1996 $51.1625 after
</Table>
-26-
in each case together with an amount equal to all dividends
(whether or not earned or declared) accumulated and unpaid
to the date fixed for redemption.
If full cumulative dividends on the Exchangeable
Preferred Stock have not been paid, the Exchangeable
Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the
Exchangeable Preferred Stock otherwise than pursuant to a
purchase or exchange offer made on the same terms to all
holders of the Exchangeable Preferred Stock. If less than
all the outstanding shares of Exchangeable Preferred Stock
are to be redeemed, the Corporation will select those to be
redeemed by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to
this paragraph (viii) and if, on or before the date fixed
for redemption, the funds necessary for such redemption
shall have been set aside by the Corporation, separate and
apart from its other funds, in trust for the pro rata
benefit of the holders of the shares so called for
redemption, then, notwithstanding that any certificates for
such shares have not been surrendered for cancellation, on
the redemption date dividends shall cease to accrue on the
shares of Exchangeable Preferred Stock to be redeemed, and
at the close of business on the redemption date the holders
of such shares shall cease to be stockholders with respect
to such shares and shall have no interest in or claims
against the Corporation by virtue thereof and shall have no
voting or other rights with respect to such shares, except
the right to receive the moneys payable upon such
redemption, without interest thereon, upon surrender (and
endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no
longer be outstanding. Subject to applicable escheat laws,
any moneys so set aside by the Corporation and unclaimed at
the end of two years from the redemption date shall revert
to the general funds of the Corporation, after which
reversion the holders
-27-
of such shares so called for redemption shall look only to
the general funds of the Corporation for the payment of the
amounts payable upon such redemption. Any interest accrued
on funds so deposited shall be paid to the Corporation from
time to time. Any funds which have been deposited by the
Corporation, or on its behalf, with a paying agent or
segregated and held in trust by the Corporation for the
redemption of shares converted into Common Stock on or prior
to the date fixed for such redemption shall (subject to any
right of the holder of such shares to receive the dividend
payable thereon as provided in paragraph (iv)) immediately
upon such conversion be returned to the Corporation or, if
then held in trust by the Corporation, shall be discharged
from such trust.
(ix) Each share of Common Stock issued upon conversion
of Exchangeable Preferred Stock on or prior to the close of
business on the earliest of (a) the Distribution Date (as
defined in the Amended and Restated Rights Agreement, dated
as of July 12, 1988, between the Corporation and Morgan
Guaranty Trust Company of New York, as Rights Agent, (the
"Rights Agreement"), (b) any date fixed for redemption of
the Rights (as defined in the Rights Agreement) in
accordance with the provisions of the Rights Agreement or
(c) the Final Expiration Date (as defined in the Rights
Agreement) shall in accordance with the Rights Agreement
also evidence one Right, and the certificates for such
Common Stock shall bear the legend set forth in Section 3(c)
of the Rights Agreement. In addition, holders of the
Exchangeable Preferred Stock converted into Common Stock
after the Distribution Date, but prior to the earlier of (x)
any date fixed for redemption of the Rights in accordance
with the provisions of the Rights Agreement and (y) the
Final Expiration Date, shall be entitled to the issuance, in
the manner provided in the Rights Agreement, of Rights
Certificates (as defined in the Rights Agreement)
representing the appropriate number of Rights in connection
with the issuance of Common Stock upon conversion of
Exchangeable
-28-
Preferred Stock; except if, and to the extent that, the
Corporation shall be advised by counsel that such issuance
would create a significant risk of material adverse tax
consequences to the Corporation or the person to whom such
Rights Certificate would be issued or appropriate adjustment
shall otherwise have been made in lieu of the issuance
thereof. Notwithstanding the foregoing, holders of
Exchangeable Preferred Stock converted into Common Stock
shall not be entitled to Rights or the issuance of Rights
Certificates if at the time of conversion all Rights under
the Rights Agreement have been terminated or cancelled.
Holders of Exchangeable Preferred Stock who have not
converted Exchangeable Preferred Stock on or prior to any
such date fixed for redemption of Rights will not be
entitled to the redemption price in respect thereof.
(x) No consent of the holders of the Exchangeable
Preferred Stock shall be required for (a) the creation of
any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any
class or series of stock of the Corporation not ranking
prior as to dividends or upon liquidation to the
Exchangeable Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase,
decrease or change in the par value thereof or in any other
terms thereof.
(xi) Subject to the provisions of paragraph (vi)
hereof, the Board reserves the right by subsequent amendment
of this resolution from time to time to increase or decrease
the number of shares which constitute the Exchangeable
Preferred Stock (but not below the number of shares thereof
then outstanding) and in other respects to amend this
resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
(xii) For the purposes of this resolution any stock of
any class or classes of the Corporation shall be deemed to
rank:
-29-
(a) prior to shares of the Exchangeable Preferred
Stock, either as to dividends or upon liquidation, if
the holders of stock of such class or classes shall be
entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of
shares of the Exchangeable Preferred Stock;
(b) on a parity with shares of the Exchangeable
Preferred Stock, either as to dividends or upon
liquidation, whether or not the dividend rates,
dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of
the Exchangeable Preferred Stock, if the holders of
stock of such class or classes shall be entitled by
the terms thereof to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in proportion to their
respective dividend rates or liquidation prices,
without preference or priority of one over the other
as between the holders of such stock and the holders
of shares of Exchangeable Preferred Stock (the term
"Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of Exchangeable
Preferred Stock, either as to dividends or upon
liquidation as the context may require); and
(c) junior to shares of the Exchangeable
Preferred Stock, either as to dividends or upon
liquidation, if such class shall be Common Stock or if
the holders of the Exchangeable Preferred Stock shall
be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to
the holders of stock of such class or classes.
-30-
The Exchangeable Preferred Stock shall rank prior to
the Series A Junior Participating Preferred Stock, par value
$1 per share, and all other shares of capital stock of the
Corporation outstanding at the time of issuance of the
Exchangeable Preferred Stock.
IN WITNESS WHEREOF, The Williams Companies Inc. has
caused this Certificate to be made under the seal of the Corporation and signed
by J. Furman Lewis, its Senior Vice President, and attested by David M. Higbee,
its Secretary, this 28th day of April 1989.
THE WILLIAMS COMPANIES, INC.
/s/ J. FURMAN LEWIS
----------------------------
[SEAL]:
Attest.
/s/ DAVID M. HIGBEE
- ----------------------------
Secretary
-31-
PAGE 1
STATE OF DELAWARE
[LOGO]
OFFICE OF SECRETARY OF STATE
----------
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF STOCK
DESIGNATION OF THE WILLIAMS COMPANIES, INC. FILED IN THIS OFFICE ON THE SEVENTH
DAY OF FEBRUARY, A.D. 1989, AT 10 O'CLOCK A.M.
[OFFICE OF THE SECRETARY OF STATE SEAL]
/s/ MICHAEL HARKINS
-----------------------------------
Michael Harkins, Secretary of State
729038057 AUTHENTICATION: 2057835
DATE: 02/07/1989
729038057
CERTIFICATE OF INCREASE
OF
AUTHORIZED NUMBER OF SHARES [STAMP]
OF
Series A Junior Participating
Preferred Stock
The Williams Companies, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of said Corporation was
filed in the office of the Secretary of State of Delaware on April 27, 1987, and
was filed for recording in the office of the Recorder of Deeds for New Castle
County, Delaware on April 27, 1987, and the Certificate of the Designations,
Preferences and Rights of the Series A Junior Participating Preferred Stock was
included in said Restated Certificate of Incorporation.
That the Board of Directors of said Corporation at a meeting held on
January 22, 1989, duly adopted a resolution authorizing and directing an
increase in the authorized number of shares of Series A Junior Participating
Preferred Stock of the Corporation, from 200,000 shares to 400,000 shares, in
accordance with the provisions of Section 151 of The General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by Vernon T. Jones, its President and attested by David
M. Higbee, its Secretary, this 26th day of January, 1989.
THE WILLIAMS COMPANIES, INC.
By /s/ VERNON T. JONES
----------------------------
President
ATTEST:
By /s/ DAVID M. HIGBEE
----------------------------
Secretary
PLEASE RETURN TO
THE CORPORATION TRUST COMPANY
INDEXED
RECEIVED FOR RECORD
'89 FEB -9 P1:27
[ILLEGIBLE]
RECORDER
[STATE OF DELAWARE LOGO]
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AGREEMENT
OF MERGER OF "THE WILLIAMS COMPANIES" A CORPORATION ORGANIZED AND EXISTING UNDER
THE LAWS OF THE STATE OF NEVADA, MERGING WITH AND INTO "THE WILLIAMS COMPANIES,
INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
DELAWARE UNDER THE NAME OF "THE WILLIAMS COMPANIES, INC." AS RECEIVED AND FILED
IN THIS OFFICE THE FIRST DAY OF JUNE, A.D. 1987, AT 10 O'CLOCK A.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CORPORATION SHALL BE
GOVERNED BY LAWS OF THE STATE OF DELAWARE.
| | | | | | | | | |
[SEAL]
/s/ Michael Harkins, Secretary of State
---------------------------------------
MICHAEL HARKINS, SECRETARY OF STATE
AUTHENTICATION: | 1257567
DATE: 06/01/1987
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated May 15, 1987 (the "Agreement"),
by and between THE WILLIAMS COMPANIES, a Nevada corporation (the "Company"), and
THE WILLIAMS COMPANIES, INC., a Delaware corporation and a wholly owned
subsidiary of the Company ("TWC, Inc."), the Company and TWC, Inc. are
hereinafter sometimes collectively referred to as the "Constituent
Corporations,"
WITNESSETH:
WHEREAS, the Company is a corporation duly organized and existing under
the laws of the State of Nevada, having been incorporated on February 3, 1949,
by the filing of Articles of Incorporation with the Secretary of State of Nevada
on February 3, 1949, said Articles of Incorporation having been restated on July
21, 1971 and having been amended from time to time thereafter; the principal
office of the Company in the State of Nevada is located at Suite 1400, First
National Bank Building, One East First Street, Reno, Nevada; and the name of the
registered agent at such office is Nevada Agency and Trust Company; and
WHEREAS, TWC, Inc. is a corporation duly organized and existing under the
laws of the State of Delaware, having been incorporated thereunder by a
Certificate of Incorporation filed with the Secretary of State of Delaware and
recorded in the Office of the Recorder of Deeds of the County of New Castle,
Delaware on February 3, 1987; the registered office of TWC, Inc. in the State of
Delaware is located at 1209 Orange Street, in the City of Wilmington, County of
New Castle; and the name of its registered agent at such office is The
Corporation trust Company; and
WHEREAS, the Company on February 20, 1987, had an authorized
capitalization consisting of (i) 120,000,000 shares of Common Stock, $1 par
value, of which 35,104,080 shares (which, including any additional shares of
Common Stock issued between such date and the effective date of the merger, are
herein called the "Common Shares") were issued and outstanding at such date and
6,674,809 shares are reserved for issuance under the Company's Automatic
Dividend Reinvestment and Common Stock Purchase Plan and under various employee
benefit plans sponsored by the Company and its subsidiaries, and (ii) 30,000,000
shares of Preferred Stock, $1 par value, 200,000 shares of which, designated
Series A Junior Participating Preferred Stock are reserved for issuance
1
upon the exercise of rights to purchase such Series A Junior Participating
Preferred Stock (the "Rights"); and
WHEREAS, TWC, Inc. has an authorized capitalization consisting of (i)
120,000,000 shares of Common Stock, $1 par value, of which 1,000 shares (the
"TWC Shares") are now issued and outstanding and owned by the Company, and (ii)
30,000,000 shares of Preferred Stock, $1 par value, none of which are issued and
outstanding; and
WHEREAS, the Board of Directors of the Constituent Corporations deem the
transaction contemplated herein to be in the best interests of their respective
stockholders, and, accordingly, such Boards of Directors have unanimously
approved and adopted this Agreement and directed that it be submitted to a vote
of the respective stockholders of the Constituent Corporations; and
WHEREAS, the Constituent Corporations desire, upon the terms and subject
to the conditions herein stated, that the Company be merged with and into TWC,
Inc. pursuant to the applicable statutes of the States of Nevada and Delaware
with (i) the outstanding Common Shares, of the Company converted into shares of
Common Stock, $1 par value, of TWC, Inc., (ii) the outstanding Rights to
purchase the Preferred Stock converted into rights to purchase Series A Junior
Participating Preferred Stock of TWC, Inc., and (iii) the 1,000 TWC Shares owned
by the Company be returned to TWC, Inc. by the Company and canceled by TWC,
Inc., so that after the effective time of the merger all of the outstanding
Common Stock and rights to purchase Series A Junior Participating Preferred
Stock of TWC, Inc. will be owned by those who, immediately prior to the
effective time of the merger, owned the outstanding Common Shares and Rights of
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
TERMS
1.1 Upon the terms and conditions herein stated, it is agreed that upon
the effective time of the merger, as defined in Section 2.1 below, the Company
shall be merged with and into TWC, Inc. in accordance with the applicable
statutes of the States of Nevada and Delaware, and the separate existence of the
Company shall cease, and TWC, Inc. shall continue under the laws of the State of
Delaware as the surviving corporation under the name "The Williams Companies,
Inc.".
2
1.2 Upon the effective time of the merger:
(a) The 1,000 TWC Shares outstanding (all of which are owned of
record and beneficially by the Company) shall be contributed to, and
transferred by, the Company to TWC, Inc. and canceled and retired; all
rights in respect thereof shall cease; and no shares of stock or other
securities of TWC, Inc. shall be issued in respect thereof.
(b) Each of the Common Shares of the Company issued and outstanding
immediately prior to the effective time of the merger shall, forthwith and
without the surrender of stock certificates or any other action on the
part of the holder thereof, be converted into one fully paid and
nonassessable share of Common Stock, $1 par value, of TWC, Inc.
(c) Each Right to purchase the Preferred Stock of the Company
outstanding immediately prior to the effective time of the merger shall,
forthwith and without any action on the part of the holder thereof, be
converted into the right to purchase the same number of shares of Series A
Junior Participating Preferred Stock of TWC, Inc.
(d) Issued and outstanding certificates representing Common Shares
of the Company shall, at and after the effective time of the merger, be
deemed for all purposes to represent the same number of shares of the
Common Stock of TWC, Inc.; and the holders of such certificates shall have
precisely the same rights as if such certificates had been issued by TWC,
Inc.
(e) After the effective time of the merger, each holder of a
certificate representing previously issued and outstanding Common Shares
of the Company may, but shall not be required to, surrender the same to
TWC, Inc., and each holder shall be entitled, upon such surrender, to
receive a certificate or certificates representing the same number of
shares of TWC, Inc. as the number of Common Shares of the Company which
were previously held by such holder.
(f) Each of the Common Shares of the Company held in the treasury of
the Company, if any, at the effective time of the merger, shall forthwith
and without any further action be converted into an equal number of shares
of Common Stock of TWC, Inc. held in the treasury of TWC, Inc.
3
(g) TWC, Inc. shall be entitled to the protection of, and to rely
upon, the stock records of the Company to the same extent as if the same
were its own records; and such records shall be deemed to be the records
of TWC, Inc. for all corporate purposes.
ARTICLE II
EFFECTIVE TIME OF MERGER
2.1 This Agreement has been or shall be submitted to the stockholders of
each of the Constituent Corporations as provided by the applicable laws of the
States of Nevada and Delaware, and if this Agreement shall have been duly
adopted by the requisite vote of such stockholders in accordance with such
applicable laws, then at the earliest convenient time thereafter this Agreement,
and all other instruments or documents required by applicable law for
consummation of the merger thereunder, shall be filed in accordance with the
laws of such States and become effective upon the issuance of a certificate of
merger by the Secretary of State of the State of Delaware (the time of such
issuance being sometimes herein referred to as the "effective time of the
merger"), unless this Agreement shall have been terminated in accordance with
the provisions of Article V.
2.2 The Restated Certificate of Incorporation and By-laws of TWC, Inc. in
existence and effect immediately prior to the effective time of the merger shall
continue in full force and effect as the Restated Certificate of Incorporation
and By-laws of TWC, Inc. until the same shall thereafter be altered, amended or
repealed, in accordance with their respective terms.
2.3 At the effective time of the merger, all and singular the rights,
privileges, powers and franchises, both of a public as well as a private nature,
and all the property, real, personal and mixed, of each of the Constituent
Corporations, and all debts due to either of them on whatever account, including
subscriptions to shares and all other things in action, or belonging to either
of them shall be taken and deemed to be transferred to, and shall be vested in
and possessed by TWC, Inc. without further act or deed; and all of the property,
rights, privileges, powers and franchises of each of the Constituent
Corporations, and all and every other interest shall be thereafter as
effectually the property of TWC, Inc. as they were of the Constituent
Corporations, and the title to any real estate vested by deed or otherwise in
either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the merger; but TWC, Inc. shall thenceforth be liable for
all debts, liabilities, obligations, duties and penalties of the Constituent
4
Corporations, and the same shall henceforth attach to TWC, Inc. and may be
enforced against it to the same extent as if said debts, liabilities,
obligations, duties and penalties had been incurred or contracted by it. No
liability or obligation due at the effective time of the merger, or then to
become due, claim or demand for any cause then existing against either of the
Constituent Corporations, or any stockholder, officer or director thereof,
shall be released or impaired by the merger, and all rights of creditors and all
liens upon property of either of the Constituent Corporations shall be preserved
unimpaired.
2.4 The parties hereto agree that from time to time as and when requested
by TWC, Inc. or by its successors or assigns, the officers and directors of the
Company and of TWC, Inc. are fully authorized in the name of the Company or
otherwise to execute and deliver all such deeds, assignments or other
instruments and to take or cause to be taken all such further action as TWC,
Inc. or any such officer of TWC, Inc. may deem necessary or desirable in order
to vest in and confirm to TWC, Inc. and its successors and assigns, title to and
possession of the property, riqhts, privileges, powers and franchises referred
to in Section 2.3 hereof, and otherwise to carry out the intent and purpose of
this Agreement.
2.5 The merger shall be accounted for in accordance with generally
accepted accounting principles. As of the effective time of the merger the
assets and liabilities of the Constituent Corporations shall be taken up or
continued, as the case may be, on the books of TWC, Inc., at the amounts at
which they respectively shall be carried on the books of the respective
Constituent Corporations immediately prior to the effective time of the merger.
2.6 Upon the effective time of the merger, all corporate acts,
resolutions, plans, policies, agreements, arrangements, approvals and
authorizations of the Company its stockholders, Board of Directors and
committees thereof, officers and agents which were valid and effective
immediately prior to the effective time of the merger, shall be taken for all
purposes as the acts, resolutions, plans, policies, agreements, approvals and
authorizations of TWC, Inc. and shall be as effective and binding thereon as the
same were with respect to the Company, and TWC; inc. will succeed to all rights
and obligations of the Company under the rights agreement pursuant to which the
Rights were issued.
2.7 Upon the effective time of the merger, all of the Company's executive,
employee and stockholders' benefit plans Including, without limitation, the
Company's Retirement Income Plan, Supplemental Retirement Plan Agreements,
Indemnity
5
Agreements, Employees' Investment Plan, Thrift Plan, Investment Plan for
Classified Employees, Executive Incentive Compensation Plan, Employee Stock
Ownership Plan, Bonus Employee Stock Ownership Plan, Stock Option Plans and
stockholders' Automatic Dividend Reinvestment and Common Stock Purchase Plan)
shall be assumed by TWC, Inc. and shall continue in full force and effect
relating to the same executives, employees and stockholders to which such plans
related immediately prior to the merger, and such executives, employees and
stockholders shall be entitled to the same number of shares of TWC, Inc. or
amount of other forms of remuneration or benefits after the effective time of
the merger, as the number of shares of the Company's Common Stock or amount of
other forms of remuneration or benefits as such executives, employees and
shareholders were entitled to immediately prior to the merger,
2.8 Upon the effective time of the merger, the directors and officers of
the Company shall be the directors and officers of TWC, Inc., and each such
director shall hold office until a successor shall have been elected and
qualified in accordance with the term of the class to which such director was a
member immediately prior to the merger as specified in the By-laws of the
Company or such director's earlier resignation or removal, and each such officer
shall hold office until a successor shall have been elected and qualified in
accordance with the By-laws of TWC, Inc. or such officer's earlier resignation
or removal.
6
ARTICLE III
COVENANTS AND AGREEMENTS
3.1 From the date hereof until the effective time of the merger or until
abandonment or deferral of the merger pursuant to Article V hereof:
(a) Each of the Constituent Corporations will exercise all
reasonable efforts to obtain requisite consents and approvals to the
merger herein contemplated and to comply with any and all instruments or
agreements to which either corporation is a party or by which either may
be bound.
(b) TWC, Inc. shall not transact any business, enter into any
transactions, permit any change in its capital stock, or perform any acts
except as shall be necessary or appropriate to the consummation of the
transactions contemplated hereby.
(c) The Board of Directors of TWC, Inc. shall cause to be taken all
steps necessary to secure listing of the shares of Common Stock and rights
to purchase Series A Junior Participating Preferred Stock of TWC, Inc. on
the New York and Pacific Stock Exchanges.
(d) The Company shall present this Agreement for adoption, or
rejection by a vote of the holders of the Common Shares of the Company at
the Company's 1987 Annual Meeting of Stockholders, will furnish to such
holders such documents and information in connection therewith as required
by law, and will recommend approval and adoption of this Agreement by such
holders.
ARTICLE IV
CONDITIONS
4.1 The obligations of the Company and TWC, Inc. to consummate the
transactions contemplated hereby are subject to the rights of the Company and
TWC, Inc. to terminate or defer this Agreement pursuant to Article V hereof and
to the receipt of the favorable legal opinion, dated the effective time of the
merger and in form and substance satisfactory to the Company and to TWC, Inc.,
to the effect that (i) TWC, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, (ii) the
Board of Directors and the stockholders of the Company and of TWC, Inc. have
taken all action necessary to adopt this Agreement, and this Agreement is a
7
valid and binding agreement in accordance with its terms; and (iii) for federal
income tax purposes (A) the merger herein contemplated will constitute a
reorganization within the meaning of Section 368(a)(l)(F) of the Internal
Revenue Code; (B) no gain or loss will be recognized to the Company or to TWC,
Inc. by reason of the merger herein contemplated; (C) the basis of the assets
transferred to TWC, Inc, pursuant to such merger will be the same as the basis
for such assets in the hands of the Company immediately prior to the effective
time of such merger; and (D) no gain or loss will be recognized to the holders
of the Common Shares of the Company upon receipt of the shares of Common Stock
of TWC, Inc.
ARTICLE V
TERMINATION
5.1 Anything herein or elsewhere to the contrary notwithstanding, this
Agreement and the merger herein provided for, may be terminated and abandoned,
or deferred for a reasonable period of time if such would be in the best
interests of the Constituent Corporations or their stockholders, by the Board of
Directors of the Company at any time before the effective date of the merger for
any reason, in the sole discretion of said Board of Directors, either before or
after stockholder approval, subject to applicable law.
5.2 In the event of termination or abandonment by the Board of Directors
of the Company, this Agreement shall become wholly void and of no effect and
there shall be no liability on the part of either of the Constituent
Corporations or their respective Boards of Directors or stockholders.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 TWC, Inc. hereby (i) agrees that it may be served with process in the
State of Nevada in any proceeding for the enforcement of any obligation of the
Company, as well as for the enforcement of any obligation of TWC, Inc. arising
from the merger; (ii) irrevocably appoints the Secretary of State of the State
of Nevada as its agent to accept service of process in any such suit or other
proceeding; and (iii) specifies One Williams Center, Tulsa, Oklahoma 74172, as
the address to which a copy of such process shall be mailed by the Secretary of
State of the State of Nevada. Nothing herein shall be deemed to imply that any
stockholder of the Company has rights of appraisal nor shall anything herein be
deemed an acknowledgment by the Company or TWC, Inc. that any stockholder has
such rights.
8
6.2 Subject of applicable law, this Agreement may be amended by an
agreement in writing, before or after the meeting of stockholders of the
Company, at any time prior to the effective time of the merger, with respect to
any of the terms contained herein except the terms of the conversion provided
for in Section 1.2.
6.3 This Agreement shall be construed under and in accordance with and be
governed by the laws of the State of Delaware.
6.4 This Agreement shall be binding upon and shall inure to the benefit of
the parties and their respective successors and assigns.
6.5 This Agreement may be executed in one or more counterparts, each of
which when duly executed shall be deemed an original, and such counterparts
shall together constitute one and the same instrument.
IN WITNESS WHEREOF, The Williams Companies and The Williams Companies,
Inc. by their duly authorized officers, have duly executed this Agreement as of
the date first above written.
THE WILLIAMS COMPANIES
a Nevada corporation
By [ILLIGIBLE]
-------------------------
President
Attests:
/s/ David M. Higbee
- -------------------
Secretary
THE WILLIAMS COMPANIES, INC.
a Delaware corporation
By [ILLIGIBLE]
-------------------------
Vice President
Attest:
/s/ David M. Higbee
- --------------------
Secretary
9
CERTIFICATE OF SECRETARY
I, David M. Higbee, Secretary of The Williams Companies, a Nevada
corporation ("the Company"), do hereby certify as such Secretary in accordance
with the General Corporation Laws of the States of Nevada and Delaware, that a
form of the Agreement and Plan of Merger (the "Agreement") to which this
Certificate is attached was duly submitted to the shareholders of the Company,
and that said Agreement was approved by such shareholders at the Annual Meeting
of Shareholders held May 19, 1987 and that 19,497,355 shares of Common Stock,
constituting a majority of the outstanding shares of Common Stock, were voted
for the adoption of said Agreement and that thereby said Agreement was therefore
duly adopted as the act of the shareholders of the Company and as the agreement
and act of the Company.
IN WITNESS WHEREOF, I have executed this Certificate this 19th day of May,
1987.
/s/ David M. Higbee
------------------------
David M. Higbee
Secretary
10
CERTIFICATE OF SECRETARY
I, David M. Higbee, Secretary of The Williams Companies, Inc., a Delaware
corporation ("TWC, Inc."), do hereby certify as such Secretary in accordance
with the Corporation Laws of the States of Delaware and Nevada, that the
Agreement and Plan of Merger (the "Agreement") to which this Certificate is
attached, after having been first duly adopted and executed by TWC, Inc. and The
Williams Companies, a Nevada corporation, was duly submitted to the sole
shareholder of TWC, Inc. and was approved by such sole stockholders by written
consent dated May 19, 1987, that by virtue of such written consent, 1,000 shares
of Common Stock, constituting all of the outstanding shares of Common Stock of
TWC, Inc., were voted for the adoption of said Agreement and that thereby such
Agreement was duly adopted as the act of the sole shareholder of TWC, Inc. and
as the agreement and act of TWC, Inc., all as provided in Subchapter VII of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, I have executed this Certificate this 19th day of May,
1987.
/s/ David M. Higbee
-------------------
David M. Higbee
Secretary
11
BOOK 530 PAGE 73
PAGE 1
STATE OF DELAWARE
[LOGO]
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF RESTATED
CERTIFICATE OF INCORPORATION OF THE WILLIAMS COMPANIES, INC. FILED IN THIS
OFFICE ON THE TWENTY-SEVENTH DAY OF APRIL, A.D. 1987, AT 10 O'CLOCK A.M.
[OFFICE OF THE SECRETARY OF STATE SEAL]
/s/ MICHAEL HARKINS
-----------------------------------
Michael Harkins, Secretary of State
877117092 AUTHENTICATION: 1214714
DATE: 04/27/1987
BOOK 530 PAGE 74 [STAMP]
RESTATED
CERTIFICATE OF INCORPORATION
OF
THE WILLIAMS COMPANIES, INC.
THE WILLIAMS COMPANIES, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Company") does hereby certify as
follows:
1. The name of the Company is THE WILLIAMS COMPANIES, INC. The date of
filing of the Company's original Certificate of Incorporation with the Secretary
of State of the state of Delaware was February 3, 1987.
2. The Board of Directors of the Company adopted a resolution
proposing and declaring advisable the following amendments to and restatement of
the Certificate of Incorporation of the Company.
3. This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the state of Delaware.
FIRST: The name of the Company is THE WILLIAMS COMPANIES, INC.
SECOND: The address of the registered office of the Company in the
state of Delaware is 1209 Orange Street, in the city of Wilmington, county of
New Castle. The name of the Company's registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Company is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware as set forth in Title 8 of the Delaware Code.
FOURTH: The total number of shares of capital stock which the Company
shall have authority to issue is 150,000,000 shares, consisting of 120,000,000
shares of Common Stock, par value $1.00 per share (the "Common Stock") and
30,000,000 shares of Preferred Stock, par value $1.00 per share (the "Preferred
Stock").
I.
1. Any unissued or treasury shares of the Preferred Stock may be
issued from time to time in one or more series, as authorized by the Board of
Directors, subject to the limitations of this Article FOURTH. The designations,
preferences and relative, participating, optional and other special rights, and
the
1
BOOK 530 PAGE 75
qualifications, limitations and restrictions thereof, of the Preferred Stock
of each series shall be such as are stated and expressed in this Article
FOURTH and, to the extent not stated and expressed herein, shall be such as may
be fixed by the Board of Directors (authority so to do being hereby expressly
granted) and stated and expressed in a resolution or resolutions adopted by the
Board of Directors providing for the issue of Preferred Stock of such series.
Such resolution or resolutions shall specify:
(a) the distinctive designation of such series and the number of
shares which shall constitute such series, which may be increased (except where
otherwise provided by the Board of Directors in creating such series) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by like action of the Board of Directors;
(b) the rate of dividends, if any, payable on shares of such series,
the date, if any, from which such dividends shall accrue, the conditions upon
which and the dates when such dividends shall be payable, and whether such
dividends shall be cumulative or noncumulative;
(c) the amount or amounts which the holders of the Preferred Stock of
such series shall be entitled to be paid in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Company (which amounts
need not be the same for each such event); and
(d) whether or not the Preferred Stock of such series shall be
redeemable and at what times and under what conditions and the amount or amounts
payable thereon in the event of redemption; and may, in a manner not
inconsistent with the provisions of this Article FOURTH,
(i) limit the number of shares of such series which may be
issued;
(ii) provide for a sinking fund for the purchase or redemption or
a purchase fund for the purchase of shares of such series and the terms and
provisions governing the operation of any such fund and the status as to reissue
of shares of Preferred Stock purchased or otherwise reacquired or redeemed or
retired through the operation thereof, and that so long as the Company is in
default as to such sinking or purchase fund the Company shall not (with such
exceptions, if any, as may be provided) pay any dividends upon or purchase or
redeem shares of capital stock ranking junior to the Preferred Stock as to
dividends or distribution of assets upon liquidation (referred to in this
Article FOURTH as "junior stock");
(iii) grant voting rights to the holders of shares of such
series, in addition to and not inconsistent with those granted by this Article
FOURTH to the holders of Preferred Stock;
(iv) impose conditions or restrictions upon the creation of
indebtedness of the Company or upon the issue of additional Preferred Stock or
other capital stock ranking equally therewith or prior thereto as to dividends
or distribution of assets on liquidation;
2
BOOK 530 PAGE 76
(v) impose conditions or restrictions upon the payment of
dividends upon, or the making of other distributions to, or the acquisition of,
junior stock;
(vi) grant to the holders of the Preferred Stock of such series
the right to convert such stock into shares of another series or class of
capital stock; and
(vii) grant such other special rights to the holders of shares of
such series as the Board of Directors may determine and as shall not be
inconsistent with the provisions of this Article FOURTH.
The term "fixed for such series" and similar terms shall mean stated
and expressed in this Article FOURTH or in the resolution or resolutions adopted
by the Board of Directors providing for the issue of Preferred Stock of the
series referred to therein.
2. Subject to any limitations specified in the resolution or
resolutions providing for the issuance thereof, the holders of the Preferred
Stock of the respective series shall be entitled to receive, when and as
declared by the Board of Directors, out of any funds legally available therefor,
preferential dividends in cash, at the rate per annum, if any, fixed for such
series, payable at quarter-yearly, half-yearly, or yearly intervals, and on such
dates, as may be specified in the resolution or resolutions adopted by the Board
of Directors providing for the issue of Preferred Stock of such respective
series, to stockholders of record on a date, preceding each such dividend
payment date, fixed for the purpose by the Board of Directors in advance of
payment of each particular dividend. Each share of Preferred Stock shall rank on
a parity with each other share of Preferred Stock, irrespective of series, with
respect to preferential dividends accrued on the shares of such series, and no
dividend shall be declared or paid or set apart for payment for the Preferred
Stock of any series unless at the same time a dividend in like proportion to the
dividends accrued upon the Preferred Stock of each other series shall be
declared or paid or set apart for payment, as the case may be, on Preferred
Stock of each other series then outstanding; but nothing in this subdivision 2.
shall prevent the authorization or issuance of one or more series of Preferred
Stock bearing dividends subject to contingencies as to the existence or amount
of earnings of the Company during one or more fiscal periods, or as to other
events, to which dividends on other series of Preferred Stock are not subject.
3. So long as any shares of Preferred Stock shall remain outstanding,
in no event shall any dividends whatsoever, whether in cash, stock, or
otherwise, be paid or declared, or any distribution be made on any class of
junior stock, nor shall any shares of junior stock be purchased, retired or
otherwise acquired for a valuable consideration by the Company, unless all
dividends accrued on outstanding shares of Preferred Stock for all past dividend
periods shall have been paid, or declared and a sum sufficient for the payment
thereof set apart, and the full
3
BOOK 530 PAGE 77
dividend thereon for the then current dividend period shall have been paid, or
declared and a sum sufficient for the payment thereof set apart. For purposes of
this Article FOURTH, dividends shall not be deemed to have "accrued" for any
dividend period on the shares of Preferred Stock of any series unless (a) such
shares were outstanding during such period, and either (b) the resolution or
resolutions of the Board of Directors providing for such series shall expressly
state that dividends on shares thereof accrue whether or not earned or declared,
and are cumulative, or (c) any and all contingencies to which the accrual of
dividends on shares of such series shall by the terms of the resolution or
resolutions of the Board of Directors providing for such series be subject shall
have been satisfied; and the term "accrued and unpaid dividends" with respect to
Preferred Stock of any series shall mean accrued dividends on all outstanding
shares of Preferred Stock of such series, from the date or dates from which
dividends accrued thereon to the date as of which accrued and unpaid dividends
are being determined, less the aggregate amount of all dividends theretofore
declared and paid or set apart for payment upon such outstanding Preferred
Stock.
4. The Company at the option of the Board of Directors may redeem all
or any part of the Preferred Stock of any series which by its terms is
redeemable, at the time or times and on the terms and conditions fixed for such
series, upon notice duly given in the manner provided in the resolution or
resolutions of the Board of Directors providing for such series, by paying
therefore in cash the sum fixed for such series, together, in each case, with an
amount equal to accrued and unpaid dividends thereon. The resolution or
resolutions of the Board of Directors providing for a series subject to
redemption may provide that when notice of redemption of all or part of the
shares of such series shall have been given, and the redemption price of such
shares, together with accrued dividends to the date fixed as the redemption date
(which shall be a date after the date of such notice), has been set aside by the
Company, or deposited with a suitable depositary, for the pro rata benefit of
the holders of the shares called for redemption, then the shares so called shall
no longer be deemed outstanding, and all rights with respect to such shares,
including the accrual of further dividends, other than the right to receive the
redemption price of such shares, without interest, shall cease. Such resolution
or resolutions may further provide, in any case where funds are deposited with a
depositary other than the Company, that any funds held by such depositary in
respect of shares not presented for redemption within such period as may be
fixed in such resolution or resolutions, but not less than six months, after the
date on which such funds were first available to holders of such shares against
presentation thereof for redemption, shall be repaid to the Company, and that
thereafter the holders of such shares shall look solely to the Company for the
funds payable upon redemption thereof.
5. Except as herein or by law expressly provided or except as may be
provided for any series of Preferred Stock by
4
BOOK 530 PAGE 78
the resolution or resolutions of the Board of Directors providing for the
issuance thereof as herein permitted, the Preferred Stock shall have no right or
power to vote on any question or in any proceeding or to be represented at or to
receive notice of any meeting of stockholders. On any matters on which the
holders of the Preferred Stock or any series thereof shall be entitled to vote
separately as a class or series, they shall be entitled to one vote for each
share held.
(a) So long as any shares of Preferred Stock are outstanding, the
Company shall not, without the consent of the holders of at least a majority of
the number of shares of the Preferred Stock at the time outstanding, given in
person or by proxy, either in writing or by vote at any annual meeting, or any
special meeting called for the purpose, purchase, redeem, or otherwise acquire
for value any shares of the Preferred Stock or of any other stock ranking on a
parity with the Preferred Stock in respect of dividends or distribution of
assets on liquidation during the continuance of any default in the payment of
dividends on the Preferred Stock.
(b) Any action specified in this subdivision 5. as requiring the
consent of the holders of at least a specified proportion of the number of
shares of Preferred Stock or of any particular series thereof at the time
outstanding or represented at a meeting may be taken with such consent and with
such additional vote or consent, if any, of stockholders as may be from time to
time required by this Restated Certificate of Incorporation, as amended from
time to time, or by law.
6. In the event of any liquidation, dissolution or winding up of the
affairs of the Company, voluntary or involuntary, then, before any distribution
or payment shall be made to the holders of any class of stock of the Company
ranking junior to the Preferred Stock as to dividends or distribution of assets
on liquidation, the holders of the Preferred Stock of the respective series
shall be entitled to be paid in full the respective amount fixed, with respect
to liquidations, dissolution or winding up, voluntary or involuntary, as the
case may be, in the resolution or resolutions of the Board of Directors
providing for the issue of shares of such series, plus a sum equal to all
accrued and unpaid dividends thereon to the date of payment thereof. After such
payment shall have been made in full to the holders of the Preferred Stock, the
remaining assets and funds of the Company shall be distributed among the holders
of the stocks of the Company ranking junior to the Preferred Stock according to
their respective rights. In the event that the assets of the Company available
for distribution to holders of Preferred Stock shall not be sufficient to make
the payment herein required to be made in full, such assets shall be distributed
to the holders of the respective shares of Preferred Stock pro rata in
proportion to the amounts payable hereunder upon each share thereof.
7. Except as otherwise provided in any resolution of the Board of
Directors providing for the issuance of any particular series of Preferred
Stock, Preferred Stock redeemed or
5
BOOK 530 PAGE 79
otherwise retired by the Company shall assume the status of authorized but
unissued Preferred Stock and may thereafter, subject to the provisions of this
Article FOURTH and of any restriction contained in any such resolution, be
reissued in the same manner as other authorized but unissued Preferred Stock.
II.
At every meeting of the stockholders of the Company, each holder of
Common Stock shall be entitled to one vote, in person or by proxy, for each
share of such Common Stock standing in such holder's name on the record books of
the Company on a record date to be fixed by the Board of Directors. The holders
of the Common Stock shall have the exclusive right to vote, except as provided
by the resolution or resolutions providing for the issue of any series of
Preferred Stock, or except as expressly provided by Part I of this Article
FOURTH.
Subject to the limitations prescribed in this Article FOURTH, and any
further limitations prescribed in accordance therewith, the holders of the
Common Stock shall be entitled to receive, when and as declared by the Board of
Directors, out of the assets of the Company which are by law available therefor,
dividends payable either in cash, in property, or in shares of the Common Stock
of the Company.
In the event of any dissolution, liquidation or winding up of the
affairs of the Company, the holders of the Common Stock shall be entitled, after
payment or provision for payment of the debts and other liabilities of the
Company, and the amounts to which the holders of the Preferred Stock shall be
entitled to share ratably in the remaining net assets of the Company.
III.
Except as may be otherwise expressly provided with respect to a
particular series of Preferred Stock in the resolution or resolutions of the
Board of Directors providing for such series, no holder of any shares of stock
of the Company of any class or series shall be entitled as of right to subscribe
to and/or purchase or acquire from the Company any stock of such class or series
or any other class or series and/or any bonds, notes, debentures or other
securities or obligations convertible into, or carrying warrants or rights to
subscribe to, stock of the Company of any class or series; but all shares of
stock, and all bonds, notes, debentures or other securities or obligations,
whether or not convertible into stock or carrying warrants or rights to
subscribe to stock, may be issued, sold and disposed of from time to time by the
Board of Directors to such persons, firms or corporations and for such
consideration (so far as may be permitted by law) as the Board of Directors
shall from time to time in its absolute discretion, determine, without offering
any stock, bonds, notes, debentures or other securities or obligations to the
holders of Common Stock or any series of Preferred Stock.
6
BOOK 530 PAGE 80
Of the 30,000,000 authorized shares of Preferred Stock of the Company,
200,000 shares shall be issued in a series designated as Series A Junior
Participating Preferred Stock, $1.00 par value per share as set forth
hereinafter.
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 200,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of Series A Junior Participating Preferred 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 last day of February, May, August and November 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 A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $20
or (b) subject to the provision for adjustment hereinafter set forth, 200 times
the aggregate per share amount of all cash dividends, and 200 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, $1.00 par value, of the Company (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 A Junior Participating
Preferred Stock. In the event the Company shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (a) and clause
(b) of the preceding sentence shall be adjusted by multiplying each 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.
7
BOOK 530 PAGE 81
(B) The Company shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A)
above 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 $20 per share on the
Series A Junior Participating 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 A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, 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 A Junior Participating 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 A Junior Participating
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 A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 200 votes on all matters submitted to a vote of the
stockholders of the Company. In the event the Company shall at any time (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares of its capital
stock in a reclassification of the outstanding Common Stock, then in each such
case the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number
8
BOOK 530 PAGE 82
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 or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Company.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for payment.
During each default period, the holders of Preferred Stock, voting as a
class, irrespective of series, shall have the right to elect two (2)
Directors.
(ii) During any default period, such voting right of the holders
of Series A Junior Participating Preferred Stock may be exercised initially
at a special meeting called pursuant to subparagraph (iii) of this Section
3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors shall be
exercised unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At any
meeting at which the holders of Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have the
right, voting as a class, to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two (2) Directors
or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting
does not amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised their right
to elect Directors in any default period and during the continuance of such
period, the number of Directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities
9
BOOK 530 PAGE 83
ranking senior to or pari passu with the Series A Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the Chairman of
the Board, the President, a Vice President or the Secretary of the Company.
Notice of such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by mailing a
copy of such notice to him at his last address as the same appears on the
books of the Company. Such meeting shall be called for a time not earlier
than 10 days and not later than 60 days after such order or request; or in
default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 10% of the total number
of shares of Preferred Stock outstanding. Notwithstanding the provisions of
this paragraph (C)(iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period the holders of Common Stock, and other
classes of stock of the Company if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (C)(ii) of this Section 3)
be filled by vote of a majority of the remaining Directors theretofore
elected by the holders of the class of stock which elected the Director
whose office shall have become vacant. References in this paragraph (C) to
Directors elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the Restated
10
Certificate of Incorporation or By-laws irrespective of any increase
made pursuant to the provisions of paragraph (C)(ii) of this Section 2
(such number being subject, however, to change thereafter in any
manner provided by law or in the Restated Certificate of Incorporation
or By-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating 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.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Company shall not
(i) declare or pay dividends on, make other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Stock;
(ii) declare or pay dividends on 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 A Junior
Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating 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 on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Company ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior Participating
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
11
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 Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary liquidation, dissolution or winding up of the
Company, 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 A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $200 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 200 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Series A Junior Participating Preferred Stock
and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the
12
BOOK 530 PAGE 86
Series A Liquidation Preference and the liquidation preferences of all other
series of Preferred Stock, if any, which rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.
(C) In the event the Company shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. In case the Company shall enter into
any consolidation, merger, combination 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, the shares of Series A
Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 200 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 Company shall at any time (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding 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 A Junior Participating 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.
Section 8. No Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Company's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
13
BOOK 530 PAGE 87
Section 10. Amendment. The Restated Certificate of Incorporation of the
Company shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in liquidating distributions and to have the
benefit of all other rights of holders of Series A Junior Participating
Preferred Stock.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Company, and for further
definition, limitation and regulation of the powers of the Company and of the
Board of Directors and stockholders:
A. The business and affairs of the Company shall be managed by or
under the direction of the Board of Directors.
B. The Board of Directors shall consist of not fewer than five nor
more than seventeen Directors. The exact number of Directors shall be
determined from time to time by resolution adopted by the affirmative vote
of a majority of the Board of Directors. The Directors shall serve for
three-year terms and shall be divided into three classes, designated Class
I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of Directors constituting the
entire Board of Directors.
C. If the number of Directors is changed in accordance with the terms
of this Restated Certificate of Incorporation, any increase or decrease
shall be apportioned among the classes so as to maintain the number of
Directors in each class as nearly equal as possible, and any additional
Director of any class elected to fill a vacancy resulting from an increase
in such class shall hold office for a term that shall coincide with the
remaining term of that class, but in no case will a decrease in the number
of Directors shorten the term of any incumbent Director. A Director shall
hold office until the annual meeting for the year in which such Director's
term expires and until such Director's successor shall be elected and shall
qualify, subject, however, to the Director's prior death, resignation,
disqualification or removal from office. The stockholders shall not have
the right to remove any one or all of the Directors except for cause and by
the
14
BOOK 530 PAGE 88
affirmative vote of the holders of 75 percent of the voting power of all
shares of outstanding stock of the Company generally entitled to vote in
the election of Directors, considered for purposes of this Article FIFTH as
one class. Any vacancy on the Board of Directors that results from a newly
created Directorship may be filled by the affirmative vote of a majority of
the Board of Directors then in office, and any other vacancy occurring on
the Board of Directors may be filled by a majority of the Directors then in
office, although less than a quorum, or by a sole remaining Director. Any
Director elected to fill a vacancy not resulting from an increase in the
number of Directors shall have the same remaining term as that of the
predecessor.
D. Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of Preferred Stock issued by the Company shall have
the right, voting separately by class or series, to elect Directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be
governed by the terms of this Restated Certificate of Incorporation
applicable thereto (including the resolutions adopted by the Board of
Directors pursuant to Article FOURTH), and such Directors so elected shall
not be divided into classes pursuant to Paragraph B of this Article FIFTH
unless expressly provided by such terms. Election of Directors need not be
by written ballot unless the By-laws so provide.
E. The Board of Directors may from time to time determine whether, to
what extent, at what times and places and under what conditions and
regulations the accounts, books and paper of the Company or any of them,
shall be open to the inspection of the stockholders, and no stockholder
shall have any right to inspect any account, book or document of the
Company, except as and to the extent expressly provided by law with
reference to the right of stockholders to examine the original or duplicate
stock ledger, or otherwise expressly provided by law, or except as
expressly authorized by resolution of the Board of Directors.
F. To the fullest extent permitted by Delaware General Corporation Law
as the same exists or may hereafter be amended, a Director of the Company
shall not be liable to the Company or its stockholders for monetary damages
for breach of such Director's fiduciary duty as Director.
G. In addition to the powers and authority herein before or by statute
expressly conferred upon them, the Directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Company, subject,
15
BOOK 530 PAGE 89
nevertheless, to the provisions of the statutes of Delaware, this Restated
Certificate of Incorporation, and any By-laws adopted by the stockholders;
provided, however, that no By-laws hereafter adopted by the stockholders
shall invalidate any prior act of the Directors which would have been valid
if such By-laws had not been adopted.
H. Any action, except election of Directors, which may be taken by the
vote of stockholders at a meeting, may be taken without a meeting if
authorized by the written consent of stockholders holding at least a
majority of the voting power, provided, that if any greater proportion of
voting power is required for such action at a meeting, then such greater
proportion of written consents shall be required.
I. Subject to the terms of any series of Preferred Stock or any other
securities of the Company, special meetings of stockholders of the Company
may be called only by the Board of Directors pursuant to a resolution
approved by a majority of the entire Board of Directors or as otherwise
provided in the By-laws of the Company.
J. No amendment to the Restated Certificate of Incorporation of the
Company shall amend, alter, change, or repeal any provision of this Article
FIFTH unless the amendment affecting such amendment, alteration, change, or
repeal shall receive the affirmative vote of the holders of 75 percent of
the voting power of all shares of outstanding stock of the Company
generally entitled to vote in the election of Directors, considered for
purposes of this Article FIFTH as one class.
SIXTH. A. Except to the extent prohibited by law, the Board of Directors
shall have the right (which, to the extent exercised, shall be exclusive) to
establish the rights, powers, duties, rules and procedures that from time to
time shall govern the Board of Directors and each of its members, including
without limitation the vote required for any action by the Board of Directors,
and that from time to time shall affect the Directors' power to manage the
business and affairs of the Company; and no By-law shall be adopted by
stockholders which shall impair or impede the implementation of the foregoing.
B. The Board of Directors shall have the power to make, alter, amend,
change, add to or repeal the By-laws of the Company. The Board of Directors may
amend the By-laws of the Company upon the affirmative vote of the number of
Directors which shall constitute, under the terms of the By-laws, the action of
the Board of Directors.
SEVENTH: Except as set forth below, the affirmative vote of the holders of
75 percent of the voting power of all
16
BOOK 530 PAGE 90
shares of outstanding stock of the Company, generally entitled to vote in
elections of Directors, considered for the purposes of this Article SEVENTH as
one class, shall be required (a) for the adoption of any agreement for the
merger or consolidation of the Company with or into any other corporation, or
(b) to authorize any sale or lease of all or any substantial part of the assets
of the Company to, or any sale or lease to the Company or any subsidiary thereof
in exchange for securities of the Company of any assets (except assets having an
aggregate fair market value of less than $6,000,000) of, any other corporation,
person or other entity, if, in either case, as of the record date for the
determination of stockholders entitled to notice thereof and to vote thereon
such other corporation, person or entity is the beneficial owner, directly or
indirectly, of more than five percent of the voting power of all shares of
outstanding stock of the Company entitled to vote in elections of Directors
considered for the purposes of this Article SEVENTH as one class. Such
affirmative vote shall be in addition to the vote of the holders of the stock of
the Company otherwise required by law or any agreement between the Company and
any national securities exchange.
For the purpose, but only for the purpose, of determining whether a person,
corporation, or other entity is "the beneficial owner, directly or indirectly,
of more than five percent of the voting power of all shares of outstanding stock
of the Company generally entitled to vote in elections of Directors", (x) any
corporation, person or other entity shall be deemed to be the beneficial owner
of any shares of stock of the Company (i) which it has the right to acquire
pursuant to any agreement, or upon exercise of conversion rights, warrants or
options, or otherwise, and whether for or without the payment of any
consideration therefor, or (ii) which are beneficially owned, directly or
indirectly (including shares deemed owned through application of clause (i),
above), by any other corporation, person or entity with which it or its
"affiliate" or "associate" (as defined below) has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting, or disposing of
stock of the Company, or which is its "affiliate" or associate" (as defined
below), and (y) the outstanding shares of any class of stock of the Company
shall include shares deemed owned through application of clause (i), as if all
such acquisitions had been effected, and clause (ii) above.
The Board of Directors shall have the power and duty to determine for the
purposes of this Article SEVENTH on the basis of information known to the
Company, whether (i) such other corporation, person or other entity beneficially
owns more than five percent of the voting power of all shares of outstanding
stock of the Company entitled to vote in elections of Directors, (ii) a
corporation, person or entity is an "affiliate" or "associate" (as defined
below) of another, (iii) the assets being acquired by the corporation, or any
subsidiary thereof, have an aggregate fair market value of less than $6,000,000
and (iv) the
17
BOOK 530 PAGE 91
memorandum of understanding referred to below is substantially consistent with
the transaction covered thereby. Any such determination shall be conclusive and
binding for all purposes of this Article SEVENTH.
The provisions of this Article SEVENTH shall not be applicable to (i) any
merger or consolidation of the Company with or into any other corporation, or
any sale or lease of all or any substantial part of the assets of the Company
to, or any sale or lease to the Company or any subsidiary thereof in exchange
for securities of the Company of any assets of, any corporation if the Board of
Directors of the Company shall by resolution have approved a memorandum of
understanding with such other corporation with respect to and substantially
consistent with such transaction, prior to the time that such other corporation
shall have become a holder of more than five percent of the voting power of all
shares of outstanding stock of the Company entitled to vote in elections of
Directors; or (ii) any merger or consolidation of the Company with, or any sale
or lease to the Company or any subsidiary thereof of any of the assets of, any
corporation of which a majority of the outstanding shares of all classes of
stock entitled to vote in elections of Directors is owned of record or
beneficially by the Company and/or its subsidiaries.
For purposes of this Article SEVENTH the following terms shall have the
following meanings:
AFFILIATE. An "affiliate" of, or a person "affiliated" with, a specified
person, is a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified.
ASSOCIATE. The term "associate" used to indicate a relationship with any
person, means (1) any corporation or organization of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (2) any trust or other estate
in which such person has a substantial beneficial interest or as to which such
person serves as trustee or in a similar fiduciary capacity, and (3) any
relative or spouse of such person, or any relative of such spouse, who has the
same home as such person or who is a director or officer of any corporation or
organization, or any parent or subsidiary of any corporation or organization, of
which such person is an affiliate or associate.
No amendment to the Restated Certificate of Incorporation of the Company
shall amend, alter, change or repeal any of the provisions of this Article
SEVENTH, unless the amendment affecting such amendment, alteration, change or
repeal shall receive the affirmative vote of the holders of 75 percent of the
voting power of all shares of outstanding stock of the Company generally
entitled to vote in elections of Directors, considered for the purpose of this
Article SEVENTH as one class.
EIGHTH: When considering a merger, consolidation, business combination or
similar transaction, the Board of
18
BOOK 530 PAGE 92
Directors, committees of the Board, individual Directors and individual officers
may, in considering the best interests of the Company and its stockholders,
consider the effects of any such transaction upon the employees, customers and
suppliers of the Company, and upon communities and states and other political
entities in which offices, plants or other facilities of the Company or any of
its subsidiaries are located.
NINTH: Subject to the provisions of this Restated Certificate of
Incorporation, the Company reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate of Incorporation, in the
manner now or thereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
certificate to be signed by V. T. Jones its President, and attested by D. M.
Higbee, its Secretary this 21st day of April, 1987.
THE WILLIAMS COMPANIES, INC.
By /s/ V. T. Jones
-------------------------------
President
ATTEST:
[STAMP]
By /s/ D. M. Higbee
-------------------------------
Secretary
19
PLEASE RETURN TO
THE CORPORATION TRUST COMPANY
RECEIVED FOR RECORD
APR 29 1987
William M. Honey, Recorder
INDEXED
BOOK 488 PAGE 0885
PAGE 1
STATE OF DELAWARE
[LOGO]
OFFICE OF SECRETARY OF STATE
----------
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF INCORPORATION OF THE WILLIAMS
COMPANIES, INC. FILED IN THIS OFFICE ON THE THIRD DAY OF
FEBRUARY A.D. 1987, AT 10 O'CLOCK A.M.
: : : : : : : : : :
[OFFICE OF THE SECRETARY OF STATE SEAL]
/s/ MICHAEL HARKINS
-----------------------------------
Michael Harkins, Secretary of State
737034056 AUTHENTICATION: 11104322
DATE: 02/03/1987
BOOK 488 PAGE 0886
[FILED STAMP]
CERTIFICATE OF INCORPORATION
OF
THE WILLIAMS COMPANIES, INC.
FIRST: The name of this corporation is
THE WILLIAMS COMPANIES, INC.
SECOND: Its registered office in the State of Delaware is to be located at
1209 Orange Street, City of Wilmington, State of Delaware, County of New Castle,
and the name and address of its registered agent is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801.
THIRD: The nature of the business and the objects and purposes proposed to
be transacted, promoted and carried on, are to engage in any other lawful acts
or activities for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of common stock which this corporation
shall have authority to issue is 1,000 shares, all of which shall be with a par
value of one dollar ($1.00) per share. The number of shares to be issued
initially will be 1,000 shares and the consideration to be received therefor
will be $1,000.
FIFTH: The name and mailing address of the incorporator is:
NAME MAILING ADDRESS
---- ---------------
David M. Higbee One Williams Center
Tulsa, OK 74172
SIXTH: Upon the filing of the Certificate of Incorporation, the authority
of the incorporator shall terminate and the following named individuals, whose
mailing addresses are set out beside their names, shall serve as directors until
the first Annual Meeting of the Stockholders or until their successors are
elected and qualified:
NAME MAILING ADDRESS
---- ---------------
K. E. Bailey One Williams Center
Tulsa, OK 74172
V. T. Jones One Williams Center
Tulsa, OK 74172
Joseph H. Williams One Williams Center
Tulsa, OK 74172
BOOK 488 PAGE 0887
SEVENTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of this corporation and for defining
and regulating the powers of this corporation and its directors and
stockholders:
1. The private property of the stockholders of the corporation shall not be
subject to the payment of corporate debts to any extent whatsoever.
2. The first meeting of the stockholders for the election of directors
shall be held in Tulsa, Oklahoma, at the office of this corporation, on June 2,
1987, or at such other time and place as may be designated by the Board of
Directors, and thereafter the directors shall be elected at the time and place
named in the By-laws of this corporation.
3. Written ballots shall not be required for the election of directors of
this corporation.
4. The Board of Directors shall have the power to make, alter or repeal
By-laws of this corporation.
5. The By-laws of the corporation may fix or provide the manner of fixing
and altering the number of directors constituting the Board of Directors,
provided that such number shall not be less than three.
IN WITNESS WHEREOF, I, the undersigned, being the incorporator of this
corporation hereinbefore named, do certify that the facts herein stated are
true, that the execution of this instrument is my act and deed, and that I
accordingly have hereunto set my hand this 29th day of January, 1987.
/s/ David M. Higbee
-------------------------
David M. Higbee
RECEIVED FOR RECORD
FEB 5 1987
William M. Honey, Recorder
PLEASE RETURN TO
THE CORPORATION TRUST COMPANY
RECEIVED FOR RECORD
FEB 5 1987
William M. Honey, Recorder
INDEXED