ARTICLES OF RESTATEMENT
OF
NATIONSBANK CORPORATION
NationsBank Corporation (the "Corporation") hereby submits these
Articles of Restatement for the purpose of amending its Articles of
Incorporation and for the purpose of integrating into one document its original
Articles of Incorporation and all amendments thereto.
1. The name of the Corporation is NationsBank Corporation.
2. Attached hereto as Exhibit A are the Amended and Restated Articles
of Incorporation of the Corporation, which contain an amendment to the Articles
of Incorporation requiring shareholder approval.
3. The amendment to the Amended and Restated Articles of Incorporation
that requires shareholder approval was approved by the shareholders of the
Corporation on December 19, 1997 in the manner prescribed by law.
4. The Amended and Restated Articles of Incorporation provide for no
exchange, reclassification or cancellation of issued shares.
These Articles of Restatement are executed as of January 6, 1998.
NATIONSBANK CORPORATION
By: /s/ James W. Kiser
------------------
James W. Kiser
Secretary
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
NATIONSBANK CORPORATION
NationsBank Corporation, a business corporation incorporated under the
North Carolina Business Corporation Act, pursuant to action by its Board of
Directors, hereby sets forth its Amended and Restated Articles of Incorporation:
1. The name of the Corporation is NationsBank Corporation.
2. The purposes for which the Corporation is organized are to engage in
any lawful act or activity for which corporations may be organized under Chapter
55 of the North Carolina General Statutes, as amended.
3. The number of shares the Corporation is authorized to issue is One
Billion Two Hundred Ninety-Five Million (1,295,000,000), divided into the
following classes:
Class Number of Shares
----- ----------------
Common................................................. 1,250,000,000
Preferred.............................................. 45,000,000
The class of common has unlimited voting rights and, after satisfaction
of claims, if any, of the holders of preferred shares, is entitled to receive
the net assets of the Corporation upon distribution.
The Board of Directors of the Corporation shall have full power and
authority to establish one or more series within the class of preferred shares
(the "Preferred Shares"), to define the designations, preferences, limitations
and relative rights (including conversion rights) of shares within such class
and to determine all variations between series.
The Board of Directors of the Corporation has designated, established
and authorized the following series of Preferred Shares:
(a) 7% Cumulative Redeemable Preferred Stock, Series B.
A. Designation.
The designation of this series is "7% Cumulative Redeemable
Preferred Stock, Series B" (hereinafter referred to as the "Series B
Preferred Stock") and the number of shares constituting such series is
Thirty-Five Thousand and Forty-Five (35,045). Shares of Series B
Preferred Stock shall have a stated value of $100.00 per share.
B. Dividends.
The holders of record of the shares of the Series B Preferred
Stock shall be entitled to receive, when and as declared by the Board
of Directors of the Corporation, out of any funds legally available for
such purpose, cumulative cash dividends at an annual dividend rate per
share of 7% of the stated value thereof, which amount is $7.00 per
annum, per share, and no more. Such dividends shall be payable each
calendar quarter at the rate of $1.75 per share on such dates as shall
be fixed by resolution of the Board of Directors of the Corporation.
The date from which dividends on such shares shall be cumulative shall
be the first day after said shares are issued. Accumulations of
dividends shall not bear interest. No cash dividend shall be declared,
paid or set apart for any shares of Common Stock unless all dividends
on all shares of the Series B Preferred Stock at the time outstanding
for all past dividend periods and for the then current dividend shall
have been paid, or shall have been declared and a sum sufficient for
the payment thereof, shall have been set apart. Subject to the
foregoing provisions of this paragraph B, cash dividends or other cash
distributions as may be determined by the Board of Directors of the
Corporation may be declared and paid upon the shares of the Common
Stock of the Corporation from time to time out of funds legally
available therefor, and the shares of the Series B Preferred Stock
shall not be entitled to participate in any such cash dividend or other
such cash distribution so declared and paid or made on such shares of
Common Stock.
C. Redemption.
From and after October 31, 1988, any holder may, by written
request, call upon the Corporation to redeem all or any part of said
holder's shares of said Series B Preferred Stock at a redemption price
of $100.00 per share plus accumulated unpaid dividends to the date said
request for redemption is received by the Corporation and no more (the
"Redemption Price"). Any such request for redemption shall be
accompanied by the certificates for which redemption is requested, duly
endorsed or with appropriate stock power attached, in either case with
signature guaranteed. Upon receipt by the Corporation of any such
request for redemption from any holder of the Series B Preferred Stock,
the Corporation shall forthwith redeem said stock at the Redemption
Price, provided that: (i) full cumulative dividends have been paid or
declared and set apart for payment upon all shares of any series of
preferred stock ranking superior to the Series B Preferred Stock as to
dividends or other distributions (collectively the "Superior Stock");
and (ii)
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the Corporation is not then in default or in arrears with respect to
any sinking or analogous fund or call for tenders obligation or
agreement for the purchase, redemption or retirement of any shares of
Superior Stock. In the event that, upon receipt of a request for
redemption, either or both of the conditions set forth in clauses (i)
and (ii) above are not met, the Corporation shall forthwith return said
request to the submitting shareholder along with a statement that the
Corporation is unable to honor such request and explanation of the
reasons therefor. From and after the receipt by the Corporation of a
request for redemption from any holder of said Series B Preferred
Stock, which request may be honored consistent with the foregoing
provisions, all rights of such holder in the Series B Preferred Stock
for which redemption is requested shall cease and terminate, except
only the right to receive the Redemption Price thereof, but without
interest.
D. Liquidation Preference.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the Series
B Preferred Stock shall be entitled to receive, subject to the
provisions of paragraph G and before any payment shall be made to the
holders of the shares of Common Stock, the amount of $100.00 per share,
plus accumulated dividends. After payment to the holders of the Series
B Preferred Stock of the full amount as aforesaid, the holders of the
Series B Preferred Stock as such shall have no right or claim to any of
the remaining assets which shall be distributed ratably to the holders
of the Common Stock. If, upon any such liquidation, dissolution or
winding up, the assets available therefor are not sufficient to permit
payments to the holders of Series B Preferred Stock of the full amount
as aforesaid, then subject to the provisions of paragraph
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G, the holders of the Series B Preferred Stock then outstanding shall
share ratably in the distribution of assets in accordance with the sums
which would be payable if such holders were to receive the full amounts
as aforesaid.
E. Sinking Fund.
There shall be no sinking fund applicable to the shares of
Series B Preferred Stock.
F. Conversion.
The shares of Series B Preferred Stock shall not be
convertible into any shares of Common Stock or any other class of
shares, nor exchanged for any shares of Common Stock or any other class
of shares.
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G. Superior Stock.
The Corporation may issue stock with preferences superior or
equal to the shares of the Series B Preferred Stock without the consent
of the holders thereof.
H. Voting Rights.
Each share of the Series B Preferred Stock shall be entitled
to equal voting rights, share for share, with each share of the Common
Stock.
(b) ESOP Convertible Preferred Stock, Series C.
The shares of the ESOP Convertible Preferred Stock, Series C,
of the Corporation shall be designated "ESOP Convertible Preferred
Stock, Series C," and the number of shares constituting such series
shall be 3,000,000. The ESOP Convertible Preferred Stock, Series C,
shall hereinafter be referred to as the "ESOP Preferred Stock."
A. Special Purpose Restricted Transfer Issue.
Shares of ESOP Preferred Stock shall be issued only to a
trustee acting on behalf of an employee stock ownership plan or other
employee benefit plan of the Corporation or any subsidiary of the
Corporation. In the event of any transfer of shares of ESOP Preferred
Stock to any person other than any such plan trustee or the
Corporation, the shares of ESOP Preferred Stock so transferred, upon
such transfer and without any further action by the Corporation or the
holder, shall be automatically converted into shares of Common Stock on
the terms otherwise provided for the conversion of shares of ESOP
Preferred Stock into shares of Common Stock pursuant to paragraph E
hereof and no such transferee shall have any of the voting powers,
preferences and relative, participating, optional or special rights
ascribed to shares of ESOP Preferred Stock hereunder but, rather, only
the powers and rights pertaining to the Common Stock into which such
shares of ESOP Preferred Stock shall be so converted. Certificates
representing shares of ESOP Preferred Stock shall be legended to
reflect such restrictions on transfer. Notwithstanding the foregoing
provisions of this paragraph A, shares of ESOP Preferred Stock (i) may
be converted into shares of Common Stock as provided by paragraph E
hereof and the shares of Common Stock issued upon such conversion may
be transferred by the holder thereof as permitted by law and (ii) shall
be redeemable by the Corporation upon the terms and conditions provided
by paragraphs F, G and H hereof.
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B. Dividends and Distributions.
(1) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of ESOP Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of
funds legally available therefor, cash dividends ("Preferred
Dividends") in an amount equal to $3.30 per share per annum, and no
more, payable semi-annually, one-half on the first day of January and
one-half on the first day of July of each year (each a "Dividend
Payment Date") commencing the first such day following the effective
time of the Merger (as defined below), to holders of record at the
start of business on such Dividend Payment Date. Preferred Dividends
shall begin to accrue on shares of ESOP Preferred Stock on the last
dividend payment date on the outstanding shares of ESOP Convertible
Preferred Stock, Series C, of C&S/Sovran Corporation ("C&S/Sovran")
(which shares were converted on a one-for-one basis into shares of ESOP
Preferred Stock at the effective time of the merger (the "Merger") of
C&S/Sovran Merger Corporation ("Merger Corporation"), a Delaware
corporation and a wholly owned subsidiary of the Corporation, with and
into C&S/Sovran, as provided in the Agreement and Plan of
Consolidation, dated July 21, 1991, between the Corporation and
C&S/Sovran). Preferred Dividends shall accrue on a daily basis whether
or not the Corporation shall have earnings or surplus at the time, but
Preferred Dividends on the shares of ESOP Preferred Stock for any
period less than a full semi-annual period between Dividend Payment
Dates shall be computed on the basis of a 360-day year of 30-day
months. Accumulated but unpaid Preferred Dividends shall accumulate as
of the Dividend Payment Date on which they first become payable, but no
interest shall accrue on accumulated but unpaid Preferred Dividends.
(2) So long as any ESOP Preferred Stock shall be outstanding,
no dividend shall be declared or paid or set apart for payment on any
other series of stock ranking on a parity with the ESOP Preferred Stock
as to dividends, unless there shall also be or have been declared and
paid or set apart for payment on the ESOP Preferred Stock, like
dividends for all dividend payment periods of the ESOP Preferred Stock
ending on or before the dividend payment date of such parity stock,
ratably in proportion to the respective amounts of dividends
accumulated and unpaid through such dividend payment period on the ESOP
Preferred Stock and accumulated and unpaid or payable on such parity
stock through the dividend payment period on such parity stock next
preceding such Dividend Payment Date. In the event that full cumulative
dividends on the ESOP Preferred Stock have not been declared and paid
or set apart for payment when due, the Corporation shall not declare or
pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase,
redemption or other retirement of any
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other class of stock or series thereof of the Corporation ranking, as
to dividends or as to distributions in the event of a liquidation,
dissolution or winding-up of the Corporation, junior to the ESOP
Preferred Stock until full cumulative dividends on the ESOP Preferred
Stock shall have been paid or declared and provided for; provided,
however, that the foregoing shall not apply to (i) any dividend payable
solely in any shares of any stock ranking, as to dividends or as to
distributions in the event of the liquidation, dissolution or
winding-up of the Corporation, junior to the ESOP Preferred Stock, or
(ii) the acquisition of shares of any stock ranking, as to dividends or
as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the ESOP Preferred Stock
either (A) pursuant to any employee or director incentive or benefit
plan or arrangement (including any employment, severance or consulting
agreement) of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted or (B) in exchange solely for shares of
any other stock ranking junior to the ESOP Preferred Stock.
C. Voting Rights.
The holders of shares of ESOP Preferred Stock shall have the
following voting rights:
(1) The holders of ESOP Preferred Stock shall be entitled to
vote on all matters submitted to a vote of the holders of Common Stock
of the Corporation, voting together with the holders of Common Stock as
one class. Each share of the ESOP Preferred Stock shall be entitled to
the number of votes equal to the number of shares of Common Stock into
which such share of ESOP Preferred Stock could be converted on the
record date for determining the shareholders entitled to vote, rounded
to the nearest whole vote; it being understood that whenever the
"Conversion Ratio" (as defined in paragraph E hereof) is adjusted as
provided in paragraph I hereof, the voting rights of the ESOP Preferred
Stock shall also be similarly adjusted.
(2) Except as otherwise required by the North Carolina
Business Corporation Act or set forth in paragraph C(1), holders of
ESOP Preferred Stock shall have no special voting rights and their
consent shall not be required for the taking of any corporate action.
D. Liquidation, Dissolution or Winding-Up.
(1) Upon any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, the holders of ESOP Preferred Stock
shall be entitled to receive out of the assets of the Corporation which
remain after satisfaction in full of all valid claims of creditors of
the Corporation and which are available for payment to shareholders and
subject to the rights of the holders of any stock of the Corporation
ranking senior to or on a parity with the ESOP Preferred Stock in
respect of distributions upon liquidation, dissolution or winding-up of
the Corporation, before any amount shall be paid or distributed among
the holders of Common Stock or any other shares ranking junior to the
ESOP Preferred Stock in respect of the distributions upon liquidation,
dissolution or winding-up of the Corporation, liquidating distributions
in the amount of $42.50 per share,
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plus an amount equal to all accrued and unpaid dividends thereon to the
date fixed for distribution, and no more. If upon any liquidation,
dissolution or winding-up of the Corporation, the amounts payable with
respect to the ESOP Preferred Stock and any other stock ranking as to
any such distribution on a parity with the ESOP Preferred Stock are not
paid in full, the holders of the ESOP Preferred Stock and such other
stock shall share ratably in any distribution of assets in proportion
to the full respective preferential amounts to which they are entitled.
After payment of the full amount to which they are entitled as provided
by the foregoing provisions of this paragraph D(1), the holders of
shares of ESOP Preferred Stock shall not be entitled to any further
right or claim to any of the remaining assets of the Corporation.
(2) Neither the merger or consolidation of the Corporation
with or into any other corporation, nor the merger or consolidation of
any other corporation with or into the Corporation, nor the sale,
transfer or lease of all or any portion of the assets of the
Corporation, shall be deemed to be a dissolution, liquidation or
winding-up of the affairs of the Corporation for purposes of this
paragraph D, but the holders of ESOP Preferred Stock shall nevertheless
be entitled in the event of any such merger or consolidation to the
rights provided by paragraph H hereof.
(3) Written notice of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, stating the
payment date or dates when, and the place or places where, the amounts
distributable to holders of ESOP Preferred Stock in such circumstances
shall be payable, shall be given by first-class mail, postage prepaid,
mailed not less than twenty (20) days prior to any payment date stated
therein, to the holders of ESOP Preferred Stock, at the address shown
on the books of the Corporation or any transfer agent for the ESOP
Preferred Stock.
E. Conversion into Common Stock.
(1) A holder of shares of ESOP Preferred Stock shall be
entitled, at any time prior to the close of business on the date fixed
for redemption of such shares pursuant to paragraph F, G or H hereof,
to cause any or all of such shares to be converted into shares of
Common Stock at a conversion rate equal to the ratio of 1.0 share of
ESOP Preferred Stock to 1.68 shares of Common Stock (as adjusted as
hereinafter provided, the "Conversion Ratio"). The Conversion Ratio set
forth above has been adjusted to reflect the 2-for-1 split of the
Common Stock paid on February 27, 1997 and is subject to further
adjustment thereafter pursuant to these Articles of Incorporation.
(2) Any holder of shares of ESOP Preferred Stock desiring to
convert such shares into shares
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of Common Stock shall surrender the certificate or certificates
representing the shares of ESOP Preferred Stock being converted, duly
assigned or endorsed for transfer to the Corporation (or accompanied by
duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer
agent for the ESOP Preferred Stock or such office or offices in the
continental United States of an agent for conversion as may from time
to time be designated by notice to the holders of the ESOP Preferred
Stock by the Corporation or the transfer agent for the ESOP Preferred
Stock, accompanied by written notice of conversion. Such notice of
conversion shall specify (i) the number of shares of ESOP Preferred
Stock to be converted and the name or names in which such holder wishes
the certificate or certificates for Common Stock and for any shares of
ESOP Preferred Stock not to be so converted to be issued, and (ii) the
address to which such holder wishes delivery to be made of such new
certificates to be issued upon such conversion.
(3) Upon surrender of a certificate representing a share or
shares of ESOP Preferred Stock for conversion, the Corporation shall
issue and send by hand delivery (with receipt to be acknowledged) or by
first-class mail, postage prepaid, to the holder thereof or to such
holder's designee, at the address designated by such holder, a
certificate or certificates for the number of shares of Common Stock to
which such holder shall be entitled upon conversion. In the event that
there shall have been surrendered a certificate or certificates
representing shares of ESOP Preferred Stock, only part of which are to
be converted, the Corporation shall issue and deliver to such holder or
such holder's designee a new certificate or certificates representing
the number of shares of ESOP Preferred Stock which shall not have been
converted.
(4) The issuance by the Corporation of shares of Common Stock
upon a conversion of shares of ESOP Preferred Stock into shares of
Common Stock made at the option of the holder thereof shall be
effective as of the earlier of (i) the delivery to such holder or such
holder's designee of the certificate or certificates representing the
shares of Common Stock issued upon conversion thereof or (ii) the
commencement of business on the second business day after the surrender
of the certificate or certificates for the shares of ESOP Preferred
Stock to be converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating
thereto) as provided hereby. On and after the effective date of
conversion, the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock, but no
allowance or adjustment shall be made in respect of dividends payable
to holders of Common Stock in respect of any period prior to such
effective date. The Corporation shall not be obligated to pay any
dividends which shall have been declared and shall be payable to
holders of shares of ESOP Preferred Stock on a Dividend Payment Date if
such Dividend Payment Date for such dividend shall coincide with or be
on or subsequent to the effective date of conversion of such shares.
(5) The Corporation shall not be obligated to deliver to
holders of ESOP Preferred Stock any fractional share or shares of
Common Stock issuable upon any conversion of such shares of ESOP
Preferred Stock, but in lieu thereof may make a cash payment in respect
thereof in any manner permitted by law.
(6) The Corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for
issuance upon the conversion of shares of ESOP Preferred Stock as
herein provided, free from any preemptive rights, such number of shares
of Common Stock as shall from time to time be issuable upon the
conversion of all shares of ESOP Preferred Stock then outstanding. The
Corporation shall prepare and shall use its best efforts to obtain and
keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
requirements as to registration or qualification of the Common Stock,
in order to enable the Corporation lawfully to issue and deliver to
each holder of record of ESOP Preferred Stock such number of shares of
its Common Stock as shall from time to
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time be sufficient to effect the conversion of all shares of ESOP
Preferred Stock then outstanding and convertible into shares of Common
Stock.
F. Redemption At the Option of the Corporation.
(1) The ESOP Preferred Stock shall be redeemable, in whole or
in part, at the option of the Corporation at any time after July 1,
1992, or on or before July 1, 1992 if permitted by paragraph F(3) or
F(4), at the following redemption prices per share (except as to
redemption pursuant to paragraph F(3)):
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During the Twelve-Month Price Per
Period Beginning July 1, Share
------------------------ -----
1991........................................ $45.14
1992........................................ 44.81
1993........................................ 44.48
1994........................................ 44.15
1995........................................ 43.82
1996........................................ 43.49
1997........................................ 43.16
1998........................................ 42.83
and thereafter at $42.50 per share, plus, in each case, an amount equal
to all accrued and unpaid dividends thereon to the date fixed for
redemption. Payment of the redemption price shall be made by the
Corporation in cash or shares of Common Stock, or a combination
thereof, as permitted by paragraph F(5). From and after the date fixed
for redemption, dividends on shares of ESOP Preferred Stock called for
redemption will cease to accrue, such shares will no longer be deemed
to be outstanding and all rights in respect of such shares of the
Corporation shall cease, except the right to receive the redemption
price. If less than all of the outstanding shares of ESOP Preferred
Stock are to be redeemed, the Corporation shall either redeem a portion
of the shares of each holder determined pro rata based on the number of
shares held by each holder or shall select the shares to be redeemed by
lot, as may be determined by the Board of Directors of the Corporation.
(2) Unless otherwise required by law, notice of redemption
will be sent to the holders of ESOP Preferred Stock at the address
shown on the books of the Corporation or any transfer agent for the
ESOP Preferred Stock by first-class mail, postage prepaid, mailed not
less than twenty (20) days nor more than sixty (60) days prior to the
redemption date. Each such notice shall state: (i) the redemption date;
(ii) the total number of shares of the ESOP Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to
be redeemed, the number of such shares to be redeemed from such holder;
(iii) the redemption price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of the redemption
price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; and (vi) the conversion rights of the
shares to be redeemed, the period within which conversion rights may be
exercised, and the Conversion Ratio and number of shares of Common
Stock issuable upon conversion of a share of ESOP Preferred Stock at
the time. These notice provisions may be supplemented if necessary in
order to comply with optional redemption provisions for preferred stock
which may be required under the Internal Revenue Code of 1986, as
amended, or the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Upon surrender of the certificates
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for any shares so called for redemption and not previously converted
(properly endorsed or assigned for transfer, if the Board of Directors
of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the date fixed for
redemption and at the applicable redemption price set forth in this
paragraph F.
(3) In the event of a change in the federal tax law of the
United States of America which has the effect of precluding the
Corporation from claiming any of the tax deductions for dividends paid
on the ESOP Preferred Stock when such dividends are used as provided
under Section 404(k)(2) of the Internal Revenue Code of 1986, as
amended and in effect on the date shares of ESOP Preferred Stock are
initially issued, the Corporation may, within 180 days following the
effective date of such tax legislation and implementing regulations of
the Internal Revenue Service, if any, in its sole discretion and
notwithstanding anything to the contrary in paragraph F(1), elect to
redeem any or all such shares for the amount payable in respect of the
shares upon liquidation of the Corporation pursuant to paragraph D.
(4) In the event the C&S/Sovran Retirement Savings, ESOP and
Profit Sharing Plan (as amended, together with any successor plan, the
"Plan") is terminated, the Corporation shall, notwithstanding anything
to the contrary in paragraph F(1), redeem all shares of ESOP Preferred
Stock for the amount payable in respect of the shares upon redemption
of the ESOP Preferred Stock pursuant to paragraph F(1) hereof.
(5) The Corporation, at its option, may make payment of the
redemption price required upon redemption of shares of ESOP Preferred
Stock in cash or in shares of Common Stock, or in a combination of such
shares and cash, any such shares to be valued for such purpose at their
Fair Market Value (as defined in paragraph I(7) hereof).
G. Other Redemption Rights.
Shares of ESOP Preferred Stock shall be redeemed by the
Corporation at a price which is the greater of the Conversion Value (as
defined in paragraph I) of the ESOP Preferred Stock on the date fixed
for redemption or a redemption price of $42.50 per share plus accrued
and unpaid dividends thereon to the date fixed for redemption, for
shares of Common Stock (any such shares of Common Stock to be valued
for such purpose as provided by paragraph F(5) hereof), at the option
of the holder, at any time and from time to time upon notice to the
Corporation given not less than five (5) business days prior to the
date fixed by the Corporation in such notice for such redemption, when
and to the extent necessary (i) to provide for distributions required
to be made under, or to satisfy an investment election provided to
participants in accordance with, the Plan to participants in the Plan
or (ii) to make payment of principal, interest or premium due and
payable (whether as scheduled or upon acceleration) on any indebtedness
incurred by the holder or Trustee under the Plan for the benefit of the
Plan.
H. Consolidation, Merger, etc.
(1) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named, pursuant
to which the outstanding shares of Common Stock are by operation of law
exchanged solely for or changed, reclassified or converted solely into
stock of any successor or resulting
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company (including the Corporation and any company that directly or
indirectly owns all of the outstanding capital stock of such successor
or resulting company) that constitutes "qualifying employer securities"
with respect to a holder of ESOP Preferred Stock within the meaning of
Section 409(l) of the Internal Revenue Code of 1986, as amended, and
Section 407(d)(5) of ERISA, or any successor provisions of law, and, if
applicable, for a cash payment in lieu of fractional shares, if any,
the shares of ESOP Preferred Stock of such holder shall be assumed by
and shall become preferred stock of such successor or resulting
company, having in respect of such company insofar as possible the same
powers, preferences and relative, participating, optional or other
special rights (including the redemption rights provided by paragraphs
F, G and H hereof), and the qualifications, limitations or restrictions
thereon, that the ESOP Preferred Stock had immediately prior to such
transaction, except that after such transaction each share of the ESOP
Preferred Stock shall be convertible, otherwise on the terms and
conditions provided by paragraph E hereof, into the qualifying employer
securities so receivable by a holder of the number of shares of Common
Stock into which such shares of ESOP Preferred Stock could have been
converted immediately prior to such transaction if such holder of
Common Stock failed to exercise any rights of election to receive any
kind or amount of stock, securities, cash or other property (other than
such qualifying employer securities and a cash payment, if applicable,
in lieu of fractional shares) receivable upon such transaction
(provided that, if the kind or amount of qualifying employer securities
receivable upon such transaction is not the same for each non-electing
share, then the kind and amount of qualifying employer securities
receivable upon such transaction for each non-electing share shall be
the kind and amount so receivable per share by a plurality of the
non-electing shares). The rights of the ESOP Preferred Stock as
preferred stock of such successor or resulting company shall
successively be subject to adjustments pursuant to paragraph I hereof
after any such transaction as nearly equivalent to the adjustments
provided for by such paragraph prior to such transaction. The
Corporation shall not consummate any such merger, consolidation or
similar transaction unless all then outstanding shares of the ESOP
Preferred Stock shall be assumed and authorized by the successor or
resulting company as aforesaid.
(2) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named, pursuant
to which the outstanding shares of Common Stock are by operation of law
exchanged for or changed, reclassified or converted into other stock or
securities or cash or any other property, or any combination thereof,
other than any such consideration which is constituted solely of
qualifying employer securities (as referred to in paragraph H(1)) and
cash payments, if applicable, in lieu of fractional shares, all
outstanding shares of ESOP Preferred Stock shall, without any action on
the part of the Corporation or any holder thereof (but subject to
paragraph H(3)), be deemed converted by virtue of such merger,
consolidation or similar transaction immediately prior to such
consummation into the number of shares of Common Stock into which such
shares of ESOP Preferred Stock could have been converted at such time,
and each share of ESOP Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of Common
Stock, be converted into or exchanged for the aggregate amount of
stock, securities, cash or other property (payable in like kind)
receivable by a holder of the number of shares of Common Stock
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into which such shares of ESOP Preferred Stock could have been
converted immediately prior to such transaction if such holder of
Common Stock failed to exercise any rights of election as to the kind
or amount of stock, securities, cash or other property receivable upon
such transaction (provided that, if the kind or amount of stock,
securities, cash or other property receivable upon such transaction is
not the same for each non-electing share, then the kind and amount of
stock, securities, cash or other property receivable upon such
transaction for each non-electing share shall be the kind and amount so
receivable per share by a plurality of the non-electing shares).
(3) In the event the Corporation shall enter into any
agreement providing for any consolidation or merger or similar
transaction described in paragraph H(2), then the Corporation shall as
soon as practicable thereafter (and in any event at least ten (10)
business days before consummation of such transaction) give notice of
such agreement and the material terms thereof to each holder of ESOP
Preferred Stock and each such holder shall have the right to elect, by
written notice to the Corporation, to receive, upon consummation of
such transaction (if and when such transaction is consummated), from
the Corporation or the successor of the Corporation, in redemption and
retirement of such ESOP Preferred Stock, a cash payment equal to the
amount payable in respect of shares of ESOP Preferred Stock upon
redemption pursuant to paragraph F(1) hereof. No such notice of
redemption shall be effective unless given to the Corporation prior to
the close of business on the second business day prior to consummation
of such transaction, unless the Corporation or the successor of the
Corporation shall waive such prior notice, but any notice of redemption
so given prior to such time may be withdrawn by notice of withdrawal
given to the Corporation prior to the close of business on the second
business day prior to consummation of such transaction.
I. Anti-dilution Adjustments.
(1) In the event the Corporation shall, at any time or from
time to time while any of the shares of the ESOP Preferred Stock are
outstanding, (i) pay a dividend or make a distribution in respect of
the Common Stock in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares, in each case
whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or
consolidation to which paragraph H hereof does not apply) or otherwise,
the Conversion Ratio in effect immediately prior to such action shall
be adjusted by multiplying such Conversion Ratio by the fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this paragraph I(1) shall be
given effect, upon payment of such a dividend or distribution, as of
the record date for the determination of shareholders entitled to
receive such dividend or distribution (on a retroactive basis) and in
the case of a subdivision or combination shall become effective
immediately as of the effective date thereof. Notwithstanding the
foregoing, the Conversion Ratio set forth in paragraph E(1) has been
adjusted to reflect the 2- for-1 split of the Common Stock paid on
February 27, 1997, and no further adjustment pursuant to this paragraph
I shall be made to the Conversion Ratio in connection with such stock
split.
(2) In the event that the Corporation shall, at any time or
from time to time while any of the shares
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of ESOP Preferred Stock are outstanding, issue to holders of shares of
Common Stock as a dividend or distribution, including by way of a
reclassification of shares or a recapitalization of the Corporation,
any right or warrant to purchase shares of Common Stock (but not
including as such a right or warrant any security convertible into or
exchangeable for shares of Common Stock) at a purchase price per share
less than the Fair Market Value (as hereinafter defined) of a share of
Common Stock on the date of issuance of such right or warrant, then,
subject to the provisions of paragraphs I(5) and I(6), the Conversion
Ratio shall be adjusted by multiplying such Conversion Ratio by the
fraction the numerator of which shall be the number of shares of Common
Stock outstanding immediately before such issuance of rights or
warrants plus the number of shares of Common Stock which could be
purchased at the Fair Market Value of a share of Common Stock at the
time of such issuance for the maximum aggregate consideration payable
upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately before such issuance of rights or warrants plus
the maximum number of shares of Common Stock that could be acquired
upon exercise in full of all such rights and warrants.
(3) In the event the Corporation shall, at any time and from
time to time while any of the shares of ESOP Preferred Stock are
outstanding, issue, sell or exchange shares of Common Stock (other than
pursuant to any right or warrant to purchase or acquire shares of
Common Stock (including as such a right or warrant any security
convertible into or exchangeable for shares of Common Stock) and other
than pursuant to any dividend reinvestment plan or employee or director
incentive or benefit plan or arrangement, including any employment,
severance or consulting agreement, of the Corporation or any subsidiary
of the Corporation heretofore or hereafter adopted) for a consideration
having a Fair Market Value on the date of such issuance, sale or
exchange less than the Fair Market Value of such shares on the date of
such issuance, sale or exchange, then, subject to the provisions of
paragraphs I(5) and (6), the Conversion Ratio shall be adjusted by
multiplying such Conversion Ratio by the fraction the numerator of
which shall be the sum of (i) the Fair Market Value of all the shares
of Common Stock outstanding on the day immediately preceding the first
public announcement of such issuance, sale or exchange plus (ii) the
Fair Market Value of the consideration received by the Corporation in
respect of such issuance, sale or exchange of shares of Common Stock,
and the denominator of which shall be the product of (i) the Fair
Market Value of a share of Common Stock on the day immediately
preceding the first public announcement of such issuance, sale or
exchange multiplied by (ii) the sum of the number of shares of Common
Stock outstanding on such day plus the number of shares of Common Stock
so issued, sold or exchanged by the Corporation. In the event the
Corporation shall, at any time or from time to time while any shares of
ESOP Preferred Stock are outstanding, issue, sell or exchange any right
or warrant to purchase or acquire shares of Common Stock (including as
such a right or warrant any security convertible into or exchangeable
for shares of Common Stock), other than any such issuance to holders of
shares of Common Stock as a dividend or distribution (including by way
of a reclassification of shares or a recapitalization of the
Corporation) and other than pursuant to any dividend reinvestment plan
or employee or director incentive or benefit plan or arrangement
(including any employment, severance or consulting agreement) of the
Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted, for a consideration having a Fair Market Value on
the date of such issuance, sale or exchange less than the Non-Dilutive
Amount (as hereinafter defined), then, subject to the provisions of
paragraphs I(5) and (6), the Conversion Ratio shall be adjusted by
multiplying such Conversion Ratio by a fraction the numerator of which
shall be the sum of (a) the Fair Market Value of all the shares of
Common Stock outstanding on the day immediately preceding the first
public announcement of such issuance, sale or exchange plus (b) the
Fair Market Value of the consideration received by the Corporation in
respect of such issuance, sale
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or exchange of such right or warrant plus (c) the Fair Market Value at
the time of such issuance of the consideration which the Corporation
would receive upon exercise in full of all such rights or warrants, and
the denominator of which shall be the product of (a) the Fair Market
Value of a share of Common Stock on the day immediately preceding the
first public announcement of such issuance, sale or exchange multiplied
by (b) the sum of the number of shares of Common Stock outstanding on
such day plus the maximum number of shares of Common Stock which could
be acquired pursuant to such right or warrant at the time of the
issuance, sale or exchange of such right or warrant (assuming shares of
Common Stock could be acquired pursuant to such right or warrant at
such time).
(4) In the event the Corporation shall, at any time or from
time to time while any of the shares of ESOP Preferred Stock are
outstanding, make any Extraordinary Distribution (as hereinafter
defined) in respect of the Common Stock, whether by dividend,
distribution, reclassification of shares or recapitalization of the
Corporation (including a recapitalization or reclassification effected
by a merger or consolidation to which paragraph H hereof does not
apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, the Conversion Ratio in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to
paragraphs I(5) and (6), be adjusted by multiplying such Conversion
Ratio by a fraction the numerator of which shall be (a) the product of
(i) the number of shares of Common Stock outstanding immediately before
such Extraordinary Distribution or Pro Rata Repurchase multiplied by
(ii) the Fair Market Value (as herein defined) of a share of Common
Stock on the Valuation Date (as hereinafter defined) with respect to an
Extraordinary Distribution, or on the applicable expiration date
(including all extensions thereof) of any tender offer which is a Pro
Rata Repurchase, or on the date of purchase with respect to any Pro
Rata Repurchase which is not a tender offer, as the case may be, minus
(b) the Fair Market Value of the Extraordinary Distribution or the
aggregate purchase price of the Pro Rata Repurchase, as the case may
be, and the denominator of which shall be the product of (i) the number
of shares of Common Stock outstanding immediately before such
Extraordinary Distribution or Pro Rata Repurchase minus, in the case of
a Pro Rata Repurchase, the number of shares of Common Stock repurchased
by the Corporation multiplied by (ii) the Fair Market Value of a share
of Common Stock on the record date with respect to an Extraordinary
Distribution or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata Repurchase
or on the date of purchase with respect to any Pro Rata Repurchase
which is not a tender offer, as the case may be. The Corporation shall
send each holder of ESOP Preferred Stock (x) notice of its intent to
make any Extraordinary Distribution and (y) notice of any offer by the
Corporation to make a Pro Rata Repurchase, in each case at the same
time as, or as soon as practicable after, such offer is first
communicated (including by announcement of a record date in accordance
with the rules of any stock exchange on which the Common Stock is
listed or admitted to trading) to holders of Common Stock. Such notice
shall indicate the intended record date and the amount and nature of
such dividend or distribution, or the number of shares subject to such
offer for a Pro Rata Repurchase and the purchase price payable by the
Corporation pursuant to such offer, as well as the Conversion Ratio and
the number of
-16-
shares of Common Stock into which a share of ESOP Preferred Stock may
be converted at such time.
(5) Notwithstanding any other provisions of this paragraph I,
the Corporation shall not be required to make any adjustment of the
Conversion Ratio unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Conversion Ratio. Any
lesser adjustment shall be carried forward and shall be made no later
than the time of, and together with, the next subsequent adjustment
which, together with any adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least one percent (1%) in
the Conversion Ratio.
(6) If the Corporation shall make any dividend or distribution
on the Common Stock or issue any Common Stock, other capital stock or
other security of the Corporation or any rights or warrants to purchase
or acquire any such security, which transaction does not result in an
adjustment to the Conversion Ratio pursuant to the foregoing provisions
of this paragraph I, the Board of Directors of the Corporation shall
consider whether such action is of such a nature that an adjustment to
the Conversion Ratio should equitably be made in respect of such
transaction. If in such case the Board of Directors of the Corporation
determines that the adjustment to the Conversion Ratio should be made,
an adjustment shall be made effective as of such date, as determined by
the Board of Directors of the Corporation. The determination of the
Board of Directors of the Corporation as to whether an adjustment to
the Conversion Ratio should be made pursuant to the foregoing
provisions of this paragraph I(6), and, if so, as to what adjustment
should be made and when, shall be final and binding on the Corporation
and all shareholders of the Corporation. The Corporation shall be
entitled to make such additional adjustments in the Conversion Ratio,
in addition to those required by the foregoing provisions of this
paragraph I, as shall be necessary in order that any dividend or
distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of stock of the
Corporation or any recapitalization of the Corporation shall not be
taxable to holders of the Common Stock.
(7) For purposes of this paragraph I, the following
definitions shall apply:
"Conversion Value" shall mean the Fair Market Value of the
aggregate number of shares of Common Stock into which a share of ESOP
Preferred Stock is convertible.
"Extraordinary Distribution" shall mean any dividend or other
distribution (effected while any of the shares of ESOP Preferred Stock
are outstanding) (a) of cash, where the aggregate amount of such cash
dividend and distribution together with the amount of all cash
dividends and distributions made during the preceding period of 12
months, when combined with the aggregate amount of all Pro Rata
Repurchases (for this purpose, including only that portion of the
aggregate purchase price of such Pro Rata Repurchase which is in excess
of the Fair Market Value of the Common Stock repurchased as determined
on the applicable expiration date (including all extensions thereof) of
any tender offer or exchange offer which is a Pro Rata Repurchase, or
the date of purchase with respect to any other Pro Rata Repurchase
which is not a tender offer or exchange offer made during such period),
exceeds Twelve and One-Half percent (12.5%) of the aggregate Fair
Market Value of all shares of Common Stock outstanding on the record
date for determining the shareholders entitled to receive such
Extraordinary Distribution and (b) any shares of capital stock of the
Corporation (other than shares of Common Stock), other securities of
the Corporation (other than securities of the type referred to in
paragraph I(2)), evidence of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary
of the Corporation), or any combination thereof. The Fair Market Value
of an Extraordinary Distribution for purposes
-17-
of paragraph I(4) shall be the sum of the Fair Market Value of such
Extraordinary Distribution plus the amount of any cash dividends which
are not Extraordinary Distributions made during such twelve-month
period and not previously included in the calculation of an adjustment
pursuant to paragraph I(4).
"Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the Corporation or
any other issuer which are publicly traded, the average of the Current
Market Prices (as hereinafter defined) of such shares or securities for
each day of the Adjustment Period (as hereinafter defined). "Current
Market Price" of publicly traded shares of Common Stock or any other
class of capital stock or other security of the Corporation or any
other issuer for a day shall mean the last reported sales price,
regular way, or, in case no sale takes place on such day, the average
of the reported closing bid and asked prices, regular way, in either
case as reported on the New York Stock Exchange Composite Tape or, if
such security is not listed or admitted to trading on the New York
Stock Exchange, on the principal national securities exchange on which
such security is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on The Nasdaq
National Market or, if such security is not quoted on Nasdaq, the
average of the closing bid and asked prices on each such day in the
over-the-counter market as reported by Nasdaq or, if bid and asked
prices for such security on each such day shall not have been reported
through Nasdaq, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm selected for such
purpose by the Board of Directors of the Corporation or a committee
thereof on each trading day during the Adjustment Period. "Adjustment
Period" shall mean the period of five (5) consecutive trading days
preceding the date as of which the Fair Market Value of a security is
to be determined. The "Fair Market Value" of any security which is not
publicly traded or of any other property shall mean the fair value
thereof as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the Corporation or
a committee thereof, or, if no such investment banking or appraisal
firm is in the good faith judgment of the Board of Directors or such
committee available to make such determination, as determined in good
faith by the Board of Directors of the Corporation or such committee.
"Non-Dilutive Amount" in respect of an issuance, sale or
exchange by the Corporation of any right or warrant to purchase or
acquire shares of Common Stock (including any security convertible into
or exchangeable for shares of Common Stock) shall mean the remainder of
(a) the product of the Fair Market Value of a share of Common Stock on
the day preceding the first public announcement of such issuance, sale
or exchange multiplied by the maximum number of shares of Common Stock
which could be acquired on such date upon
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the exercise in full of such rights and warrants (including upon the
conversion or exchange of all such convertible or exchangeable
securities), whether or not exercisable (or convertible or
exchangeable) at such date, minus (b) the aggregate amount payable
pursuant to such right or warrant to purchase or acquire such maximum
number of shares of Common Stock; provided, however, that in no event
shall the Non-Dilutive Amount be less than zero. For purposes of the
foregoing sentence, in the case of a security convertible into or
exchangeable for shares of Common Stock, the amount payable pursuant to
a right or warrant to purchase or acquire shares of Common Stock shall
be the Fair Market Value of such security on the date of the issuance,
sale or exchange of such security by the Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Corporation or any subsidiary thereof, whether for
cash, shares of capital stock of the Corporation, other securities of
the Corporation, evidences of indebtedness of the Corporation or any
other person or any other property (including shares of a subsidiary of
the Corporation), or any combination thereof, effected while any of the
shares of ESOP Preferred Stock are outstanding, pursuant to any tender
offer or exchange offer subject to Section 13(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock; provided, however, that no
purchase of shares by the Corporation or any subsidiary thereof made in
open market transactions shall be deemed a Pro Rata Repurchase. For
purposes of this paragraph I(7), shares shall be deemed to have been
purchased by the Corporation or any subsidiary thereof "in open market
transactions" if they have been purchased substantially in accordance
with the requirements of Rule 10b-18 as in effect under the Exchange
Act, on the date shares of ESOP Preferred Stock are initially issued by
the Corporation or on such other terms and conditions as the Board of
Directors of the Corporation or a committee thereof shall have
determined are reasonably designed to prevent such purchases from
having a material effect on the trading market for the Common Stock.
"Valuation Date" with respect to an Extraordinary Distribution
shall mean the date that is five (5) business days prior to the record
date for such Extraordinary Distribution.
(8) Whenever an adjustment to the Conversion Ratio is required
pursuant hereto, the Corporation shall forthwith place on file with the
transfer agent for the Common Stock and the ESOP Preferred Stock if
there be one, and with the Secretary of the Corporation, a statement
signed by two officers of the Corporation, stating the adjusted
Conversion Ratio determined as provided herein and the voting rights
(as appropriately adjusted) of the ESOP Preferred Stock. Such statement
shall set forth in reasonable detail such facts as shall be necessary
to show the reason and the manner of computing such adjustment,
including any determination of Fair Market Value involved in such
computation. Promptly after each adjustment to the Conversion Ratio and
the related voting rights of the ESOP Preferred Stock, the Corporation
shall mail a notice thereof to each holder of shares of the ESOP
Preferred Stock.
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J. Ranking; Retirement of Shares.
(1) The ESOP Preferred Stock shall rank (a) senior to the
Common Stock as to the payment of dividends and the distribution of
assets on liquidation, dissolution and winding-up of the Corporation
and (b) unless otherwise provided in the Articles of Incorpo ration of
the Corporation or an amendment to such Articles of Incorporation
relating to a subsequent series of Preferred Shares, junior to all
other series of Preferred Shares as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding-up.
(2) Any shares of ESOP Preferred Stock acquired by the
Corporation by reason of the conversion or redemption of such shares as
provided hereby, or otherwise so acquired, shall be retired as shares
of ESOP Preferred Stock and restored to the status of authorized but
unissued shares of Preferred Shares, undesignated as to series, and may
thereafter be reissued as part of a new series of such Preferred Shares
as permitted by law.
K. Miscellaneous.
(1) All notices referred to herein shall be in writing, and
all notices hereunder shall be deemed to have been given upon the
earlier of receipt thereof or three (3) business days after the mailing
thereof if sent by registered mail (unless first-class mail shall be
specifically permitted for such notice under the terms hereof) with
postage prepaid, addressed: (a) if to the Corporation, to its office at
NationsBank Corporate Center, Charlotte, North Carolina 28255
(Attention: Treasurer) or to the transfer agent for the ESOP Preferred
Stock, or other agent of the Corporation designated as permitted hereby
or (b) if to any holder of the ESOP Preferred Stock or Common Stock, as
the case may be, to such holder at the address of such holder as listed
in the stock record books of the Corporation (which may include the
records of any transfer agent for the ESOP Preferred Stock or Common
Stock, as the case may be) or (c) to such other address as the
Corporation or any such holder, as the case may be, shall have
designated by notice similarly given.
(2) The term "Common Stock" as used herein means the
Corporation's Common Stock, as the same existed at the date of filing
of the Amendment to the Corporation's Articles of Incorporation
relating to the ESOP Preferred Stock or any other class of stock
resulting from successive changes or reclassification of such Common
Stock consisting solely of changes in par value, or from par value to
no par value. In the event that, at any time as a result of an
adjustment made pursuant to paragraph I hereof, the holder of any
-20-
share of the ESOP Preferred Stock upon thereafter surrendering such
shares for conversion shall become entitled to receive any shares or
other securities of the Corporation other than shares of Common Stock,
the Conversion Ratio in respect of such other shares or securities so
receivable upon conversion of shares of ESOP Preferred Stock shall
thereafter be adjusted, and shall be subject to further adjustment from
time to time, in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in
paragraph I hereof, and the provisions of paragraphs A through H, J,
and K hereof with respect to the Common Stock shall apply on like or
similar terms to any such other shares or securities.
(3) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance
or delivery of shares of ESOP Preferred Stock or shares of Common Stock
or other securities issued on account of ESOP Preferred Stock pursuant
hereto or certificates representing such shares or securities. The
Corporation shall not, however, be required to pay any such tax which
may be payable in respect of any transfer involved in the issuance or
delivery of shares of ESOP Preferred Stock or Common Stock or other
securities in a name other than that in which the shares of ESOP
Preferred Stock with respect to which such shares or other securities
are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than
a payment to the registered holder thereof, and shall not be required
to make any such issuance, delivery or payment unless and until the
person otherwise entitled to such issuance, delivery or payment has
paid to the Corporation the amount of any such tax or has established,
to the satisfaction of the Corporation, that such tax has been paid or
is not payable.
(4) In the event that a holder of shares of ESOP Preferred
Stock shall not by written notice designate the name in which shares of
Common Stock to be issued upon conversion of such shares should be
registered or to whom payment upon redemption of shares of ESOP
Preferred Stock should be made or the address to which the certificate
or certificates representing such shares, or such payment, should be
sent, the Corporation shall be entitled to register such shares, and
make such payment, in the name of the holder of such ESOP Preferred
Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment,
to the address of such holder shown on the records of the Corporation.
(5) The Corporation may appoint, and from time to time
discharge and change, a transfer agent for the ESOP Preferred Stock.
Upon any such appointment or discharge of a transfer agent, the
Corporation shall send notice thereof by first-class mail, postage
prepaid, to each holder of record of ESOP Preferred Stock.
(c) $2.50 Cumulative Convertible Preferred Stock, Series BB.
-------------------------------------------------------
A. Designation.
The designation of this series is "$2.50 Cumulative Convertible
Preferred Stock, Series BB" (hereinafter referred to as the "Series BB
Preferred Stock"), and the initial number of shares constituting such
series shall be 20,000,000, which number may be increased or decreased
(but not below the number of shares then outstanding) from time to time
by the Board of Directors. The Series BB Preferred Stock shall rank
prior to each of the Common Stock, the Series B
-21-
Preferred Stock and the ESOP Preferred Stock with respect to the payment of
dividends and the distribution of assets.
B. Dividend Rights.
(1) The holders of shares of Series BB Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors, out of
funds legally available therefor, cumulative preferential cash dividends,
accruing from January 1, 1998, at the annual rate of $2.50 per share, and no
more, payable quarterly on the first day of January, April, July and October of
each year (each of the quarterly periods ending on the last day of March, June,
September and December being hereinafter referred to as a "dividend period").
Dividends on the Series BB Preferred Stock shall first become payable on the
first day of January, April, July or October, as the case may be, next following
the date of issuance, provided, however, that if the first dividend period ends
within 20 days of the date of issuance, such initial dividend shall be payable
at the completion of the first full dividend period.
(2) Dividends on shares of Series BB Preferred Stock shall be
cumulative from January 1, 1998, whether or not there shall be funds legally
available for the payment thereof. Accumulations of dividends on the Series BB
Pre ferred Stock shall not bear interest. The Corporation shall not (i) declare
or pay or set apart for payment any dividends or distributions on any stock
ranking as to dividends junior to the Series BB Preferred Stock (other than
dividends paid in shares of such junior stock) or (ii) make any purchase or
redemption of, or any sinking fund payment for the purchase or redemption of,
any stock ranking as to dividends junior to the Series BB Preferred Stock (other
than a purchase or redemption made by issue or delivery of such junior stock)
unless all dividends payable on all outstanding shares of Series BB Preferred
Stock for all past dividend periods shall have been paid in full or declared and
a sufficient sum set apart for payment thereof; provided, however, that any
moneys theretofore deposited in any sinking fund with respect to any preferred
stock of the Corporation in compliance with the provisions of such sinking fund
may thereafter be applied to the purchase or redemption of such preferred stock
in accordance with the terms of such sinking fund regardless of whether at the
time of such application all dividends payable on all outstanding shares of
Series BB Preferred Stock for all past dividend periods shall have been paid in
full or declared and a sufficient sum set apart for payment thereof.
(3) All dividends declared on shares of Series BB Preferred Stock and
any other class of preferred stock or series thereof ranking on a parity as to
dividends with the Series BB Preferred Stock shall be declared pro rata, so that
the amounts of dividends declared on the Series BB Preferred Stock and such
other preferred stock for the same dividend period, or for the dividend period
of the Series BB Preferred Stock ending within the
-22-
dividend period of such other stock, shall, in all cases, bear to each other the
same ratio that accrued dividends on the shares of Series BB Preferred Stock and
such other stock bear to each other.
C. Liquidation Preference.
(1) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
Series BB Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to shareholders an amount equal to $25
per share plus an amount equal to accrued and unpaid dividends thereon to and
including the date of such distribution, and no more, before any distribution
shall be made to the holders of any class of stock of the Corporation ranking
junior to the Series BB Preferred Stock as to the distribution of assets.
(2) In the event the assets of the Corporation available for
distribution to shareholders upon any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full the amounts payable with respect to the Series BB
Preferred Stock and any other shares of preferred stock of the Corporation
ranking on a parity with the Series BB Preferred Stock as to the distribution of
assets, the holders of Series BB Preferred Stock and the holders of such other
preferred stock shall share ratably in any distribution of assets of the
Corporation in proportion to the full respective preferential amounts to which
they are entitled.
(3) The merger or consolidation of the Corporation into or with any
other corporation, the merger or consolidation of any other corporation into or
with the Corporation or the sale of the assets of the Corporation substantially
as an entirety shall not be deemed a liquidation, dissolution or winding up of
the affairs of the Corporation within the meaning of this paragraph C.
D. Redemption.
(1) The Corporation, at its option, may redeem all or any shares of the
Series BB Preferred Stock at any time at a redemption price (the "Redemption
Price") consisting of the sum of (i) $25 per share and (ii) an amount equal to
accrued and unpaid dividends thereon to and in cluding the date of redemption.
(2) If less than all the outstanding shares of Series BB Preferred
Stock are to be redeemed, the shares to be redeemed shall be selected pro rata
as nearly as practicable or by lot, as the Board of Directors may determine.
(3) Notice of any redemption shall be given by first class mail,
postage prepaid, mailed not less than 60 nor more than 90 days prior to the date
fixed for redemption to the holders of record of the shares of Series BB Pre
ferred Stock to be redeemed, at their respective addresses appearing on the
books of the Corporation. Notice so mailed shall be conclusively presumed to
have been duly given whether or not actually received. Such notice shall state:
(1) the date fixed for redemption; (2) the Redemption Price; (3) the right of
the holders of Series BB Pre ferred Stock to convert such stock into Common
Stock until the close of business on the
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15th day prior to the redemption date (or the next succeeding business day, if
the 15th day is not a business day); (4) if less than all the shares held by
such holder are to be redeemed, the number of shares to be redeemed from such
holder; and (5) the place(s) where certificates for such shares are to be
surrendered for payment of the Redemption Price. If such notice is mailed as
aforesaid, and if on or before the date fixed for redemption funds sufficient to
redeem the shares called for redemption are set aside by the Corporation in
trust for the account of the holders of the shares to be redeemed,
notwithstanding the fact that any certificate for shares called for redemption
shall not have been surrendered for cancellation, on and after the redemption
date the shares represented thereby so called for redemption shall be deemed to
be no longer outstanding, dividends thereon shall cease to accrue, and all
rights of the holders of such shares as shareholders of the Corporation shall
cease, except the right to receive the Redemption Price, without interest, upon
surrender of the certificate(s) representing such shares. Upon surrender in
accordance with the aforesaid notice of the certificate(s) for any shares so
redeemed (duly endorsed or accompanied by appropriate instruments of transfer,
if so required by the Corporation in such notice), the holders of record of such
shares shall be entitled to receive the Redemption Price, without interest.
(4) At the option of the Corporation, if notice of redemption is mailed
as aforesaid, and if prior to the date fixed for redemption funds sufficient to
pay in full the Redemption Price are deposited in trust, for the account of the
holders of the shares to be redeemed, with a bank or trust company named in such
notice doing business in the Borough of Manhattan, The City of New York, State
of New York or the City of Charlotte, State of North Carolina and having
capital, surplus and undivided profits of at least $3 million, which bank or
trust company also may be the Transfer Agent and/or Paying Agent for the Series
BB Preferred Stock, notwithstanding the fact that any certificate for shares
called for redemption shall not have been surrendered for cancellation, on and
after such date of deposit the shares represented thereby so called for
redemption shall be deemed to be no longer outstanding, and all rights of the
holders of such shares as shareholders of the Corporation shall cease, except
the right of the holders thereof to convert such shares in accordance with the
provisions of paragraph F at any time prior to the close of business on the 15th
day prior to the redemption date (or the next succeeding business day, if the
15th day is not a business day), and the right of the holders thereof to receive
out of the funds so deposited in trust the Redemption Price, without interest,
upon surrender of the certificate(s) representing such shares. Any funds so
deposited with such bank or trust company in respect of shares of Series BB
Preferred Stock converted before the close of business on the 15th day prior to
the redemption date (or the next succeeding business day, if the 15th day is not
a business day) shall be returned to the Corporation upon such conversion. Any
funds so depos ited with such a bank or trust company which shall remain
unclaimed by the holders of shares called for redemption at the end of six years
after the redemption date shall be repaid to the Corporation, on demand, and
thereafter the holder of any such shares shall look only to the Corporation for
the payment, without interest, of the Redemption Price.
(5) Any provisions of paragraph D or E to the contrary notwithstanding,
in the event that any quarterly dividend payable on the Series BB Preferred
Stock shall be in arrears and until all such dividends in arrears shall have
been paid or declared and set apart for payment, the Corporation shall not
redeem any shares of Series BB Preferred Stock unless all outstanding shares of
Series BB Preferred Stock are simultaneously redeemed and shall not purchase or
otherwise acquire any shares of Series BB Pre ferred Stock except in accordance
with a purchase offer made by the Corporation on the same terms to all holders
of record of Series BB Preferred Stock for the purchase of all outstanding
shares thereof.
E. Purchase by the Corporation.
(1) Except as provided in paragraph D(5), the Corporation shall be
obligated to purchase shares of Series BB Preferred Stock tendered by the holder
thereof for purchase hereunder, at a purchase price consisting of the sum of (i)
$25 per share and (ii) an amount equal to accrued and unpaid dividends thereon
to and including the date of purchase. In order to exercise his right to require
the Corporation to purchase his shares of Series BB Preferred Stock, the holder
thereof shall surrender the Certificate(s) therefor duly endorsed if the
Corporation shall so require or accompanied by appropriate instruments of
transfer satisfactory to the Corporation, at the office of the Transfer Agent(s)
for the Series BB Preferred Stock, or at such other office as may be designated
by the Corporation, together with written notice that such holder irrevocably
elects to sell such shares to the Corporation. Shares of Series BB Preferred
Stock shall be deemed to have been purchased by the Corporation immediately
prior to the close of business on the date such shares are tendered for sale to
the Corporation and notice of election to sell the same is received by the
Corporation in accordance with the foregoing provisions. As of such date the
shares so tendered for sale shall be deemed to be no longer outstanding,
dividends thereon shall cease to accrue and all rights of the holder of such
shares as a shareholder of the Corporation shall cease, except the right to
receive the purchase price.
F. Conversion Rights.
The holders of shares of Series BB Preferred Stock shall have the
right, at their option, to convert such shares into shares of Common Stock on
the following terms and conditions:
(1) Shares of Series BB Preferred Stock shall be convertible at any
time into fully paid and
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nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/1,000 of a share) at the initial rate of 6.17215 shares of Common
Stock for each share of Series BB Preferred Stock surrendered for conversion
(the "Conversion Rate"). The Conversion Rate shall be subject to adjustment from
time to time as hereinafter provided. No payment or adjustment shall be made on
account of any accrued and unpaid dividends on shares of Series BB Preferred
Stock surrendered for conversion prior to the record date for the determination
of shareholders entitled to such dividends or on account of any dividends on the
Common Stock issued upon such conversion subsequent to the record date for the
determination of shareholders entitled to such dividends. If any shares of
Series BB Preferred Stock shall be called for redemption, the right to convert
the shares designated for redemption shall terminate at the close of business on
the 15th day prior to the redemption date (or the next succeeding business day,
if the 15th day is not a business day) unless default be made in the pay ment of
the Redemption Price. In the event of default in the payment of the Redemption
Price, the right to convert the shares designated for redemption shall terminate
at the close of business on the business day immediately preceding the date that
such default is cured.
(2) In order to convert shares of Series BB Preferred Stock into Common
Stock, the holder thereof shall surrender the certificate(s) therefor, duly
endorsed if the Corporation shall so require, or accompanied by appropriate
instruments of transfer satisfactory to the Corporation, at the office of the
Transfer Agent(s) for the Series BB Preferred Stock, or at such other office as
may be designated by the Corporation, together with written notice that such
holder irrevocably elects to convert such shares. Such notice shall also state
the name(s) and address(es) in which such holder wishes the certificate(s) for
the shares of Common Stock issuable upon conversion to be issued. As soon as
practicable after receipt of the certificate(s) representing the shares of
Series BB Preferred Stock to be converted and the notice of election to convert
the same, the Corporation shall issue and deliver at said office a certificate
or certificates for the number of whole shares of Common Stock issuable upon
conversion of the shares of Series BB Preferred Stock surrendered for
conversion, together with a cash payment in lieu of any fraction of a share, as
hereinafter provided, to the person(s) entitled to receive the same. Shares of
Series BB Preferred Stock shall be deemed to have been converted immediately
prior to the close of business on the date such shares are surrendered for
conversion and notice of election to convert the same is received by the
Corporation in accordance with the foregoing provisions, and the person(s)
entitled to receive the Common Stock issuable upon such conversion shall be
deemed for all purposes as record holder(s) of such Common Stock as of such
date.
(3) No fractional shares of Common Stock shall be issued upon
conversion of any shares of Series BB
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Preferred Stock. If more than one share of Series BB Preferred Stock is
surrendered at one time by the same holder, the number of full shares issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of shares so surrendered. If the conversion of any shares of Series BB Preferred
Stock results in a fractional share of Common Stock, the Corporation shall pay
cash in lieu thereof in an amount equal to such fraction multiplied times the
closing price of the Common Stock on the date on which the shares of Series BB
Preferred Stock were duly sur rendered for conversion, or if such date is not a
trading date, on the next succeeding trading date. The closing price of the
Common Stock for any day shall mean the last reported sales price regular way on
such day or, in case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, on the New York Stock
Exchange, or, if the Common Stock is not then listed on such Exchange, on the
principal national securities exchange on which the Common Stock is listed for
trading, or, if not then listed for trading on any national securities exchange,
the average of the closing bid and asked prices of the Common Stock as fur
nished by the National Quotation Bureau, Inc., or if the National Quotation
Bureau, Inc. ceases to furnish such information, by a comparable independent
securities quota tion service.
(4) In the event the Corporation shall at any time (i) pay a dividend
or make a distribution to holders of Common Stock in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a larger number of
shares, or (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Rate in effect at the time of the record date
for such dividend or distribution or the effective date of such subdivision or
combination shall be adjusted so that the holder of any shares of Series BB
Preferred Stock surrendered for conversion after such record date or effective
date shall be entitled to receive the number of shares of Common Stock which he
would have owned or have been entitled to receive immediately following such
record date or effective date had such shares of Series BB Preferred Stock been
converted immediately prior thereto.
(5) Whenever the Conversion Rate shall be adjusted as herein provided
(i) the Corporation shall forthwith keep available at the office of the Transfer
Agent(s) for the Series BB Preferred Stock a statement describing in reasonable
detail the adjustment, the facts requiring such ad justment and the method of
calculation used; and (ii) the Corporation shall cause to be mailed by first
class mail, postage prepaid, as soon as practicable to each holder of record of
shares of Series BB Preferred Stock a notice stating that the Conversion Rate
has been adjusted and setting forth the adjusted Conversion Rate.
(6) In the event of any consolidation of the Corporation with or merger
of the Corporation into any other corporation (other than a merger in which the
Corporation is the surviving corporation) or a sale of the assets of the
Corporation substantially as an entirety, the holder of each share of Series BB
Preferred Stock shall have the right,
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after such consolidation, merger or sale to convert such share into the number
and kind of shares of stock or other securities and the amount and kind of
property receivable upon such consolidation, merger or sale by a holder of the
number of shares of Common Stock issuable upon conversion of such share of
Series BB Preferred Stock immediately prior to such consolidation, merger or
sale. Provision shall be made for adjustments in the Conversion Rate which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
paragraph F(4). The provisions of this paragraph F(6) shall similarly apply to
successive consolidations, mergers and sales.
(7) The Corporation shall pay any taxes that may be payable in respect
of the issuance of shares of Common Stock upon conversion of shares of Series BB
Preferred Stock, but the Corporation shall not be required to pay any taxes
which may be payable in respect of any transfer involved in the issuance of
shares of Common Stock in a name other than that in which the shares of Series
BB Preferred Stock so converted are registered, and the Corporation shall not be
required to issue or deliver any such shares unless and until the person(s)
requesting such issuance shall have paid to the Corporation the amount of any
such taxes, or shall have established to the satisfaction of the Corporation
that such taxes have been paid.
(8) The Corporation shall at all times reserve and keep available out
of its authorized but unissued Common Stock the full number of shares of Common
Stock issuable upon the conversion of all shares of Series BB Preferred Stock
then outstanding.
(9) In the event that:
(i) The Corporation shall declare a dividend or any other
distribution on its Common Stock, payable otherwise than in cash out of
retained earnings; or
(ii) The Corporation shall authorize the granting to the holders of
its Common Stock of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(iii) The Corporation shall propose to effect any consolidation of
the Corporation with or merger of the Corporation with or into any other
corporation or a sale of the assets of the company substantially as an
entirety which would result in an adjustment under paragraph F(6),
the Corporation shall cause to be mailed to the holders of record of Series BB
Preferred Stock at least 20 days prior to the applicable date hereinafter
specified a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to
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be determined or (y) the date on which such consolidation, merger or sale is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
consolidation, merger or sale. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such dividend,
distribution, consolidation, merger or sale.
G. Voting Rights.
Holders of Series BB Preferred Stock shall have no voting rights except
as required by law and as follows: in the event that any quarterly dividend
payable on the Series BB Preferred Stock is in arrears, the holders of Series BB
Preferred Stock shall be entitled to vote together with the holders of Common
Stock at the Corporation's next meeting of shareholders and at each subsequent
meeting of shareholders unless all dividends in arrears have been paid or
declared and set apart for payment prior to the date of such meeting. For the
purpose of this paragraph G, each holder of Series BB Preferred Stock shall be
entitled to cast the number of votes equal to the number of whole shares of
Common Stock into which his Series BB Preferred Stock is then convertible.
H. Reacquired Shares.
Shares of Series BB Preferred Stock converted, redeemed, or otherwise
purchased or acquired by the Corporation shall be restored to the status of
authorized but unissued shares of preferred stock without designation as to
series.
I. No Sinking Fund.
Shares of Series BB Preferred Stock are not subject to the operation of
a sinking fund.
4. The address of the registered office of the Corporation is
NationsBank Corporate Center, NC1-007-56, Charlotte, Mecklenburg County, North
Carolina 28255, and the name of its registered agent at such address is James W.
Kiser.
5. No holder of any stock of the Corporation of any class now or
hereafter authorized shall have any preemptive right to purchase, subscribe for,
or otherwise acquire any shares of stock of the Corporation of any class now or
hereafter authorized, or any securities exchangeable for or convertible into any
such shares, or any warrants or other instruments evidencing rights or options
to subscribe for, purchase or otherwise acquire any such shares whether such
shares, securities, warrants or other instruments be unissued, or issued and
thereafter acquired by the Corporation.
6. To the fullest extent permitted by the North Carolina Business
Corporation Act, as the same exists or may hereafter be amended, a director of
the Corporation shall not be personally liable to the Corporation, its
shareholders or otherwise for monetary damage for breach of his duty as a
director. Any repeal or modification of this Article shall be prospective only
and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.
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