RESTATED CERTIFICATE OF INCORPORATION
OF
U S WEST, INC.
(ORIGINALLY INCORPORATED ON DECEMBER 23, 1997
UNDER THE NAME USW-C, INC.)
ARTICLE I
NAME
The name of the corporation is U S WEST, Inc. (the "Corporation").
ARTICLE II
ADDRESS OF REGISTERED OFFICE;
NAME OF REGISTERED AGENT
The address of the registered office of the Corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, 19801. The name of its registered agent at
that address is The Corporation Trust Company.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "Corporation Law").
ARTICLE IV
POWERS
The Corporation shall have all powers that may now or hereafter be
lawful for a corporation to exercise under the Corporation Law.
ARTICLE V
CAPITAL STOCK
SECTION 1. AUTHORIZATION. The aggregate number of shares of stock
which the Corporation shall have authority to issue is two billion two
hundred million (2,200,000,000) shares, of which two billion (2,000,000,000)
shares shall be shares of common stock having a par value of $0.01 per share
(the "Common Stock"), and two hundred million (200,000,000) shares shall be
shares of a class of preferred stock having a par value of $1.00 per share
(the "Preferred Stock") and issuable in one or more series as hereinafter
provided. For purposes of this Article V, references to the "Board of
Directors" shall refer to the Board of Directors of the Corporation, as
established in accordance with Article VI of the Certificate of Incorporation
of the Corporation and references to "the Certificate of Incorporation" of
the Corporation" shall refer to this Restated Certificate of Incorporation as
the same may be amended from time to time.
SECTION 2. COMMON STOCK. The shares of Common Stock of the
Corporation shall be of one and the same class. The holders of Common Stock
shall have one vote per share of Common Stock on all matters on which holders
of Common Stock are entitled to vote. Except as otherwise provided by law or
by the terms of any outstanding series of Preferred Stock, the entire voting
power of the stockholders of the Corporation shall be vested in the holders
of Common Stock of the Corporation, who shall be entitled to vote on any
matter on which the holders of stock of the Corporation shall, by law or by
the provisions of the Certificate of Incorporation or bylaws of the
Corporation, be entitled to vote.
SECTION 3. PREFERRED STOCK. The Preferred Stock may be issued
from time to time in one or more series. Except as provided by subsection 3.1
with respect to the Series A Preferred Stock (as hereinafter defined), the
Board of Directors is authorized, by resolution adopted and filed in
accordance with law, to fix the number of shares in each series, the
designation thereof, the voting powers, preferences and relative,
participating, optional or other special rights thereof, and the
qualifications or restrictions thereon, of each series and the variations in
such voting powers and preferences and rights as between series. Any shares
of any series of Preferred Stock purchased, exchanged, converted or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
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cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock,
without designation as to series, and may be reissued as part of any series
of Preferred Stock created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
in this Certificate of Incorporation or in such resolution or resolutions.
3.1. SERIES A JUNIOR PREFERRED STOCK. There is hereby created a series
of Preferred Stock, designated Series A Junior Preferred Stock, par value
$1.00 per share (the "Series A Preferred Stock"), of 10,000,000 shares having
the following voting powers, preferences and rights, and qualifications and
restrictions thereon provided by this subsection 3.1:
3.1.1 DIVIDENDS AND DISTRIBUTIONS.
A. Subject to the provisions for adjustment hereinafter set forth,
the holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per share
(rounded to the nearest cent) equal to 100 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, and (ii) a
preferential cash dividend (the "Preferential Dividends"), if any, in
preference to the holders of Common Stock, on the first day of February, May,
August and November of each year (each a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock,
payable in an amount (except in the case of the first Quarterly Dividend
Payment if the date of the first issuance of Series A Preferred Stock is a
date other than a Quarterly Dividend Payment date, in which case such payment
shall be a prorated amount of such amount) equal to $25 per share of Series A
Preferred Stock less the per share amount of all cash dividends declared on
the Series A Preferred Stock pursuant to clause (i) of this sentence since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall, at any time after the issuance of any share or fraction of
a share of Series A Preferred Stock,
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make any distribution on the shares of Common Stock, whether by way of a
dividend or a reclassification of stock, a recapitalization, reorganization
or partial liquidation of the Corporation or otherwise, which is payable in
cash or any debt security, debt instrument, real or personal property or any
other property (other than cash dividends subject to the immediately
preceding sentence, a distribution of shares of Common Stock or other capital
stock of the Corporation or a distribution of rights or warrants to acquire
any such share, including any debt security convertible into or exchangeable
for any such share, at a price less than the Fair Market Value (as
hereinafter defined) of such share), then, and in each such event, the
Corporation shall simultaneously pay on each then outstanding share of Series
A Preferred Stock a distribution, in like kind, of 100 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the
Series A Preferred Stock to which holders thereof are entitled pursuant to
clause (i) of the first sentence of this paragraph and pursuant to the second
sentence of this paragraph are hereinafter referred to as "Dividends" and the
multiple of such cash and non-cash dividends on the Common Stock applicable
to the determination of the Dividends, which shall be 100 initially but shall
be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Dividend Multiple". In the event the Corporation shall
at any time after __________, 1998 (the "Effective Date") declare or pay any
dividend or make any distribution on Common Stock payable in shares of Common
Stock, or effect a subdivision or split or a combination, consolidation or
reverse split of the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each such case the Dividend
Multiple thereafter applicable to the determination of the amount of
Dividends which holders of shares of Series A Preferred Stock shall be
entitled to receive shall be the Dividend Multiple applicable immediately
prior to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
B. The Corporation shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash
dividend or distribution on the Common Stock in respect of
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which a Dividend is required to be paid shall be paid or set aside for
payment on the Common Stock unless a Dividend in respect of such dividend or
distribution on the Common Stock shall be simultaneously paid, or set aside
for payment, on the Series A Preferred Stock.
C. Preferential Dividends shall begin to accrue on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issuance of any shares of Series A Preferred
Stock. Accrued but unpaid Preferential Dividends shall cumulate but shall
not bear interest. Preferential Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
3.1.2 VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the holders of the
Common Stock. The number of votes which a holder of Series A Preferred Stock
is entitled to cast, as the same may be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Vote Multiple". In
the event the Corporation shall at any time after the Effective Date declare
or pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser
number of shares of Common Stock, then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes per share
to which holders of shares of Series A Preferred Stock shall be entitled
after such event shall be the Vote Multiple immediately prior to such event
multiplied by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by-laws of the Corporation,
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the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock shall vote together as one class on all matters submitted to
a vote of stockholders of the Corporation.
(C) In the event that the Preferential Dividends accrued on the
Series A Preferred Stock for four or more quarterly dividend periods, whether
consecutive or not, shall not have been declared and paid or irrevocably set
aside for payment, the holders of record of Preferred Stock of the
Corporation of all series (including the Series A Preferred Stock), other
than any series in respect of which such right is expressly withheld by the
Certificate of Incorporation or the authorizing resolutions included in any
Certificate of Designations therefor, shall have the right, at the next
meeting of stockholders called for the election of directors, to elect two
members to the Board of Directors, which directors shall be in addition to
the number required by the by-laws of the Corporation prior to such event, to
serve until the next Annual Meeting and until their successors are elected
and qualified or their earlier resignation, removal or incapacity or until
such earlier time as all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series A Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series
A Preferred Stock shall continue to have the right to elect directors as
provided by the immediately preceding sentence until all accrued and unpaid
Preferential Dividends upon the outstanding shares of Series A Preferred
Stock shall have been paid (or set aside for payment) in full. Such
directors may be removed and replaced by such stockholders, and vacancies in
such directorships may be filled only by such stockholders (or by the
remaining director elected by such stockholders, if there be one) in the
manner permitted by law; provided, however, that any such action by
stockholders shall be taken at a meeting of stockholders and shall not be
taken by written consent thereto.
(D) Except as otherwise required by the Certificate of
Incorporation or by-laws of the Corporation or set forth herein, holders of
Series A Preferred Stock shall have no other special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for the taking of any
corporate action.
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3.1.3. CERTAIN RESTRICTIONS.
(A) Whenever Preferential Dividends or Dividends are in arrears or
the Corporation shall be in default of payment thereof, thereafter and until
all accrued and unpaid Preferential Dividends and Dividends, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been
paid or set irrevocably aside for payment in full, and in addition to any and
all other rights which any holder of shares of Series A Preferred Stock may
have in such circumstances, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration, any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity as to dividends with the Series
A Preferred Stock, unless dividends are paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled if the full dividends accrued thereon
were to be paid;
(iii) except as permitted by subparagraph (iv) of this paragraph
3.1.3(A), redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares
of any stock of the Corporation ranking junior (both as to dividends and
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock (either as to dividends or upon
liquidation, dissolution or winding up), except in accordance with a
purchase offer made to all holders of such shares upon such terms as the
Board of Directors,
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after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any Subsidiary (as
hereinafter defined) of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 3.1.3, purchase or otherwise
acquire such shares at such time and in such manner. A "Subsidiary" of the
Corporation shall mean any corporation or other entity of which securities or
other ownership interests having ordinary voting power sufficient to elect a
majority of the board of directors of such corporation or other entity or
other persons performing similar functions are beneficially owned, directly
or indirectly, by the Corporation or by any corporation or other entity that
is otherwise controlled by the Corporation.
(C) The Corporation shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that
certain Rights Agreement dated as of _____________, 1998 between the
Corporation and State Street Bank and Trust Company, as Rights Agent, a copy
of which is on file with the Secretary of the Corporation at its principal
executive office and shall be made available to stockholders of record
without charge upon written request therefor addressed to said Secretary.
Notwithstanding the foregoing sentence, nothing contained in the provisions
hereof shall prohibit or restrict the Corporation from issuing for any
purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Series A Preferred Stock.
3.1.4. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares upon their retirement and cancellation shall become authorized
but unissued shares of Preferred Stock, without designation as to series, and
such shares may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors.
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3.1.5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless the holders of shares of Series A
Preferred Stock shall have received for each share of Series A Preferred
Stock, subject to adjustment as hereinafter provided, (A) $100 ($1.00 per one
one-hundredth of a share) plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment or, (B) if greater than the amount specified in clause (i)(A) of
this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be adjusted
as hereinafter provided and (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred
Stock, unless simultaneously therewith distributions are made ratably on the
Series A Preferred Stock and all other shares of such parity stock in
proportion to the total amounts to which the holders of shares of Series A
Preferred Stock are entitled under clause (i)(A) of this sentence and to
which the holders of such parity shares are entitled, in each case upon such
liquidation, dissolution or winding up. The amount to which holders of
Series A Preferred Stock may be entitled upon liquidation, dissolution or
winding up of the Corporation pursuant to clause (i)(B) of the foregoing
sentence is hereinafter referred to as the "Participating Liquidation Amount"
and the multiple of the amount to be distributed to holders of shares of
Common Stock upon the liquidation, dissolution or winding up of the
Corporation applicable pursuant to said clause to the determination of the
Participating Liquidation Amount, as said multiple may be adjusted from time
to time as hereinafter provided, is hereinafter referred to as the
"Liquidation Multiple". In the event the Corporation shall at any time after
the Effective Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into
a greater or lesser number of shares of Common Stock, then, in each such
case, the Liquidation Multiple thereafter applicable to the determination of
the Participating Liquidation Amount to which holders of Series A Preferred
Stock shall be entitled after such event shall be the Liquidation Multiple
applicable immediately prior to such event multiplied by a
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fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
3.1.6. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(A) In the event that holders of shares of Common Stock receive
after the Effective Date in respect of their shares of Common Stock any share
of capital stock of the Corporation (other than any share of Common Stock),
whether by way of reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise (a "Transaction"), then, and in
each such event, the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Corporation of the shares of
Series A Preferred Stock shall be adjusted so that after such event the
holders of Series A Preferred Stock shall be entitled, in respect of each
share of Series A Preferred Stock held, in addition to such rights in respect
thereof to which such holder was entitled immediately prior to such
adjustment, to (i) such additional dividends as equal the Dividend Multiple
in effect immediately prior to such Transaction multiplied by the additional
dividends which the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such capital stock,
(ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such Transaction multiplied by the additional voting
rights which the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such capital stock and
(iii) such additional distributions upon liquidation, dissolution or winding
up of the Corporation as equal the Liquidation Multiple in effect immediately
prior to such Transaction multiplied by the additional amount which the
holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Corporation by virtue of the
receipt in the Transaction of such capital stock, as the case may be, all as
provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock receive
after the Effective Date in respect of their shares of Common Stock any right
or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share
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less than the Fair Market Value of a share of Common Stock on the date of
issuance of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon the liquidation, dissolution or winding
up of the Corporation of the shares of Series A Preferred Stock shall each be
adjusted so that after such event the Dividend Multiple, the Vote Multiple
and the Liquidation Multiple shall each be the product of the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple, as the case may be,
in effect immediately prior to such event multiplied by a 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 maximum
number of shares of Common Stock which could be acquired 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 number of shares of Common Stock which could
be purchased, at the Fair Market Value of the Common Stock at the time of
such issuance, by the maximum aggregate consideration payable upon exercise
in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock receive
after the Effective Date in respect of their shares of Common Stock any right
or warrant to purchase capital stock of the Corporation (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the
Corporation (other than Common Stock), at a purchase price per share less
than the Fair Market Value of such shares of capital stock on the date of
issuance of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon liquidation, dissolution or winding up
of the Corporation of the shares of Series A Preferred Stock shall each be
adjusted so that after such event each holder of a share of Series A
Preferred Stock shall be entitled, in respect of each share of Series A
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in effect immediately
prior to such event multiplied, first, by the additional dividends to which
the holder of a share of Common Stock shall be entitled upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction (as hereinafter
defined) and (ii) such
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additional voting rights as equal the Vote Multiple in effect immediately
prior to such event multiplied, first, by the additional voting rights to
which the holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction and
(iii) such additional distributions upon liquidation, dissolution or winding
up of the Corporation as equal the Liquidation Multiple in effect immediately
prior to such event multiplied, first, by the additional amount which the
holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Corporation upon exercise of
such right or warrant by virtue of the capital stock which could be acquired
upon such exercise and multiplied again by the Discount Fraction. For
purposes of this paragraph, the "Discount Fraction" shall be a fraction the
numerator of which shall be the difference between the Fair Market Value of a
share of the capital stock subject to a right or warrant distributed to
holders of shares of Common Stock of the Corporation as contemplated by this
paragraph immediately after the distribution thereof and the purchase price
per share for such share of capital stock pursuant to such right or warrant
and the denominator of which shall be the Fair Market Value of a share of
such capital stock immediately after the distribution of such right or
warrant.
(D) For purposes of this Certificate of Designations, the "Fair
Market Value" of a share of capital stock of the Corporation (including a
share of Common Stock) on any date shall be deemed to be the average of the
daily closing price per share thereof over the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date;
provided, however, that, in the event that such Fair Market Value of any such
share of capital stock is determined during a period which includes any date
that is within 30 Trading Days after (i) the ex-dividend date for a dividend
or distribution on stock payable in shares of such stock or securities
convertible into shares of such stock, or (ii) the effective date of any
subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then, and in each such case, the Fair Market
Value shall be appropriately adjusted by the Board of Directors of the
Corporation to take into account ex-dividend or post-effective date trading.
The closing price for any day shall be the last sale price, regular way, or,
in case, no such sale takes place on such day, the average of the closing bid
and asked
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prices, regular way (in either case, as reported in the applicable
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange), or, if the shares are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
applicable transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares are listed or
admitted to trading or, if the shares are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or if on any such date the shares are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the shares
selected by the Board of Directors of the Corporation. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to
trading on any national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be selected by the
Board of Directors of the Corporation is open. If the shares are not
publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Fair Market Value thereof as
aforesaid, "Fair Market Value" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors of the
Corporation. In either case referred to in the foregoing sentence, the
determination of Fair Market Value shall be described in a statement filed
with the Secretary of the Corporation.
3.1.7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
each outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case
may be, for which or into which each share of Common Stock is changed or
exchanged multiplied by the highest of the Vote
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Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
3.1.8. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series A Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Corporation shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect of any adjustment
to the voting rights, dividend rights or rights upon liquidation, dissolution
or winding up of the Corporation of such shares required by the provisions
hereof. Notwithstanding the foregoing sentence, the failure of the
Corporation to give such notice shall not affect the validity of or the force
or effect of or the requirement for such adjustment.
3.1.9. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable at the option of the Corporation or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the
Corporation may acquire shares of Series A Preferred Stock in any other
manner permitted by law, the provisions hereof and the Certificate of
Incorporation.
3.1.10. RANKING. Unless otherwise provided in the Certificate of
Incorporation or a Certificate of Designations relating to a subsequent
series of preferred stock of the Corporation, the Series A Preferred Stock
shall rank junior to all other series of the Corporation's preferred stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
3.1.11. AMENDMENT. The provisions hereof and the Certificate of
Incorporation shall not be amended in any manner which would adversely affect
the rights, privileges or powers of the Series A Preferred Stock without, in
addition to any other vote of stockholders required by law, the affirmative
vote of the holders of two-thirds or more of the outstanding shares of Series
A Preferred Stock, voting together as a single class.
3.1.12. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in fractions of a share (in one one-
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hundredths (1/100) of a share and integral multiples thereof) that shall
entitle the holder thereof, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in distributions
and have the benefit of all other rights of holders of shares of Series A
Preferred Stock.
ARTICLE VI
BOARD OF DIRECTORS
SECTION 1. NUMBER OF DIRECTORS. The number of Directors shall be fixed
by the Bylaws of the Corporation, but shall not be less than six nor more
than seventeen.
SECTION 2. POWERS OF THE BOARD OF DIRECTORS. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors selected as provided by law and the Certificate of Incorporation
and the bylaws of the Corporation. In furtherance, and not in limitation, of
the powers conferred by the laws of the State of Delaware, the Board of
Directors is expressly authorized to:
(A) adopt, amend, alter, change or repeal bylaws of the
Corporation; PROVIDED, HOWEVER, that no bylaw hereafter adopted shall
invalidate any prior act of the Corporation that would have been valid
if such new Bylaws had not been adopted;
(B) subject to the bylaws as from time to time in effect,
determine the rules and procedures for the conduct of the business of
the Board of Directors and the management and direction by the Board of
Directors of the business and affairs of the Corporation, including the
power to designate and empower committees of the Board of Directors, to
elect, or authorize the appointment of, and empower officers and other
agents of the Corporation, and to determine the time and place of, the
notice requirements for, and the manner of conducting, Board meetings,
as well as other notice requirements for, and the manner of taking,
Board action; and
(C) exercise all such powers and do all such acts as may be
exercised or done by the Corporation, subject to the provisions of the
Corporation Law and the
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Certificate of Incorporation and bylaws of the Corporation.
SECTION 3. CLASSIFIED BOARD OF DIRECTORS. The directors, other than
those who may be elected solely by the holders of shares of any class or
series of stock having a preference over the common stock of the Corporation
as to dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation pursuant to the terms of Article V of the
Certificate of Incorporation of the Corporation, shall be classified, with
respect to the time for which they severally hold office, into three classes,
with each class to hold office until its successors are elected and
qualified. Subject to the rights of the holders of any series of Preferred
Stock, at each annual meeting of the stockholders, the successors of the
class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election.
SECTION 4. VACANCIES. Except as otherwise required by law and subject
to the rights of the holders of any series of Preferred Stock, any vacancy in
the Board of Directors for any reason and any newly created directorship
resulting by reason of any increase in the number of directors may be filled
only by the Board of Directors (and not by the stockholders), by resolution
adopted by the affirmative vote of a majority of the remaining directors then
in office, even though less than a quorum (or by a sole remaining director);
PROVIDED, HOWEVER, that if not so filled, any such vacancy shall be filled by
the stockholders at the next annual meeting or at a special meeting called
for that purpose. Any director so appointed shall hold office until the next
meeting of stockholders at which directors of the class for which such
director has been chosen are to be elected and until his or her successor is
elected and qualified.
SECTION 5. REMOVAL OF DIRECTORS. Except as may be provided in respect
of any series of Preferred Stock pursuant to Article V with respect to any
directors elected solely by the holders of such series of Preferred Stock,
any director (including all members of the Board of Directors) may be removed
from office at any time, but only for cause and only by the affirmative vote
of the holders of at least 80% of the voting power of all of the shares of
capital
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stock of the Corporation then entitled to vote generally in the election of
directors, voting together as a single class. For the purposes of this
Section 5, "cause" shall mean the wilful and continuous failure of a director
to substantially perform such director's duties to the Corporation (other
than any such failure resulting from incapacity due to physical or mental
illness) or the wilful engaging by a director in gross misconduct materially
and demonstrably injurious to the Corporation.
ARTICLE VII
STOCKHOLDER ACTIONS AND MEETINGS OF STOCKHOLDERS
Subject to the rights of the holders of any series of Preferred Stock,
any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of
such holders and may not be effected by written consent in lieu of a meeting
of such holders. Subject to the rights of the holders of any series of
Preferred Stock, special meetings of stockholders of the Corporation may be
called only by the Chairman of the Board of Directors of the Corporation or
the Board of Directors pursuant to a resolution adopted by a majority of the
members of the Board of Directors then in office. Elections of directors need
not be by written ballot, unless otherwise provided in the Bylaws. For
purposes of all meetings of stockholders, a quorum shall consist of a
majority of the shares entitled to vote at such meeting of stockholders,
unless otherwise required by law or, in respect of a meeting of the holders
of any series of Preferred Stock, by the provisions of Section 3 of Article
V.
ARTICLE VIII
LIMITATION ON LIABILITY OF DIRECTORS
No person shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
including without limitation for serving on a committee of the Board of
Directors; PROVIDED, HOWEVER, that the foregoing shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
17
violation of law, (iii) arising under Section 174 of the Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit. Any amendment, repeal or modification of this Article VII shall not
adversely affect any right or protection of a director of the Corporation
existing hereunder with respect to any act or omission occurring prior to
such amendment, repeal or modification.
ARTICLE IX
CERTAIN BUSINESS COMBINATIONS
SECTION 1. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS. Except as
otherwise expressly provided in Section 2 of this Article, in addition to any
affirmative vote required by law or by any other provision of the Certificate
of Incorporation of the Corporation, the affirmative vote of the holders of
not less than 80% of the outstanding shares of "Voting Stock" (as hereinafter
defined) of the Corporation voting together as a single class shall be
required for the approval or authorization of any "Business Combination" (as
hereinafter defined) of the Corporation with any "Related Person" (as
hereinafter defined). For the purpose of this Article:
(A) The term "Business Combination" shall mean (1) any merger or
consolidation of the Corporation or a Subsidiary (as hereinafter
defined) of the Corporation with or into a Related Person or of a
Related Person with or into the Corporation or a Subsidiary of the
Corporation; (2) any sale, lease, exchange, transfer, or other
disposition, including, without limitation, a mortgage or any other
hypothecation or transfer as collateral, of all or any "Substantial
Part" (as hereinafter defined) of the assets either of the Corporation
(including, without limitation, any voting securities of a Subsidiary)
or of a Subsidiary of the Corporation to a Related Person; (3) the
issuance of any securities (other than by way of a distribution to
stockholders made pro rata to all holders of the class of stock to
receive the distribution) of the Corporation or a Subsidiary of the
Corporation to a Related Person; (4) the acquisition by the Corporation
or a Subsidiary of the Corporation of any securities of a Related
Person; (5) any recapitalization that would have the effect, directly or
indirectly, of increasing the voting power of a Related Person; (6) any
merger of
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the Corporation into a Subsidiary of the Corporation; or (7) any agreement,
contract, or other arrangement providing for any of the transactions
described in this definition of "Business Combination."
(B) The term "Continuing Director" shall mean any member of the
Board of Directors who is neither Affiliated (as defined below) or
Associated (as defined below) with the Related Person and who was a
member of the Board of Directors prior to the time that the Related
Person became a Related Person, and any successor of a Continuing
Director who is recommended to succeed a Continuing Director by a
majority of Continuing Directors then members of the Board of Directors.
(C) The term "Related Person" shall mean and include any
individual, corporation, partnership, or other person or entity which,
together with its "Affiliates" and "Associates," "Beneficially Owns" (as
hereinafter defined), in the aggregate ten percent (10%) or more of the
outstanding Voting Stock of the Corporation, and any Affiliate or
Associate of any such individual, corporation, partnership, or other
person or entity.
(D) The term "Substantial Part" shall mean more than 80% of the
book value of the total consolidated assets of the Corporation as
reported in the consolidated financial statements of the Corporation and
its subsidiaries as of the end of its most recent fiscal year ending
prior to the time as of which a "Substantial Part" is to be determined.
(E) The term "Voting Stock" shall mean all outstanding shares of
capital stock of the Corporation entitled to vote generally in the
election of directors of the Corporation and each reference to a
percentage of shares of Voting Stock shall refer to such percentage of
the votes entitled to be cast by such shares.
(F) The terms "Affiliate" and "Associate" shall have the meanings
set forth in Rule 12b-2 under the Securities Exchange Act of 1934, as in
effect on the Effective Date (as defined in subsection 2.6).
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(G) The term "Beneficially Owns" shall have the meaning set forth
in Rule 13d-3 under the Securities Exchange Act of 1934, as in effect on
the Effective Date (as defined in subsection 2.6), PROVIDED, HOWEVER,
that, any shares of Voting Stock of the Corporation that any Related
Person has the right to acquire pursuant to any agreement, or upon
exercise of conversion rights, warrants or options, or otherwise, shall
be deemed Beneficially Owned by the Related Person whether immediately
exercisable or exercisable within ten years of the date as of which
Beneficial Ownership is to be determined.
(H) The term "Subsidiary" with respect to the Corporation shall
mean any corporation, partnership, limited liability company, business
trust or similar entity in which a majority of any class of any equity
security is owned directly or indirectly by the Corporation.
SECTION 2. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of Section
1 of this Article shall not be applicable to any particular Business
Combination and such Business Combination shall require only such affirmative
vote as may be required by law or by any other provision of the certificate
of incorporation of the Corporation, if all of the conditions specified in
either of the following paragraphs (A) or (B) are met:
(A) the Business Combination shall have been approved by a vote of
not less than a majority of the Continuing Directors, or
(B) all of the following conditions shall have been met:
(1) The aggregate amount of cash and the Fair Market Value
(as hereinafter defined) as of the date of the consummation of the
Business Combination of the consideration, other than cash, to be
received per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest of the
following:
(a) if applicable, the highest price per share
(including any brokerage commissions, transfer taxes, and
soliciting dealers' fees) paid by the Related Person for
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any shares of Common Stock acquired by it (i) within the two year
period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or
(ii) in the transaction in which it became a Related Person; or
(b) the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the Related
Person became a Related Person (such latter date is referred
to in this Article as the "Determination Date"), whichever is
higher; and
(2) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of the consideration, other than cash, to be received
per share by holders of shares of any class or series of
outstanding Voting Stock, other than Common Stock, shall be at
least equal to the highest of the following (it being intended that
the requirements of this subparagraph (B)(2) shall be required to
be met with respect to every class or series of outstanding capital
stock of the Corporation other than Common Stock, whether or not
the Related Person has previously acquired any shares of such class
or series of Voting Stock):
(a) if applicable, the highest per share price
(including any brokerage commission, transfer taxes, and
soliciting dealers' fees) paid by the Related Person for any
shares of such class or series of Voting Stock acquired by it
(i) within the two year period immediately prior to the
Announcement Date or (ii) in the transaction in which it
became a Related Person, whichever is higher; or
(b) if applicable, the Redemption Price (as hereinafter
defined) of the shares of such class or series, or if such
shares have no Redemption Price, the highest amount per share
which such class or series would be entitled to receive upon
liquidation of the
21
Corporation on the Announcement Date or the Determination
Date, whichever is higher; or
(c) the Fair Market Value per share of such class or
series of Voting stock on the Announcement Date or on the
Determination Date, whichever is higher; and
(3) the consideration to be received in such Business
Combination by holders of each class or series of outstanding
Voting Stock (including Common stock) shall be in cash or in the
same form as the Related Person has previously paid for shares of
such class or series of Voting Stock; PROVIDED, HOWEVER, that if
the Related Person has paid for shares of any class or series of
Voting Stock with varying forms of consideration, the form of
consideration for such class or series of Voting Stock shall be
either cash or the form used to acquire the largest number of
shares of such class or series of Voting Stock previously acquired
by it; and
(4) a proxy statement responsive to the requirements of the
Securities Exchange Act of 1934, as amended, shall have been mailed
to public stockholders of the Corporation for the purpose of
soliciting stockholder approval of the Business Combination and
shall have contained at the front thereof, in a prominent place,
any recommendations as to the advisability (or inadvisability) of
the Business Combination that the Continuing Directors, or any of
them, may choose to state and, if deemed advisable by a majority of
the Continuing Directors, an opinion of a reputable investment
banking firm as to the fairness (or not) of the terms of the
Business Combination, from the point of view of the remaining
public stockholders of the Corporation (such investment banking
firm to be selected by a majority of the Continuing Directors and
to be paid a reasonable fee for their services by the Corporation
upon receipt of the opinion).
SECTION 3. CERTAIN DEFINITIONS AND ADDITIONAL PROVISIONS. For the
purposes of this Article:
(A) "Fair Market Value" shall mean:
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(1) in the case of stock, the highest closing sale price
during the 30-day period immediately preceding the date in question
of a share of such stock on the Composite Tape for New York Stock
Exchange Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock
is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of
1934, as amended, on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day
period preceding the date in question on the NASDAQ National Market
or any quotations system then generally in use, or, if no such
quotations are available, the Fair Market Value on the date in
question of a share of such stock as determined by the Continuing
Directors in good faith, which determination shall be final; and
(2) in the case of property other than cash or stock, the
Fair Market Value of such property on the date in question as
determined by the Continuing Directors in good faith, which
determination shall be final.
(B) The Board of Directors, with the approval of a majority of the
total number of Continuing Directors, shall have the power and duty to
determine, on the basis of information known to it after reasonable
inquiry, all facts necessary to determine compliance with this Article,
including, without limitation, (i) whether a person is a Related Person,
(ii) the number of shares of Voting Stock Beneficially Owned by any
person, (iii) whether a person is an Affiliate or Associate of another
person, (iv) whether the applicable conditions set forth in paragraph
(B) of Section 2 have been met with respect to any Business Combination,
and (v) whether the proposed transaction is a Business Combination. Any
such determinations shall be final.
SECTION 4. AMENDMENT OF THIS ARTICLE. This Article may be amended,
altered, changed, or repealed only by the affirmative vote of the holders of
at least 80% of the outstanding shares of Voting Stock voting together as a
23
single class unless the proposed amendment, alteration, change, or repeal has
been recommended to the stockholders by the Board of Directors with the
approval of at least two-thirds of the Continuing Directors, in which event
the proposed amendment, alteration, change, or repeal shall require for
approval the affirmative vote of the holders of at least 66 2/3% of the
outstanding shares of Voting Stock, voting as a single class.
ARTICLE X
BYLAWS
The Board of Directors shall have the power to adopt, amend, alter,
change or repeal Bylaws of and for the Corporation by the affirmative vote of
662 3% of the members then in office. The affirmative vote of the holders of
at least 80% of the voting power of all of the shares of capital stock of the
Corporation then entitled to vote generally in the election of directors,
voting together as a single class shall be required to adopt, amend, alter,
change or repeal Bylaws of the Corporation (notwithstanding the fact that
approval by a lesser percentage may be permitted by the Corporation Law).
ARTICLE XI
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation hereby reserves the right from time to time to amend,
alter, change or repeal any provision contained in the Certificate of
Incorporation of the Corporation in any manner permitted by the Corporation
Law and all rights and powers conferred upon stockholders, directors and
officers herein are granted subject to this reservation. In addition to any
vote otherwise required by law, and except as may otherwise be provided in
Article V or IX hereof, any such amendment, alteration, change or repeal
shall require approval of both (i) the Board of Directors by the affirmative
vote of a majority of the members then in office and (ii) the holders of a
majority of the voting power of all of the shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, except that any proposal to amend, alter, change
or repeal the provisions of Section 3 of Article VI, Section 5 of Article VI,
Article VII, Article X and this Article XI shall require the affirmative vote
of the holders of 80% of the
24
voting power of all of the shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class.
25
IN WITNESS WHEREOF, this Restated Certificate of Incorporation which
restates, integrates and amends the provisions of the certificate of
incorporation of the Corporation, and which has been duly adopted by written
consent of the sole stockholder of the Corporation in accordance with the
provisions of Sections 228, 242 and 245 of the Delaware General Corporation
Law, has been executed by ______________________, its ______________________,
this day of , 1998.
U S WEST, INC.
By:
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Name:
--------------------------------------
Title:
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