Exhibit 4.1
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USX CORPORATION
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RESTATED
CERTIFICATE OF INCORPORATION
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FILED IN OFFICE OF SECRETARY OF STATE,
STATE OF DELAWARE
SEPTEMBER 1, 1996
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TABLE OF CONTENTS
Article First--Corporate Name........................................... 1
Article Second--Registered Office....................................... 1
Article Third--Corporate Purpose........................................ 1
Article Fourth--Capital Stock........................................... 1
Division I--Common Stock............................................. 1
1.Dividend Rights................................................ 1
▇.▇▇▇▇▇▇▇▇ and Redemption........................................ 2
▇.▇▇▇▇▇▇ Rights.................................................. 7
4.Liquidation Rights............................................. 9
5.Definitions.................................................... 9
6.Determinations of the Board of Directors....................... 12
Division II--Preferred Stock......................................... 12
Series A Junior Preferred Stock.................................. 13
6.50% Cumulative Convertible Preferred Stock..................... 19
Article Fifth--Perpetual Existence...................................... 35
Article Sixth--Stockholder Liability.................................... 35
Article Seventh--Board of Directors..................................... 35
Article Eighth--By-laws................................................. 36
Article Ninth--Inspection of Accounts................................... 36
Article Tenth--Dividends and Debt Obligations........................... 36
Article Eleventh--Director Liability.................................... 36
Article Twelfth--Power and Authority ................................... 36
Article Thirteenth--Amendment of Certificate of Incorporation........... 37
RESTATED
CERTIFICATE OF INCORPORATION
OF
USX CORPORATION
(Originally incorporated under the name of U.S. Steel Company on September 10,
1965)
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First: The name of the Corporation (which is hereinafter referred to as the
"Corporation") is
USX CORPORATION
Second: Its registered office and place of business in the State of Delaware
is located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of New Castle. The
registered agent in charge thereof upon whom process against the Corporation
may be served, is The ▇▇▇▇▇▇▇▇-▇▇▇▇ Corporation System, Inc.
Third: The purposes of the Corporation are to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware, and without limiting the foregoing to engage in integrated
steel operations and to develop, mine, produce, manufacture, construct,
transport, buy, hold, sell and generally deal in products, materials,
property, both tangible and intangible, and services of all kinds.
Fourth: The total number of shares of capital stock which the Corporation
shall have authority to issue is Eight Hundred Forty Million (840,000,000), of
which Forty Million (40,000,000) shares shall be shares of Preferred Stock,
without par value (hereinafter called "Preferred Stock"), Five Hundred Fifty
Million (550,000,000) shares shall be shares of a class of common stock desig-
nated as USX-Marathon Group Common Stock, par value $1.00 per share ("Marathon
Stock"), Two Hundred Million (200,000,000) shares shall be shares of a class
of common stock designated as USX-U.S. Steel Group Common Stock, par value
$1.00 per share ("Steel Stock"), and Fifty Million (50,000,000) shares shall
be shares of a class of common stock designated as USX-Delhi Group Common
Stock, par value $1.00 per share ("Delhi Stock"). The Marathon Stock, the
Steel Stock and the Delhi Stock shall hereinafter collectively be called the
"Common Stock".
DIVISION I
The powers and rights of the shares of each class of Common Stock, and the
qualifications, limitations or restrictions thereof, are as follows:
1. Dividend Rights. Subject to the express terms of any outstanding se-
▇▇▇▇ of Preferred Stock, dividends may be declared and paid upon each class
of the Common Stock upon the terms provided for below with respect to each
such class solely in the discretion of the Board of Directors:
(a) Dividends on Marathon Stock. Dividends on the Marathon Stock may
be declared and paid out of funds of the Corporation legally available
therefor.
(b) Dividends on Steel Stock. Dividends on the Steel Stock may be de-
clared and paid only out of the lesser of (i) funds of the Corporation
legally available therefor and (ii) the Available Steel Dividend Amount.
(c) Dividends on Delhi Stock. Dividends on the Delhi Stock may be de-
clared and paid only out of the lesser of (i) funds of the Corporation
legally available therefor and (ii) the Available Delhi Dividend Amount.
(d) Discrimination Between Classes of Common Stock. The Board of Di-
rectors, subject to the provisions of Sections 1(a), 1(b) and 1(c), may,
in its sole discretion, declare and pay dividends exclusively on any
class or classes of Common Stock in equal or unequal amounts, notwith-
standing the amounts of funds available for dividends on each class, the
respective voting and liquidation rights of each class, the amount of
prior dividends declared on each class or any other factor.
1
2. Exchange and Redemption. Shares of each class of Common Stock are sub-
ject to exchange or redemption, as the case may be, upon the terms provided
below with respect to each such class; provided that no such class may be
exchanged or redeemed in its entirety if all of the other classes have
been, or are at the time being, exchanged or redeemed in their entirety:
(a) Exchange and Redemption of Marathon Stock.
(i) At any time on or after the date on which the Corporation has
transferred all of the assets and liabilities of the Marathon Group
to a wholly owned subsidiary of the Corporation (the "Marathon Group
Subsidiary"), the Board of Directors may, in its sole discretion and
by a majority vote of the directors then in office, provided that
there are funds of the Corporation legally available therefor, ▇▇-
▇▇▇▇▇ that all of the outstanding shares of Marathon Stock shall be
exchanged on an Exchange Date set forth in a notice to holders of
Marathon Stock pursuant to Section 2(d)(i), for all of the outstand-
ing shares of common stock of the Marathon Group Subsidiary, on a pro
rata basis, each of which shall, upon such issuance, be fully paid
and nonassessable.
(ii) After any Exchange Date for Marathon Stock, any share of Mara-
thon Stock that is issued on conversion or exercise of any Convert-
ible Securities shall, to the extent of funds of the Corporation ▇▇-
▇▇▇▇▇ available therefor, immediately upon issuance pursuant to such
conversion or exercise and without any notice or any other action on
the part of the Corporation or its Board of Directors or the holder
of such share of Marathon Stock, be redeemed for $.01 in cash.
(b) Exchange and Redemption of Steel Stock.
(i) In the event of the Disposition, in one transaction or a series
of related transactions, by the Corporation of all or substantially
all of the properties and assets of the U.S. Steel Group (other than
in connection with the Disposition by the Corporation of all of its
properties and assets in one transaction) to any person, entity or
group (other than (A) the holders of all outstanding shares of Steel
Stock on a pro rata basis or (B) any person, entity or group in which
the Corporation, directly or indirectly, owns a majority equity in-
terest), the Corporation shall, on or prior to the first Business Day
following the 60th day following the consummation of such Disposi-
tion, either:
(A) subject to paragraph 1(b) above, declare and pay a dividend
in cash and/or in securities or other property received as pro-
ceeds of such Disposition to the holders of Steel Stock in an
amount equal to the Net Proceeds of such Disposition; or
(B) to the extent that there are funds of the Corporation ▇▇-
▇▇▇▇▇ available therefor, redeem the number of whole shares of
outstanding Steel Stock that has an aggregate average Market Val-
ue, during the ten-Business Day period beginning on the first
Business Day following such consummation, closest to the value of
the Net Proceeds of such Disposition, for cash and/or securities
or other property received as proceeds of such Disposition in an
amount equal to such Net Proceeds; or
(C) exchange each outstanding share of Steel Stock for a number
of fully paid and nonassessable shares of Marathon Stock or, if
there are no shares of Marathon Stock outstanding on the Exchange
Date and shares of Delhi Stock are then outstanding, of Delhi
Stock equal to 110% of the average daily ratio (calculated to the
nearest five decimal places) of the Market Value of one share of
Steel Stock to the Market Value of one share of Marathon Stock or
one share of Delhi Stock, as the case may be, during such ten-
Business Day period.
For purposes of this Section 2(b)(i):
(x) as of any date, "substantially all of the properties and assets
of the U.S. Steel Group" shall mean a portion of such properties and
assets that represents at least 80% of either of the then-current
market value of, or the aggregate revenues for the immediately pre-
ceding twelve fiscal quarterly periods of the Corporation derived
from, the properties and assets of the U.S. Steel Group as of such
date (excluding the properties and assets of any person, entity or
group in which the Corporation, directly or indirectly, owns less
than a majority equity interest);
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(y) if immediately after any event, the Corporation, directly or
indirectly, owns less than a majority equity interest in any person,
entity or group in which the Corporation, directly or indirectly,
owned a majority equity interest immediately prior to the occurrence
of such event, a Disposition of all of the properties and assets of
the U.S. Steel Group owned by such person, entity or group shall be
deemed to have occurred; and
(z) in the case of a Disposition of properties and assets in a se-
▇▇▇▇ of related transactions, such Disposition shall not be deemed to
have been consummated until the consummation of the last of such
transactions.
(ii) The Board of Directors may, by a majority vote of the direc-
tors then in office, at any time after a dividend or redemption pur-
suant to clause (A) or (B), respectively, of Section 2(b)(i), declare
that each of the remaining outstanding shares of Steel Stock shall be
exchanged, on an Exchange Date set forth in a notice to holders of
Steel Stock pursuant to Section 2(d)(i), for a number of fully paid
and nonassessable shares of Marathon Stock or, if there are no shares
of Marathon Stock outstanding on such Exchange Date and shares of
Delhi Stock are then outstanding, of Delhi Stock, equal to 110% of
the Market Value Ratio as of the fifth Business Day prior to the date
such notice is mailed to such holders. For purposes of the preceding
sentence, "Market Value Ratio", as of any date, shall mean the high-
est of the following (calculated to the nearest five decimal places):
(A) the average ratio of S/X for the five-Business Day period ending
on such date, (B) the quotient of (1) the sum of (w) four times the
average ratio of S/X for the five-Business Day period ending on such
date, (x) three times the average ratio of S/X for the next preceding
five-Business Day period, (y) two times the average ratio of S/X for
the next preceding five-Business Day period and (z) the average ratio
of S/X for the next preceding five-Business Day period, divided by
(2) ten and (C) if the dividend pursuant to clause (A) of Section
2(b)(i) was declared and paid or the redemption pursuant to (B) of
Section 2(b)(i) was made prior to the commencement of the most re-
cently completed fiscal quarter of the Corporation, the average ratio
of S/X for such fiscal quarter, where S is the Market Value of one
share of Steel Stock and X is the Market Value of one share of Mara-
thon Stock or one share of Delhi Stock, as the case may be.
(iii) At any time on or after the date on which the Corporation has
transferred all of the assets and liabilities of the U.S. Steel Group
(and no other assets or liabilities) to a wholly owned subsidiary of
the Corporation (the "U.S. Steel Group Subsidiary"), the Board of Di-
rectors may, in its sole discretion and by a majority vote of the di-
rectors then in office, provided that there are funds of the Corpora-
tion legally available therefor, declare that all of the outstanding
shares of Steel Stock shall be exchanged on an Exchange Date set
forth in a notice to holders of Steel Stock pursuant to Section
2(d)(i), for all of the outstanding shares of common stock of the
U.S. Steel Group Subsidiary, on a pro rata basis, each of which
shall, upon such issuance, be fully paid and nonassessable.
(iv) After any Exchange Date or Redemption Date on which all out-
standing Steel Stock was exchanged or redeemed, any share of Steel
Stock that is issued on conversion or exercise of any Convertible Se-
curities shall, immediately upon issuance pursuant to such conversion
or exercise and without any notice or any other action on the part of
the Corporation or its Board of Directors or the holder of such share
of Steel Stock:
(A) in the event the then-outstanding Steel Stock was exchanged
for Marathon Stock or Delhi Stock on such Exchange Date pursuant
to Section 2(b)(i) or 2(b)(ii), be exchanged for the kind and
amount of shares of capital stock and other securities and prop-
erty that a holder of such Convertible Security would have been
entitled to receive pursuant to the terms of such Convertible Se-
curity had such terms provided that the conversion privilege in
effect immediately prior to any exchange by the Corporation of
any of its capital stock for shares of any other capital stock of
the Corporation would be adjusted so that the holder of any such
Convertible Security thereafter surrendered for conversion would
be entitled to receive the number of shares of capital stock of
the Corporation and other securities and property he would have
owned immediately following such action had such Convertible Se-
curity been converted immediately prior thereto; or
(B) in the event the then-outstanding Steel Stock was redeemed
in whole pursuant to clause (B) of Section 2(b)(i) or exchanged
for common stock of the U.S. Steel Group Subsidiary pursuant to
Section 2(b)(iii), be redeemed, to the extent of funds of the
Corporation legally available therefor, for $.01 in cash.
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The provisions of clause (A) of this Section 2(b)(iv) shall not
apply to the extent that equivalent adjustments are otherwise
made pursuant to the provisions of such Convertible Securities.
(c) Exchange and Redemption of Delhi Stock.
(i) In the event of the Disposition, in one transaction or a series
of related transactions, by the Corporation of all or substantially
all of the properties and assets of the Delhi Group (other than in
connection with the Disposition by the Corporation of all of its
properties and assets in one transaction) to any person, entity or
group (other than (A) the holders of all outstanding shares of Delhi
Stock on a pro rata basis or (B) any person, entity or group in which
the Corporation, directly or indirectly, owns a majority equity in-
terest), the Corporation shall, on or prior to the first Business Day
following the 60th day following the consummation of such Disposi-
tion, either:
(A) subject to paragraph 1(c) above, declare and pay a dividend
in cash and/or in securities or other property received as pro-
ceeds of such Disposition to the holders of Delhi Stock in an
amount equal to the product of the Delhi Fraction and the Net
Proceeds of such Disposition; or
(B) to the extent that there are funds of the Corporation ▇▇-
▇▇▇▇▇ available therefor, redeem the number of whole shares of
outstanding Delhi Stock that has an aggregate average Market Val-
ue, during the ten-Business Day period beginning on the first
Business Day following such consummation, closest to the value of
the product of the Delhi Fraction and the Net Proceeds of such
Disposition, for cash and/or securities or other property re-
ceived as proceeds of such Disposition in an amount equal to such
product; or
(C) exchange each outstanding share of Delhi Stock for a number
of fully paid and nonassessable shares of Marathon Stock or, if
there are no shares of Marathon Stock outstanding on such Ex-
change Date and shares of Steel Stock are then outstanding, of
Steel Stock, equal to 110% of the average daily ratio (calculated
to the nearest five decimal places) of the Market Value of one
share of Delhi Stock to the Market Value of one share of Marathon
Stock or one share of Steel Stock, as the case may be, during
such ten-Business Day period.
For purposes of this Section 2(c)(i):
(x) as of any date, "substantially all of the properties and assets
of the Delhi Group" shall mean a portion of such properties and as-
sets that represents at least 80% of either of the then-current mar-
ket value of, or the aggregate revenues for the immediately preceding
twelve fiscal quarterly periods of the Corporation derived from, the
properties and assets of the Delhi Group as of such date (excluding
the properties and assets of any person, entity or group in which the
Corporation, directly or indirectly, owns less than a majority equity
interest);
(y) if immediately after any event, the Corporation, directly or
indirectly, owns less than a majority equity interest in any person,
entity or group in which the Corporation, directly or indirectly,
owned a majority equity interest immediately prior to the occurrence
of such event, a Disposition of all of the properties and assets of
the Delhi Group owned by such person, entity or group shall be deemed
to have occurred; and
(z) in the case of a Disposition of properties and assets in a se-
▇▇▇▇ of related transactions, such Disposition shall not be deemed to
have been consummated until the consummation of the last of such
transactions.
(ii) The Board of Directors may, by a majority vote of the direc-
tors then in office, at any time after a dividend or redemption pur-
suant to clause (A) or (B), respectively, of Section 2(c)(i), declare
that each of the remaining outstanding shares of Delhi Stock shall be
exchanged, on an Exchange Date set forth in a notice to holders of
Delhi Stock pursuant to Section 2(d)(i), for a number of fully paid
and nonassessable shares of Marathon Stock or, if there are no shares
of Marathon Stock outstanding on such Exchange Date and shares of
Steel Stock are then outstanding, of Steel Stock equal to 110% of the
Market Value Ratio as of the fifth Business Day prior to the date
such notice is mailed to such holders.
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(iii) The Board of Directors may, by a majority vote of the direc-
tors then in office, at any time declare that each of the outstanding
shares of Delhi Stock shall be exchanged, on an Exchange Date set
forth in a notice to holders of Delhi Stock pursuant to Section
2(d)(i), for a number of fully paid and nonassessable shares of Mara-
thon Stock or, if there are no shares of Marathon Stock outstanding
on such Exchange Date, of Steel Stock equal to 115% of the Market
Value Ratio as of the fifth Business Day prior to the date such no-
▇▇▇▇ is mailed to such holders.
(iv) For purposes of Section 2(c)(ii) and (iii), the "Market Value
Ratio", as of any date, shall mean the highest of the following (cal-
culated to the nearest five decimal places): (A) the average ratio of
D/X for the five-Business Day period ending on such date, (B) the
quotient of (1) the sum of (w) four times the average ratio of D/X
for the five-Business Day period ending on such date, (x) three times
the average ratio of D/X for the next preceding five-Business Day pe-
riod, (y) two times the average ratio of D/X for the next preceding
five-Business Day period and (z) the average ratio of D/X for the
next preceding five-Business Day period, divided by (2) ten and (C)
if the dividend pursuant to clause (A) of Section 2(c)(i) was de-
clared and paid or the redemption pursuant to clause (B) of Section
2(c)(i) was made prior to the commencement of the most recently com-
pleted fiscal quarter of the Corporation, the average ratio of D/X
for such fiscal quarter, where D is the Market Value of one share of
Delhi Stock and X is the Market Value of one share of Marathon Stock
or one share of Steel Stock, as the case may be.
(v) At any time on or after the date on which the Corporation has
transferred all of the assets and liabilities of the Delhi Group (and
no other assets or liabilities) to a wholly owned subsidiary of the
Corporation (the "Delhi Group Subsidiary"), the Board of Directors
may, in its sole discretion and by a majority vote of the directors
then in office, provided that there are funds of the Corporation ▇▇-
▇▇▇▇▇ available therefor, declare that all of the outstanding shares
of Delhi Stock shall be exchanged on an Exchange Date set forth in a
notice to holders of Delhi Stock pursuant to Section 2(d)(i), for a
number of outstanding shares of common stock of the Delhi Group Sub-
sidiary equal to the product of the Delhi Fraction and the number of
all outstanding shares of common stock of the Delhi Group Subsidiary,
on a pro rata basis, each of which shall, upon such issuance, be
fully paid and nonassessable.
(vi) After any Exchange Date or Redemption Date on which all out-
standing Delhi Stock was exchanged or redeemed, any share of Delhi
Stock that is issued on conversion or exercise of any Convertible Se-
curities shall, immediately upon issuance pursuant to such conversion
or exercise and without any notice or any other action on the part of
the Corporation or its Board of Directors or the holder of such share
of Delhi Stock:
(A) in the event the then-outstanding Delhi Stock was exchanged
for Marathon Stock or Steel Stock on such Exchange Date pursuant
to Section 2(c)(i), 2(c)(ii) or 2(c)(iii), be exchanged for the
kind and amount of shares of capital stock and other securities
and property that a holder of such Convertible Security would
have been entitled to receive pursuant to the terms of such Con-
vertible Security had such terms provided that the conversion
privilege in effect immediately prior to any exchange by the Cor-
poration of any of its capital stock for shares of any other cap-
ital stock of the Corporation would be adjusted so that the
holder of any such Convertible Security thereafter surrendered
for conversion would be entitled to receive the number of shares
of capital stock of the Corporation and other securities and
property he would have owned immediately following such action
had such Convertible Security been converted immediately prior
thereto; or
(B) in the event the then-outstanding Delhi Stock was redeemed
in whole pursuant to clause (B) of Section 2(c)(i) or exchanged
for common stock of the Delhi Group Subsidiary pursuant to Sec-
tion 2(c)(v), be redeemed, to the extent of funds of the Corpora-
tion legally available therefor, for $.01 in cash.
The provisions of clause (A) of this Section 2(c)(vi) shall not ap-
ply to the extent that equivalent adjustments are otherwise made pur-
suant to the provisions of such Convertible Securities.
(d) General Exchange and Redemption Provisions.
(i) In the event of any exchange or redemption pursuant to this
Section 2 (other than Section 2(a)(ii), 2(b)(iv), or 2(c)(vi)), the
Corporation shall cause to be given to each holder of the class of
Common Stock to be so exchanged or redeemed a notice stating (A) that
shares of such class
5
of Common Stock shall be exchanged or redeemed, as the case may be,
(B) the Exchange Date or the Redemption Date, (C) in the event of a
partial redemption of Steel Stock or Delhi Stock, as the case may be,
pursuant to clause (B) of Section 2(b)(i) or clause (B) of Section
2(c)(i), respectively, the number of shares of Steel Stock or Delhi
Stock, as the case may be, to be redeemed, (D) the kind and amount of
shares of capital stock or cash and/or securities or other property
to be received by such holder with respect to each share of such
class of Common Stock held by such holder, including details as to
the calculation thereof, (E) the place or places where certificates
for shares of such class of Common Stock, properly endorsed or as-
signed for transfer (unless the Corporation shall waive such require-
ment), are to be surrendered for delivery of certificates for shares
of such capital stock or cash and/or securities or other property and
(F) that, subject to Section 2(d)(iv) hereof, dividends on such
shares of Common Stock will cease to be paid as of such Exchange Date
or Redemption Date. Such notice shall be sent by first-class mail,
postage prepaid, not less than 30 nor more than 60 days prior to the
Exchange Date or Redemption Date, as the case may be, and in any case
to each holder of the class of Common Stock to be exchanged or re-
deemed, at such holder's address as the same appears on the stock
transfer books of the Corporation. Neither the failure to mail such
notice to any particular holder of such class of Common Stock nor any
defect therein shall affect the sufficiency thereof with respect to
any other holder of such class of Common Stock.
(ii) If less than all of the outstanding shares of Steel Stock or
Delhi Stock, as the case may be, are to be redeemed pursuant to
clause (B) of Section 2(b)(i) or clause (B) of Section 2(c)(i), re-
spectively, such shares shall be redeemed by the Corporation pro rata
among the holders of such class of Common Stock or by such other
method as may be determined by the Board of Directors to be equita-
ble.
(iii) The Corporation shall not be required to issue or deliver
fractional shares of any class of capital stock or any fractional se-
curities to any holder of any class of Common Stock upon any ex-
change, redemption, dividend or other distribution pursuant to this
Section 2. If more than one share of any class of Common Stock shall
be held at the same time by the same holder, the Corporation may ag-
gregate the number of shares of any class of capital stock that shall
be issuable or the amount of securities that shall be deliverable to
such holder upon any exchange, redemption, dividend or other distri-
bution (including any fractions of shares or securities). If the num-
ber of shares of any class of capital stock or the amount of securi-
ties remaining to be issued or delivered to any holder of any class
of Common Stock is a fraction, the Corporation shall, if such frac-
tion is not issued or delivered to such holder, pay a cash adjustment
in respect of such fraction in an amount equal to the fair market
value of such fraction on the fifth Business Day prior to the date
such payment is to be made. For purposes of the preceding sentence,
"fair market value" of any fraction shall be (i) in the case of any
fraction of a share of capital stock of the Corporation, the product
of such fraction and the Market Value of one share of such capital
stock and (ii) in the case of any other fractional security, such
value as is determined by the Board of Directors.
(iv) No adjustments in respect of dividends shall be made upon the
exchange or redemption of any shares of any class of Common Stock;
provided, however, that if the Exchange Date or Redemption Date with
respect to any class of Common Stock shall be subsequent to the rec-
ord date for the payment of a dividend or other distribution thereon
or with respect thereto, the holders of shares of such class of Com-
mon Stock at the close of business on such record date shall be enti-
tled to receive the dividend or other distribution payable on or with
respect to such shares on the date set for payment of such dividend
or other distribution, notwithstanding the exchange or redemption of
such shares or the Corporation's default in payment of the dividend
or distribution due on such date.
(v) Before any holder of shares of any class of Common Stock shall
be entitled to receive certificates representing shares of any capi-
tal stock or cash and/or securities or other property to be received
by such holder with respect to such shares of such class of Common
Stock pursuant to this Section 2, such holder shall surrender at such
office as the Corporation shall specify certificates for such shares
of such class of Common Stock, properly endorsed or assigned for
transfer (unless the Corporation shall waive such requirement). The
Corporation will as soon as practicable after such surrender of cer-
tificates representing such shares of such class of Common Stock de-
liver to the person for whose account such shares of such class of
Common Stock
6
were so surrendered, or to his nominee or nominees, certificates rep-
resenting the number of whole shares of the kind of capital stock or
cash and/or securities or other property to which he shall be enti-
tled as aforesaid, together with any fractional payment contemplated
by Section 2(d)(iii). If less than all of the shares of any class of
Common Stock, represented by any one certificate are to be redeemed,
the Corporation shall issue and deliver a new certificate for the
shares of such class of Common Stock not redeemed.
(vi) From and after any applicable Exchange Date or Redemption
Date, all rights of a holder of shares of any class of Common Stock
that were exchanged or redeemed shall cease except for the right,
upon surrender of the certificates representing such shares of Common
Stock, to receive certificates representing shares of the kind and
amount of capital stock or cash and/or securities or other property
for which such shares were exchanged or redeemed, together with any
fractional payment contemplated by Section 2(d)(iii) and rights to
dividends as provided in Section 2(d)(iv). No holder of a certifi-
cate, that immediately prior to the applicable Exchange Date for any
class of Common Stock represented shares of such class of Common
Stock, shall be entitled to receive any dividend or other distribu-
tion with respect to shares of any kind of capital stock into which
such class of Common Stock was exchanged until surrender of such
holder's certificate for a certificate or certificates representing
shares of such kind of capital stock. Upon such surrender, there
shall be paid to the holder the amount of any dividends or other dis-
tributions (without interest) which theretofore became payable with
respect to a record date after the Exchange Date, but that were not
paid by reason of the foregoing, with respect to the number of whole
shares of the kind of capital stock represented by the certificate or
certificates issued upon such surrender. From and after an Exchange
Date for any class of Common Stock, the Corporation shall, however,
be entitled to treat the certificates for such class of Common Stock
that have not yet been surrendered for exchange as evidencing the
ownership of the number of whole shares of the kind or kinds of capi-
tal stock for which the shares of such class of Common Stock repre-
sented by such certificates shall have been exchanged, notwithstand-
ing the failure to surrender such certificates.
(vii) The Corporation will pay any and all documentary, stamp or
similar issue or transfer taxes that may be payable in respect of the
issue or delivery of any shares of capital stock on exchange of
shares of any class of Common Stock pursuant hereto. The Corporation
shall not, however, be required to pay any tax that may be payable in
respect of any transfer involved in the issue and delivery of any
shares of capital stock in a name other than that in which the shares
of the class of Common Stock so exchanged were registered, and no
such issue or delivery shall be made unless and until the person re-
questing such issue has paid to the Corporation the amount of any
such tax, or has established to the satisfaction of the Corporation
that such tax has been paid.
3. Voting Rights.
(a) Except as provided in clauses (c), (d) or (e) below, the holders
of all classes of Common Stock shall vote together as a single class on
all matters as to which holders of Common Stock are entitled to vote. On
all matters to be voted on by the holders of all classes of Common Stock
together as a single class, (i) each outstanding share of Marathon Stock
shall have one vote, (ii) each outstanding share of any other class of
Common Stock shall have a number of votes equal to the quotient (calcu-
lated to the nearest three decimal places), as of the fifth Business Day
prior to the applicable record date or as of any other applicable date,
of (A) the sum of (1) four times the average ratio of X/Y for the five-
Business Day period ending on such fifth Business Day, (2) three times
the average ratio of X/Y for the next preceding five-Business Day peri-
od, (3) two times the average ratio of X/Y for the next preceding five-
Business Day period and (4) the average ratio of X/Y for the next pre-
ceding five-Business Day period, divided by (B) ten, where X is the Mar-
ket Value of such class of Common Stock and Y is the Market Value of the
Marathon Stock or if there are no shares of Marathon Stock outstanding
on such record or other applicable date or on any of the twenty-five
Business Days prior thereto, the sum of the Market Values of the Steel
Stock and of the Delhi Stock; provided that until the Delhi Stock has
been traded regular way on the New York Stock Exchange for at least
twenty-five Business Days, each outstanding share of the Delhi Stock
shall have a number of votes equal to the ratio of A/B (calculated to
the nearest three decimal places), where A is the average of the high
and low reported sales prices of a share of the Delhi Stock on the New
York Stock Exchange, and B is the average of the high and low reported
sales prices of a share of Marathon Stock or, if there are no shares of
Marathon Stock outstanding, the sum of the average of the high and low
7
reported sales prices of a share of the Steel Stock and a share of the
Delhi Stock on such Exchange, in each case on the Effective Date, or on
the first Business Day thereafter on which shares of the Delhi Stock are
traded on such Exchange. If shares of only one class of Common Stock are
outstanding, each share of that class shall have one vote.
(b) Unless the vote or consent of a greater number of shares shall
then be required by law, the vote or consent of the holders of a major-
ity of all of the shares of any class of Common Stock then outstanding,
voting as a separate class, shall be necessary for authorizing, effect-
ing or validating the merger or consolidation of the Corporation into or
with any other corporation if such merger or consolidation would ad-
versely affect the powers or special rights of such class of Common
Stock either directly by amendment of this Restated Certificate of In-
corporation or indirectly by requiring the holders of such class to ac-
cept or retain, in such merger or consolidation, anything other than (i)
shares of such class or (ii) shares of the surviving or resulting corpo-
ration having, in either case, powers and special rights identical to
those of such class prior to such merger or consolidation.
(c) Unless the vote or consent of a greater number of shares shall
then be required by law, the vote or consent of the holders of at least
66 2/3% of all of the shares of Steel Stock then outstanding, voting as
a separate class, shall be necessary for:
(i) the declaration or payment of any dividend on, or the making of
any other payment or distribution with respect to any shares of any
other class of Common Stock, if such dividend, payment or distribu-
tion is to be made with (A) proceeds from the Disposition of any of
the properties and assets of the U.S. Steel Group or (B) any portion
of an equity interest in a person, entity or group that owns any of
the properties or assets of the U.S. Steel Group; or
(ii) the use, or reservation for use, of any proceeds from the Dis-
position of any of the properties and assets of the U.S. Steel Group,
or any of the properties and assets acquired with such proceeds, in
any business of the Corporation other than a business of the U.S.
Steel Group;
provided such vote shall not be required if such proceeds are loaned at
a rate or rates representative of actual borrowings and short-term in-
vestments by the Corporation.
(d) Unless the vote or consent of a greater number of shares shall
then be required by law, the vote or consent of the holders of at least
66 2/3% of all the shares of Marathon Stock then outstanding, voting as
a separate class, shall be necessary for:
(i) the declaration or payment of any dividend on, or the making of
any other payment or distribution with respect to, any shares of any
other class of Common Stock, if such dividend, payment or distribu-
tion is to be made with (A) proceeds from the Disposition of any of
the properties and assets of the Marathon Group or (B) any portion of
an equity interest in a person, entity or group that owns any of the
properties and assets of the Marathon Group; or
(ii) the use, or reservation for use, of any proceeds from the Dis-
position of any of the properties and assets of the Marathon Group,
or any of the properties and assets acquired with such proceeds, in
any business of the Corporation other than a business of the Marathon
Group;
provided such vote shall not be required to the extent such proceeds are
loaned at a rate or rates representative of actual borrowings and short-
term investments by the Corporation.
(e) Unless the vote or consent of a greater number of shares shall
then be required by law, the vote or consent of the holders of at least
66 2/3% of all of the shares of Delhi Stock then outstanding, voting as
a separate class, shall be necessary for:
(i) the declaration or payment of any dividend on, or the making of
any other payment or distribution with respect to any shares of any
other class of Common Stock, if such dividend, payment or distribu-
tion is to be made with (A) proceeds from the Disposition of any of
the properties and assets of the Delhi Group or (B) any portion of an
equity interest in a person, entity or group that owns any of the
properties or assets of the Delhi Group; or
(ii) the use, or reservation for use, of any proceeds from the Dis-
position of any of the properties and assets of the Delhi Group, or
any of the properties and assets acquired with such proceeds, in any
business of the Corporation other than a business of the Delhi Group;
8
provided such vote shall not be required if such proceeds are loaned at
a rate or rates representative of actual borrowings and short-term in-
vestments by the Corporation.
(f) The number of authorized shares of any class of Common Stock may
be increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of shares of
Common Stock having a majority of the votes entitled to be cast by the
holders of all classes of Common Stock, voting together as provided for
in Section 3(a) and without a separate vote of the holders of any class.
4. Liquidation Rights. In the event of the dissolution, liquidation or
winding-up of the Corporation, whether voluntary or involuntary, after
there shall have been paid or set apart for the holders of Preferred Stock
the full preferential amounts to which they are entitled, the holders of
the outstanding shares of each class of Common Stock shall be entitled to
receive a fraction of the funds of the Corporation remaining for distribu-
tion to its stockholders, where such fraction is equal to the quotient of
(A) the sum of (1) four times the average ratio of x/y for the five-Busi-
ness Day period ending on the Business Day prior to the date of the public
announcement of (I) a voluntary dissolution, liquidation or winding-up by
the Corporation or (II) the institution of the proceeding for the involun-
tary dissolution, liquidation or winding-up of the Corporation, (2) three
times the average ratio of x/y for the next preceding five-Business Day pe-
riod, (3) two times the average ratio of x/y for the next preceding five-
Business Day period and (4) the average ratio of x/y for the next preceding
five-Business Day period, divided by (B) ten, where x is the Market Capi-
talization of such class of Common Stock, and y is the aggregate Market
Capitalization of all classes of Common Stock. For purposes of the preced-
ing sentence, "Market Capitalization" of any class of Common Stock on any
day shall mean the product of (i) the Market Value of such class of Common
Stock on such day and (ii) the number of shares of such class of Common
Stock outstanding on such day.
5. Definitions. As used in this Division I, the following terms shall
have the following meanings (with terms defined in the singular having com-
parable meaning when used in the plural and vice versa), unless another
definition is provided or the context otherwise requires:
"Available Delhi Dividend Amount", on any date, shall mean the product
of the Delhi Fraction and either (a) the greater of (i) an amount equal
to (x) $172.9 million, increased or decreased, as appropriate, to re-
flect, from June 30, 1992, (A) Delhi Net Income, (B) any dividends or
other distributions declared or paid with respect to, or repurchases or
issuances of, any shares of Marathon Stock prior to the close of busi-
ness on the date Delhi Stock is first issued attributed to the Delhi
Group, (C) any dividends or other distributions declared or paid with
respect to, or repurchases or issuances of, any shares of Delhi Stock or
any shares of Preferred Stock attributed to the Delhi Group, (D) assets
or properties of the Delhi Group that are no longer included as part of
the Delhi Group as a result of any such dividend, distribution or repur-
chase pursuant to the proviso to the definition of "Delhi Group" and (E)
any other adjustments to stockholders' equity of the Delhi Group made in
accordance with generally accepted accounting principles, less (y) the
sum of the aggregate stated capital of all outstanding Preferred Stock
attributed to the Delhi Group and the quotient of the aggregate par
value of all outstanding Delhi Stock divided by the Delhi Fraction and
(ii) the excess of the fair market value of the net assets of the Delhi
Group over the sum of the aggregate stated capital of all outstanding
Preferred Stock attributed to the Delhi Group, and the quotient of the
aggregate par value of all outstanding Delhi Stock divided by the Delhi
Fraction, or (b) in case there shall be no such amount, an amount equal
to Delhi Net Income (if positive) for the fiscal year in which the divi-
dend is declared and/or the preceding fiscal year.
"Available Steel Dividend Amount", on any date, shall mean either (a)
the greater of (i) an amount equal to (x) $2.244 billion, increased or
decreased, as appropriate, to reflect (A) Steel Net Income from the
close of business on December 31, 1990, (B) any dividends or other dis-
tributions declared or paid with respect to, or repurchases or issuances
of, any shares of common stock of the Corporation after December 31,
1990 and prior to the close of business on May 6, 1991 attributed to the
U.S. Steel Group, (C) any dividends or other distributions declared or
paid with respect to, or repurchases or issuances of, any shares of
Steel Stock or any shares of Preferred Stock attributed to the U.S.
Steel Group and (D) any other adjustments to stockholders' equity of the
U.S. Steel Group made in accordance with generally accepted accounting
principles, less (y) the sum of the aggregate par value of all outstand-
ing Steel Stock and the aggregate stated capital of all outstanding Pre-
ferred Stock attributed to the U.S. Steel Group and (ii) the excess of
the fair market value of the net assets of the U.S. Steel Group over the
sum of the aggregate par value of all outstanding Steel Stock and the
aggregate stated capital of all outstanding Preferred Stock attributed
to the U.S. Steel Group, in
9
the case of each of clause (i) and clause (ii) increased by an amount
equal to any effects of the recognition of the transition obligation
upon the adoption of Statement of Financial Accounting Standards (SFAS)
No. 106, "Employer's Accounting for Postretirement Benefits Other than
Pensions" (including any amendments thereto) and any cumulative effects
of the adoption of SFAS No. 109, "Accounting for Income Taxes" (includ-
ing any amendments thereto) in the year of adoption or (b) in case there
shall be no such amount, an amount equal to Steel Net Income (if posi-
tive) for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.
"Business Day" shall mean each weekday other than any day on which any
relevant class of Common Stock is not traded on any national securities
exchange or the National Association of Securities Dealers Automated
Quotations National Market System or in the over-the-counter market.
"Convertible Securities" shall mean any securities of the Corporation
that are convertible into or evidence the right to purchase any shares
of any class of Common Stock, pursuant to antidilution provisions of
such securities or otherwise.
The "Delhi Fraction" as of any date is a fraction the numerator of
which shall be the number of shares of Delhi Stock outstanding on such
date and the denominator of which shall be initially 14,000,000 provided
that such fraction shall in no event be greater than one. The denomina-
tor of the Delhi Fraction shall be adjusted from time to time as appro-
priate to reflect (i) subdivisions (by stock split or otherwise) and
combinations (by reverse stock split or otherwise) of the Delhi Stock
and stock dividends payable in shares of Delhi Stock to holders of Delhi
Stock and other reclassifications of Delhi Stock, (ii) the issuance of
Delhi Stock, the proceeds of which are attributed to the Delhi Group and
(iii) repurchases by the Corporation of outstanding shares of Delhi
Stock.
"Delhi Group" shall mean, (i) all of the businesses in which any of
Delhi Gas Pipeline Corporation, The Nueces Company, Delhi Gasmark, Inc.
(previously Texas Gasmark, Inc.), Tonkawa Gas Processing Company, Delhi
Gas Marketing Corp. (previously TXO Gas Marketing Corp.), Delhi Gas Ven-
tures Corp. (previously TXO Gas Ventures Corp.), Red River Gas Pipeline
Corporation, Ozark Gas Pipeline Corporation, Sweetwater Pipeline Corpo-
ration, Western Gas Transmission, Inc., and Western Gas Corporation (or
any of their predecessors or successors) is or has been engaged, di-
rectly or indirectly, (ii) all assets and liabilities of the Corporation
to the extent attributed to any of such businesses, whether or not such
assets or liabilities are or were assets and liabilities of such compa-
▇▇▇▇, and (iii) such businesses, assets and liabilities acquired by the
Corporation for the Delhi Group as determined by the Board of Directors
to be included in the Delhi Group; provided that, from and after any
dividend or distribution with respect to any shares of Delhi Stock, or
any repurchase of shares of Delhi Stock from holders of Delhi Stock gen-
erally, the Delhi Group shall no longer include an amount of assets or
properties of the Delhi Group equal to the aggregate amount of such kind
of assets or properties so paid in respect of shares of Delhi Stock mul-
tiplied by a fraction, the numerator of which is equal to one less the
Delhi Fraction and the denominator of which is equal to the Delhi Frac-
tion. From and after the date on which all of the outstanding shares of
Steel Stock are exchanged for shares of Delhi Stock pursuant to any pro-
vision of Section 2, all of the businesses, assets and liabilities of
the U.S. Steel Group shall be included in the Delhi Group.
"Delhi Group Subsidiary" shall have the meaning set forth in Section
2(c)(v).
"Delhi Net Income" shall mean the net income or loss of the Delhi
Group determined in accordance with generally accepted accounting prin-
ciples, including income and expenses of the Corporation attributed to
the operations of the Delhi Group on a substantially consistent basis,
including, without limitation, corporate administrative costs, net in-
terest and other financial costs and income taxes.
"Disposition" shall mean the sale, transfer, assignment or other dis-
position (whether by merger, consolidation, sale or contribution of as-
sets or stock or otherwise) of properties or assets.
"Exchange Date" shall mean any date fixed for an exchange of shares of
any class of Common Stock, as set forth in a notice to holders of such
class of Common Stock pursuant to Section 2(d)(i).
"Marathon Group" shall mean, at any time, (i) all of the businesses in
which any of Marathon Oil Company, Texas Oil & Gas Corp., Carnegie Natu-
ral Gas Company and Apollo Gas Company (or any of their predecessors or
successors) is or has been engaged, directly or indirectly, other than
the businesses of the Delhi Group after the date of the first issuance
of Delhi Stock, (ii) all assets and liabilities of the Corporation to
the extent attributed to any of such businesses, whether or not such
10
assets or liabilities are or were assets and liabilities of such compa-
▇▇▇▇, (iii) a proportionate interest in the business, assets and liabil-
ities of the Delhi Group equal to one less the Delhi Fraction, and (iv)
such businesses, assets, and liabilities acquired by the Corporation for
the Marathon Group after May 6, 1991 and as determined by the Board of
Directors to be included in the Marathon Group; provided that, from and
after any dividend or distribution with respect to any shares of Delhi
Stock, or any repurchase of shares of Delhi Stock from holders of Delhi
Stock generally, the Marathon Group shall include an amount of assets or
properties of the Delhi Group equal to the aggregate amount of such kind
of assets or properties so paid in respect of shares of Delhi Stock mul-
tiplied by a fraction, the numerator of which is equal to one less the
Delhi Fraction and the denominator of which is equal to the Delhi Frac-
tion. From and after the date on which there are no shares of Steel
Stock outstanding (other than as a result of an exchange for shares of
Delhi Stock pursuant to any provision of Section 2), all of the busi-
nesses, assets and liabilities of the U.S. Steel Group shall be included
in the Marathon Group.
"Marathon Group Subsidiary" shall have the meaning set forth in Sec-
tion 2(a)(i).
"Market Value" of any class of capital stock of the Corporation on any
Business Day shall mean the average of the high and low reported sales
prices regular way of a share of such class on such Business Day or in
case no such reported sale takes place on such Business Day the average
of the reported closing bid and asked prices regular way of a share of
such class on such Business Day, in either case on the New York Stock
Exchange Composite Tape, or if the shares of such class are not listed
or admitted to trading on such Exchange on such Business Day, on the
principal national securities exchange in the United States on which the
shares of such class are listed or admitted to trading, or if not listed
or admitted to trading on any national securities exchange on such Busi-
ness Day, on the National Association of Securities Dealers Automated
Quotations National Market System, or if the shares of such class are
not listed or admitted to trading on any national securities exchange or
quoted on such National Market System on such Business Day, the average
of the closing bid and asked prices of a share of such class in the
over-the-counter market on such Business Day as furnished by any New
York Stock Exchange member firm selected from time to time by the Corpo-
ration, or if such closing bid and asked prices are not made available
by any such New York Stock Exchange member firm on such Business Day,
the market value of a share of such class as determined by the Board of
Directors; provided that (i) for purposes of determining the ratios set
forth in Sections 2(b)(i), 2(b)(ii), 2(c)(i), 2(c)(ii), 2(c)(iii), 3(a)
and 4, the "Market Value" of any share of any class of Common Stock on
any day prior to the "ex" date or any similar date for any dividend or
distribution paid or to be paid with respect to such class of Common
Stock (other than a regular quarterly cash dividend or a dividend or
distribution in shares of such class of Common Stock) shall be reduced
by the fair market value of the per share amount of such dividend or
distribution and (ii) for purposes of determining the ratios set forth
in Sections 2(b)(i), 2(b)(ii), 2(c)(i), 2(c)(ii), 2(c)(iii) and 3(a),
the "Market Value" of any share of any class of Common Stock on any day
prior to (A) the effective date of any subdivision (by stock split or
otherwise) or combination (by reverse stock split or otherwise) of out-
standing shares of such class of Common Stock or (B) the "ex" date or
any similar date for any dividend or distribution with respect to either
such class of Common Stock in shares of such class of Common Stock shall
be appropriately adjusted to reflect such subdivision, combination, div-
idend or distribution. For the purposes of the foregoing clause (i) the
Board of Directors shall determine the fair market value of any dividend
or distribution.
"Net Proceeds", as of any date, from any Disposition of any of the
properties and assets of the U.S. Steel Group or the Delhi Group, as the
case may be, shall mean an amount, if any, equal to the gross proceeds
of such Disposition after any payment of, or reasonable provision for,
(i) any taxes payable by the Corporation in respect of such Disposition,
(ii) any taxes payable by the Corporation in respect of any dividend or
redemption pursuant to clause (A) or (B), respectively, of Sections
2(b)(i) or 2(c)(i), respectively, (iii) any transaction costs, includ-
ing, without limitation, any legal, investment banking and accounting
fees and expenses and (iv) any liabilities (contingent or otherwise) of,
or allocated to, the U.S. Steel Group or the Delhi Group, as the case
may be, including, without limitation, any indemnity obligations in-
curred in connection with the Disposition. For purposes of this defini-
tion, any properties and assets of the Steel Group or the Delhi Group,
as the case may be, remaining after such Disposition shall constitute
"reasonable provision" for such amount of taxes, costs and liabilities
(contingent or otherwise) as can be supported by such properties and as-
sets. To the extent the proceeds of any Disposition include any securi-
ties or other property other than cash, the Board of Directors shall ▇▇-
▇▇▇▇▇▇▇ the value of such securities or property.
11
"Redemption Date" shall mean any date fixed for a redemption of shares
of any class of Common Stock, as set forth in a notice to holders of
such class of Common Stock pursuant to Section 2(d)(i).
"Steel Net Income" shall mean the net income or loss of the U.S. Steel
Group determined in accordance with generally accepted accounting
principles, including income and expenses of the Corporation attributed
to the operations of the Steel Group on a substantially consistent
basis, including, without limitation, corporate administrative costs,
net interest and other financial costs and income taxes.
"U.S. Steel Group" shall mean, at any time, all of the businesses in
which the Corporation is or has been engaged, directly or indirectly,
and all assets and liabilities of the Corporation, other than any busi-
nesses, assets or liabilities of the Marathon Group or the Delhi Group
if any shares of Marathon Stock or Delhi Stock are outstanding.
"U.S. Steel Group Subsidiary" shall have the meaning set forth in Sec-
tion 2(b)(iii).
6. Determinations by the Board of Directors. Any determinations made by
the Board of Directors of the Corporation under any provision in this Divi-
sion I of Article Fourth shall be final and binding on all stockholders of
the Corporation.
DIVISION II
A statement of the designations of the Preferred Stock or of any series
thereof, and the powers, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof,
or of the authority of the Board of Directors to fix by resolution or
resolutions such designations and other terms not fixed by the Certificate of
Incorporation, is as follows:
1. The Preferred Stock may be issued in one or more series, from time to
time, with each such series to have such designation, powers, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issue of such
series adopted by the Board of Directors of the Corporation, subject to the
limitations prescribed by law and in accordance with the provisions hereof,
the Board of Directors being hereby expressly vested with authority to
adopt any such resolution or resolutions. The authority of the Board of
Directors with respect to each such series shall include, but not limited
to, the determination or fixing of the following:
(i) The distinctive designation and number of shares comprising
such series, which number may (except where otherwise provided by the
Board of Directors in creating such series) be increased or decreased
(but not below the number of shares then oustanding) from time to
time by like action of the Board of Directors;
(ii) The dividend rate of such series, the conditions and times
upon which such dividends shall be payable, the relation which such
dividends shall bear to the dividends payable on any other class or
classes of stock or series thereof, or any other series of the same
class, and whether dividends shall be cumulative or non-cumulative;
(iii) The conditions upon which the shares of such series shall be
subject to redemption by the Corporation and the times, prices and
other terms and provisions upon which the shares of the series may be
redeemed;
(iv) Whether or not the shares of the series shall be subject to
the operation of a retirement or sinking fund to be applied to the
purchase or redemption of such shares and, if such retirement or
sinking fund be established, the annual amount thereof and the terms
and provisions relative to the operation thereof;
(v) Whether or not the shares of the series shall be convertible
into or exchangeable for shares of any other class or classes, with
or without par value, or of any other series of the same class, and,
if provision is made for conversion or exchange, the times, prices,
rates, adjustments, and other terms and conditions of such conversion
or exchange;
12
(vi) Whether or not the shares of the series shall have voting
rights, in addition to the voting rights provided by law, and, if so,
subject to the limitation hereinafter set forth, the terms of such
voting rights;
(vii) The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution, or upon the
distribution of assets of the Corporation;
(viii) Any other powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series, as the Board of
Directors may deem advisable and as shall not be inconsistent with
the provisions of this Certificate of Incorporation.
2. The holders of shares of the Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board of Directors, out of
funds legally available for the payment of dividends, dividends at the
rates fixed by the Board of Directors for such series, and no more, before
any dividends, other than dividends payable in Common Stock, shall be
declared and paid, or set apart for payment, on the Common Stock with
respect to the same dividend period.
3. Whenever, at any time, dividends on the then outstanding Preferred
Stock as may be required with respect to any series outstanding shall have
been paid or declared and set apart for payment on the then outstanding
Preferred Stock, and after complying with respect to any retirement or
sinking fund or funds for any series of Preferred Stock, the Board of
Directors may, subject to the provisions of the resolution or resolutions
creating any series of Preferred Stock, declare and pay dividends on the
Common Stock, and the holders of shares of the Preferred Stock shall not be
entitled to share therein.
4. The holders of shares of the Preferred Stock of each series shall be
entitled upon liquidation or dissolution or upon the distribution of the
assets of the Corporation to such preferences as provided in the resolution
or resolutions creating such series of Preferred Stock, and no more, before
any distribution of the assets of the Corporation shall be made to the
holders of shares of the Common Stock.
5. Except as otherwise provided by a resolution or resolutions of the
Board of Directors creating any series of Preferred Stock or by the General
Corporation Law of Delaware, the holders of shares of the Common Stock
issued and outstanding shall have and possess the exclusive right to notice
of stockholders' meetings and the exclusive power to vote. The holders of
shares of the Preferred Stock issued and outstanding shall, in no event, be
entitled to more than one vote for each share of Preferred Stock held by
them unless otherwise required by law.
Terms of the Preferred Stocks are as follows:
SERIES A JUNIOR PREFERRED STOCK
Section 1. Designation and Amount. This resolution shall provide for a
single series of preferred stock, the designation of which shall be "Series
A Junior Preferred Stock", without par value, and the number of shares
constituting such series shall be Eight Million (8,000,000).
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Junior Preferred Stock with respect to dividends,
the holders of shares of Series A Junior Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December
in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share
of Series A Junior Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $5.00 or (b) subject to
the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
13
reclassification or otherwise), to be or being declared on the Common
Stock, par value $1.00 per share, of the Corporation (the "Common
Stock") with respect to the same dividend period. If the Quarterly
Dividend Payment Date is a Saturday, Sunday or legal holiday then such
Quarterly Dividend Payment Date shall be the first immediately preceding
calendar day which is not a Saturday, Sunday or legal holiday. In the
event the Corporation shall at any time after October 10, 1989 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of
shares of Series A Junior Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Preferred Stock as provided in paragraph (A) above
immediately prior to the time it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall be
declared on the Common Stock with respect to a particular dividend
period, a dividend of $5.00 per share on the Series A Junior Preferred
Stock shall nevertheless be payable on such Quarterly Dividend Payment
Date with respect to such quarterly period.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Junior Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Junior Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of
Series A Junior Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment thereof.
Dividends in arrears may be declared and paid at any time, without
reference to any Quarterly Dividend Payment Date, to holders of record
on such date, not exceeding 45 days preceding the payment date thereof,
as may be fixed by the Board of Directors.
(D) Except as hereinafter provided, no dividends shall be declared or
paid or set apart for payment on the shares of Series A Junior Preferred
Stock for any period if the Corporation shall be in default in the
payment of any dividends (including cumulative dividends, if applicable)
on any shares of Preferred Stock ranking, as to dividends, prior to the
Series A Junior Preferred Stock, unless the same shall be
contemporaneously declared and paid.
(E) Dividends payable on the Series A Junior Preferred Stock for the
initial dividend period and for any period less than a full quarterly
period, shall be computed on the basis of a 360-day year of 30-day
months.
Section 3. Voting Rights. The holders of shares of Series A Junior
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Preferred Stock shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation. The holders of Series A Junior
Preferred Stock shall be entitled to notice of all meetings of the
stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior 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.
14
(C) If, on the date used to determine stockholders of record for any
meeting of stockholders for the election of directors, a default in
preference dividends on the Preferred Stock shall exist, the number of
directors constituting the Board of Directors of the Corporation shall
be increased by two, and the holders of the Preferred Stock of all
series (whether or not the holders of such series of Preferred Stock
would be entitled to vote for the election of directors if such default
in preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series, to
the exclusion of the holders of Common Stock, to elect two directors of
the Corporation to fill such newly created directorships. Each director
elected by the holders of shares of Preferred Stock (herein called a
"Preferred Director"), shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall not
be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the stockholders, or of the
holders of shares of Preferred Stock, called for the purpose. So long as
a default in any preference dividends on the Preferred Stock shall exist
(i) any vacancy in the office of a Preferred Director may be filled
(except as provided in the following clause (ii)) by an instrument in
writing signed by the remaining Preferred Director and filed with the
Corporation and (ii) in the case of the removal of any Preferred
Director, the vacancy may be filled by the vote of the holders of the
outstanding shares of Preferred Stock, voting together as a single class
without regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining
Preferred Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the Preferred
Directors shall end and no default in preference dividends shall exist,
the number of directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes of this paragraph
(C), a "default in preference dividends" on the Preferred Stock shall be
deemed to have occurred whenever the amount of accrued and unpaid
dividends upon any series of the Preferred Stock shall be equivalent to
six full quarterly dividends or more, and, having so occurred, such
default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all shares of Preferred Stock of each and every
series then outstanding shall have been paid through the last Quarterly
Dividend Payment Date.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on
(other than a dividend in Common Stock or in any other stock of the
Corporation ranking junior to the Series A Junior Preferred Stock as
to dividends and upon liquidation, dissolution or winding up and
other than as provided in subparagraph (ii) of this section), or
redeem or purchase or otherwise acquire for consideration (except by
conversion into or exchange for stock of the Corporation ranking
junior to the Series A Junior Preferred Stock as to dividends and
upon dissolution, liquidation or winding up), any shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Preferred Stock, except dividends paid ratably on the Series A Junior
Preferred Stock and all stock ranking on a parity with the Series A
Junior Preferred Stock as to dividends on which dividends are payable
or in arrears in proportion to the total amounts to which the holders
of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
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
(as to dividends and upon dissolution, liquidation or winding up) to
the Series A Junior Preferred Stock;
15
(iv) purchase or otherwise acquire for consideration any shares of
Series A Junior Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary 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 4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior 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 shall upon their cancellation become authorized
but unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the Series
A Junior Preferred Stock shall be entitled to receive the greater of (a)
$100 per share, plus accrued dividends to the date of distribution,
whether or not earned or declared, or (b) an amount per share, subject
to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of
Common Stock (the "Series A Liquidation Preference"). In the event the
Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series A Junior
Preferred Stock were entitled immediately prior to such event pursuant
to clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A Junior
Preferred Stock, then such remaining assets shall be distributed ratably
to the holders of such parity shares in proportion to their respective
liquidation preferences.
Section 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
the shares of Series A Junior Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged. In the event the Corporation shall
at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
shares of Series A Junior Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. Optional Redemption.
(A) The Corporation shall have the option to redeem the whole or any
part of the Series A Junior Preferred Stock at any time on at least 30
days notice in accordance with the provisions of paragraph
16
(B) of this Section 8 at a redemption price equal to, subject to the
provision for adjustment hereinafter set forth, 100 times the "current
per share market price" of the Common Stock on the date of the mailing
of the notice of redemption, together with unpaid accumulated dividends
to the date of such redemption. In the event the Corporation shall at
any time after October 10, 1989 (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of
shares of Series A Junior Preferred Stock were otherwise entitled
immediately prior to such event under the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event. The
"current per share market price" on any date shall be deemed to be the
average of the closing price per share of such Common Stock for the 10
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date. The closing price for each 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 prices regular
way, in either cases as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common
Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if the Common Stock is
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 Quotations
System ("NASDAQ") or such other system then in use or, if on any such
date the Common Stock is 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 Common Stock selected
by the Corporation. If on such date no such market maker is making a
market in the Common Stock, the fair value of the Common Stock on such
date as determined in good faith by the Board of Directors of the
Corporation shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for the transaction of
business or, if the Common Stock is not listed or admitted to trading on
any national securities exchange, a Monday, Tuesday, Wednesday, Thursday
or Friday on which banking institutions in the State of New York are not
authorized or obligated by law or executive order to close.
(B) Whenever shares of Series A Junior Preferred Stock are to be
redeemed, the Corporation shall mail a notice ("Notice of Redemption")
by first-class mail, postage prepaid, to each holder of record of shares
of Series A Junior Preferred Stock to be redeemed and to the transfer
agent for the Series A Junior Preferred Stock. The Notice of Redemption
shall be addressed to the holder at the address of the holder appearing
on the stock transfer books of the Corporation maintained by the
transfer agent for the Series A Junior Preferred Stock. The Notice of
Redemption shall include a statement of (i) the redemption date, (ii)
the redemption price, (iii) the number of shares of Series A Junior
Preferred Stock to be redeemed, (iv) the place or places where shares of
the Series A Junior Preferred Stock are to be surrendered for payment of
the redemption price, (v) that the dividends on the shares to be
redeemed will cease to accrue on such redemption date, and (vi) the
provision under which redemption is made. No defect in the Notice of
Redemption or in the mailing thereof shall affect the validity of the
redemption proceedings, except as required by law. From the date on
which a Notice of Redemption shall have been given as aforesaid and the
Corporation shall have deposited with the transfer agent for the Series
A Junior Preferred Stock a sum sufficient to redeem the shares of Series
A Junior Preferred Stock as to which Notice of Redemption has been
given, with irrevocable instructions and authority to pay the redemption
price to the holders thereof, or if no such deposit is made, then upon
such date fixed for redemption (unless the Corporation shall default in
making payment of the redemption price), all rights of the holders
thereof as stockholders of the Corporation by reason of the ownership of
such shares (except their right to receive the redemption price thereof,
but without interest), shall terminate including, but not limited to,
their right to receive dividends, and such shares shall no longer be
deemed outstanding. The Corporation shall be entitled to receive, from
time to time, from the transfer agent for Series A Junior Preferred
Stock the interest, if any, on such monies deposited with it and the
holders of any shares so redeemed shall have no claim to any such
interest. In case the holder of any shares so called for redemption
shall not claim the redemption price
17
for his shares within one year after the date of redemption, the
transfer agent for the Series A Junior Preferred Stock shall, upon
demand, pay over to the Corporation such amount remaining on deposit and
the transfer agent for the Series A Junior Preferred Stock shall
thereupon be relieved of all responsibility to the holders of such
shares and such holder of the shares of the Series A Junior Preferred
Stock so called for redemption shall look only to the Corporation for
the payment thereof.
(C) In the event that fewer than all the outstanding shares of the
Series A Junior Preferred Stock are to be redeemed, the number of shares
to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method as may be
determined by the Board of Directors in its sole discretion to be
equitable.
(D) If the Corporation shall be in default in the payment of any
dividends (including cumulative dividends, if applicable) on any shares
of Preferred Stock ranking, as to dividends, prior to the Series A
Junior Preferred Stock, then no shares of the Series A Junior Preferred
Stock shall be redeemed and the Corporation shall not purchase or
otherwise acquire any shares of the Series A Junior Preferred Stock.
Section 9. Ranking.
(A) The Series A Junior 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 upon liquidation, dissolution
or winding up, unless the terms of any such series shall provide
otherwise.
(B) For purposes of this resolution, any stock of any class or classes
of the Corporation shall be deemed to rank:
(i) prior to the shares of the Series A Junior Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding
up, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, as the case may be, in preference or priority to the
holders of shares of the Series A Junior Preferred Stock. Each holder
of any share of the Series A Junior Preferred Stock, by his
acceptance thereof, expressly covenants and agrees that the rights of
the holders of any shares of any other series of Preferred Stock of
the Corporation to receive dividends or amounts distributable upon
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be and hereby are expressly prior to
his rights unless in the case of any particular series of Preferred
Stock the certificate or other instrument creating or evidencing the
same expressly provides that the rights of the holders of such series
shall not be prior to the shares of the Series A Junior Preferred
Stock; and
(ii) on a parity with shares of the Series A Junior Preferred
Stock, either as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates or redemption or liquidation
prices per share or sinking fund provisions, if any, be different
from those of the Series A Junior Preferred Stock, if the holders of
such stock shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, as the case may
be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as
between the holders of such stock and the holders of shares of the
Series A Junior Preferred Stock; and
(iii) junior to shares of the Series A Junior Preferred Stock,
either as to dividends or upon liquidation, if such class or classes
shall be Common Stock or if the holders of shares of the Series A
Junior Preferred Stock shall be entitled to receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, as the case may
be, in preference or priority to the holders of shares of such class
or classes.
Section 10. Amendment. Except as otherwise set forth in this Certificate
of Designation, Preferences and Rights with respect to the Series A Junior
Preferred Stock, holders of Series A Junior Preferred Stock shall not have
any special powers and their consent shall not be required for taking any
corporate action, provided, however, that:
18
(A) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at
least 66 2/3% of all of the shares of the Series A Junior Preferred
Stock at the time outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the
holders of shares of the Series A Junior Preferred Stock shall vote
together as a separate class, shall be necessary for authorizing,
effecting or validating the amendment, alteration or repeal of any of
the provisions of the Restated Certificate of Incorporation or of any
certificate amendatory thereof or supplemental thereto (including any
Certificate of Designation, Preferences and Rights or any similar
document relating to any series of Preferred Stock) so as to affect
adversely the powers, preferences, or rights, of this Series A Junior
Preferred Stock. The increase of the authorized amount of the Preferred
Stock, or the creation, authorization or issuance of any shares of any
other class of stock of the Corporation ranking prior to or on a parity
with the shares of the Series A Junior Preferred Stock as to dividends
or upon liquidation, or the reclassification of any authorized or
outstanding stock of the Corporation into any such prior or parity
shares, or the creation, authorization or issuance of any obligation or
security convertible into or evidencing the right to purchase any such
prior or parity shares shall not be deemed to affect adversely the
powers, preferences or rights of the Series A Junior Preferred Stock.
Section 11. Fractional Shares. Series A Junior Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Junior Preferred Stock.
6.50% CUMULATIVE CONVERTIBLE PREFERRED STOCK (WITHOUT PAR VALUE)
1. Designation. This resolution shall provide for a single series of
Preferred Stock, the designation of which shall be "6.50% Cumulative
Convertible Preferred Stock", without par value (hereinafter called this
"Series"), and the number of authorized shares constituting this Series is
6,900,000. Shares of this Series shall have a stated value of $1.00 per
share (which shall also be the stated capital of each share). The number of
authorized shares of this Series may be reduced by further resolution
adopted by the Board of Directors and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized, but the number
of authorized shares of this Series shall not be so increased.
2. Dividends.
(a) The holders of shares of this Series shall be entitled to receive
dividends payable in cash at a rate of 6.50% per annum per share on the
initial liquidation preference of $50.00 per share. Such dividends shall
be cumulative from the date of original issue of such shares, and shall
be payable, when, as and if declared by the Board of Directors, out of
funds legally available for such purpose, on the last calendar day of
March, June, September and December of each year, commencing June 30,
1993, except that if such date is a Saturday, Sunday or legal holiday,
then such dividend shall be payable on the first immediately preceding
calendar day which is not a Saturday, Sunday or legal holiday.
(b) Each dividend on shares of this Series shall be paid to the
holders of record of such shares as they appear on the stock transfer
books of the Corporation on such record date, not exceeding 30 days
preceding the payment date thereof, as shall be fixed by the Board of
Directors. Dividends in arrears for any past dividend period or any part
thereof may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed by
the Board of Directors.
(c) Except as hereinafter provided, no dividends shall be declared or
paid or set apart for payment on the Preferred Stock of any series
ranking, as to dividends, on a parity with or junior to this Series for
any period unless full cumulative dividends have been or
contemporaneously are declared and paid on this Series for all past
dividend periods. When dividends are not paid in full, as aforesaid,
upon the shares of this Series and any other Preferred Stock ranking on
a parity as to dividends with this Series, all dividends declared upon
shares of this Series and any other Preferred Stock ranking on a parity
as to dividends with this Series shall be declared pro rata so that the
amount of dividends declared per share on this Series and such other
Preferred Stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of this Series and such
19
other Preferred Stock bear to each other. Holders of shares of this
Series shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as herein
provided, on this Series. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
(d) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock of the
Corporation ranking junior to this Series as to dividends and upon
liquidation and other than as provided in Section 2(c)) shall be
declared or paid or set aside for payment or other distribution declared
or made upon the Common Stock or any other stock of the Corporation
ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock nor any other stock of the
Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange
for stock of the Corporation ranking junior to this Series as to
dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall have
been paid or contemporaneously are declared and paid for all past
dividend periods.
(e) Dividends payable on this Series for each full quarterly dividend
period shall be computed by dividing the annual dividend rate by four
and multiplying by the initial liquidation preference of $50.00 per
share. Dividends payable on this Series for any period shorter or longer
than a full quarterly dividend period, including for the initial
dividend period, shall be computed on the basis of a 360-day year of
twelve 30-day months.
3. Optional Redemption; Provision for U.S. Steel Group Special Events;
Related Provisions.
(a) Except as provided in Section 3(b), the shares of this Series
shall not be redeemable by the Corporation prior to April 1, 1996. On
and after April 1, 1996, shares of this Series may, subject to the
satisfaction of the condition set forth in the last sentence of this
Section 3(a), be redeemed, in whole at any time or in part from time to
time, at the option of the Corporation, out of funds legally available
for such purpose, for cash in an amount equal to the following
redemption prices per share if redeemed during the twelve-month period
beginning April 1 of the year indicated below, upon giving notice as
provided below:
REDEMPTION PRICE
(AS A PERCENTAGE OF INITIAL DOLLAR EQUIVALENT
YEAR LIQUIDATION PREFERENCE) PER SHARE
---- --------------------------- -----------------
1996 104.55% $52.275
1997 103.90 51.950
1998 103.25 51.625
1999 102.60 51.300
2000 101.95 50.975
2001 101.30 50.650
2002 100.65 50.325
2003 and thereafter 100.00 50.000
and thereafter at the initial liquidation preference of $50.00 per
share, plus, in each case, an amount equal to all accrued and unpaid
dividends thereon to the date fixed for redemption. No shares of this
Series may be redeemed in accordance with this Section 3(a) if the
Corporation shall be advised on or prior to the related Redemption Date
by either ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") (provided that
▇▇▇▇▇'▇ is then rating the senior unsecured debt of the Corporation) or
Standard & Poor's Corporation ("S&P") (provided that S&P is then rating
the senior unsecured debt of the Corporation) that such redemption would
result in an immediate lowering by Moody's or S&P, as the case may be,
of the credit rating on the Corporation's senior unsecured debt from its
then existing level, unless the Corporation shall have received from the
issuance of common stock of the Corporation, since the date which is two
years prior to the related Redemption Date, net proceeds in an aggregate
amount at least equal to the product of the initial liquidation
preference of $50.00 per share times the number of shares of this Series
to be redeemed.
20
(b) (i) The shares of this Series shall be redeemed by the
Corporation, in whole, out of funds legally available for such purpose,
for cash in an amount equal to the Redemption Price if any of the
following events with respect to the U.S. Steel Group occur (such
events, collectively, the "U.S. Steel Group Special Events"):
(A) (1) The Corporation exchanges all of the outstanding shares of
Steel Stock for all of the outstanding shares of common stock of the
U.S. Steel Group Subsidiary (as provided in Section 2(b)(iii) of
Division I of the Certificate of Incorporation) (the "Steel Group
Subsidiary Exchange") or (2) in the event of a Disposition of all or
substantially all of the properties and assets of the U.S. Steel
Group, the Corporation either pays a dividend on the Steel Stock in,
or redeems a number of shares of Steel Stock for, an amount equal to
the Net Proceeds of such Disposition (as provided in Section
2(b)(i)(A) or Section 2(b)(i)(B), respectively, of Division I of the
Certificate of Incorporation) (the "Steel Group Disposition Dividend"
or the "Steel Group Disposition Redemption", respectively); or
(B) The Corporation pays a dividend on, or the Corporation or any
of its Subsidiaries consummates a tender offer or exchange offer for,
shares of Steel Stock and the aggregate amount of such dividend or
the consideration paid in such tender offer or exchange offer is an
amount equal to all or substantially all of the properties and assets
of the U.S. Steel Group (the "Steel Group Special Dividend" or the
"Steel Group Tender or Exchange Offer", respectively); provided that
the calculation of all or substantially all of the properties and
assets of the U.S. Steel Group shall be made without giving effect to
any money borrowed by the Corporation or any of its Subsidiaries in
connection with such dividend or tender offer or exchange offer, as
the case may be.
The Redemption Date of shares of this Series pursuant to this Section
3(b)(i) shall be, if the applicable U.S. Steel Group Special Event is
(I) the Steel Group Subsidiary Exchange, the date of such exchange, (II)
the Steel Group Disposition Dividend or the Steel Group Special
Dividend, the date such dividend is paid, (III) the Steel Group
Disposition Redemption, the date of such redemption or (IV) the Steel
Group Tender or Exchange Offer, the date such tender offer or exchange
offer is consummated. Notwithstanding anything to the contrary contained
in this Section 3(b)(i), any redemption pursuant to this Section 3(b)(i)
shall be conditioned upon the actual exchange of Steel Stock for shares
of common stock of the U.S. Steel Group Subsidiary, payment of the Steel
Group Disposition Dividend or the amount due as a result of the Steel
Group Disposition Redemption (in each case in the required kind of
capital stock, cash, securities and/or other property), payment of the
Steel Group Special Dividend or the consummation of the Steel Group
Tender or Exchange Offer, as the case may be.
(ii) The shares of this Series shall be redeemed by the Corporation,
in whole, out of funds legally available for such purpose, for cash in
an amount equal to the Redemption Price if following the Disposition of
all or substantially all of the properties and assets of the U.S. Steel
Group, the Corporation exchanges all of the outstanding shares of Steel
Stock for Marathon Stock (as provided in Section 2(b)(i)(C) of Division
I of the Certificate of Incorporation) and, at any time subsequent to
such exchange, any of the following events with respect to the Marathon
Group occur (such events, collectively, the "Marathon Group Special
Events"):
(A) The Corporation exchanges all of the outstanding shares of
Marathon Stock for all of the outstanding shares of common stock of
the Marathon Group Subsidiary (as provided in Section 2(a)(i) of
Division I of the Certificate of Incorporation) (the "Marathon Group
Subsidiary Exchange"); or
(B) The Corporation pays a dividend on, or the Corporation or any
of its Subsidiaries consummates a tender offer or exchange offer for,
shares of Marathon Stock and the aggregate amount of such dividend or
the consideration paid in such tender offer or exchange offer is an
amount equal to all or substantially all of the properties and assets
of the Marathon Group (the "Marathon Group Special Dividend" or the
"Marathon Group Tender or Exchange Offer", respectively); provided
that the calculation of all or substantially all of the properties
and assets of the Marathon Group shall be made without giving effect
to any money borrowed by the Corporation or any of its Subsidiaries
in connection with such dividend or tender offer or
21
exchange offer, as the case may be; provided, further, that, at the
time of the payment of such dividend on, or the consummation of such
tender or exchange offer for, Marathon Stock, there is another class
of common stock, other than Marathon Stock, of the Corporation then
outstanding.
The Redemption Date of shares of this Series pursuant to this Section
3(b)(ii) shall be, if the applicable Marathon Group Special Event is (I)
the Marathon Group Subsidiary Exchange, the date of such exchange, (II)
the Marathon Group Special Dividend, the date such dividend is paid or
(III) the Marathon Group Tender or Exchange Offer, the date such tender
offer or exchange offer is consummated. Notwithstanding anything to the
contrary contained in this Section 3(b)(ii), any redemption pursuant to
this Section 3(b)(ii) shall be conditioned upon the actual exchange of
Marathon Stock for shares of common stock of the Marathon Group
Subsidiary, payment of the Marathon Group Special Dividend or the
consummation of the Marathon Group Tender or Exchange Offer, as the case
may be.
(c) The following general redemption provisions shall apply, as the
context requires, to any redemption of any shares of this Series
pursuant to this Section 3:
(i) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall
be determined by the Board of Directors and the shares to be redeemed
shall be determined by lot or pro rata as may be determined by the
Board of Directors or by any other method as may be determined by the
Board of Directors in its sole discretion to be equitable, provided
that the Corporation may redeem any number of shares of this Series
owned by holders whose aggregate holdings of such shares do not
exceed 100 as may be specified by the Corporation.
(ii) In the event the Corporation shall redeem shares of this
Series pursuant to this Section 3, notice of such redemption shall be
given, (x) if such redemption is a result of the Steel Group Tender
or Exchange Offer or the Marathon Group Tender or Exchange Offer, on
the date of the public announcement of such tender offer or exchange
offer by the Corporation or any of its Subsidiaries, but in any event
not less than 30 days prior to such redemption, and on the date of
the public announcement of any extension thereof, (y) if such
redemption is a result of the Steel Group Disposition Dividend or the
Steel Group Disposition Redemption, on a date not less than 45 days
prior to the date selected by the Board of Directors for the payment
of such dividend or such redemption and (z) otherwise, on a date at
least 30 days but not more than 60 days prior to the date fixed for
such redemption by the Board of Directors, in each case to each
holder of record of the shares of this Series to be redeemed. Such
notice shall be given by first class mail, postage prepaid, at such
holder's address as the same appears on the stock transfer books of
the Corporation. Neither the failure to mail, to any particular
holder, any notice required by this Section 3(c)(ii) nor any defect
therein or in the mailing thereof, shall affect the sufficiency of
the notice or the validity of the proceedings for redemption with
respect to any other holder. Any notice which was mailed in the
manner herein provided shall be conclusively presumed to have been
duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state, as appropriate: (A) the
Redemption Date; (B) the number of shares of this Series 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; (C) the Redemption Price to be paid in respect of the
redemption; (D) the place or places where certificates for such
shares are to be surrendered for the payment of the Redemption Price;
(E) the then current Conversion Price and, if any event then known to
the Corporation will result in an adjustment to the Conversion Price
on or prior to the Redemption Date, such adjusted Conversion Price
and the date of such adjustment; (F) if such redemption of shares of
this Series is the result of a U.S. Steel Group Special Event or a
Marathon Group Special Event, that such redemption is conditioned
upon the occurrence of the applicable U.S. Steel Group Special Event
or Marathon Group Special Event and if that U.S. Steel Group Special
Event is the Steel Group Disposition Dividend or the Steel Group
Disposition Redemption, the last date on which the shares of this
Series may be converted into shares of Steel Stock, determined as set
forth in Section 4(a); and (G) that dividends on the shares of this
Series to be redeemed shall cease to accrue on the Redemption Date,
provided that if such redemption of shares of this Series is the
result of a U.S. Steel Group Special Event or a Marathon Group
Special Event, the conditions to such redemption shall have been
satisfied.
(iii) Notice having been given as provided in Section 3(c)(ii),
from and after the Redemption Date (unless default shall be made by
the Corporation in providing an adequate amount of money
22
for the payment of the Redemption Price necessary to effect such
redemption in accordance with the terms hereof) (A) except if the
redemption is the result of a U.S. Steel Group Special Event or a
Marathon Group Special Event and the conditions to such redemption
shall not have been satisfied, dividends on the shares of this Series
so called for redemption shall cease to accrue, (B) such shares shall
no longer be deemed to be outstanding and (C) all rights of the
holders thereof as holders of shares of this Series shall cease
(except the right to receive from the Corporation the Redemption
Price, without interest thereon, upon surrender and endorsement of
their certificates). Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, unless the Corporation shall waive such
requirement), such shares shall be so redeemed by the Corporation.
(iv) The Corporation's obligation to provide an adequate amount of
money for the payment of the Redemption Price necessary to effect any
redemption in accordance with this Section 3 shall be deemed
fulfilled if, on or before the applicable Redemption Date, the
Corporation shall deposit with a bank or trust company that has an
office in the Borough of Manhattan, City of New York, and that has,
or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, an amount of money adequate for the
payment of the aggregate Redemption Price necessary for such
redemption in accordance with the terms hereof, in trust, with
irrevocable instructions that such money be applied to the redemption
of the shares of this Series so called for redemption. If such
redemption is conditioned upon the payment of the Steel Group
Disposition Dividend or payment of the amount due as a result of the
Steel Group Disposition Redemption, the Corporation shall deposit
such moneys and give such irrevocable instructions in respect of such
redemption, subject to the payment of such Steel Group Disposition
Dividend or payment of the amount due as a result of such Steel Group
Disposition Redemption, not later than the 30th day prior to the date
selected by the Board for the payment of such dividend on, or the
redemption of, Steel Stock, but in any event prior to the date the
Corporation declares such dividend or gives notice of such
redemption, each in accordance with Section 2 of Division I of the
Certificate of Incorporation. No interest shall accrue for the
benefit of the holders of shares of this Series to be redeemed on any
money so payable by the Corporation in respect of any redemption.
Subject to applicable escheat laws, any money unclaimed at the end of
two years from the related Redemption Date shall revert to the
general funds of the Corporation, after which reversion the holders
of such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of such money. In
case fewer than all the shares of this Series represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder
thereof.
(v) Any shares of this Series which shall at any time have been
redeemed shall, upon the taking of any action required by law, have
the status of authorized but unissued shares of Preferred Stock,
without designation as to series until such shares are once more
designated as part of a particular series by the Board of Directors.
(vi) Notwithstanding the foregoing provisions of this Section 3,
unless the full cumulative dividends on all outstanding shares of
this Series shall have been paid or contemporaneously are declared
and paid for all past dividend periods, no shares of this Series
shall be redeemed unless all outstanding shares of this Series are
simultaneously redeemed, and the Corporation shall not purchase or
otherwise acquire any shares of this Series; provided, however, that
the foregoing shall not prevent the purchase or acquisition of shares
of this Series pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding shares of this Series.
4. Conversion or Exchange. Holders of shares of this Series shall have
the right to convert all or a portion of such shares into shares of Steel
Stock, as follows:
(a) Subject to and upon compliance with the provisions of this Section
4, a holder of shares of this Series shall have the right, at such
holder's option, at any time, to convert such shares into the number of
fully paid and nonassessable shares of Steel Stock equal to the quotient
of (i) the product of the initial liquidation preference for shares of
this Series of $50.00 per share for such shares times the number of
shares of this Series to be converted, divided by (ii) the Conversion
Price (as in effect on the date provided for in the last paragraph of
Section 4(b)) by surrendering the certificates representing such shares
to be converted, such surrender to be made in the manner provided in
accordance with this Section 4; provided that the right to convert
shares of this Series called for
23
redemption pursuant to Section 3 shall terminate at the close of
business on the related Redemption Date, unless the Corporation shall
default in making payment of any moneys payable upon such redemption
under Section 3 or, if the redemption of shares of this Series is the
result of a Steel Group Special Event or a Marathon Group Special Event,
the conditions to such redemption shall not have been satisfied; and,
provided, further, that if the Corporation has given notice of a
redemption pursuant to Section 3(c) which is conditioned on the
occurrence of the Steel Group Disposition Dividend or the Steel Group
Disposition Redemption, the right to convert shares of this Series shall
terminate on the 31st day prior to the date selected by the Board of
Directors for such redemption. Any holder of any share or shares of this
Series may only convert whole shares of this Series and the Corporation
shall not be obligated to issue any fractional shares of this Series.
(b) In order to exercise the conversion right, the holder of any
shares of this Series to be converted shall surrender the certificate
representing such shares, duly endorsed or assigned to the Corporation
or in blank, at the office of the Transfer Agent, accompanied by written
notice to the Corporation that the holder thereof elects to convert such
shares or a specified portion thereof. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such
shares of this Series are registered, any shares surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of shares of this Series at the close of business on a record
date for determining stockholders entitled to receive a dividend shall
be entitled to receive the dividend payable on such shares on the
corresponding dividend payment date (except that holders of shares
called for redemption on a Redemption Date between such record date and
the dividend payment date shall not be entitled to receive such dividend
on such dividend payment date) notwithstanding the conversion thereof
following such dividend record date and prior to such dividend payment
date. However, shares of this Series surrendered for conversion during
the period between the close of business on any dividend record date and
the opening of business on the corresponding dividend payment date
(except shares called for redemption on a Redemption Date during such
period) must be accompanied by payment of an amount equal to the
dividend payable on such shares on such dividend payment date. A holder
of shares of this Series on a dividend record date who (or whose
transferee) tenders any such shares for conversion into shares of Steel
Stock on a dividend payment date will receive the dividend payable by
the Corporation on such shares of this Series on such date, and the
converting holder need not include payment of the amount of such
dividend upon surrender of such shares for conversion. Except as
provided above, the Corporation shall make no payment or allowance for
unpaid dividends, whether or not in arrears, on converted shares or for
dividends on the shares of Steel Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of this Series as aforesaid, the Corporation shall issue and
shall deliver at such office to such holder, or on such holder's written
order, a certificate or certificates for the number of full shares of
Steel Stock issuable upon the conversion of such shares in accordance
with the provisions of this Section 4, and any fractional interest in
respect of a share of Steel Stock arising upon such conversion shall be
settled as provided in Section 4(c).
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
shares of this Series shall have been surrendered and the notice
referred to in the third preceding paragraph (and, if applicable,
payment of an amount equal to the dividend payable on such shares as
described in the second preceding paragraph) received by the Corporation
as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Steel Stock shall be issuable
upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such
date and such conversion shall be at the Conversion Price in effect at
such time on such date.
(c) No fractional shares or scrip representing fractions of shares of
Steel Stock or any other common stock of the Corporation shall be issued
upon conversion of any share of this Series. Instead of any fractional
interest in a share of Steel Stock or such other common stock that would
otherwise be deliverable upon the conversion of a share of this Series,
the Corporation shall pay to the holder
24
of such share an amount in cash based upon the Closing Price of Steel
Stock or such other common stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be
surrendered for conversion at one time by the same holder, the number of
full shares of Steel Stock or such other common stock issuable upon
conversion thereof shall be computed on the basis of the aggregate
number of shares of this Series so surrendered.
(d) The Conversion Price per share of Steel Stock shall be adjusted
from time to time as follows:
(i) If the Corporation shall after the date on which shares of this
Series are initially issued (A) pay a dividend or make a distribution
on any class of its capital stock in shares of Steel Stock, (B)
subdivide the outstanding Steel Stock into a greater number of shares
or (C) combine the outstanding Steel Stock into a smaller number of
shares, then the Conversion Price in effect at the opening of
business on the day next following the date fixed for the
determination of stockholders entitled to receive such dividend or
distribution or at the opening of business on the day next following
the day on which such subdivision or combination becomes effective,
as the case may be, shall be adjusted so that the holder of any share
of this Series thereafter surrendered for conversion shall be
entitled to receive the number of shares of Steel Stock that such
holder would have owned or have been entitled to receive after the
happening of any of the events described above had such share been
converted immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case of a
subdivision or combination. An adjustment made pursuant to this
Section 4(d)(i) shall become effective immediately after the opening
of business on the day next following the record date (except as
provided in Section 4(m)) in the case of a dividend or distribution
and shall become effective immediately after the opening of business
on the day next following the effective date in the case of a
subdivision or combination.
(ii) If the Corporation shall issue after the date on which shares
of this Series are initially issued rights or warrants (other than
any rights or warrants (including the Rights) referred to in Section
4(d)(iii) below) to all holders of Steel Stock entitling them (for a
period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase Steel Stock at a price per share less
than the Current Market Price per share of Steel Stock on the record
date for the determination of stockholders entitled to receive such
rights or warrants, then the Conversion Price in effect at the
opening of business on the day next following such record date shall
be adjusted to equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior to the opening of
business on the day next following the date fixed for such
determination by (II) a fraction, the numerator of which shall be the
sum of (A) the number of shares of Steel Stock outstanding on the
close of business on the date fixed for such determination and (B)
the number of shares that the aggregate proceeds to the Corporation
from the exercise of such rights or warrants for Steel Stock would
purchase at such Current Market Price, and the denominator of which
shall be the sum of (A) the number of shares of Steel Stock
outstanding on the close of business on the date fixed for such
determination and (B) the number of additional shares of Steel Stock
offered for subscription or purchase pursuant to such rights or
warrants. Such adjustment shall become effective immediately after
the opening of business on the day next following such record date
(except as provided in Section 4(m)). In determining whether any
rights or warrants entitle the holders of Steel Stock to subscribe
for or purchase shares of Steel Stock at less than the Current Market
Price thereof, there shall be taken into account any consideration
received by the Corporation upon issuance and upon exercise of such
rights or warrants, the value of such consideration, if other than
cash, to be determined by the Board of Directors.
(iii) If the Corporation shall distribute to all holders of the
Steel Stock any shares of capital stock (other than common stock of
the Corporation), evidences of indebtedness, cash or other assets of
the Corporation (including securities, but excluding (w) any dividend
or distribution referred to in Section 4(d)(i), (x) any rights or
warrants referred to in Section 4(d)(ii) or in the second or third
paragraph of this Section 4(d)(iii), (y) any dividend or distribution
paid exclusively in cash or (z) any stocks, securities or other
property received as a result of a transaction referred to in Section
4(f)) (any of the foregoing being hereinafter referred to in this
Section 4(d)(iii) as the "Securities"), then in each such case the
Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying (I) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such
25
distribution by (II) a fraction, the numerator of which shall be the
Current Market Price per share of the Steel Stock on the record date
mentioned below less the then fair market value (as determined by the
Board of Directors) of the portion of the Securities so distributed
to one share of Steel Stock, and the denominator of which shall be
the Current Market Price per share of the Steel Stock on the record
date mentioned below. Such adjustment shall become effective
immediately at the opening of business on the day next following the
record date for the determination of stockholders entitled to receive
such distribution (except as provided in Section 4(m)).
With respect to the Amended and Restated Rights Agreement, dated as of
October 1, 1992 (as amended or otherwise modified from time to time, the
"Restated Rights Agreement"), between the Corporation and Mellon Bank,
N.A. (terms used in this paragraph and not otherwise defined herein
having the meanings set forth in the Restated Rights Agreement), the
Conversion Price will be adjusted only when the Rights issuable pursuant
thereto become exercisable after the Corporation's right of redemption
thereunder has expired. Subject to the foregoing, upon the later to
occur of the Distribution Date and a Section 11(a)(ii) Event (the
"Adjustment Date"), the Conversion Price in effect at the opening of
business on the Adjustment Date shall be adjusted to equal the price
determined by multiplying such Conversion Price by a fraction the
numerator of which shall be equal to the Current Market Price per share
of the Steel Stock on the Trading Day immediately prior to the
Adjustment Date less an amount equal to the quotient of (x) the
aggregate fair market value on the Adjustment Date (as determined by the
Board of Directors) of the Rights distributed under the Restated Rights
Agreement divided by (y) the number of shares of Steel Stock outstanding
on such day prior to the Adjustment Date and the denominator of which
shall be equal to such Current Market Price per share of the Steel
Stock. Such adjustment shall become effective immediately after the
opening of business on the day next following such Adjustment Date.
In case the Corporation shall (other than pursuant to the Restated
Rights Agreement) distribute rights or warrants to purchase Steel Stock
pro rata to all holders of Steel Stock which rights or warrants are not
at such time immediately exercisable but, upon the occurrence of a
specified event or events ("Exercise Trigger Date") will become
exercisable and once they become exercisable will entitle, or upon the
occurrence of an additional specified event or events ("Price Trigger
Date") will entitle, the holder thereof to purchase Steel Stock at a
price per share of Steel Stock less than the Current Market Price of the
Steel Stock on the Trading Day next succeeding the later of the Exercise
Trigger Date or the Price Trigger Date ("Adjustment Trigger Date") and
there shall have occurred such Adjustment Trigger Date, thus permitting
the holders of such rights or warrants irrevocably to exercise any
exchange, subscription or purchase rights conferred by such rights or
warrants at a price per share of Steel Stock less than such Current
Market Price, then the Conversion Price in effect at the opening of
business on the Adjustment Trigger Date shall be adjusted by multiplying
(I) such Conversion Price by (II) a fraction, the numerator of which
shall be equal to the Current Market Price per share of the Steel Stock
on the Trading Day immediately prior to the Adjustment Trigger Date less
an amount equal to the quotient of (x) the aggregate fair market value
on the Adjustment Trigger Date of the rights or warrants so distributed
(as determined by the Board of Directors) divided by (y) the number of
shares of Steel Stock outstanding on such day prior to the Adjustment
Trigger Date and the denominator of which shall be equal to such Current
Market Price per share of the Steel Stock. Such adjustment shall become
effective immediately after the opening of business on the day next
following such Adjustment Trigger Date.
(iv) If the Corporation shall, by dividend or otherwise, at any
time distribute to all holders of the Steel Stock cash (excluding any
regular quarterly dividend payable solely in cash, any cash that is
distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to Section 4(d)(iii) and cash that is distributed
in a merger or consolidation to which Section 4(f) applies) in an
aggregate amount that, together with (A) the aggregate amount of any
other distributions to all holders of the Steel Stock made
exclusively in cash (to which this Section 4(d)(iv) would otherwise
apply) within the 12 months preceding the date of payment of such
distribution and in respect of which no Conversion Price adjustment
has been made and (B) all Excess Purchase Payments in respect of each
tender offer or exchange offer or other negotiated purchase for Steel
Stock concluded by the Corporation or any of its Subsidiaries within
the 12 months preceding the date of payment of such distribution and
in respect of which no Conversion Price adjustment has been made,
exceeds an amount equal to 12 1/2% of the product of the
26
Current Market Price per share of Steel Stock on the date fixed for
determination of holders of Steel Stock entitled to receive such
distribution times the number of shares of Steel Stock outstanding on
such date, then the Conversion Price shall be adjusted so that it
shall equal the price determined by multiplying (I) such Conversion
Price in effect immediately prior to the Conversion Price adjustment
contemplated by this Section 4(d)(iv) by (II) a fraction the
numerator of which shall be the Current Market Price per share of the
Steel Stock on the date fixed for determination of holders of Steel
Stock entitled to receive such distribution less the combined amount
of such cash and such Excess Purchase Payments so distributed
applicable to one share of Steel Stock and the denominator of which
shall be such Current Market Price per share of the Steel Stock on
such date of determination. Such adjustment shall become effective
immediately prior to the opening of business on the day next
following the date fixed for such determination.
(v) In case a tender offer or exchange offer or other negotiated
purchase made by the Corporation or any of its Subsidiaries for all
or any portion of the Steel Stock shall be consummated, if the
aggregate amount of any Excess Purchase Payment, together with (A)
the aggregate amount of any distributions made to all holders of
Steel Stock made exclusively in cash (excluding any regular quarterly
dividend payable solely in cash, any cash that is distributed as part
of a distribution requiring a Conversion Price adjustment pursuant to
Section 4(d)(iii) and cash that is distributed in a merger or
consolidation to which Section 4(f) applies) within the 12 months
preceding the consummation of such tender or exchange offer or other
negotiated purchase and in respect of which no Conversion Price
adjustment has been made, and (B) all other Excess Purchase Payments
in respect of each tender or exchange offer or other negotiated
purchase for Steel Stock concluded by the Corporation or any of its
Subsidiaries within the 12 months preceding the consummation of such
tender or exchange offer or other negotiated purchase and in respect
of which no Conversion Price adjustment has been made, exceeds an
amount equal to 12 1/2% of the product of the Current Market Price
per share of Steel Stock on the consummation date of such tender or
exchange offer or other negotiated purchase (any such date, the
"Purchase Date") times the number of shares of Steel Stock
outstanding (including any tendered, exchanged or purchased shares)
on such Purchase Date, then the Conversion Price shall be adjusted so
that it shall equal the price determined by multiplying (I) such
Conversion Price in effect immediately prior to such Purchase Date by
(II) a fraction, the numerator of which shall be the Current Market
Price per share of the Steel Stock on such Purchase Date less the
combined amount of Excess Purchase Payments and such cash so
distributed applicable to one share of Steel Stock and the
denominator of which shall be such Current Market Price per share on
such Purchase Date. Such adjustment shall become effective
immediately prior to the opening of business on the day next
following such Purchase Date.
(vi) The Corporation from time to time may reduce the Conversion
Price by any amount for any period of at least 20 business days (or
such other period as may then be required by applicable law),
provided that the Board of Directors shall have determined that such
reduction is in the best interests of the Corporation. No reduction
in the Conversion Price pursuant to this Section 4(d)(vi) shall
become effective unless the Corporation shall have mailed a notice,
at least
15 days prior to the date on which such reduction is scheduled to
become effective, to each holder of shares of this Series. Such
notice shall be given by first class mail, postage prepaid, at such
holder's address as the same appears on the stock transfer books of
the Corporation. Such notice shall state the amount per share by
which the Conversion Price will be reduced and the period for which
such reduction will be in effect.
(vii) The Corporation may make such reductions in the Conversion
Price, in addition to those required by Sections 4(d)(i) through (v),
as the Board determines to be necessary in order that any event
treated for Federal income tax purposes as a dividend of stock or
stock rights will not be taxable to the recipients; provided that any
such reduction shall not be effective until written evidence of the
action of the Board authorizing such reduction shall be filed with
the Secretary of the Corporation and notice thereof shall have been
given by first class mail, postage prepaid, to each holder of shares
of this Series at such holder's address as the same appears on the
stock transfer books of the Corporation.
(e) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at
least 1% in such price; provided, however, that any adjustments that by
reason of this Section 4(e) are not required to be made shall be carried
forward
27
and taken into account in any subsequent adjustment until made; and
provided, further, that any adjustment shall be required and made in
accordance with the provisions of this Section 4 (other than this
Section 4(e)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares
of Steel Stock or any other common stock into which shares of this
Series are convertible. Notwithstanding any other provisions of this
Section 4, the Corporation shall not be required to make any adjustment
of any Conversion Price established hereunder for the issuance of any
shares of common stock of the Corporation (including Steel Stock)
pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of such common stock under such
plan. All calculations under this Section 4 shall be made to the nearest
1/100 of a cent (with $.00005 being rounded upward) or to the nearest
1/10,000 of a share (with .00005 of a share being rounded upward), as
the case may be.
(f) If the Corporation shall be a party to any transaction (including
without limitation a merger or consolidation of the Corporation and
excluding any transaction as to which Sections 4(d)(i) through (vi)
apply), in each case as a result of which shares of Steel Stock shall be
converted into the right to receive stock, securities or other property
(including cash or any combination thereof), (each of the foregoing
being referred to herein as a "Transaction"), each share of this Series
which is not converted into the right to receive stock, securities or
other property in connection with such Transaction shall thereafter be
convertible into the kind and amount of shares of stock, securities and
other property (including cash or any combination thereof) receivable
upon the consummation of such Transaction by a holder of that number of
shares or fraction thereof of Steel Stock into which one share of this
Series was convertible immediately prior to such Transaction, assuming
such holder of Steel Stock (i) is not a person with which the
Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made,
as the case may be (a "Constituent Person"), or an affiliate of a
Constituent Person and (ii) failed to exercise his rights of election,
if any, as to the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction (provided that if the
kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each share of Steel
Stock of the Corporation held immediately prior to such Transaction by
other than a Constituent Person or an affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this Section 4(f) the kind and
amount of stock, securities and other property (including cash)
receivable upon such Transaction by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares). The Corporation shall not be a party to any
Transaction unless the terms of such Transaction are consistent with the
provisions of this Section 4(f) and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered into an
agreement with the other party or parties to such transaction for the
benefit of the holders of shares of this Series that will contain
provisions enabling the holders of such shares that remain outstanding
after such Transaction to convert into the consideration received by
holders of Steel Stock at the Conversion Price in effect immediately
prior to such Transaction. The provisions of this Section 4(f) shall
similarly apply to successive Transactions.
(g) The reclassification of common stock into which shares of this
Series are then convertible into securities which include securities
other than such common stock (other than any reclassification upon a
consolidation or merger to which Section 4(f) applies), shall be deemed
to involve (i) a distribution of such securities other than such common
stock to all holders of such common stock (and the effective date of
such reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution")
and (ii) a subdivision or combination, as the case may be, of the number
of shares of such common stock outstanding immediately prior to such
reclassification into the number of shares of such common stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be the effective date of such
subdivision or combination).
(h) If the Corporation shall, by dividend or otherwise, distribute to
all holders of Steel Stock or other class of common stock into which
shares of this Series are then convertible shares of common stock other
than Steel Stock or any class of common stock into which shares of this
Series are then convertible, each share of this Series shall be
convertible, in addition to the number of shares of Steel Stock and/or
such other common stock into which such share is then convertible, into
the number of shares of such other common stock receivable upon payment
of such distribution to a holder of that number of shares or fraction
thereof of Steel Stock or such other common stock into which one share
28
of this Series was convertible immediately prior to the record date
fixed for the determination of stockholders entitled to receive such
distribution. Shares of this Series shall become so convertible
immediately after the opening of business on the day next following such
record date (except as provided in Section 4(m)). In addition, a
Conversion Price shall be established with respect to such common stock
in an amount equal to the quotient of (i) the initial liquidation
preference of $50.00 per share of this Series divided by (ii) the number
of shares or fraction thereof of such common stock that a holder of one
share of Steel Stock or such other common stock into which shares of
this Series are then convertible would be entitled to receive on the
payment date for such distribution from and after any such date of
determination of stockholders entitled to receive such distribution and,
thereafter, Conversion Price adjustments as nearly as equivalent in type
as may be practicable to the adjustments pursuant to Sections 4(d)
through (f) which are to be made in respect of Steel Stock shall be made
in respect of shares of such common stock. Notwithstanding the foregoing
and the provisions of Section 4(d)(iii), if the Corporation shall make
such a distribution in common stock and, thereafter, all of the shares
of such common stock cease to be outstanding, on the date such shares of
common stock cease to be outstanding (x) the shares of this Series shall
cease to be convertible into shares of such common stock, (y) a
distribution of shares of such common stock shall be deemed to have
occurred on such date and (z) the Conversion Price for the class of
common stock upon which such distribution was made, or if no shares of
such class are then outstanding because shares of such class were
exchanged for shares of another class of common stock, of such other
class of common stock, shall be adjusted in the manner set forth in
Section 4(d)(iii) to the same extent as if shares of the common stock in
which such distribution was made were within the meaning of the term
"Securities" in Section 4(d)(iii).
(i) After the date, if any, on which all outstanding shares of Steel
Stock or of any other common stock into which shares of this Series are
then convertible are exchanged for shares of another class of common
stock (as provided in the Certificate of Incorporation), each share of
this Series shall thereafter be convertible into the number of shares of
such other class of common stock receivable upon such exchange by a
holder of that number of shares or fraction thereof of Steel Stock
and/or such other common stock into which shares of this Series are then
convertible into which one share of this Series was convertible
immediately prior to such exchange. From and after any such exchange,
Conversion Price adjustments as nearly equivalent as may be practicable
to the adjustments pursuant to Sections 4(d) through 4(h) which, prior
to such exchange, were made in respect of Steel Stock and/or such other
common stock into which shares of this Series are then convertible shall
instead be made pursuant to such Sections 4(d) through 4(h) in respect
of shares of such other class of common stock.
(j) Subject to the provisions of Section 4(k), if:
(i) the Corporation takes any action that would require an
adjustment of the Conversion Price pursuant to Sections 4(d) through
(i); or
(ii) there shall be any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of
the Corporation is required, or the sale or transfer of all or
substantially all of the assets of the Corporation or the U.S. Steel
Group; or
(iii) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; or
(iv) the Corporation or any of its Subsidiaries shall commence a
tender offer or exchange offer for all or a portion of the
outstanding shares of Steel Stock (or shall amend any such tender or
exchange offer),
then the Corporation shall cause to be filed with the Transfer Agent
and shall cause to be mailed to the holders of shares of this Series
at their addresses as shown on the stock transfer books of the
Corporation, as promptly as possible, but at least 15 days prior to
the earliest applicable date hereinafter specified, a notice stating,
as applicable, (A) the proposed record date for a dividend or
distribution or the proposed effective date of a consolidation,
merger, sale, transfer, liquidation, dissolution or winding up, (B)
the date as of which it is expected that holders of Steel Stock of
record shall be entitled to exchange their shares of Steel Stock for
securities or other property, if any, deliverable upon such
consolidation, merger, sale, transfer, liquidation, dissolution or
winding up or (C) the date on which such tender or exchange offer
commenced, the date on
29
which such tender or exchange offer is scheduled to expire unless
extended, the consideration offered and the other material terms
thereof (or the material terms of any amendment thereto). Failure to
give or receive such notice or any defect therein shall not affect
the legality or validity of the related transaction.
(k) If the Corporation intends:
(i) to effect a U.S. Steel Group Special Event or a Marathon Group
Special Event; or
(ii) exchange shares of Steel Stock for Marathon Stock or Delhi
Stock following a Disposition of all or substantially all of the
properties and assets of the U.S. Steel Group,
then the Corporation shall cause to be filed with the Transfer Agent
and shall cause to be mailed to the holders of shares of this Series
at their addresses as shown on the stock transfer books of the
Corporation, not less than 45 days prior to the Steel Group
Disposition Dividend or the Steel Group Disposition Redemption and
not less than 30 days prior to any other U.S. Steel Group Special
Event, any Marathon Group Special Event or any such exchange of Steel
Stock for shares of Marathon Stock or Delhi Stock, a notice stating,
as applicable, (A) the record date for any dividend that is a U.S.
Steel Group Special Event or a Marathon Group Special Event, (B) the
date on which any redemption or exchange that is a U.S. Steel Group
Special Event, a Marathon Group Special Event or an exchange of Steel
Stock for shares of Marathon Stock or Delhi Stock is expected to
become effective, and the date as of which it is expected that
holders of record of Steel Stock or Marathon Stock shall be entitled
to exchange their shares of Steel Stock or Marathon Stock,
respectively, for securities or other property deliverable upon such
redemption or exchange or (C) the date on which the Steel Group
Tender or Exchange Offer or the Marathon Group Tender or Exchange
Offer commenced, the consideration offered and the other material
terms thereof (or the material terms of any amendment thereto). In
addition, from and after any exchange of Steel Stock for Delhi Stock,
effected in accordance with Section 2(b)(i) of Division I of the
Certificate of Incorporation, the Corporation shall give similar
notice of its intention to exchange Delhi Stock for shares of the
Delhi Group Subsidiary, if Steel Stock has been exchanged therefor,
or to pay a dividend on, or redeem shares of, Delhi Stock following
the Disposition of all or substantially all of the properties and
assets of the Delhi Group. Failure to give or receive any such notice
or any defect therein shall not affect the legality or validity of
the related transaction. In the event of any conflict between the
notice provisions of this paragraph (k) and paragraph (j) above, the
notice provisions of this paragraph (k) shall govern.
(l) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be prima facie evidence of the correctness of
such adjustment. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the effective date
of such adjustment and shall send such notice of such adjustment of the
Conversion Price by first class mail, postage prepaid, to the holder of
each share of this Series at such holder's address as the same appears
on the stock transfer books of the Corporation.
(m) In any case in which Section 4(d) or 4(h) provides that an
adjustment shall become effective on the day next following a record
date for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of this Series
converted after such record date and before the occurrence of such event
the additional shares of Steel Stock or any other common stock of the
Corporation issuable upon such conversion by reason of the adjustment
required by such event over and above the number of shares of Steel
Stock or such other common stock issuable upon such conversion before
giving effect to such adjustment and (B) paying to such holder any
amount in cash in lieu of any fraction thereof pursuant to Section 4(c).
(n) For purposes of this Section 4, the number of shares of Steel
Stock or any other common stock of the Corporation at any time
outstanding shall not include any shares of Steel Stock or such other
common stock then owned or held by or for the account of Corporation.
The Corporation shall not pay a dividend or make any distribution on
shares of Steel Stock or such other common stock held in the treasury of
the Corporation.
30
(o) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set
forth in this Section 4. If any action or transaction would require
adjustment of any Conversion Price established hereunder pursuant to
more than one paragraph of this Section 4, only the adjustment which
would result in the largest reduction of such Conversion Price shall be
made.
(p) The Corporation covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Steel Stock and/or, if the shares of
this Series are then convertible into other common stock of the
Corporation, such other common stock, or its issued shares of Steel
Stock or such other common stock, as the case may be, held in its
treasury, or both, for the purpose of effecting conversion of shares of
this series, the full number of shares of Steel Stock or such other
common stock deliverable upon the conversion of all outstanding shares
of this Series not theretofore converted. For purposes of this Section
4(p), the number of shares of Steel Stock or such other common stock
that shall be deliverable upon the conversion of all outstanding shares
of this Series shall be computed as if at the time of computation all
such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Steel Stock or other common
stock of the Corporation issued upon conversion of shares of this Series
shall be validly issued, fully paid and nonassessable.
The Corporation shall endeavor to list the shares of Steel Stock or other
common stock of the Corporation required to be delivered upon conversion of
shares of this Series, prior to such delivery, upon each national
securities exchange, if any, upon which the outstanding Steel Stock or such
other common stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of shares of this Series, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with,
or any approval of or consent to the delivery thereof by, any governmental
authority.
(q) The Corporation will pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Steel Stock or other securities or property on conversion of
shares of this Series pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of shares of
Steel Stock or other securities or property in a name other than that of
the holder of such shares to be converted and no such issue or delivery
shall be made unless and until the person requesting such issue or
delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that
such tax has been paid.
5. Voting. The shares of this Series shall not have any voting powers,
either general or special, except that:
(a) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at
least 66 2/3% of all of the shares of this Series at the time
outstanding, given in person or by proxy, either in writing or by a vote
at a meeting called for the purpose at which the holders of shares of
this Series shall vote together as a separate class, shall be necessary
for authorizing, effecting or validating the amendment, alteration or
repeal of any of the provisions of the Certificate of Incorporation or
of any certificate amendatory thereof or supplemental thereto (including
any Certificate of Designation and Terms or any similar document
relating to any series of Preferred Stock) so as to affect adversely the
powers, preferences, or rights, of this Series. The increase of the
authorized amount of the Preferred Stock, or the creation or
authorization of any shares of any other class of stock of the
Corporation ranking prior to or on a parity with the shares of this
Series as to dividends or upon liquidation, or the reclassification of
any authorized stock of the Corporation into any such parity shares, or
the creation or authorization of any obligation or security convertible
into or evidencing the right to purchase any such prior or parity shares
shall not be deemed to affect adversely the powers, preferences or
rights of this Series.
(b) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at
least 66 2/3% of all of the shares of this Series and all other series
of Preferred Stock ranking on a parity with shares of this Series,
either as to dividends or upon
31
liquidation, at the time outstanding, given in person or by proxy,
either in writing or by a vote at a meeting called for the purpose at
which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting or validating the
issuance of any shares of any class of stock of the Corporation ranking
prior to the shares of this Series as to dividends or upon liquidation,
or the reclassification of any outstanding stock of the Corporation into
any such prior shares, or the issuance of any obligation or security
convertible into or evidencing the right to purchase any such prior
shares.
(c) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at
least a majority of all of the shares of this Series and all other
series of Preferred Stock ranking on a parity with this Series, either
as to dividends or upon liquidation, at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series and such
other series of Preferred Stock shall vote together as a single class
without regard to series, shall be necessary for authorizing, effecting
or validating the merger or consolidation of the Corporation into or
with any other corporation if such merger or consolidation would
adversely affect the powers, preferences or rights of this Series or
such other series of Preferred Stock or if, after such merger or
consolidation, there shall be outstanding any shares of any class of
stock ranking prior to the shares of this Series as to dividends or upon
liquidation or any obligation or security convertible into or evidencing
the right to purchase any such prior shares (except such stock,
securities or obligations of the Corporation as may have been
outstanding immediately preceding such merger or consolidation).
(d) If, on the date used to determine stockholders of record for any
meeting of stockholders for the election of directors, a default in
preference dividends on the Preferred Stock shall exist, the number of
directors constituting the Board of Directors shall be increased by two,
and the holders of the Preferred Stock of all series (whether or not the
holders of such series of Preferred Stock would be entitled to vote for
the election of directors if such default in preference dividends did
not exist), shall have the right at such meeting, voting together as a
single class without regard to series, to the exclusion of the holders
of Common Stock of the Corporation, to elect two directors of the
Corporation to fill such newly created directorships. Each director
elected by the holders of shares of Preferred Stock (herein called a
"Preferred Director"), shall continue to serve as such director for the
full term for which such director shall have been elected,
notwithstanding that prior to the end of such term a default in
preference dividends shall cease to exist. Any Preferred Director may be
removed without cause by, and shall not be removed without cause except
by, the vote of the holders of record of the outstanding shares of
Preferred Stock, voting together as a single class without regard to
series, at a meeting of the stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default in any
preference dividends on the Preferred Stock shall exist (A) any vacancy
in the office of a Preferred Director may be filled (except as provided
in the following clause (B)) by an instrument in writing signed by the
remaining Preferred Director and filed with the Corporation and (B) in
the case of the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of Preferred
Stock, voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and no default
in preference dividends shall exist, the number of directors
constituting the Board of Directors shall be reduced by two. For the
purposes hereof, a "default in preference dividends" on the Preferred
Stock shall be deemed to have occurred whenever the amount of accrued
and unpaid dividends upon any series of the Preferred Stock shall be
equivalent to six full quarterly dividends or more (whether or not
consecutive), and, having so occurred, such default shall be deemed to
exist thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then outstanding
shall have been paid for all past dividend periods.
6. Liquidation Rights.
(a) Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the shares
of this Series shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, before any
payment or distribution shall be made on any class of the common stock
of the Corporation or on any other class of stock ranking
32
junior to the Preferred Stock upon liquidation, the amount of $50 per
share, plus a sum equal to all dividends (whether or not earned or
declared) on such shares accrued and unpaid thereon to the date of final
distribution.
(b) Neither the sale, lease or exchange (for cash, shares of stock,
securities or other consideration) of all or substantially all the
property and assets of the Corporation nor the merger or consolidation
of the Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation,
shall be deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary, for the purposes of this Section 6.
(c) After the payment to the holders of the shares of this Series of
the full preferential amounts provided for in this Section 6, the
holders of shares of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
(d) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to Section 6(a), no
such distribution shall be made on account of any shares of any other
class or series of Preferred Stock ranking on a parity with the shares
of this Series upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the
shares of this Series, ratably, in proportion to the full distributable
amounts for which holders of all such parity shares are respectively
entitled upon such dissolution, liquidation or winding up.
7. Ranking. For purposes of this resolution, any stock of any class or
classes of the Corporation shall be deemed to rank:
(a) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled
to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, as the case may be, in preference or priority
to the holders of shares of this Series;
(b) on a parity with the shares of this Series, either as to dividends
or upon liquidation, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of this Series, if the
holders of such stock shall be entitled to the receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, as the case may be,
in proportion to their respective dividend rates or liquidation prices,
without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(c) junior to shares of this Series, either as to dividends or upon
liquidation, if such class or classes shall be the Series A Junior
Preferred Stock issued by the Corporation pursuant to the Restated
Rights Agreement or if such class or classes shall be any class of
common stock of the Corporation or if the holders of shares of this
Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, as the case may be, in
preference or priority to the holders of shares of such class or
classes.
8. Determinations by the Board of Directors. Any determinations made by
the Board of Directors of the Corporation under any provision of this
Resolution shall be final and binding on all stockholders (including
holders of shares of this Series) of the Corporation.
9. Definitions. Unless otherwise defined herein, terms used herein shall
have the meanings assigned to them in Division I of the Certificate of
Incorporation and the following terms shall have the following meanings:
"Board of Directors" or "Board" means, at any time, the duly elected or
acting board of directors (or duly authorized committee thereof) of the
Corporation at such time.
"Certificate of Incorporation" means the Corporation's Restated
Certificate of Incorporation, as amended, supplemented or otherwise
modified from time to time.
33
"Closing Price" of shares of any class of common stock of the Corporation
for any day shall mean the last reported sales price, regular way on such
day, or, if no reported sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way, in either
case as reported on the New York Stock Exchange Composite Tape or, if such
common stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such common stock is listed
or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the National Market System of NASDAQ or,
if such common stock is not quoted on such National Market System, the
average of the closing bid and asked prices on such day in the over-the-
counter market as reported by NASDAQ or, if closing bid and asked prices
for such common stock on such day shall not have been reported through
NASDAQ, the average of the closing bid and asked prices on such day as
furnished by any NYSE member firm regularly making a market in such common
stock selected for such purpose by the Board of Directors.
"Conversion Price" means the conversion price per share of Steel Stock
and/or other shares of common stock of the Corporation into which shares of
this Series are convertible, as such Conversion Price may be adjusted
pursuant to Section 4. The initial conversion price per share of Steel
Stock will be $46.125 (equivalent to a conversion rate of 1.084 shares of
Steel Stock for each share of this Series).
"Current Market Price" shall mean, with respect to any class of common
stock of the Corporation, the average of the daily Closing Prices of a
share of such common stock during the five consecutive Trading Days
selected by the Corporation commencing not more than 20 Trading Days
before, and ending not later than, the date in question ; provided,
however, that (i) if the "ex" date for any event (other than the issuance
or distribution requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Sections 4(d)(ii) through (v) occurs on or
after the 20th Trading Day prior to the day in question and prior to the
"ex" date for the issuance or distribution requiring such computation, the
Closing Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, (ii) if the "ex" date for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Sections 4(d) (ii) through
(v) occurs on or after the "ex" date for the issuance or distribution
requiring such computation and on or prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event, and (iii) if the "ex" date for
the issuance or distribution requiring such computation is on or prior to
the day in question, after taking into account any adjustment required
pursuant to clause (ii) of this proviso, the Closing Price for each Trading
Day on or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value on the day in question (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 4(d) (iii) or (iv)) of
the evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of the applicable class of common stock
of the Corporation as of the close of business on the day before such "ex"
date. For purposes of this definition, the term "ex" date, with respect to
any class of common stock of the Corporation, (i) when used with respect to
any issuance or distribution, means the first date on which such common
stock trades regular way on such exchange or in the relevant market from
which the Closing Price was obtained without the right to receive such
issuance or distribution, (ii) when used with respect to any subdivision or
combination of shares of such common stock, means the first date on which
such common stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective,
and (iii) when used with respect to any tender or exchange offer means the
first date on which such common stock trades regular way on such exchange
or in such market after the expiration time of such tender or exchange
offer.
"Excess Purchase Payment" means the excess, if any, of (A) the aggregate
of the cash and the value (as determined by the Board of Directors) of all
other consideration paid by the Corporation or any of its Subsidiaries with
respect to the shares of the applicable class of common stock of the
Corporation acquired in a tender or exchange offer or other negotiated
purchase respectively, over (B) the product of the Current Market Price per
share of such common stock times the number of shares of such common stock
acquired in such tender or exchange offer or purchase.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotations System or any successor thereto.
34
"NYSE" means the New York Stock Exchange, Inc. or any successor thereto.
"Redemption Date" means any date on which the Corporation redeems any
shares of this Series.
"Redemption Price" means (i) with respect to any redemption pursuant to
Section 3(a), the applicable amount set forth in such Section and (ii) with
respect to any redemption pursuant to Section 3(b), an amount per share
equal to the sum of the initial liquidation preference of $50.00 per share
of this Series, plus an amount equal to all accrued and unpaid dividends
thereon to the date fixed for redemption.
"Restated Rights Agreement" shall have the meaning given to it in the
second paragraph of Section 4 (d)(iii).
"Rights" shall mean the rights of the Corporation which are issuable
under the Corporation's stockholder rights plan adopted by the Board of
Directors, the terms and conditions of which are set forth in the Restated
Rights Agreement, or rights to purchase any capital stock of the
Corporation under any successor shareholder rights plan or plan adopted in
replacement of the Corporation's stockholder rights plan.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Corporation or by
one or more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"substantially all of the properties and assets of the U.S. Steel Group"
and "substantially all of the properties and assets of the Marathon Group"
shall mean a portion of such properties and assets that represents at least
80% of either of the then-current market value of, or the aggregate
revenues for the immediately preceding twelve fiscal quarterly periods of
the Corporation derived from, the properties and assets of the U.S. Steel
Group or the Marathon Group, respectively, as of such date (excluding the
properties and assets of any person, entity or group in which the
Corporation, directly or indirectly, owns less than a majority interest).
"Trading Day" shall mean, with respect to any class of common stock of
the Corporation, any day on which such common stock is traded on the NYSE,
or if such common stock is not listed or admitted to trading on the NYSE,
on the principal national securities exchange on which such common stock is
listed or admitted, or if not listed or admitted to trading on any national
securities exchange, on the National Market System of the NASDAQ, or if
such common stock is not quoted on such National Market System, in the
applicable securities market in which such common stock is traded.
"Transfer Agent" means the Corporation, through its Shareholder Services
Department, or such other agent or agents of the Corporation as may be
designated by the Board of Directors as the Transfer Agent for shares of
this Series.
Fifth: The existence of the Corporation is to be perpetual.
Sixth: The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
Seventh: The number of directors of the Corporation shall be fixed from time
to time by, or in the manner provided in, its by-laws and may be increased or
decreased as therein provided; but the number thereof shall not be less than
three.
The directors of the Corporation shall be divided into three classes: Class
I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the whole number of the Board of Directors. In the
election of directors at the 1984 annual meeting of the stockholders, the
Class I directors shall be elected to hold office for a term to expire at the
first annual meeting of the stockholders thereafter; the Class II directors
shall be elected to hold office for a term to expire at the second annual
meeting of the stockholders thereafter; and the Class III directors shall be
elected to hold office for a term to expire at the third annual meeting of the
stockholders thereafter, and in the case of each class, until their respective
successors are duly elected and qualified. At each annual election held after
the 1984 annual meeting of the stockholders the directors elected to succeed
those whose terms expire shall be identified as being of the same class as the
directors they
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succeed and shall be elected to hold office for a term to expire at the third
annual meeting of the stockholders after their election, and until their
respective successors are duly elected and qualified. If the number of
directors is changed, any increase or decrease in directors shall be
apportioned among the classes so as to maintain all classes as equal in number
as possible, and any additional director elected to any class shall hold
office for a term which shall coincide with the terms of the other directors
in such class and until his successor is duly elected and qualified.
In the case of any increase in the number of directors of the Corporation,
the additional director or directors shall be elected by the Board of
Directors.
In the case of any vacancy in the Board of Directors from death,
resignation, disqualification or other cause, a successor to hold office for
the unexpired portion of the term of the director whose place shall be vacant,
and until the election of his successor, shall be elected by a majority of the
Board of Directors then in office, though less than a quorum.
Directors of the Corporation may be removed only for cause.
Eighth: The Board of Directors shall have power to adopt, amend and repeal
the by-laws at any regular or special meeting of the Board of Directors,
provided that notice of intention to adopt, amend or repeal the by-laws in
whole or in part shall have been included in the notice of meeting; or,
without any such notice, by a vote of two-thirds of the directors then in
office.
Stockholders may adopt, amend and repeal the by-laws at any regular or
special meeting of the stockholders by an affirmative vote of two-thirds of
the shares outstanding and entitled to vote thereon, provided that notice of
intention to adopt, amend or repeal the by-laws in whole or in part shall have
been included in the notice of the meeting.
Any action required to be taken at any annual or special meeting of the
stockholders of the Corporation, or any action which may be taken at any
annual or special meeting of the stockholders or otherwise, may not be taken
without a meeting, prior notice and a vote, and stockholders may not act by
written consent.
Ninth: The Board of Directors from time to time shall determine whether and
to what extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the Corporation, or any of them, shall
be open to the inspection of the stockholders, and no stockholder shall have
any right to inspect any account or book or document of the Corporation,
except as conferred by law or authorized by the Board of Directors, or by the
stockholders.
Tenth: The directors may from time to time declare such dividends as they
shall deem advisable and proper, subject to the provisions of Article Fourth
and to such restrictions as may be imposed by law, and pay the same to the
stockholders at such times as they shall fix.
The Board of Directors shall have power to issue bonds, debentures, or other
obligations, either non-convertible or convertible into the Corporation's
stock, subject to the provisions of Article Fourth and upon such terms, in
such manner and under such conditions in conformity with law, as may be fixed
by the Board of Directors prior to the issue of such bonds, debentures or
other obligations.
Eleventh: No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director, except (i) for 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 violation
of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director derived an improper
personal benefit. No amendment to or repeal of this Article Eleventh shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal.
Twelfth: The powers and authorities hereinbefore conferred upon the Board of
Directors are in furtherance and not in limitation of those conferred by the
laws of the State of Delaware.
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Thirteenth: The Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation in the manner now or hereafter prescribed by law;
and all rights preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the rights reserved in this Article.
In Witness Whereof, this Restated Certificate of Incorporation, which
restates and integrates and does not further amend the provisions of the
Corporation's Certificate of Incorporation, as heretofore amended and
supplemented, there being no discrepancies between those provisions and the
provisions of this Restated Certificate of Incorporation, and having been duly
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Section 245 of the General Corporation Law of the State of
Delaware, has been executed on the 1st day of September, 1996.
USX CORPORATION
/s/ ▇. ▇. ▇▇▇▇▇
By: ___________________________________
▇. ▇. ▇▇▇▇▇
Chairman of the Board of Directors
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