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Exhibit 3a(CEI)
THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY
AMENDED ARTICLES
OF
INCORPORATION
EFFECTIVE MARCH 30, 1994
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AMENDED ARTICLES OF INCORPORATION
OF
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
Effective March 30, 1994
ARTICLE ONE. The name of the Corporation shall be The Cleveland Electric
Illuminating Company.
ARTICLE TWO. The place in the State of Ohio where the principal office
of the Corporation shall be located is the City of Cleveland in the County of
Cuyahoga.
ARTICLE THREE. The purposes for which the Corporation is formed are as
follows:
A. To manufacture, generate, develop, create and produce from any source
and by any means, and to purchase, otherwise acquire, use, transmit,
transport, distribute, sell, exchange, lease as lessor or as lessee,
otherwise dispose of, grant licenses with respect to, furnish any
kind of service by means of and engage in research with respect to,
any kind or form of electricity, energy, radiation, light, refrigera-
tion, heat, water, steam, gas and fuel;
B. To purchase, otherwise acquire, hold, use, improve, develop, build,
manufacture, repair, sell, exchange, encumber, lease as lessor or as
lessee, otherwise dispose of, grant licenses with respect to, furnish
any kind of service by means of and engage in research with respect
to, any kind or form of tangible and intangible personal property and
any kind or form of real estate, interests therein, buildings and
structures;
C. To purchase, otherwise acquire, hold, sell, assign, exchange,
encumber and otherwise dispose of shares of stock and other
securities of whatever nature issued by other corporations, govern-
ments, firms, trusts and individuals, both domestic and foreign; and
D. To do any and all things and transact any and all business incidental
to the foregoing.
ARTICLE FOUR. The authorized number of shares of the Corporation is
112,000,000 consisting of 4,000,000 shares of Serial Preferred Stock without
par value (hereinafter called "Serial Preferred Stock"), 3,000,000 shares of
Preference Stock without par value (hereinafter called "Preference Stock") and
105,000,000 shares of Common Stock without par value (hereinafter called
"Common Stock").
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DIVISION A
The Serial Preferred Stock shall have the following express terms:
{Section 1. Series.} The Serial Preferred Stock may be issued from time to
time in one or more series. All shares of Serial Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each share of
a series shall be identical with all other shares of such series, except as to
the date from which dividends are cumulative. Subject to the provisions of
Sections 2 to 7, both inclusive, of this Division, which provisions shall
apply to all Serial Preferred Stock, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more series and with
respect to each such series to determine and fix prior to the issuance thereof
(and thereafter, to the extent provided in clause (b) of this Section) the
following:
(a) The designation of the series, which may be by distinguishing number,
letter or title;
(b) The number of shares of the series, which number the Board of
Directors may (except where otherwise provided in the creation of
the series) increase or decrease from time to time before or after
the issuance thereof (but not below the number of shares thereof
then outstanding);
(c) The annual dividend rate or rates of the series;
(d) The dates on which and the period or periods for which dividends, if
declared, shall be payable and the date or dates from which
dividends shall accrue and be cumulative;
(e) The redemption rights and price or prices, if any, for shares of the
series;
(f) The terms and amount of the sinking fund, if any, for the purchase
or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation;
(h) Whether the shares of the series shall be convertible into Common
Stock or shares of any other class and, if so, the conversion rate
or rates or price or prices, any adjustments thereof and all other
terms and conditions upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in Sections 5(c) and
5(d) of this Division) on the issuance of shares of the same series
or of any other class or series.
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The Board of Directors is authorized to adopt from time to time amendments to
the Amended Articles of Incorporation fixing, with respect to each such
series, the matters described in clauses (a) to (i), both inclusive, of this
Section.
{Section 2. Dividends.}
(a) The holders of Serial Preferred Stock of each series, in preference
to the holders of Common Stock and of any other class of shares
ranking junior to the Serial Preferred Stock, shall be entitled to
receive out of any funds legally available and when and as declared
by the Board of Directors, dividends in cash at the rate or rates
for such series fixed in accordance with the provisions of Section 1
of this Division and no more, payable on the dates fixed for such
series. Such dividends shall be cumulative, in the case of shares
of each particular series, from and after the date or dates fixed
with respect to such series. No dividends shall be paid upon or
declared or set apart for any series of the Serial Preferred Stock
for any dividend period unless at the same time a like proportionate
dividend for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual
dividend rates fixed therefor, shall have been paid upon or declared
or set apart for all Serial Preferred Stock of all series then
issued and outstanding and entitled to receive such dividend.
(b) So long as any Serial Preferred Stock shall be outstanding no
dividend, except a dividend payable in Common Stock or other shares
ranking junior to the Serial Preferred Stock, shall be paid or
declared or any distribution be made, except as aforesaid, in re-
spect of the Common Stock or any other shares ranking junior to the
Serial Preferred Stock, nor shall any Common Stock or any other
shares ranking junior to the Serial Preferred Stock be purchased,
retired or otherwise acquired by the Corporation, except out of the
proceeds of the sale of Common Stock or other shares of the
Corporation ranking junior to the Serial Preferred Stock received by
the Corporation subsequent to the date of first issuance of Serial
Preferred Stock of any series, unless:
(1) All accrued and unpaid dividends on Serial Preferred Stock,
including the full dividends for all current dividend periods,
shall have been declared and paid or a sum sufficient for
payment thereof set apart; and
(2) There shall be no arrearages with respect to the redemption of
Serial Preferred Stock of any series from any sinking fund
provided for shares of such series in accordance with the
provisions of Section 1 of this Division.
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{Section 3. Redemption.}
(a) Subject to the express terms of each series and to the provisions of
Section 5(c)(3) of this Division, the Corporation:
(1) May, from time to time at the option of the Board of Directors,
redeem all or any part of any redeemable series of Serial
Preferred Stock at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Division; and
(2) Shall, from time to time, make such redemptions of each series
of Serial Preferred Stock as may be required to fulfill the
requirements of any sinking fund provided for shares of such
series at the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this Division;
and shall in each case pay all accrued and unpaid dividends to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed, postage pre-
paid, to the holders of record of the Serial Preferred Stock to
be redeemed at their respective addresses then appearing on the
books of the Corporation, not less than 30 days nor more than
60 days prior to the date fixed for such redemption, or such
other time prior thereto as the Board of Directors shall fix
for any series pursuant to Section 1(e) of this Division prior
to the issuance thereof. At any time after notice as provided
above has been deposited in the mail, the Corporation may
deposit the aggregate redemption price of the shares of Serial
Preferred Stock to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio or New York, New York,
having capital and surplus of not less than $25,000,000, named
in such notice, directed to be paid to the respective holders
of the shares of Serial Preferred Stock so to be redeemed, in
amounts equal to the redemption price of all shares of Serial
Preferred Stock so to be redeemed, on surrender of the stock
certificate or certificates held by such holders; and upon the
deposit of such notice in the mail and the making of such
deposit of money with such bank or trust company, such holders
shall cease to be shareholders with respect to such shares; and
from and after the time such notice shall have been so
deposited and such deposit of money shall have been so made,
such holders shall have no interest or claim against the
Corporation with respect to such shares, except only the right
to receive such money from such bank or trust company without
interest or to exercise, before the redemption date, any unex-
pired privileges of conversion. In the event less than all of
the outstanding shares of Serial Preferred Stock are to be
redeemed, the Corporation shall select by lot the shares so to
be redeemed in such manner as shall be prescribed by the Board
of Directors.
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(2) If the holders of shares of Serial Preferred Stock which have
been called for redemption shall not, within 6 years after
such deposit, claim the amount deposited for the redemption
thereof, any such bank or trust company shall, upon demand, pay
over to the Corporation such unclaimed amounts and thereupon
such bank or trust company and the Corporation shall be re-
lieved of all responsibility in respect thereof and to such
holders.
(c) Any shares of Serial Preferred Stock which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) pur-
chased and delivered in satisfaction of any sinking fund require-
ments provided for shares of such series, (3) converted in
accordance with the express terms thereof, or (4) otherwise acquired
by the Corporation, shall resume the status of authorized but
unissued shares of Serial Preferred Stock without serial
designation.
{Section 4. Liquidation.}
(a) (1) The holders of Serial Preferred Stock of any series shall, in
the event of voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation, be entitled to
receive in full out of the assets of the Corporation, including
its capital, before any amount shall be paid or distributed
among the holders of the Common Stock or any other shares rank-
ing junior to the Serial Preferred Stock, the amounts fixed
with respect to shares of such series in accordance with
Section 1 of this Division, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment of
the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event
the net assets of the Corporation legally available therefor
are insufficient to permit the payment upon all outstanding
shares of Serial Preferred Stock of the full preferential
amount to which they are respectively entitled, then such net
assets shall be distributed ratably upon outstanding shares of
Serial Preferred Stock in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Serial Preferred Stock of the
full preferential amounts as aforesaid, the holders of Serial
Preferred Stock, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with any
other corporation, the merger of any other corporation into it, or
the sale, lease or conveyance of all or substantially all the
property or business of the Corporation, shall not be deemed to be a
dissolution, liquidation or winding up for the purposes of this
Section.
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{Section 5. Voting.}
(a) The holders of Serial Preferred Stock shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in default in the
payment of the equivalent of the full dividends for a number of
dividend payment periods (whether or not consecutive) which in
the aggregate contain at least 540 days on any series of Serial
Preferred Stock at the time outstanding, whether or not earned
or declared, the holders of Serial Preferred Stock of all
series, voting separately as a class, shall be entitled to
elect, as herein provided, two members of the Board of
Directors of the Corporation; provided, however, that the
holders of shares of Serial Preferred Stock shall not have or
exercise such special class voting rights except at meetings of
such shareholders for the election of Directors at which the
holders of not less than 50% of the outstanding shares of
Serial Preferred Stock of all series then outstanding are
present in person or by proxy; and provided further that the
special class voting rights provided for in this paragraph when
the same shall have become vested shall remain so vested until
all accrued and unpaid dividends on the Serial Preferred Stock
of all series then outstanding shall have been paid, whereupon
the holders of Serial Preferred Stock shall be divested of
their special class voting rights in respect of subsequent
elections of Directors, subject to the revesting of such
special class voting rights in the event hereinabove specified
in this paragraph.
(2) In the event of default entitling the holders of Serial
Preferred Stock to elect two Directors as specified in
Paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such Directors shall be
called by the Secretary of the Corporation upon written request
of, or may be called by, the holders of record of at least 10%
of the shares of Serial Preferred Stock of all series at the
time outstanding, and notice thereof shall be given in the same
manner as that required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be required
to call such special meeting if the annual meeting of share-
holders shall be held within 120 days after the date of receipt
of the foregoing written request from the holders of Serial
Preferred Stock. At any meeting at which the holders of Serial
Preferred Stock shall be entitled to elect Directors, the
holders of 50% of the then outstanding shares of Serial
Preferred Stock of all series, present in person or by proxy,
shall be sufficient to constitute a quorum, and the vote of the
holders of a majority of such shares so present at any such
meeting at which there shall be such a quorum shall be
sufficient to elect the members of the Board of Directors which
the holders of Serial Preferred Stock are entitled to elect as
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hereinabove provided. Notwithstanding any provision of these
Amended Articles of Incorporation or the Regulations of the
Corporation or any action taken by the holders of any class of
shares fixing the number of Directors of the Corporation, the
two Directors who may be elected by the holders of Serial
Preferred Stock pursuant to this Subsection shall serve in
addition to any other Directors then in office or proposed to
be elected otherwise than pursuant to this Subsection. Nothing
in this Subsection shall prevent any change otherwise permitted
in the total number of Directors of the Corporation or require
the resignation of any Director elected otherwise than pursuant
to this Subsection. Notwithstanding any classification of the
other Directors of the Corporation, the two Directors elected
by the holders of Serial Preferred Stock shall be elected
annually for the terms expiring at the next succeeding annual
meeting of shareholders.
(c) The affirmative vote or consent of the holders of at least two-
thirds of the shares of Serial Preferred Stock at the time outstand-
ing, voting or consenting separately as a class, given in person or
by proxy either in writing or at a meeting called for the purpose,
shall be necessary to effect any one or more of the following (but
so far as the holders of Serial Preferred Stock are concerned, such
action may be effected with such vote or consent):
(1) Any amendment, alteration or repeal of any of the provisions of
the Amended Articles of Incorporation or of the Regulations of
the Corporation which affects adversely the preferences or vot-
ing or other rights of the holders of Serial Preferred Stock;
provided, however, that for the purpose of this paragraph only,
neither the amendment of the Amended Articles of Incorporation
so as to authorize, create or change the authorized or out-
standing amount of Serial Preferred Stock or of any shares of
any class ranking on a parity with or junior to the Serial
Preferred Stock nor the amendment of the provisions of the
Regulations so as to change the number of directors of the
Corporation shall be deemed to affect adversely the preferences
or voting or other rights of the holders of Serial Preferred
Stock; and provided further, that if such amendment, alteration
or repeal affects adversely the preferences or voting or other
rights of one or more but not all series of Serial Preferred
Stock at the time outstanding, only the affirmative vote or
consent of the holders of at least two-thirds of the number of
the shares at the time outstanding of the series so affected
shall be required;
(2) The authorization, creation or the increase in the authorized
amount of any shares of any class or any security convertible
into shares of any class, in either case ranking prior to the
Serial Preferred Stock; or
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(3) The purchase or redemption (for sinking fund purposes or other-
wise) of less than all of the Serial Preferred Stock then out-
standing except in accordance with a stock purchase offer made
to all holders of record of Serial Preferred Stock, unless all
dividends on all Serial Preferred Stock then outstanding for
all previous dividend periods shall have been declared and paid
or funds therefor set apart and all accrued sinking fund
obligations applicable thereto shall have been complied with.
(d) The affirmative vote or consent of the holders of at least a
majority of the shares of Serial Preferred Stock at the time
outstanding, voting or consenting separately as a class, given in
person or by proxy either in writing or at a meeting called for the
purpose, shall be necessary to effect any one or more of the
following (but so far as the holders of Serial Preferred Stock are
concerned, such action may be effected with such vote or consent):
(1) The sale, lease or conveyance by the Corporation of all or
substantially all of its property or business;
(2) The consolidation of the Corporation with or its merger into
any other corporation, unless the corporation resulting from
such consolidation or surviving such merger will not have after
such consolidation or merger any class of shares either
authorized or outstanding ranking prior to or on a parity with
the Serial Preferred Stock except the same number of shares
ranking prior to or on a parity with the Serial Preferred Stock
and having the same rights and preferences as the shares of the
Corporation authorized and outstanding immediately preceding
such consolidation or merger (and each holder of Serial
Preferred Stock immediately preceding such consolidation or
merger shall receive the same number of shares with the same
rights and preferences of the resulting or surviving
corporation); or
(3) The authorization of any shares ranking on a parity with the
Serial Preferred Stock or an increase in the authorized number
of shares of Serial Preferred Stock.
(e) Neither the vote, consent nor any adjustment of the voting rights of
holders of shares of Serial Preferred Stock shall be required for an
increase in the number of shares of Common Stock authorized or
issued or for stock splits of the Common Stock or for stock
dividends on any class of stock payable solely in Common Stock; and
none of the foregoing actions shall be deemed to affect adversely
the preferences or voting or other rights of Serial Preferred Stock
within the meaning and for the purpose of this Division.
{Section 6. Pre-emptive Rights.} No holder of Serial Preferred Stock, as
such, shall have any pre-emptive right to purchase, have offered to him for
purchase or subscribe for any of the Corporation's shares or other securities
of any class, whether now or hereafter authorized.
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{Section 7. Definitions.} For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to the Serial
Preferred Stock", such reference shall mean and include all shares
of the Corporation in respect of which the rights of the holders
thereof as to the payment of dividends or as to distributions in the
event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation are given preference
over the rights of the holders of Serial Preferred Stock;
(b) Whenever reference is made to shares "on a parity with the Serial
Preferred Stock", such reference shall mean and include all shares
of the Corporation in respect of which the rights of the holders
thereof as to the payment of dividends and as to distributions in
the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation rank on an equality
(except as to the amounts fixed therefor) with the rights of the
holders of Serial Preferred Stock; and
(c) Whenever reference is made to shares "ranking junior to the Serial
Preferred Stock", such reference shall mean and include all shares
of the Corporation other than those defined under Subsections (a)
and (b) of this Section as shares "ranking prior to" or "on a parity
with" the Serial Preferred Stock.
{Section 8. Serial Preferred Stock, $7.40 Series A.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 500,000 shares are designated as
a series entitled "Serial Preferred Stock, $7.40 Series A" (hereinafter called
"Series A Stock"). The Series A Stock shall have the express terms set forth
in this Division as being applicable to all shares of Serial Preferred Stock
as a class, and, in addition, the following express terms applicable to all
shares of Series A Stock as a series of the Serial Preferred Stock:
(a) The annual dividend rate of the Series A Stock shall be $7.40 per
share.
(b) Dividends on Series A Stock shall be payable, if declared, quarterly
on the first day of March, June, September and December of each
year, the first quarterly dividend being payable, if declared, on
March 1, 1972.
(c) Dividends on Series A Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
A Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series A Stock, dividends shall be
cumulative from the date of the initial issue of Series A
Stock; and
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(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series A Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject to the provisions of Section 5(c)(3) of this Division,
Series A Stock shall be redeemable in the manner provided in
Sections 3(b)(1) and (2) of this Division, at any time or from time
to time, at the option of the Board of Directors, upon payment of
$107.50 per share if redeemed on any date prior to December 1, 1976,
$105.00 per share if redeemed on or after the date last stated and
prior to December 1, 1981, $102.50 per share if redeemed on or after
the date last stated and prior to December 1, 1986, and $101.00 per
share if redeemed on or after the date last stated, plus in each
case an amount equal to all dividends accrued and unpaid thereon to
the date of redemption; provided, however, that Series A Stock may
not be redeemed prior to December 1, 1976, directly or indirectly as
a part of or in anticipation of any refunding of Series A Stock
involving the incurring of indebtedness or the issuance of shares of
Serial Preferred Stock or any other shares ranking prior to or on a
parity with the Serial Preferred Stock if the interest on such
indebtedness or the dividends on such shares result in an effective
cost to the Corporation of less than 7.49% per year.
(e) The amount payable per share on Series A Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d) of this Section and in the event of any in-
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $100.00, plus in each case an amount equal
to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to this Subsection.
{Section 9. Serial Preferred Stock, $7.56 Series B.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 450,000 shares are designated as
a series entitled "Serial Preferred Stock, $7.56 Series B" (hereinafter called
"Series B Stock"). The Series B Stock shall have the express terms set forth
in this Division as being applicable to all shares of Serial Preferred Stock
as a class, and, in addition, the following express terms applicable to all
shares of Series B Stock as a series of the Serial Preferred Stock:
(a) The annual dividend rate of the Series B Stock shall be $7.56 per
share.
(b) Dividends on Series B Stock shall be payable, if declared, quarterly
on the first day of January, April, July and October of each year,
the first quarterly dividend being payable, if declared, on
October 1, 1972.
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(c) Dividends on Series B Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
B Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series B Stock, dividends shall be
cumulative from the date of the initial issue of Series B
Stock; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series B Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject to the provisions of Section 5(c)(3) of this Division,
Series B Stock shall be redeemable in the manner provided in
Sections 3(b)(1) and (2) of this Division, at any time or from time
to time, at the option of the Board of Directors, upon payment of
$108.76 per share if redeemed on any date prior to August 1, 1977,
$106.35 per share if redeemed on or after the date last stated and
prior to August 1, 1982, $103.78 per share if redeemed on or after
the date last stated and prior to August 1, 1987, and $102.26 per
share if redeemed on or after the date last stated, plus in each
case an amount per share equal to all dividends accrued and unpaid
thereon to the date of redemption; provided, however, that Series B
Stock may not be redeemed prior to August 1, 1977, directly or in-
directly as a part of or in anticipation of any refunding of Series
B Stock involving the incurring of indebtedness or the issuance of
shares of Serial Preferred Stock or any other shares ranking prior
to or on a parity with the Serial Preferred Stock if the interest on
such indebtedness or the dividends on such shares result in an
effective cost to the Corporation of less than 7.55% per year.
(e) The amount payable per share on Series B Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $100.00, plus in each case an amount equal
to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to this Subsection.
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{Section 10. Serial Preferred Stock, $7.35 Series C.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 250,000 shares are designated as
a series entitled "Serial Preferred Stock, $7.35 Series C" (hereinafter called
"Series C Stock"). The Series C Stock shall have the express terms set forth
in this Division as being applicable to all shares of Serial Preferred Stock
as a class, and, in addition, the following express terms applicable to all
shares of Series C Stock as a series of the Serial Preferred Stock:
(a) The annual dividend rate of the Series C Stock shall be $7.35 per
share.
(b) Dividends on Series C Stock shall be payable, if declared, quarterly
on the first day of February, May, August and November of each year,
the first quarterly dividend being payable, if declared, on
November 1, 1973, to the extent then accrued.
(c) Dividends on Series C Stock shall be cumulative from the date of
initial issue.
(d) Subject in each case to the provisions of Section 5(c)(3) of this
Division, Series C Stock shall be redeemable in the manner provided
in Sections 3(b)(1) and (2) of this Division, and as follows:
(1) The Series C Stock shall be redeemed in part from time to time
for the Sinking Fund as hereinafter set forth at a redemption
price of $100.00 per share, plus in each case an amount per
share equal to all dividends accrued and unpaid thereon to the
date of redemption (such price plus such amount being herein-
after called the "Sinking Fund Redemption Price"). As and for
a Sinking Fund for the Series C Stock, so long as and to the
extent that any shares thereof are outstanding, the Corporation
will redeem on each August 1 (hereinafter called "Sinking Fund
Date") commencing with August 1, 1984, 10,000 shares of Series
C Stock at the Sinking Fund Redemption Price (the Corporation's
obligation to redeem such number of such shares on any Sinking
Fund Date being hereinafter referred to as the "Sinking Fund
Obligation"). Such redemption shall be mandatory, subject to
any applicable restrictions of law, and not optional to the
Corporation. If the Corporation shall for any reason fail to
discharge its Sinking Fund Obligation on any Sinking Fund Date,
such Sinking Fund Obligation to the extent not discharged
shall, without prejudice to any other right or remedy, become
an additional Sinking Fund Obligation for each succeeding
Sinking Fund Date until fully discharged.
(2) On each Sinking Fund Date so long as and to the extent that
Series C Stock shall be outstanding, and provided that the
Corporation has fulfilled its Sinking Fund Obligation on such
date, the Corporation may at the option of the Board of
Directors redeem up to but not in excess of 10,000 additional
shares of Series C Stock at the redemption price of $100.00 per
share plus in each case an amount per share equal to all
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dividends accrued and unpaid thereon to the date of redemption;
provided, however, that no more than 83,000 shares of Series C
Stock in the aggregate may be redeemed pursuant to this
Subsection (d)(2).
(3) The Corporation at the option of the Board of Directors may at
any time and from time to time redeem all or any part of the
outstanding Series C Stock upon payment of $110.00 per share if
redeemed on any date prior to August 1, 1983, $103.00 per share
if redeemed on or after the date last stated and prior to
August 1, 1988, and $101.00 per share if redeemed on or after
August 1, 1988, plus in each case an amount per share equal to
all dividends accrued and unpaid thereon to the date of redemp-
tion; provided, however, that Series C Stock may not be re-
deemed prior to August 1, 1978, directly or indirectly (i) as a
part of or in anticipation of any refunding of Series C Stock
involving the borrowing of funds or the issuance of shares of
Serial Preferred Stock or any other shares ranking prior to or
on a parity with the Serial Preferred Stock if the interest on
such borrowed funds or the dividends on such shares result in
an effective cost to the Corporation of less than 7.35% per
year, or (ii) from proceeds derived from the sale of equity
securities junior to Series C Stock.
(4) On August 1, 2008, the Corporation shall redeem all remaining
shares of Series C Stock, if any, then outstanding at the
redemption price of $100.00 per share plus in each case an
amount per share equal to all dividends accrued and unpaid
thereon to the date of redemption.
(e) The amount payable per share on Series C Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d)(3) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $100.00, plus in each case an amount equal
to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to this Subsection.
(f) The number of shares of Series C Stock shall not be increased above,
and shall not exceed 250,000. Series C Stock once redeemed shall
not be reissued as shares of Series C Stock, but, having been
restored to the status of authorized but unissued shares of Serial
Preferred Stock without serial designation, may, in whole or in
part, be, or be included in, any subsequent series of Serial
Preferred Stock of a new designation with such express terms as may
be fixed by the Board of Directors of the Corporation.
- 13 -
15
{Section 11. Serial Preferred Stock, $12.00 Series D.} Redeemed June 16,
1978.
{Section 12. Serial Preferred Stock, $88.00 Series E.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 60,000 shares are designated as a
series entitled "Serial Preferred Stock, $88.00 Series E" (hereinafter called
"Series E Stock"). The Series E Stock shall have the express terms set forth
in this Division as being applicable to all shares of Serial Preferred Stock
as a class and, in addition, the following express terms applicable to all
shares of Series E Stock as a series of the Serial Preferred Stock:
(a) The annual dividend rate of the Series E Stock shall be $88.00 per
share.
(b) Dividends on Series E Stock shall be payable, if declared, quarterly
on the first day of March, June, September and December of each
year, the first quarterly dividend being payable, if declared, on
September 1, 1976, to the extent then accrued.
(c) Dividends on Series E Stock shall be cumulative from the date of
initial issue.
(d) Subject in each case to the provisions of Section 5(c)(3) of this
Division, Series E Stock shall be redeemable in the manner provided
in Sections 3(b)(1) and (2) of this Division, and as follows:
(1) The Series E Stock shall be redeemed in part from time to time
for the Sinking Fund as hereinafter set forth at a redemption
price of $1,000.00 per share, plus in each case an amount per
share equal to all dividends accrued and unpaid thereon to the
date of redemption (such price plus such amount being herein-
after called the "Sinking Fund Redemption Price"). As and for
a Sinking Fund for the Series E Stock, so long as and to the
extent that any shares thereof are outstanding, the Corporation
will redeem on each June 1 (hereinafter call "Sinking Fund
Date") commencing with June 1, 1981, 3,000 shares of Series E
Stock at the Sinking Fund Redemption Price (the Corporation's
obligation to redeem such number of such shares on any Sinking
Fund Date being hereinafter referred to as the "Sinking Fund
Obligation"). Such redemption shall be mandatory, subject to
any applicable restrictions of law, and not optional to the
Corporation. If the Corporation shall for any reason fail to
discharge its Sinking Fund Obligation on any Sinking Fund Date,
such Sinking Fund Obligation to the extent not discharged
shall, without prejudice to any other right or remedy, become
an additional Sinking Fund Obligation for each succeeding
Sinking Fund Date until fully discharged.
- 14 -
16
(2) On each Sinking Fund Date so long as and to the extent that
Series E Stock shall be outstanding, and provided that the
Corporation has fulfilled its Sinking Fund Obligation on such
date, the Corporation may at the option of the Board of
Directors redeem up to but not in excess of 3,000 additional
shares of Series E Stock at the redemption price of $1,000.00
per share plus in each case an amount per share equal to all
dividends accrued and unpaid thereon to the date of redemption;
provided, however, that no more than 20,000 shares of Series E
Stock in the aggregate may be redeemed pursuant to this
Subsection (d)(2).
(3) The Corporation at the option of the Board of Directors may at
any time and from time to time redeem all or any part of the
outstanding Series E Stock upon payment of $1,088.00 per share
if redeemed on any date prior to June 1, 1986, and as follows:
If redeemed in the 12 Upon payment
months ending May 31 per share of
1987 ..................................... $1,049.74
1988 ..................................... 1,045.91
1989 ..................................... 1,042.09
1990 ..................................... 1,038.26
1991 ..................................... 1,034.43
1992 ..................................... 1,030.61
1993 ..................................... 1,026.78
1994 ..................................... 1,022.96
1995 ..................................... 1,019.13
1996 ..................................... 1,015.30
1997 ..................................... 1,011.48
1998 ..................................... 1,007.65
1999 ..................................... 1,003.83
2000 or in any year thereafter ........... 1,000.00
plus in each case an amount per share equal to all dividends
accrued and unpaid thereon to the date of redemption; provided,
however, that Series E Stock may not be redeemed prior to
June 1, 1986, directly or indirectly (i) as a part of or in
anticipation of any refunding of Series E Stock involving the
borrowing of funds or the issuance of shares of Serial
Preferred Stock or any other shares ranking prior to or on a
parity with the Serial Preferred Stock if the interest on such
borrowed funds or the dividends on such shares result in an
effective cost to the Corporation of less than 8.80% per year,
or (ii) from proceeds derived from the sale of equity
securities junior to Series E Stock.
- 15 -
17
(4) On June 1, 2001, the Corporation shall redeem all remaining
shares of Series E Stock, if any, then outstanding at the
redemption price of $1,000.00 per share plus in each case an
amount per share equal to all dividends accrued and unpaid
thereon to the date of redemption.
(e) The amount payable per share on Series E Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d)(3) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $1,000.00, plus in each case an amount
equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to this Subsection.
(f) The number of shares of Series E Stock shall not be increased above,
and shall not exceed, 60,000. Series E Stock once redeemed shall
not be reissued as shares of Series E Stock, but having been re-
stored to the status of authorized but unissued shares of Serial
Preferred Stock without serial designation, may, in whole or in
part, be, or be included in, any subsequent series of Serial
Preferred Stock of a new designation with such express terms as may
be fixed by the Board of Directors of the Corporation.
{Section 13. Serial Preferred Stock, $75.00 Series F.} Redeemed November 1,
1991.
{Section 14. Serial Preferred Stock, $80.00 Series G.} Redeemed December 1,
1990.
{Section 15. Serial Preferred Stock, $145.00 Series H.} Redeemed June 1,
1990.
{Section 16. Serial Preferred Stock, $145.00 Series I.} Redeemed June 1,
1991.
{Section 17. Serial Preferred Stock, $113.50 Series J.} Redeemed June 1,
1987.
{Section 18. Serial Preferred Stock, $113.50 Series K.} Redeemed June 1,
1991.
{Section 19. Serial Preferred Stock, Adjustable Rate Series L.} Of the
4,000,000 authorized shares of Serial Preferred Stock, 500,000 shares are
designated as a series entitled "Serial Preferred Stock, Adjustable Rate
Series L" (hereinafter called "Series L Stock"). The Series L Stock shall
have the express terms set forth in this Division as being applicable to all
shares of Serial Preferred Stock as a class, and, in addition, the following
express terms applicable to all shares of Series L Stock as a series of the
Serial Preferred Stock:
(a) The dividend rate of the Series L Stock shall be as follows:
(1) An annual rate of $11.36 per share for the dividend period from
the date of initial issue of the Series L Stock to and includ-
ing March 31, 1984, and an annual rate of .50 of 1% below the
Applicable Rate [as defined in Subsection (a)(2)] from time to
18
time in effect for each subsequent three-month dividend period;
provided, however, that the annual dividend rate shall in no
event be less than 7.00% or more than 13.00% for any dividend
period.
(2) The applicable rate (hereinafter called the "Applicable Rate")
for any dividend period shall be the highest of the Treasury
Bill Rate, the Ten Year Constant Maturity Rate and the Twenty
Year Constant Maturity Rate (each as hereinafter defined) for
such dividend period, except that in the event the Corporation
determines in good faith that for any reason one or more of
such rates cannot be determined for any dividend period, then
the Applicable Rate for such dividend shall be the higher of
whichever of such rates can be so determined or in the event
the Corporation determines in good faith that none of such
rates can be determined for any dividend period, then the
Applicable Rate in effect for the preceding dividend period
shall be continued for such dividend period.
(3) Except as provided below in this Subsection (a)(3), the
"Treasury Bill Rate" for each dividend period shall be the
arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market
discount rate, if only one such rate is published during the
relevant Calendar Period (as hereinafter defined)) for three-
month U.S. Treasury bills, as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to
the last 10 calendar days of March, June, September or
December, as the case may be, prior to the dividend period for
which the dividend rate on the Series L Stock is being deter-
mined. In the event that the Federal Reserve Board does not
publish such a weekly per annum market discount rate during any
such Calendar Period, then the Treasury Bill Rate for the
related dividend period shall be the arithmetic average of the
two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such
rate is published during the relevant Calendar Period) for
three-month U.S. Treasury bills, as published weekly during
such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation.
In the event that a per annum market discount rate for three-
month U.S. Treasury bills is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such dividend period shall be
the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market
discount rate, if only one such rate is published during the
relevant Calendar Period) for all of the U.S. Treasury bills
then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish
19
such rates, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event
the Corporation determines in good faith that for any reason no
such U.S. Treasury bill rates are published as provided above
during such Calendar Period, then the Treasury Bill Rate for such
dividend period shall be the arithmetic average of the per annum
market discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable non-interest
bearing U.S. Treasury securities with a maturity of not less than
80 nor more than 100 days from the date of each such quotation,
as quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to
the Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation. In the event the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Treasury Bill Rate for any
dividend period as provided above in this Subsection (a)(3), the
Treasury Bill Rate for such dividend period shall be the
arithmetic average of the per annum market discount rates based
upon the closing bids during the related Calendar Period for each
of the issues of marketable interest bearing U.S. Treasury
securities with a maturity of not less than 80 nor more than 100
days from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at
least three recognized U.S. Government securities dealers
selected by the Corporation.
(4) Except as provided below in this Subsection (a)(4), the "Ten
Year Constant Maturity Rate" for each dividend period shall be
the arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (or the one weekly per annum Ten Year
Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to
the last 10 calendar days of March, June, September or
December, as the case may be, prior to the dividend period for
which the dividend rate on the Series L Stock is being deter-
mined. In the event that the Federal Reserve Board does not
publish such a weekly per annum Ten Year Average Yield during
such Calendar Period, then the Ten Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of the
two most recent weekly per annum Ten Year Average Yields (or
the one weekly per annum Ten Year Average Yield, if only one
such yield is published during the relevant Calendar Period),
as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that a per annum Ten
Year Average Yield is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten
20
Year Constant Maturity Rate for such dividend period shall be
the arithmetic average of the two most recent weekly per annum
average yields to maturity (or the one weekly average yield to
maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other
than Special Securities (as hereinafter defined)) then having
maturities of not less than eight nor more than 12 years, as
published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board does not publish such
yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event
the Corporation determines in good faith that for any reason
the Corporation cannot determine the Ten Year Constant Maturity
Rate for any dividend period as provided above in this
Subsection (a)(4), then the Ten Year Constant Maturity Rate for
such dividend period shall be the arithmetic average of the per
annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final date not less than
eight nor more than 12 years from the date of each such quota-
tion, as quoted daily for each business day in New York City
(or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation.
(5) Except as provided below in this Subsection (a)(5), the "Twenty
Year Constant Maturity Rate" for each dividend period shall be
the arithmetic average of the two most recent weekly per annum
Twenty Year Average Yields (or the one weekly per annum Twenty
Year Average Yield, if only one such yield is published during
the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately
prior to the last 10 calendar days of March, June, September or
December, as the case may be, prior to the dividend period for
which the dividend rate on the Series L Stock is being deter-
mined. In the event the Federal Reserve Board does not publish
such a weekly per annum Twenty Year Average Yield during such
Calendar Period, then the Twenty Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of the
two most recent weekly per annum Twenty Year Average Yields (or
the one weekly per annum Twenty Year Average Yield, if only one
such yield is published during the relevant Calendar Period),
as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that a per annum
Twenty Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such dividend
period shall be the arithmetic average of the two most recent
21
weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield is published
during the relevant Calendar Period) for all of the actively
traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) then having maturities of not
less than 18 nor more than 22 years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation
determines in good faith that for any reason the Corporation
cannot determine the Twenty Year Constant Maturity Rate for any
dividend period as provided above in this Subsection (a)(5),
then the Twenty Year Constant Maturity Rate for such dividend
period shall be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) with a final maturity date not less
than 18 nor more than 22 years from the date of each quotation,
as quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to
the Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation.
(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Twenty Year Constant Maturity Rate each shall be rounded to
the nearest one hundredth of a percentage point.
(7) The fixed dividend rate per share for each dividend period shall
be computed in dollars by dividing the dividend rate for such
dividend period by four and, in the case of an Applicable Rate,
converting such rate to a fraction and multiplying it by $100.00;
provided that the dividend payable for the initial dividend
period or any period longer or shorter than a full quarterly
dividend period shall be computed on the basis of a 360-day year
consisting of 30-day months.
(8) The dividend rate with respect to each dividend period shall be
calculated as promptly as practicable by the Corporation. The
mathematical accuracy of each such calculation shall be con-
firmed in writing by the Corporation's independent auditors.
The Corporation shall cause each individual rate to be pub-
lished in a newspaper of general circulation in New York City
prior to the commencement of the dividend period to which it
applies.
22
(9) As used in this Subsection (a), the term "Calendar Period"
means a period of 14 calendar days; the term "Special
Securities" mean securities which can, at the option of the
holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of 10 years); and the term
"Twenty Year Average Yield" means the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest
rate securities (adjusted to constant maturities of 20 years).
(b) Dividends on Series L Stock shall be payable, if declared, quarterly
on the first day of January, April, July and October of each year,
the first quarterly dividend being payable, if declared, on April 1,
1984, to the extent accrued.
(c) Dividends on Series L Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
L Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series L Stock, dividends shall be
cumulative from the date of the initial issue of Series L
Stock; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series L Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject to the provisions of Section 5(c)(3) of this Division,
Series L Stock shall be redeemable in the manner provided in
Sections 3(b)(1) and (2) of this Division, at any time or from time
to time, at the option of the Board of Directors, upon payment of
$111.36 per share if redeemed on any date prior to January 1, 1985,
$109.69 per share if redeemed on or after the date last stated and
prior to January 1, 1986, $108.02 per share if redeemed on or after
the date last stated and prior to January 1, 1987, $106.34 per share
if redeemed on or after the date last stated and prior to January 1,
1988, $104.67 per share if redeemed on or after the date last stated
and prior to January 1, 1989, $103.00 if redeemed on or after the
date last stated and prior to January 1, 1994, and $100.00 per share
if redeemed on or after the date last stated, plus in each case an
amount equal to all dividends accrued and unpaid thereon to the date
of redemption; provided, however, that Series L Stock may not be
23
redeemed prior to January 1, 1989, directly or indirectly as a part
of or in anticipation of any refunding of Series L Stock involving
the incurring of indebtedness or the issuance of shares of Serial
Preferred Stock or any other shares ranking prior to or on a parity
with the Serial Preferred Stock if the interest on such indebtedness
or the dividends on such shares results in an effective annual cost
to the Corporation of less than the annual dividend rate of the
Series L Stock. In the case of a refunding redemption of Series L
Stock with borrowed funds or shares having a fixed interest or
dividend rate, the annual rate of the Series L Stock is the dividend
payable on the Series L Stock on or, if it is not payable on, then
payable most recently before, the date the redemption notice is
deposited in the mail. In the case of a refunding redemption of
Series L Stock with borrowed funds or shares having an adjustable
interest or dividend rate, the effective annual interest or dividend
cost of such borrowed funds or shares shall be deemed to be lower
than the annual dividend rate of the Series L Stock if either (i)
the initial annual interest or dividend rate of such borrowed funds
or shares is lower than the annual dividend rate of the Series L
Stock payable on, or if it is not payable on, then payable most
recently before, the date the redemption notice is deposited in the
mail, or (ii) the adjusted annual interest or dividend rate of such
borrowed funds or shares definitely would, under the applicable
adjustment formula, be lower at any time while such borrowing or
shares would be outstanding than the adjusted annual dividend rate
of the Series L Stock would be at the corresponding time if it also
were to remain outstanding.
(e) The amount payable per share on Series L Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $100.00, plus in each case an amount equal
to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to this Subsection.
(f) The number of shares of Series L Stock shall not be increased above,
and shall not exceed, 500,000. Series L Stock once purchased,
acquired or otherwise redeemed by the Corporation shall not be
reissued as shares of Series L Stock, but, having been restored to
the status of authorized but unissued shares of Serial Preferred
Stock without serial designation, may, in whole or in part, be, or
be included in, any subsequent series of Serial Preferred Stock of a
new designation with such express terms as may be fixed by the Board
of Directors of the Corporation.
24
{Section 20. Serial Preferred Stock, Adjustable Rate Series M.} Of the
4,000,000 authorized shares of Serial Preferred Stock, 500,000 shares are
designated as a series entitled "Serial Preferred Stock, Adjustable Rate
Series M" (hereinafter called "Series M Stock"). The Series M Stock shall
have the express terms set forth in this Division as being applicable to all
shares of Serial Preferred Stock as a class and, in addition, the following
express terms applicable to all shares of Series M Stock as a series of the
Serial Preferred Stock:
(a) The dividend rate of the Series M Stock shall be as follows:
(1) An annual rate of $9.27 per share for the dividend period from
the date of initial issue of the Series M Stock to and includ-
ing January 31, 1986 and an annual rate 1.15 percentage points
below the Applicable Rate (as defined in Subsection (a)(2))
from time to time in effect for each subsequent three-month
dividend period; provided, however, that the annual dividend
rate shall in no event be less than 7.00% or more than 13.50%
for any dividend period.
(2) The applicable rate (hereinafter called the "Applicable Rate")
for any dividend period shall be the highest of the Treasury
Bill Rate, the Ten Year Constant Maturity Rate and the Twenty
Year Constant Maturity Rate (each as hereinafter defined) for
such dividend period, except that in the event the Corporation
determines in good faith that for any reason one or more of
such rates cannot be determined for any dividend period, then
the Applicable Rate for such dividend shall be the higher of
whichever of such rates can be so determined or in the event
the Corporation determines in good faith that none of such
rates can be determined for any dividend period, then the
Applicable Rate in effect for the preceding dividend period
shall be continued for such dividend period.
(3) Except as provided below in this Subsection (a)(3), the
"Treasury Bill Rate" for each dividend period shall be the
arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market dis-
count rate, if only one such rate is published during the
relevant Calendar Period (as hereinafter defined)) for three-
month U.S. Treasury bills, as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to
the last 10 calendar days of January, April, July or October,
as the case may be, prior to the dividend period for which the
dividend rate on the Series M Stock is being determined. In
the event that the Federal Reserve Board does not publish such
a weekly per annum market discount rate during such Calendar
Period, then the Treasury Bill Rate for such dividend period
shall be the arithmetic average of the two most recent weekly
per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during
such Calendar Period) for three-month U.S. Treasury bills, as
25
published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that a per annum
market discount rate for three-month U.S. Treasury bills is not
published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Treasury Bill Rate for
such dividend period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate is
published during such Calendar Period) for all of the U.S.
Treasury bills then having maturities of not less than 80 nor
more than 100 days, as published during such Calendar Period by
the Federal Reserve Board or, if the Federal Reserve Board does
not publish such rates, by any Federal Reserve Bank or by any
U.S. Government department or agency selected by the
Corporation. In the event the Corporation determines in good
faith that for any reason no such U.S. Treasury bill rates are
published as provided above during such Calendar Period, then
the Treasury Bill Rate for such dividend period shall be the
arithmetic average of the per annum market discount rates based
upon the closing bids during such Calendar Period for each of
the issues of marketable non-interest bearing U.S. Treasury
securities with a maturity of not less than 80 nor more than
100 days from the date of each such quotation, as quoted daily
for each business day in New York City (or less frequently if
daily quotations are not generally available) to the
Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation. In the event
the Corporation determines in good faith that for any reason
the Corporation cannot determine the Treasury Bill Rate for
such dividend period as provided above in this Subsection
(a)(3), the Treasury Bill Rate for such dividend period shall
be the arithmetic average of the per annum market discount
rates based upon the closing bids during such Calendar Period
for each of the issues of marketable interest bearing U.S.
Treasury securities with a maturity of not less than 80 nor
more than 100 days from the date of each such quotation, as
quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to
the Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation.
(4) Except as provided below in this Subsection (a)(4), the "Ten
Year Constant Maturity Rate" for each dividend period shall be
the arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (or the one weekly per annum Ten Year
Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to
the last 10 calendar days of January, April, July or October,
as the case may be, prior to the dividend period for which the
26
dividend rate on the Series M Stock is being determined. In
the event that the Federal Reserve Board does not publish such
a weekly per annum Ten Year Average Yield during such Calendar
Period, then the Ten Year Constant Maturity Rate for such
dividend period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one
weekly per annum Ten Year Average Yield, if only one such yield
is published during such Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the
Corporation. In the event that a per annum Ten Year Average
Yield is not published by the Federal Reserve Board or by any
Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Ten Year Constant
Maturity Rate for such dividend period shall be the arithmetic
average of the two most recent weekly per annum average yields
to maturity (or the one weekly average yield to maturity, if
only one such yield is published during such Calendar Period)
for all of the actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities (as
hereinafter defined)) then having maturities of not less than
eight nor more than 12 years, as published during said Calendar
Period by the Federal Reserve Board or, if the Federal Reserve
Board does not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the
Corporation. In the event the Corporation determines in good
faith that for any reason the Corporation cannot determine the
Ten Year Constant Maturity Rate for such dividend period as
provided above in this Subsection (a)(4), then the Ten Year
Constant Maturity Rate for such dividend period shall be the
arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eight nor more than 12
years from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by
at least three recognized U.S. Government securities dealers
selected by the Corporation.
(5) Except as provided below in this Subsection (a)(5), the "Twenty
Year Constant Maturity Rate" for each dividend period shall be
the arithmetic average of the two most recent weekly per annum
Twenty Year Average Yields (or the one weekly per annum Twenty
Year Average Yield, if only one such yield is published during
the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately
prior to the last 10 calendar days of January, April, July or
October, as the case may be, prior to the dividend period for
which the dividend rate on the Series M Stock is being
determined. In the event the Federal Reserve Board does not
27
publish such a weekly per annum Twenty Year Average Yield
during such Calendar Period, then the Twenty Year Constant
Maturity Rate for such dividend period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year
Average Yields (or the one weekly per annum Twenty Year Average
Yield, if only one such yield is published during such Calendar
Period), as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that a per
annum Twenty Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such dividend
period shall be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield is published
during such Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having maturities of not less
than 18 nor more than 22 years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation
determines in good faith that for any reason the Corporation
cannot determine the Twenty Year Constant Maturity Rate for
such dividend period as provided above in this Subsection
(a)(5), then the Twenty Year Constant Maturity Rate for such
dividend period shall be the arithmetic average of the per
annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not
less than 18 nor more than 22 years from the date of each
quotation, as quoted daily for each business day in New York
City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation.
(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Twenty Year Constant Maturity Rate each shall be rounded to
the nearest one hundredth of a percentage point.
(7) The fixed dividend rate per share for each dividend period
shall be computed in dollars by dividing the dividend rate for
such dividend period by four and, in the case of an Applicable
Rate, converting such rate to a fraction and multiplying it by
$100.00; provided that the dividend payable for the initial
dividend period or any period longer or shorter than a full
quarterly dividend period shall be computed on the basis of a
360-day year consisting of 30-day months.
28
(8) The dividend rate with respect to each dividend period shall be
calculated as promptly as practicable by the Corporation. The
mathematical accuracy of each such calculation shall be con-
firmed in writing by the Corporation's independent auditors.
The Corporation shall cause each individual rate to be pub-
lished in a newspaper of general circulation in New York City
prior to the commencement of the dividend period to which it
applies.
(9) As used in this Subsection (a), the term "Calendar Period"
means a period of 14 calendar days; the term "Special
Securities" means securities which can, at the option of the
holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of 10 years); and the term
"Twenty Year Average Yield" means the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest
rate securities (adjusted to constant maturities of 20 years).
(b) Dividends on Series M Stock shall be payable, if declared, quarterly
on the first day of February, May, August and November of each year,
the first quarterly dividend being payable, if declared, on
February 1, 1986, to the extent accrued.
(c) Dividends on Series M Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
M Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series M Stock, dividends shall be
cumulative from the date of the initial issue of Series M
Stock; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series M Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject to the provisions of Section 5(c)(3) of this Division, the
Series M Stock shall be redeemed in the manner provided in Sections
3(b)(1) and (2) of this Division as follows:
29
(1) The Corporation shall, on November 1, 1991 and on each
November 1 thereafter, redeem 100,000 shares of Series M Stock,
or the number of shares then outstanding, if less, at the re-
demption price of $100.00 per share, plus an amount per share
equal to all dividends accrued and unpaid thereon to the date
of redemption. The Corporation's obligation to redeem such
number of shares on any such date is hereinafter referred to as
a "Mandatory Redemption Obligation". If the Corporation shall
not have on such date sufficient funds legally available to
effect such mandatory redemption, it shall set aside for such
redemption on such date such funds, if any, as are then legally
available, and shall do so as promptly as practicable there-
after as the Corporation determines that it has funds then
legally available, and shall apply such funds to the redemption
of shares of Series M Stock as provided in the last sentence of
this Subsection (d)(1) until it has redeemed all of the Series
M Stock then required to be redeemed pursuant to the first
sentence of this Subsection (d)(1). Notwithstanding the fore-
going, if at any time the Corporation (i) shall be obligated to
redeem Series M Stock or to set aside legally available funds
for that purpose and to redeem other Serial Preferred Stock for
its sinking fund or other mandatory redemption and (ii) shall
not have sufficient funds legally available to do so in full,
then such portion of such then legally available funds shall be
set aside to redeem the Series M Stock as shall bear the same
ratio to the total funds then legally available to effect such
redemption and to meet the then unmet obligations of the sink-
ing fund and other mandatory redemption terms of all outstand-
ing Serial Preferred Stock as the then unmet obligation to
redeem Series M Stock bears to the aggregate of such unmet
obligations to redeem and the then unmet obligations of the
sinking fund and other mandatory redemption terms of all out-
standing Serial Preferred Stock. At any time following the
setting aside of funds to redeem Series M Stock pursuant to
this Subsection (d)(1) when the amount so set aside is suffi-
cient to redeem at least 1,000 shares of the Series M Stock,
the Corporation shall promptly call for redemption such number
of whole shares of Series M Stock as may be redeemed with such
amount at the redemption price of $100.00 per share, plus
accrued but unpaid dividends on the Series M Stock then being
redeemed to the date of redemption.
(2) On each mandatory redemption date specified in Subsection
(d)(1), so long as and to the extent that Series M Stock shall
be outstanding, and provided that the Corporation has fulfilled
all its Mandatory Redemption Obligations under Subsection
(d)(1) on such date, the Corporation, at the option of the
Board of Directors, may redeem not more than 100,000 additional
shares of Series M Stock, or the number of shares then out-
standing in excess of those then being redeemed pursuant to
Subsection (d)(1), if less, at the mandatory redemption price
specified in Subsection (d)(1). The option to redeem addi-
tional Series M Stock pursuant to this Subsection (d)(2) shall
not be cumulative.
30
(3) The Corporation, at the option of the Board of Directors, may
redeem at any time and from time to time all or any part of the
outstanding Series M Stock as follows:
Upon payment of
If redeemed in the 12 the redemption
months ending on October 31, price per share of
1986 ......................... $109.27
1987 ......................... 108.02
1988 ......................... 106.76
1989 ......................... 105.51
1990 ......................... 104.25
1991 ......................... 103.00
1992 ......................... 102.00
1993 ......................... 101.00
1994 ......................... 100.00
1995 ......................... 100.00
plus in each case an amount equal to all dividends accrued and
unpaid thereon to the date of redemption; provided, however,
that Series M Stock may not be redeemed prior to November 1,
1990, directly or indirectly as a part of or in anticipation of
any refunding of Series M Stock involving the incurring of in-
debtedness or the issuance of shares of Serial Preferred Stock
or any other shares ranking prior to or on a parity with the
Serial Preferred Stock if the interest on such indebtedness or
the dividends on such shares results in an effective annual
cost to the Corporation of less than the annual dividend rate
of the Series M Stock. In the case of a refunding redemption
of Series M Stock with borrowed funds or shares having a fixed
interest or dividend rate, the annual rate of the Series M
Stock is the dividend payable on the Series M Stock on or, if
it is not payable on, then payable most recently before, the
date the redemption notice is deposited in the mail. In the
case of a refunding redemption of Series M Stock with borrowed
funds or shares having an adjustable interest or dividend rate,
the effective annual interest or dividend cost of such borrowed
funds or shares shall be deemed to be lower than the annual
dividend rate of the Series M Stock if either (i) the initial
annual interest or dividend rate of such borrowed funds or
shares is lower than the annual dividend rate of the Series M
Stock payable on, or if it is not payable on, then payable most
recently before, the date the redemption notice is deposited in
the mail, or (ii) the adjusted annual interest or dividend rate
of such borrowed funds or shares definitely would, under the
applicable adjustment formula, be lower at any time while such
borrowing or shares would be outstanding than the adjusted
annual dividend rate of the Series M Stock would be at the
corresponding time if it also were to remain outstanding.
31
(4) Any shares of Series M Stock acquired by the Corporation pur-
suant to Subsection (d)(2) or (3) or by purchase or otherwise
may, at the option of the Board of Directors, be credited on
any mandatory redemption date specified in Subsection (d)(1),
in whole or in part, to reduce all or part of any unsatisfied
Mandatory Redemption Obligation of the Corporation under
Subsection (d)(1) on such date, such reduction to be credited
first to the oldest unsatisfied Mandatory Redemption Obligation
and then sequentially to each subsequent unsatisfied Mandatory
Redemption Obligation, if any, to the extent of the number of
shares so acquired and determined by the Board of Directors to
be so credited. Any shares so credited may not thereafter be
again so credited.
(e) The amount payable per share on Series M Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d)(3) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $100.00, plus in each case an amount equal
to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to this Subsection (e).
(f) The number of shares of Series M Stock shall not be increased above,
and shall not exceed 500,000. Series M Stock once redeemed, pur-
or otherwise acquired by the Corporation shall not be re-issued as
shares of Series M Stock, but, having been restored to the status
of authorized but unissued shares of Serial Preferred Stock without
serial designation, may, in whole or in part, be, or be included in,
any subsequent series of Serial Preferred Stock of a new designation
with such express terms as may be fixed by the Board of Directors of
the Corporation.
{Section 21. Serial Preferred Stock, $9.125 Series N.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 750,000 shares are designated as
a series entitled "Serial Preferred Stock, $9.125 Series N" (hereinafter
called "Series N Stock"). The Series N Stock shall have the express terms set
forth in this Division as being applicable to all shares of Serial Preferred
Stock as a class and, in addition, the following express terms applicable to
all shares of Series N Stock as a series of the Serial Preferred Stock:
(a) The annual dividend rate of the Series N Stock shall be $9.125 per
share.
(b) Dividends on Series N Stock shall be payable, if declared, quarterly
on the first day of February, May, August and November of each year,
the first quarterly dividend being payable, if declared, on
February 1, 1987, to the extent accrued.
(c) Dividends on Series N Stock shall be cumulative as follows:
32
(1) With respect to shares included in the initial issue of Series
N Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series N Stock, dividends shall be
cumulative from the date of the initial issue of Series N
Stock; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series N Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject to the provisions of Section 5(c)(3) of this Division, the
Series N Stock shall be redeemable in the manner provided in
Sections 3(b)(1) and (2) of this Division as follows:
(1) The Corporation shall, on February 1, 1993 and on each
February 1 thereafter, redeem 150,000 shares of Series N Stock,
or the number of shares then outstanding, if less, at the re-
demption price of $100.00 per share, plus an amount per share
equal to all dividends accrued and unpaid thereon to the date
of redemption. If the Corporation shall not have on any such
date sufficient funds legally available to effect such manda-
tory redemption, it shall set aside for such redemption on such
date such funds, if any, as are then legally available, and
shall do so as promptly as practicable thereafter as the
Corporation determines that it has funds then legally
available, and shall apply such funds to the redemption of
shares of Series N Stock as provided in the last sentence of
this Subsection (d)(1) until it has redeemed all of the Series
N Stock then required to be redeemed pursuant to the first
sentence of this Subsection (d)(1). Notwithstanding the
foregoing, if at any time the Corporation (i) shall be obli-
gated to redeem Series N Stock or to set aside legally
available funds for that purpose and to redeem other Serial
Preferred Stock for its sinking fund or other mandatory re-
demption terms and (ii) shall not have sufficient funds
legally available to do so in full, then such portion of such
then legally available funds shall be set aside to redeem the
Series N Stock as shall bear the same ratio to the total funds
then legally available to effect such redemption and to meet
the then unmet obligations of the sinking fund and other
mandatory redemption terms of all outstanding Serial Preferred
Stock as the then unmet obligation to redeem Series N Stock
bears to the aggregate of such unmet obligations to redeem and
the then unmet obligations of the sinking fund and other
mandatory redemption terms of all outstanding Serial Preferred
Stock. At any time following the setting aside of funds to
redeem Series N Stock pursuant to this Subsection (d)(1) when
33
the amount so set aside is sufficient to redeem at least 1,000
shares of the Series N Stock, the Corporation shall promptly
call for redemption such number of whole shares of Series N
Stock as may be redeemed with such amount at the redemption price
of $100.00 per share, plus accrued but unpaid dividends on the
Series N Stock then being redeemed to the date of redemption.
(2) The Corporation, at the option of the Board of Directors, may
redeem at any time and from time to time all or any part of the
outstanding Series N Stock as follows:
Upon payment of
If redeemed in the 12 the redemption
months ending on January 31, price per share of
1987 ......................... $109.13
1988 ......................... 109.13
1989 ......................... 108.11
1990 ......................... 107.10
1991 ......................... 106.08
1992 ......................... 105.07
1993 ......................... 104.06
1994 ......................... 103.04
1995 ......................... 102.03
1996 ......................... 101.01
1997 ......................... 100.00
plus in each case an amount equal to all dividends accrued and
unpaid thereon to the date of redemption; provided, however,
that Series N Stock may not be so redeemed prior to February 1,
1992, directly or indirectly as part of or in anticipation of
any refunding of Series N Stock involving the incurring of
indebtedness or the issuance of shares of Serial Preferred
Stock or any other shares ranking prior to or on a parity with
the Serial Preferred Stock if the interest on such indebtedness
or the dividends on such shares results in an effective annual
cost to the Corporation of less than the annual dividend rate
of the Series N Stock. In the case of a refunding optional
redemption of Series N Stock with borrowed funds or shares or
proceeds of shares having an adjustable interest or dividend
rate, the effective annual interest or dividend cost of such
borrowed funds or shares shall be deemed to be less than the
annual dividend rate of the Series N Stock if the initial
annual interest or dividend rate of such borrowed funds or
shares is less than the annual dividend rate of the Series N
Stock.
34
(3) On February 1, 1997, the Corporation shall redeem all remaining
shares of Series N Stock, if any, then outstanding at the re-
demption price of $100.00 per share, plus an amount per share
equal to all dividends accrued and unpaid thereon to the date
of redemption.
(e) The amount payable per share on Series N Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d)(2) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $100.00, plus in each case an amount equal
to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to this Subsection (e).
(f) The number of shares of Series N Stock shall not be increased above,
and shall not exceed, 750,000. Series N Stock once redeemed, pur-
chased or otherwise acquired by the Corporation shall not be re-
issued as shares of Series N Stock, but, having been restored to the
status of authorized but unissued shares of Serial Preferred Stock
without serial designation, may, in whole or in part, be, or be
included in, any subsequent series of Serial Preferred Stock of a
new designation with such express terms as may be fixed by the Board
of Directors of the Corporation.
{Section 22. Serial Preferred Stock, Remarketed Series P.} Redeemed August
31, 1993.
{Section 23. Serial Preferred Stock, $91.50 Series Q.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 75,000 shares are designated as a
series entitled "Serial Preferred Stock, $91.50 Series Q" (hereinafter called
"Series Q Stock"). The shares of Series Q Stock shall have the express terms
set forth in this Division as being applicable to all shares of Serial
Preferred Stock as a class and, in addition, the following express terms
applicable to all shares of Series Q Stock as a series of the Serial Preferred
Stock:
(a) The annual dividend rate of the Series Q Stock shall be $91.50 per
share.
(b) Dividends on Series Q Stock shall be payable, if declared, quarterly
on the first day of March, June, September and December of each
year, the first quarterly dividend being payable, if declared, on
September 1, 1991, to the extent accrued.
(c) Dividends on Series Q Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
Q Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series Q Stock, dividends shall be
cumulative from the date of the initial issue of Series Q
Stock; and
35
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series Q Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject in each case to the provisions of Section 5(c)(3) of this
Division, Series Q Stock shall be redeemable in the manner provided
in Sections 3(b)(1) and (2) of this Division, and as follows:
(1) Series Q Stock shall be redeemed in part from time to time for
the Sinking Fund as hereinafter set forth at a redemption price
of $1,000.00 per share, plus in each case an amount per share
equal to all dividends accrued and unpaid thereon to the date
of redemption (such price plus such amount being hereinafter
called the "Sinking Fund Redemption Price"). As and for a
Sinking Fund for Series Q Stock, so long as and to the extent
that any shares thereof are outstanding, the Corporation will
redeem on each June 1 (hereinafter called "Sinking Fund Date")
commencing with June 1, 1995 and ending on June 1, 2000,
10,714 shares of Series Q Stock, and on June 1, 2001, the re-
maining 10,716 shares of Series Q Stock, or the number of
shares then outstanding, if less, at the Sinking Fund
Redemption Price (the Corporation's obligation to redeem such
number of such shares on any Sinking Fund Date being herein-
after referred to as the "Sinking Fund Obligation"). If the
Corporation shall not have on any Sinking Fund Date sufficient
funds legally available to effect such mandatory redemption, it
shall set aside for such redemption on such date such funds, if
any, as are then legally available, and shall do so as promptly
as practicable thereafter as the Corporation determines that it
has funds then legally available, and shall apply such funds to
the redemption of shares of Series Q Stock as provided in the
last sentence of this Subsection (d)(1) until it has redeemed
all of the Series Q Stock then required to be redeemed pursuant
to this Subsection (d)(1). Notwithstanding the foregoing, if
at any time the Corporation (i) shall be obligated to redeem
Series Q Stock or to set aside legally available funds for that
purpose and to redeem other Serial Preferred Stock for its
sinking fund or other mandatory redemption terms and (ii)
shall not have sufficient funds legally available to do so in
full, then such portion of such then legally available funds
shall be set aside to redeem the Series Q Stock as shall bear
the same ratio to the total funds then legally available to
effect such redemption and to meet the then unmet obligations
of the sinking fund and other mandatory redemption terms of all
outstanding Serial Preferred Stock as the then unmet obligation
to redeem Series Q Stock bears to the aggregate of such unmet
obligations to redeem and the then unmet obligations of the
36
sinking fund and other mandatory redemption terms of all
outstanding Serial Preferred Stock. At any time following the
setting aside of funds to redeem Series Q Stock pursuant to
this Subsection (d)(1) when the amount so set aside is
sufficient to redeem at least 100 shares of Series Q Stock, the
Corporation shall promptly call for redemption such number of
whole shares of Series Q Stock as may be redeemed with such
amount at the redemption price of $1,000.00 per share, plus
accrued but unpaid dividends on Series Q Stock then being
redeemed to the date of redemption.
(2) On each Sinking Fund Date so long as and to the extent that
Series Q Stock shall be outstanding, and provided that the
Corporation has fulfilled its Sinking Fund Obligation on such
date, the Corporation may at the option of the Board of
Directors redeem additional shares of Series Q Stock (any
redemption of less than all of the then outstanding Series Q
Stock being applied in satisfaction of required Sinking Fund
Obligations in inverse order of their scheduled Sinking Fund
Dates) at the redemption price of $1,000.00 per share (the
Redemption Amount"), plus in each case an amount per share
equal to all dividends accrued and unpaid thereon to the date
of redemption, plus in each case the Optional Redemption
Amount, if any.
For purposes of this Section 23(d)(2) (and Section 23(e) as
provided therein), the following definitions shall apply:
"OPTIONAL REDEMPTION AMOUNT" shall mean, with respect to each
share of Series Q Stock, an amount equal to (A) the excess, if
any, of the Discounted Value of the Called Amount over the sum
of (i) such Called Amount plus (ii) accrued and unpaid
dividends on the shares of Series Q Stock to be redeemed as of
(including dividends payable on) the Settlement Date, divided
by (B) the number of shares of Series Q Stock to be redeemed on
such Settlement Date. The Optional Redemption Amount shall in
no event be less than zero.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City or
Ohio are required or authorized to be closed.
"CALLED AMOUNT" shall mean, with respect to the Series Q Stock,
the aggregate Redemption Amount of the shares of Series Q Stock
that are to be redeemed pursuant to this Section 23(d)(2) or
pursuant to the provisions of Section 23(e) regarding voluntary
liquidation, dissolution, or winding up of the affairs of the
Corporation.
37
"DISCOUNTED VALUE" shall mean, with respect to the Called
Amount, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Amount from
their respective scheduled due dates to the Settlement Date, in
accordance with accepted financial practice and at a discount
factor (applied on a quarterly basis) equal to the Reinvestment
Yield with respect to such Called Amount.
"REINVESTMENT YIELD" shall mean, with respect to the Called
Amount, the yield to maturity implied by (i) the yields re-
ported, as of 10:00 A.M. (New York City time) on the Business Day
next preceding the Settlement Date, on the display designated
as "Page 678" on the Telerate Service (or such other display as
may replace Page 678 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Amount as of such
Settlement Date, or, if such yields shall not be reported as of
such time or if the yields reported as of such time shall not
be ascertainable, (ii) the Treasury Constant Maturity Series
yields reported, for the latest day for which such yields shall
have been so reported as of the Business Day next preceding the
Settlement Date, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Amount as of
such Settlement Date. Such implied yield shall be determined,
if necessary, by (a) converting U.S. Treasury bill quotations
to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported
yields.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Amount, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Amount into
(ii) the sum of the products obtained by multiplying (a) each
Remaining Scheduled Payment of such Called Amount (but not of
dividends that would have been payable with respect to the
shares of Series Q Stock to be redeemed between the Settlement
Date and the respective Sinking Fund Dates) by (b) the number
of years (calculated to the nearest one-twelfth year) which
will elapse between the Settlement Date and the scheduled
Sinking Fund Date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the
Called Amount, all payments required by Section 23(d)(1) with
respect to such Called Amount plus all dividends at the rate of
$103.60 per annum on the shares of Series Q Stock to be re-
deemed that would have been payable between the Settlement Date
and the respective Sinking Fund Dates.
38
"SETTLEMENT DATE" shall mean, with respect to the Called
Amount, the date on which such Called Amount is to be redeemed
pursuant to this Section 23(d)(2) or becomes payable pursuant
to the provisions of Section 23(e) regarding voluntary liquida-
tion, dissolution or winding up of the affairs of the
Corporation.
(3) On June 1, 2001, the Corporation shall redeem all remaining
shares of Series Q Stock, if any, then outstanding at the re-
demption price of $1,000.00 per share plus in each case an
amount per share equal to all dividends accrued and unpaid
thereon to the date of redemption.
(e) The amount payable per share on Series Q Stock in the event of any
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be the redemption price then in effect as set
forth in Subsection (d)(2) of this Section and in the event of any
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation shall be $1,000.00, plus in each case an amount
equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to this Subsection (e).
(f) The number of shares of Series Q Stock shall not be increased above,
and shall not exceed, 75,000. Series Q Stock once redeemed, pur-
chased or otherwise acquired by the Corporation shall not be re-
issued as shares of Series Q Stock, but, having been restored to the
status of authorized but unissued shares of Serial Preferred Stock
without serial designation, may, in whole or in part, be, or be
included in, any subsequent series of Serial Preferred Stock of a
new designation with such express terms as may be fixed by the Board
of Directors of the Corporation.
(g) In the event that there is for any reason a change in the Federal
Tax Rate (other than a change increasing such rate to more than
34%), then, in that event, the dividend rate on the Series Q Stock
shall be automatically adjusted (but not higher than a rate of
$105.00 per annum), effective as of the effective date of change for
each such change, to the rate per annum determined by multiplying
the original dividend rate on such Series Q Stock by the Adjustment
Fraction.
For purposes of this Section 23(g), the following definitions shall
apply:
"ADJUSTMENT FRACTION" shall mean the following fraction resulting
from the following formula:
(1 - (Xo x Fo)) x (1 - Fn)
(1 - (Xo x Fn)) x (1 - Fo)
where
39
Xo = 30% (the Inclusion Rate, which is that portion of dividends
received that are includable in taxable income for corporations as
set forth in the Internal Revenue Code of 1986 as amended)
Fo = 34% (the Federal Tax Rate in effect on the date the original
dividend rate was determined)
Fn = the new Federal Tax Rate
The Adjustment Fraction will be rounded to three decimal places with
rounding up if the fourth decimal place is .0005 or higher, and
rounding down otherwise.
"FEDERAL TAX RATE" shall mean the highest marginal income tax rate
in effect for corporations as set forth in the Internal Revenue Code
of 1986 as amended.
{Section 24. Serial Preferred Stock, $88.00 Series R.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 50,000 shares are designated as a
series entitled "Serial Preferred Stock, $88.00 Series R" (hereinafter called
"Series R Stock"). The shares of Series R Stock shall have the express terms
set forth in this Division as being applicable to all shares of Serial
Preferred Stock as a class and, in addition, the following express terms
applicable to all shares of Series R Stock as a series of the Serial Preferred
Stock:
(a) The annual dividend rate of the Series R Stock shall be $88.00 per
share.
(b) Dividends on Series R Stock shall be payable, if declared, quarterly
on the first day of March, June, September and December of each
year, the first quarterly dividend being payable, if declared, on
March 1, 1992, to the extent accrued. The amount of dividends pay-
able on any share of Series R Stock for any period shorter than a
full quarterly dividend period shall be calculated on the basis of a
360-day year and 30-day months and, with respect to any month in
which such share of the Series R Stock is not outstanding for the
entire month, the actual number of days that such share of Series R
Stock is outstanding in such month.
(c) Dividends on Series R Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
R Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series R Stock, dividends shall be cumula-
tive from the date of the initial issue of Series R Stock; and
40
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series R Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
(d) Subject to the provisions of Section 5(c)(3) of this Division and in
the manner provided in Sections 3(b)(1) and (2) of this Division,
the Corporation shall, on December 1, 2001, redeem all shares of
Series R Stock then outstanding at the redemption price of $1,000.00
per share, plus an amount per share equal to all dividends accrued
and unpaid thereon to the date of redemption. If the Corporation
shall not have on such date sufficient funds legally available to
effect such mandatory redemption, it shall set aside for such re-
demption on such date such funds, if any, as are then legally
available, and shall do so as promptly as practicable thereafter as
the Corporation determines that it has funds then legally available,
and shall apply such funds to the redemption of shares of Series R
Stock as provided in this paragraph until it has redeemed all of the
Series R Stock. Notwithstanding the foregoing, if at any time the
Corporation (i) shall be obligated to redeem Series R Stock or to
set aside legally available funds for that purpose and to redeem
other Serial Preferred Stock and (ii) shall not have sufficient
funds legally available to do so in full, then such portion of such
then legally available funds shall be set aside to redeem the Series
R Stock as shall bear the same ratio to the total funds then legally
available to effect such redemption and to meet the then unmet obli-
gations to redeem all outstanding Serial Preferred Stock as the then
unmet obligation to redeem Series R Stock bears to the aggregate of
such unmet obligations to redeem and the then unmet obligations to
redeem all outstanding Serial Preferred Stock. At any time follow-
ing the setting aside of funds to redeem Series R Stock pursuant to
this paragraph when the amount so set aside is sufficient to redeem
at least 100 shares of Series R Stock, the Corporation shall
promptly call for redemption such number of whole shares of Series R
Stock as may be redeemed with such amount at the redemption price of
$1,000.00 per share, plus accrued but unpaid dividends on Series R
Stock then being redeemed to the date of redemption. The shares of
Series R Stock shall not be subject to redemption except pursuant to
this paragraph.
(e) The amount payable per share on Series R Stock in the event of any
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $1,000.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment of the
amount due pursuant to this paragraph.
41
(f) The number of shares of Series R Stock shall not be increased above,
and shall not exceed, 50,000. Series R Stock once redeemed, pur-
chased or otherwise acquired by the Corporation shall not be re-
issued as shares of Series R Stock, but, having been restored to the
status of authorized but unissued shares of Serial Preferred Stock
without serial designation, may, in whole or in part, be, or be in-
cluded in, any subsequent series of Serial Preferred Stock of a new
designation with such express terms as may be fixed by the Board of
Directors of the Corporation.
{Section 25. Serial Preferred Stock, $90.00 Series S.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 75,000 shares are designated as a
series entitled "Serial Preferred Stock, $90.00 Series S" (hereinafter called
"Series S Stock"). The shares of Series S Stock shall have the express terms
set forth in this Division as being applicable to all shares of Serial
Preferred Stock as a class and, in addition, the following express terms
applicable to all shares of Series S Stock as a series of the Serial Preferred
Stock:
(a) The annual dividend rate of the Series S Stock shall be $90.00 per
share.
(b) Dividends on Series S Stock shall be payable, if declared, quarterly
on the first day of February, May, August and November of each year,
the first quarterly dividend being payable, if declared, on
February 1, 1993, to the extent accrued. The amount of dividends
payable for the initial dividend period or any period shorter than a
full quarterly dividend period shall be calculated on the basis of a
360-day year and 30-day months or, with respect to any month in
which any share of the Series S Stock is not outstanding for the
entire month, the actual number of days that such share of Series S
Stock is outstanding in such month.
(c) Dividends on Series S Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
S Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series S Stock, dividends shall be cumula-
tive from the date of the initial issue of Series S Stock; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series S Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
42
(d) Subject to the provisions of Section 5(c)(3) of this Division and in
the manner provided in Sections 3(b)(1) and (2) of this Division,
the Corporation shall, on November 1, 1999 and on each November 1
thereafter, redeem 18,750 shares of Series S Stock, or the number of
shares then outstanding, if less, at the redemption price of
$1,000.00 per share, plus an amount per share equal to all dividends
accrued and unpaid thereon to the date of redemption. If the
Corporation shall not have on any such date sufficient funds legally
available to effect such mandatory redemption, it shall set aside
for such redemption on such date such funds, if any, as are then
legally available, and shall do so as promptly as practicable there-
after as the Corporation determines that it has funds then legally
available, and shall apply such funds to the redemption of shares of
Series S Stock as provided in the last sentence of this paragraph
until it has redeemed all of the Series S Stock then required to be
redeemed pursuant to the first sentence of this paragraph. Notwith-
standing the foregoing, if at any time the Corporation (i) shall be
obligated to redeem Series S Stock or to set aside legally available
funds for that purpose and to redeem other Serial Preferred Stock
for its sinking fund or other mandatory redemption terms and (ii)
shall not have sufficient funds legally available to do so in full,
then such portion of such then legally available funds shall be set
aside to redeem the Series S Stock as shall bear the same ratio to
the total funds then legally available to effect such redemption and
to meet the then unmet obligations of the sinking fund and other
mandatory redemption terms of all outstanding Serial Preferred Stock
as the then unmet obligation to redeem Series S Stock bears to the
aggregate of such unmet obligations to redeem and the then unmet
obligations of the sinking fund and other mandatory redemption terms
of all outstanding Serial Preferred Stock. At any time following the
setting aside of funds to redeem Series S Stock pursuant to this
paragraph when the amount so set aside is sufficient to redeem at
least 100 shares of Series S Stock, the Corporation shall promptly
call for redemption such number of whole shares of Series S Stock
as may be redeemed with such amount at the redemption price of
$1,000.00 per share, plus accrued but unpaid dividends on Series S
Stock then being redeemed to the date of redemption. The shares of
Series S Stock shall not be subject to redemption except pursuant
to this paragraph.
(e) The amount payable per share on Series S Stock in the event of any
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $1,000.00, plus an amount equal to all dividends
accrued and unpaid thereon to the date of payment of the amount due
pursuant to this paragraph.
43
(f) The number of shares of Series S Stock shall not be increased above,
and shall not exceed, 75,000. Series S Stock once redeemed, pur-
chased or otherwise acquired by the Corporation shall not be re-
issued as shares of Series S Stock, but, having been restored to the
status of authorized but unissued shares of Serial Preferred Stock
without serial designation, may, in whole or in part, be, or be
included in, any subsequent series of Serial Preferred Stock of a
new designation with such express terms as may be fixed by the Board
of Directors of the Corporation.
{Section 26. Serial Preferred Stock, $42.40 Series T.} Of the 4,000,000
authorized shares of Serial Preferred Stock, 200,000 shares are designated as
a series entitled "Serial Preferred Stock, $42.40 Series T" (hereinafter
called "Series T Stock"). The shares of Series T Stock shall have the express
terms set forth in this Division as being applicable to all shares of Serial
Preferred Stock as a class and, in addition, the following express terms
applicable to all shares of Series T Stock as a series of the Serial Preferred
Stock:
(a) The annual dividend rate of the Series T Stock shall be $42.40 per
share.
(b) Dividends on Series T Stock shall be payable, if declared, quarterly
on the first day of February, May, August and November of each year,
the first quarterly dividend being payable, if declared, on
August 1, 1993, to the extent accrued. The amount of dividends pay-
able for the initial dividend period or any period shorter than a
full quarterly dividend period shall be calculated on the basis of a
360-day year and 30-day months or, with respect to any month in
which any share of the Series T Stock is not outstanding for the
entire month, the actual number of days that such share of Series T
Stock is outstanding in such month.
(c) Dividends on Series T Stock shall be cumulative as follows:
(1) With respect to shares included in the initial issue of Series
T Stock and shares issued any time thereafter up to and includ-
ing the record date for the payment of the first dividend on
the initial issue of Series T Stock, dividends shall be cumula-
tive from the date of the initial issue of Series T Stock; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period com-
mencing the day after the record date for the payment of a
dividend on Series T Stock and ending on the payment date of
that dividend, dividends with respect to such shares shall be
cumulative from that dividend payment date.
44
(d) Series T Stock shall not be redeemable prior to June 1, 1998.
Thereafter, subject to the provisions of Section 5(c)(3) of this
Division and in the manner provided in Sections 3(b)(1) and (2) of
this Division, Series T Stock shall be redeemable at any time or
from time to time, at the option of the Board of Directors, upon
payment of $500.00 per share, plus an amount per share equal to all
dividends accrued and unpaid thereon to the date of redemption.
(e) The amount payable per share on Series T Stock in the event of any
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $500.00, plus an amount per share equal to all
dividends accrued and unpaid thereon to the date of payment of the
amount due pursuant to this paragraph.
(f) The number of shares of Series T Stock shall not be increased above,
and shall not exceed, 200,000. Series T Stock once redeemed, pur-
chased or otherwise acquired by the Corporation shall not be re-
issued as shares of Series T Stock, but, having been restored to the
status of authorized but unissued shares of Serial Preferred Stock
without serial designation, may, in whole or in part, be, or be
included in, any subsequent series of Serial Preferred Stock of a
new designation with such express terms as may be fixed by the Board
of Directors of the Corporation.
DIVISION B
The Preference Stock shall have the following express terms:
{Section 1. Preferences; Series.} The Preference Stock shall rank junior to
the Serial Preferred Stock as to the payment of dividends and as to distribu-
tions in the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation. The Preference Stock may be
issued from time to time in one or more series. All shares of Preference
Stock shall be of equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as hereinafter provided,
and each share of a series shall be identical with all other shares of such
series, except as to the date from which dividends are cumulative. Subject to
the provisions of Sections 2 to 7, inclusive, of this Division, which pro-
visions shall apply to all Preference Stock, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more series and with
respect to each such series to determine and fix prior to the issuance thereof
(and thereafter, to the extent provided in clause (b) of this Section) the
following:
(a) The designation of the series, which may be by distinguishing
number, letter or title;
45
(b) The number of shares of the series, which number the Board of
Directors may (except where otherwise provided in the creation of
the series) increase or decrease from time to time before or after
the issuance thereof (but not below the number of shares thereof
then outstanding);
(c) The annual dividend rate or rates of the series;
(d) The dates on which and the period or periods for which dividends, if
declared, shall be payable and the date or dates from which
dividends shall accrue and be cumulative;
(e) The redemption rights and price or prices, if any, for shares of the
series;
(f) The terms and amount of the sinking fund, if any, for the purchase
or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, which may be different for voluntary
and involuntary liquidation, dissolution or winding up;
(h) Whether the shares of the series shall be convertible into Common
Stock or shares of any other class ranking junior to the Preference
Stock or any series of the same class of stock of the Corporation
and, if so, the conversion rate or rates or price or prices, any
adjustments thereof and all other terms and conditions upon which
such conversion may be made; and
(i) Restrictions (in addition to those set forth in Sections 5(c) and
5(d) of this Division) on the issuance of shares of the same series
or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Amended Articles or Incorporation fixing, with respect to each such
series, the matters described in clauses (a) through (i), inclusive, of this
Section.
{Section 2. Dividends.}
(a) The holders of Preference Stock of each series, subject to the prior
preference with respect to dividends upon Serial Preferred Stock set
forth in Section 2 of Division A and in preference to the holders of
Common Stock and of any other class of shares ranking junior to the
Preference Stock, shall be entitled to receive out of any funds
legally available and when and as declared by the Board of
Directors, dividends in cash at the rate or rates for such series
fixed in accordance with the provisions of Section 1 of this
Division and no more, payable on the dates fixed for such series.
Such dividends shall be cumulative, in the case of shares of each
particular series, from and after the date or dates fixed with
46
respect to such series. No dividends shall be paid upon or declared
or set apart for any series of the Preference Stock for any dividend
period unless at the same time a like proportionate dividend for the
dividend periods terminating on the same or any earlier date,
ratably in proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart for all
Preference Stock of all series then issued and outstanding and
entitled to receive such dividend.
(b) So long as any Preference Stock shall be outstanding no dividend,
except a dividend payable in Common Stock or other shares ranking
junior to the Preference Stock, shall be paid or declared or any
distribution be made, except as aforesaid, in respect of the Common
Stock or any other shares ranking junior to the Preference Stock,
nor shall any Common Stock or any other shares ranking junior to the
Preference Stock be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common Stock
or other shares of the Corporation ranking junior to the Preference
Stock received by the Corporation subsequent to the date of first
issuance of Preference Stock of any series, unless:
(1) All accrued and unpaid dividends on Preference Stock, including
the full dividends for all current dividend periods, shall have
been declared and paid or a sum sufficient for payment thereof
set apart; and
(2) There shall be no arrearages with respect to the redemption of
Preference Stock of any series from any sinking fund provided
for shares of such series in accordance with the provisions of
Section 1 of this Division.
{Section 3. Redemption.}
(a) Subject to the express terms of each series and to the provisions of
Section 5(c)(2) of this Division, the Corporation:
(1) May, from time to time at the option of the Board of Directors,
redeem all or any part of any redeemable series of Preference
Stock at the time outstanding at the applicable redemption
price for such series fixed in accordance with the provisions
of Section 1 of this Division; and
(2) Shall, from time to time, make such redemptions of each series
of Preference Stock as may be required to fulfill the
requirements of any sinking fund provided for shares of such
series at the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this Division;
47
and shall in each case pay all accrued and unpaid dividends to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed, postage pre-
paid, to the holders of record of the Preference Stock to be
redeemed at their respective addresses then appearing on the
books of the Corporation, not less than 30 days nor more than
90 days prior to the date fixed for such redemption, or such
other time prior thereto as the Board of Directors shall fix
for any series pursuant to Section 1(e) of this Division prior
to the issuance thereof. At any time after notice as provided
above has been deposited in the mail, the Corporation may
deposit the aggregate redemption price of the shares of
Preference Stock to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Ohio or New York, New York, having capital
and surplus of not less than $25,000,000, named in such notice,
directed to be paid to the respective holders of the shares of
Preference Stock so to be redeemed, in amounts equal to the
redemption price of all shares of Preference Stock so to be
redeemed, on surrender of the stock certificate or certificates
held by such holders; and upon the deposit of such notice in the
mail and the making of such deposit of money with such bank or
trust company, such holders shall cease to be shareholders with
respect to such shares; and from and after the time such notice
shall have been so deposited and such deposit of money shall
have been so made, such holders shall have no interest in or
claim against the Corporation with respect to such shares,
except only the right to receive such money from such bank or
trust company without interest or to exercise, before the re-
demption date, any unexpired privileges of conversion. In the
event less than all of the outstanding shares of Preference
Stock are to be redeemed, the Corporation shall select by lot
or pro rata the shares so to be redeemed in such manner as
shall be prescribed by the Board of Directors.
(2) If the holders of shares of Preference Stock which have been
called for redemption shall not, within six years after such
deposit, claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company shall be relieved of all responsibility in
respect thereof and to such holders.
(c) Except as otherwise provided in Section 5(d)(2) of this Division,
the Corporation may also from time to time purchase or otherwise
acquire, for a consideration, shares of its outstanding Preference
Stock of any series.
48
(d) Any shares of Preference Stock which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) pur-
chased and delivered in satisfaction of any sinking fund require-
ments provided for shares of such series, (3) converted in
accordance with the express terms thereof, or (4) otherwise acquired
by the Corporation, shall resume the status of authorized but
unissued shares of Preference Stock without serial designation.
{Section 4. Liquidation.}
(a) Subject to the prior preference with respect to distributions to
holders of Serial Preferred Stock in the event of a voluntary or in-
voluntary liquidation, dissolution or winding up of the affairs of
the Corporation:
(1) The holders of Preference Stock of any series shall, in the
event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, be entitled to
receive in full out of the assets of the Corporation, including
its capital, before any amount shall be paid or distributed
among the holders of the Common Stock or any other shares rank-
ing junior to the Preference Stock, the amounts fixed with re-
spect to shares of such series in accordance with Section 1 of
this Division, plus an amount equal to all dividends accrued
and unpaid thereon to the date of payment of the amount due
pursuant to such liquidation, dissolution or winding up of the
affairs of the Corporation; and in the event the net assets of
the Corporation legally available therefor are insufficient to
permit the payment upon all outstanding shares of Preference
Stock of the full preferential amount to which they are re-
spectively entitled, then such net assets shall be distributed
ratably upon outstanding shares of Preference Stock in propor-
tion to the full preferential amount to which each such share
is entitled; and
(2) After payment to the holders of Preference Stock of the full
preferential amounts as aforesaid, the holders of Preference
Stock, as such, shall have no right or claim to any of the
remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with any
other corporation, the merger of any other corporation into it,
or the sale, lease or conveyance of all or substantially all the
property or business of the Corporation, shall not be deemed to
be a dissolution, liquidation or winding up for the purposes of
this Section.
(c) Nothing in this Section 4 of this Division shall be deemed to prevent
the purchase, acquisition or other retirement by the Corporation of
any shares of its outstanding stock as now or in the future
authorized or permitted by the laws of the State of Ohio.
49
{Section 5. Voting.}
(a) The holders of Preference Stock shall have no voting rights, except
as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in default in the
payment of the equivalent of the full dividends for a number of
dividend payment periods (whether or not consecutive) which in
the aggregate contain at least 540 days on any series of
Preference Stock at the time outstanding, whether or not earned
or declared, the holders of Preference Stock of all series,
voting separately as a class, shall be entitled to elect, as
herein provided, two members of the Board of Directors of the
Corporation, subject to the prior rights of the holders of
Serial Preferred Stock as hereinbefore provided in Division A;
provided, however, that the holders of shares of Preference
Stock shall not have or exercise such special class voting
rights except at meetings of such shareholders for the election
of Directors at which the holders of not less than 50% of the
outstanding shares of Preference Stock of all series then
outstanding are present in person or by proxy; and provided
further that the special class voting rights provided for in this
paragraph when the same shall have become vested shall remain so
vested until all accrued and unpaid dividends on the Preference
Stock of all series then outstanding shall have been paid, where-
upon the holders of Preference Stock shall be divested of their
special class voting rights in respect of subsequent elections
of Directors, subject to the revesting of such special class
voting rights in the event hereinabove specified in this
paragraph.
(2) In the event of default entitling the holders of Preference
Stock to elect two Directors as specified in Paragraph 1 of
this Subsection, a special meeting of such holders for the
purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be
called by, the holders of record of at least 10% of the shares
of Preference Stock of all series at the time outstanding, and
notice thereof shall be given in the same manner as that re-
quired for the annual meeting of shareholders; provided, how-
ever, that the Corporation shall not be required to call such
special meeting if the annual meeting of shareholders shall be
held within 120 days after the date of receipt of the foregoing
written request from the holders of Preference Stock. At any
meeting at which the holders of Preference Stock shall be
entitled to elect Directors, the holders of 50% of the then
outstanding shares of Preference Stock of all series, present
in person or by proxy, shall be sufficient to constitute a
quorum, and the vote of the holders of a majority of such
shares so present at any such meeting at which there shall be
such a quorum shall be sufficient to elect the members of the
Board of Directors which the holders of Preference Stock are
50
entitled to elect as hereinabove provided. Notwithstanding any
provision of these Amended Articles of Incorporation or the
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of Directors
of the Corporation, the two Directors who may be elected by the
holders of Preference Stock pursuant to this Subsection shall
serve in addition to any other Directors then in office or pro-
posed to be elected otherwise than pursuant to this Subsection.
Nothing in this Subsection shall prevent any change otherwise
permitted in the total number of Directors of the Corporation
or require the resignation of any Director elected otherwise
than pursuant to this Subsection. Notwithstanding any
classification of the other Directors of the Corporation, the
two Directors elected by the holders of Preference Stock shall
be elected annually for terms expiring at the next succeeding
annual meeting of shareholders.
(3) In case of any vacancy in the office of a Director occurring
among the Directors elected by the holders of the Preference
Stock, voting separately as a class, or of a vacancy in the
office of his or her successor appointed as below provided, the
remaining Director so elected may elect a successor to hold
office for the unexpired term of the Director whose place shall
be vacant. Likewise, in case of any vacancy in the office of a
Director occurring among the Directors not elected by the
holders of the Serial Preferred Stock or the Preference Stock,
or of a vacancy in the office of his or her successor appointed
as below provided, the remaining Directors not elected by the
holders of the Serial Preferred Stock or the Preference Stock,
by affirmative vote of a majority thereof, or the remaining
such Director if there be but one, may elect a successor or
successors to hold office for the unexpired term of the
Director or Directors whose place or places shall be vacant.
(c) The holders of the outstanding shares of any series of Preference
Stock shall not have any right under the provisions set forth in
this Section 5 to vote in respect of the authorization of issuance
of any shares of any class of stock of the Corporation if, through
the application of proceeds thereof or otherwise in connection
therewith, provision is to be made for redemption or retirement of
all of the shares of such series of Preference Stock at the time
outstanding.
(d) The affirmative vote or consent of the holders of at least two-
thirds of the shares of Preference Stock at the time outstanding,
voting or consenting separately as a class, given in person or by
proxy either in writing or at a meeting called for the purpose,
shall be necessary to effect any one or more of the following (but
so far as the holders of Preference Stock are concerned, such action
may be effected with such vote or consent):
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(1) Any amendment, alteration or repeal of any of the provisions of
the Amended Articles of Incorporation or of the Regulations of
the Corporation which affects adversely the preferences or vot-
ing or other rights of the holders of Preference Stock; pro-
vided, however, that for the purpose of this paragraph only,
neither the amendment of the Amended Articles of Incorporation
so as to authorize, create or change the authorized or out-
standing amount of Preference Stock or of any shares of any
class ranking on a parity with or junior to the Preference
Stock nor the amendment of the provisions of the Regulations so
as to change the number of Directors of the Corporation shall
be deemed to affect adversely the preferences or voting or
other rights of the holders of Preference Stock; and provided
further, that if such amendment, alteration or repeal affects
adversely the preferences or voting or other rights of one or
more but not all series of Preference Stock at the time out-
standing, only the affirmative vote or consent of the holders
of at least two-thirds of the number of the shares at the time
outstanding of the series so affected shall be required; or
(2) The purchase or redemption (for sinking fund purposes or other-
wise) of less than all of the Preference Stock then outstanding
except in accordance with a stock purchase offer made to all
holders of record of Preference Stock, unless all dividends on
all Preference Stock then outstanding for all previous dividend
periods shall have been declared and paid or funds therefor set
apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
(e) The affirmative vote or consent of the holders of at least a
majority of the shares of Preference Stock at the time outstanding,
voting or consenting separately as a class, given in person or by
proxy either in writing or at a meeting called for the purpose,
shall be necessary to effect any one or more of the following (but
so far as the holders of Preference Stock are concerned, such action
may be effected with such vote or consent):
(1) The sale, lease or conveyance by the Corporation of all or
substantially all of its property or business;
(2) The consolidation of the Corporation with or its merger into
any other corporation, unless the corporation resulting from
such consolidation or surviving such merger will not have after
such consolidation or merger any class of shares either author-
ized or outstanding ranking prior to or on a parity with the
Preference Stock except the same number of shares ranking prior
to or on a parity with the Preference Stock and having the same
rights and preferences as the shares of the Corporation author-
ized and outstanding immediately preceding such consolidation
or merger (and each holder of Preference Stock immediately
preceding such consolidation or merger shall receive the same
number of shares with the same rights and preferences of the
52
resulting or surviving corporation); provided, however, that no
vote or consent of the holders of Preference Stock shall be
necessary to effect the consolidation of the Corporation with
or its merger into a company owning all or a majority of the
Corporation's Common Stock, or any affiliate;
(3) The authorization, creation or the increase in the authorized
amount of any shares of any class or any security convertible
into shares of any class, in either case ranking prior to the
Preference Stock; or
(4) The authorization of any shares ranking on a parity with or
convertible into the Preference Stock, or convertible into a
class of stock on a parity with the Preference Stock, or an
increase in the authorized number of shares of Preference Stock.
(f) Neither the vote, consent nor any adjustment of the voting rights of
holders of shares of Preference Stock shall be required for an in-
crease in the number of shares of Common Stock authorized or issued
or for stock splits of the Common Stock or for stock dividends on
any class of stock payable solely in Common Stock; and none of the
foregoing actions shall be deemed to affect adversely the preferences
or voting or other rights of Preference Stock within the meaning and
for the purpose of this Division.
{Section 6. Pre-emptive Rights.} No holder of Preference Stock as such, shall
have any pre-emptive right to purchase, have offered to him for purchase or
subscribe for any of the Corporation's shares or other securities of any
class, whether now or hereafter authorized.
{Section 7. Definitions.} For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to the
Preference Stock", such reference shall mean and include all shares
of the Corporation in respect of which the rights of the holders
thereof as to the payment of dividends or as to distributions in the
event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation are given preference
over the rights of the holders of Preference Stock;
(b) Whenever reference is made to shares "on a parity with the
Preference Stock", such reference shall mean and include all shares
of the Corporation in respect of which the rights of the holders
thereof as to the payment of dividends and as to distributions in
the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation rank on an equality
(except as to the amounts fixed therefor) with the rights of the
holders of Preference Stock; and
53
(c) Whenever reference is made to shares "ranking junior to the
Preference Stock", such reference shall mean and include all shares
of the Corporation other than those defined under Subsections (a)
and (b) of this Section as shares "ranking prior to" or "on a parity
with" the Preference Stock.
{Section 8. Preference Stock, $77.50 Series 1.} Redeemed August 1, 1989.
DIVISION C
The Common Stock shall have the following express terms:
{Section 1. General.} The Common Stock shall be subject to the express terms
of the Serial Preferred Stock and any series thereof and to the express terms
of the Preference Stock and any series thereof. Each share of Common Stock
shall be equal to every other share of Common Stock and the holders thereof
shall be entitled to one vote for each share of Common Stock on all questions
presented to the shareholders.
{Section 2. Changes in Number of Authorized Shares.} The affirmative vote or
consent of the holders of at least a majority of the shares of Common Stock at
the time outstanding, voting or consenting separately as a class, given in
person or by proxy either in writing or at a meeting called for the purpose,
shall be necessary to effect a change in the authorized number of shares of
the Corporation or of any class of such shares.
{Section 3. Pre-emptive Rights.} No holder of Common Stock shall have any
pre-emptive right to purchase, have offered to him for purchase or subscribe
for any of the Corporation's shares or other securities of any class, whether
now or hereafter authorized.
ARTICLE FIVE. The Corporation, by action of the Board of Directors, may
purchase shares of any class issued by the Corporation.
ARTICLE SIX. These Amended Articles of Incorporation shall supersede and
take the place of the heretofore existing Amended Articles of Incorporation of
the Corporation and all amendments thereof prior to the date hereof.