EXHIBIT NO. 4.11
CERTIFICATE OF DESIGNATIONS
OF
ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES N
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on ________ __, 1995, pursuant to
authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the
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Rights Agreement, dated as of April 13, 1989 (as amended, the "Rights
Agreement"), between the Corporation and Chemical Bank, as Rights Agent, be
accompanied by a corresponding number of Chemical Rights (as defined in the
Merger Agreement), and (iii) each share (other than shares which would be
cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
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"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, 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, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (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 Corporation's
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
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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 a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation 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 dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
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 to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
________ __, 1995, pursuant to the authority conferred upon the Preferred Stock
Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
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State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Nine Million One Hundred Thousand
(9,100,000) shares of Adjustable Rate Cumulative Preferred Stock, Series N,
$1.00 par value, of the Corporation is hereby authorized, and the designation,
preferences and privileges, relative, participating, optional and other special
rights, and qualifications, limitations and restrictions of all 9,100,000
shares of this series, in addition to those set forth in the Certificate of
Incorporation of the Corporation and, with respect to voting rights, in the
resolutions of the Board of Directors of the Corporation adopted on October 17,
1995, are hereby fixed as follows:
1. Designation. The designation of such series shall be
"Adjustable Rate Cumulative Preferred Stock, Series N" (hereinafter
referred to as the "Series N Preferred Stock") and the number of
shares constituting such series is Nine Million One Hundred Thousand
(9,100,000). Shares of Series N Preferred Stock shall have a stated
value of $25.00 per share. The number of authorized shares of Series
N Preferred Stock may be reduced by further resolution duly adopted by
the Board of Directors of the Corporation or any duly authorized
committee thereof 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 Series N Preferred Stock shall not be increased.
The Series N Preferred Stock shall rank on a parity as to dividends
and distributions of assets with the series of Preferred Stock, $1.00
par value, of the Corporation designated as "10.96% Preferred Stock",
"8-3/8% Preferred Stock", "7.92% Cumulative Preferred Stock", "7.58%
Cumulative Preferred Stock", "7-1/2% Cumulative Preferred Stock",
"Adjustable Rate Cumulative Preferred Stock, Series L", "10-1/2%
Cumulative Preferred Stock", "9.76% Cumulative Preferred Stock",
"10.84% Cumulative Preferred Stock", "9.08% Cumulative Preferred
Stock", "8-1/2% Cumulative Preferred Stock", "8.32% Cumulative
Preferred Stock" and "8.40% Cumulative Preferred Stock". The Series N
Preferred Stock shall rank senior as to dividends and distributions of
assets to the series of Preferred Stock, $1.00 par value, of the
Corporation designated as Junior Participating Preferred Stock.
2. Dividends. Dividends shall be payable on the shares of
the Series N Preferred Stock, when and as declared by the Board of
Directors, for the Initial Dividend Period (as defined below) and each
quarterly dividend period (a
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"Quarterly Dividend Period"; the Initial Dividend Period and each such
Quarterly Dividend Period being hereinafter referred to as "Dividend
Periods") thereafter, which Quarterly Dividend Periods shall commence
on January 1, April 1, July 1 and October 1 in each year, commencing
with the first such date to occur after the effective time (the
"Effective Time") of the merger of The Chase Manhattan Corporation
("Chase") with and into the Corporation, and shall end on and include
the day next preceding the first day of the next Dividend Period, at a
rate per annum of the stated value thereof equal to the Applicable
Rate (as defined in Section 3) in respect of such Dividend Period,
expressed as a percentage to the nearest ten thousandth of a
percentage point. The amount of dividends per share for each Dividend
Period shall be computed by dividing the Applicable Rate for such
Quarterly Dividend Period by four and applying the resulting rate to
the stated value per share of the Series N Preferred Stock. The
Initial Dividend Period is the period commencing on the day following
the most recent date next preceding the Effective Time on which a
dividend was paid on the Preferred Stock, Adjustable Rate Series N, of
Chase (the "Chase Adjustable Rate Preferred")(or commencing on the
date of the Effective Time if such date was such a dividend payment
date) and shall end on and include the date next preceding the first
day of the next Quarterly Dividend Period; provided, however, that in
the event the Effective Time shall occur after the record date for the
payment of a regular quarterly dividend on the Chase Adjustable Rate
Preferred but prior to the payment date for such dividend, then the
Initial Dividend Period shall be the first Quarterly Dividend Period
as described in the preceding sentence. Dividends shall be cumulative
from the date on which the Initial Dividend Period commences and shall
be payable, when and as declared by the Board of Directors, on the
last day of March, June, September and December of each year,
commencing with the last day of the Initial Dividend Period. Each
such dividend shall be paid to the holders of record of shares of
Series N Preferred Stock as they appear on the stock register 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 of
the Corporation. Dividends on account of arrears for any past
dividend periods 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 of the Corporation.
In the event that there shall be outstanding shares of any other
series of Preferred Stock ranking on a parity as to dividends with the
Series N Preferred Stock, the Corporation, in making any dividend
payment on account of arrears on the Series N Preferred Stock or such
other series of Preferred Stock, shall make payments ratably upon all
outstanding shares of Series N Preferred Stock and such
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other series of Preferred Stock in proportion to the respective
amounts of dividends in arrears upon all such outstanding shares of
Series N Preferred Stock and such other series of Preferred Stock to
the date of such dividend payment. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment
or payments which may be in arrears. Dividends payable on the Series
N Preferred Stock for any period which is less than a full Quarterly
Dividend Period shall be computed on the basis of a 360 day year
consisting of twelve 30-day months.
3. Definition of Applicable Rate, etc.
Except as provided below in this paragraph, the "Applicable
Rate" for the Initial Dividend Period (if it commences prior to the
date of the Effective Time) shall be the Applicable Rate of the Chase
Adjustable Rate Prefered immediately prior to the Effective Time, and
for any Quarterly Dividend Period (including the Initial Dividend
Period if it commences on or after the date of the Effective Time)
will be equal to 85% of the Effective Rate (as hereinafter defined).
The "Effective Rate" for any Quarterly Dividend Period will be equal
to the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate (each as
hereinafter defined) for such Dividend Period. In the event that the
Corporation determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty
Year Constant Maturity Rate cannot be
determined for any Quarterly Dividend Period,
then the Effective Rate for such Quarterly
Dividend Period will be equal to the higher
of whichever two of such Rates can be so
determined;
(ii) only one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty
Year Constant Maturity Rate can be determined
for any Quarterly Dividend Period, then the
Effective Rate for such Quarterly Dividend
Period will be equal to whichever such Rate
can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year
Constant Maturity Rate can be determined for
any Quarterly Dividend Period, then the
Effective Rate for the preceding dividend
period will be continued for such Quarterly
Dividend Period.
Anything herein to the contrary notwithstanding, the Applicable Rate
for any Quarterly Dividend Period shall in
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no event be less than 4.50% per annum or greater than 10.50% per
annum.
Except as described below in this paragraph, the "Treasury
Bill Rate" for each Quarterly Dividend Period will be the arithmetic
average of the two most recent weekly per annum market discount rates
(or the one weekly per annum market discount rate, if only one such
rate is published during the relevant Calendar Period (as hereinafter
defined)) for three-month U.S. Treasury bills, as published weekly by
the Federal Reserve Board (as hereinafter defined) during the Calendar
Period immediately preceding the last ten calendar days preceding the
Quarterly Dividend Period for which the dividend rate on the Series N
Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum market discount
rate during such Calendar Period, then the Treasury Bill Rate for such
Quarterly Dividend Period will be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate is published
during the relevant Calendar Period) for three-month U.S. Treasury
bills, as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that a per annum market discount
rate for three-month U.S. Treasury bills is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period, then the
Treasury Bill Rate for such Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate, if
only one such rate is published during the relevant Calendar Period)
for all of the U.S. Treasury bills then having remaining maturities of
not less than 80 or more than 100 days, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such rates, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good
faith that for any reason no such U.S. Treasury bill rates are
published as provided above during such Calendar Period, then the
Treasury Bill Rate for such Quarterly Dividend Period will be the
arithmetic average of the per annum market discount rates based upon
the closing bids during such Calendar Period for each of the issues of
marketable non-interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for each
business day in New York City (or less frequently if daily quotations
are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the
Corporation. In the event that the
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Corporation determines in good faith that for any reason the
Corporation cannot determine the Treasury Bill Rate for any Quarterly
Dividend Period as provided above in this paragraph, the Treasury Bill
Rate for such Quarterly Dividend Period will be the arithmetic average
of the per annum market discount rates based upon the closing bids
during such Calendar Period for each of the issues of marketable
interest-bearing U.S. Treasury securities with a remaining maturity of
not less than 80 nor more than 100 days, as chosen and quoted daily
for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least
three recognized dealers in U.S. Government securities selected by the
Corporation.
Except as described below in this paragraph, the "Ten Year
Constant Maturity Rate" for each Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum Ten Year
Average Yields (as hereinafter defined) (or the one weekly per annum
Ten Year Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly by the Federal Reserve
Board during the Calendar Period immediately preceding the last ten
calendar days preceding the Quarterly Dividend Period for which the
dividend rate on the Series N Preferred Stock is being determined. In
the event that the Federal Reserve Board does not publish such a
weekly per annum Ten Year Average Yield during such Calendar Period,
then the Ten Year Constant Maturity Rate for such Quarterly Dividend
Period will be the arithmetic average of the two most recent weekly
per annum Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that a
per annum Ten Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum average
yields to maturity (or the one weekly per annum average yield to
maturity, if only one such yield is published during the relevant
Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities
(as hereinafter defined)) then having remaining maturities of not less
than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good
faith that for
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any reason the Corporation cannot determine the Ten Year Constant
Maturity Rate for any Quarterly Dividend Period as provided above in
this paragraph, then the Ten Year Constant Maturity Rate for such
Quarterly Dividend Period will be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during
such Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than eight nor
more than twelve years from the date of each such quotation, as chosen
and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
Except as described below in this paragraph, the "Thirty Year
Constant Maturity Rate" for each Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum Thirty Year
Average Yields (as hereinafter defined) (or the one weekly per annum
Thirty Year Average Yield, if only one such yield is published during
the relevant Calendar Period), as published weekly by the Federal
Reserve Board during the Calendar Period immediately preceding the
last ten calendar days preceding the Quarterly Dividend Period for
which the dividend rate on the Series N Preferred Stock is being
determined. In the event that the Federal Reserve Board does not
publish such a weekly per annum Thirty Year Average Yield during such
Calendar Period, then the Thirty Year Constant Maturity Rate for such
Quarterly Dividend Period will be the arithmetic average of the two
most recent weekly per annum Thirty Year Average Yields (or the one
weekly per annum Thirty Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the
event that a per annum Thirty Year Average Yield is not published by
the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then
the Thirty Year Constant Maturity Rate for such Quarterly Dividend
Period will be the arithmetic average of the two most recent weekly
per annum average yields to maturity (or the one weekly per annum
average yield to maturity, if only one such yield is published during
the relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) then having remaining maturities of not less than
twenty-eight nor more than thirty years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In the
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event that the Corporation determines in good faith that for any
reason the Corporation cannot determine the Thirty Year Constant
Maturity Rate for any Quarterly Dividend Period as provided above in
this paragraph, then the Thirty Year Constant Maturity Rate for such
Quarterly Dividend Period will be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during
such Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than
twenty-eight nor more than thirty years from the date of each such
quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in
U.S. Government securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate
and the Thirty Year Constant Maturity Rate shall each be rounded to
the nearest five hundredths of a percent.
The Applicable Rate with respect to each Quarterly Dividend
Period will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The
Corporation will cause each Applicable Rate to be published in a
newspaper of general circulation in New York City before the
commencement of the Quarterly Dividend Period to which it applies and
will cause notice of such Applicable Rate to be enclosed with the
dividend payment checks next mailed to the holders of Series N
Preferred Stock.
For purposes of this Section,
(i) "Calendar Period" means a period of fourteen
calendar days;
(ii) "Federal Reserve Board" means the Board of
Governors of the Federal Reserve System;
(iii) "Special Securities" means securities which
can, at the option of the holder, be
surrendered at face value in payment of any
Federal estate tax or which provide tax
benefits to the holder and are priced to
reflect such tax benefits or which were
originally issued at a deep or substantial
discount;
(iv) "Ten Year Average Yield" means the average
yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities
of ten years); and
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(v) "Thirty Year Average Yield" means the average
yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities
of thirty years).
4. Redemption. On or after June 30, 1999, the Corporation,
at its option, may redeem shares of the Series N Preferred Stock, as a
whole or in part, at any time or from time to time at a redemption
price of $25 per share plus an amount equal to the accrued and unpaid
dividends thereon to the date fixed for redemption (whether or not
such dividends have been declared). To permit the Series N Preferred
Stock to qualify as Tier 1 capital of the Corporation, any such
redemption shall be subject to the prior approval of the Board of
Governors of the Federal Reserve System.
In the event the Corporation shall redeem shares of Series N
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of Series N
Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (3) the redemption price; (4) the place or
places where certificates for such shares are to be surrendered for
payment of the redemption price; and (5) that dividends on the shares
to be redeemed will cease to accrue on such redemption date. Notice
having been mailed as aforesaid, from and after the redemption date
(unless default shall be made by the Corporation in providing money
for the payment of the redemption price) dividends on the shares of
the Series N Preferred Stock so called for redemption shall cease to
accrue, and notwithstanding the fact that any certificates for such
shares shall not have been surrendered for payment of the redemption
price, said shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. If less than all the outstanding
shares of Series N Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares
of Series N Preferred Stock not previously called for redemption by
lot or pro rata (as
13
nearly as may be) or by any other method determined by the Corporation
in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of Series N Preferred Stock pursuant to the first
paragraph of this Section 4 or purchase or otherwise acquire any
shares of Series N Preferred Stock unless full cumulative dividends
shall have been paid or declared and set apart for payment upon all
outstanding shares of Series N Preferred Stock for all past Dividend
Periods; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of Series N Preferred Stock pursuant
to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of Series N Preferred Stock.
5. Shares to be Retired. All shares of Series N Preferred
Stock redeemed or purchased by the Corporation shall be retired and
canceled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of Series N Preferred
Stock.
6. Conversion or Exchange. The holders of shares of Series N
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
7. Voting. The shares of Series N Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
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, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior
14
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 Corporation's 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 a default in preference
dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation 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 dividends upon
any series of the Preferred Stock shall be equivalent to six
full quarter-yearly 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 to the end of the last preceding dividend
period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would
15
adversely affect the voting power, preferences or special
rights of one or more, but not all, series of Preferred Stock
at the time outstanding, consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to
be cast by the holders of all of the shares of all such series
so affected, voting as a class, shall be required in lieu of
the consent of the holders of shares entitled to cast at least
two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock at the time
outstanding.
8. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the Series N Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders, before any distribution of assets shall
be made to the holders of Common Stock or of any other shares of stock
of the Corporation ranking as to such a distribution junior to the
Series N Preferred Stock, an amount equal to $25 per share plus an
amount equal to any accrued and unpaid dividends thereon to the date
fixed for payment of such distribution (whether or not such dividends
have been declared). If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the Series N Preferred Stock and any other
shares of stock of the Corporation ranking as to any such distribution
on a parity with the Series N Preferred Stock are not paid in full,
the holders of the Series N Preferred Stock and of such other shares
shall share ratably in any such distribution of assets of the
Corporation in proportion to the full respective preferential amounts
to which they are entitled. After payment to the holders of the
Series N Preferred Stock of the full preferential amounts provided for
in this Section 8, the holders of the Series N Preferred Stock shall
be entitled to no further participation in any distribution of assets
by the Corporation. The consolidation or merger of the Corporation
with or into any other corporation, or the sale of substantially all
the assets of the Corporation in consideration for the issuance of
equity securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 8, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the Series N Preferred Stock.
9. Limitation on Dividends on Junior Ranking Stock. So long
as any Series N Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock
of the Corporation ranking as to dividends or distributions of assets
junior to
16
the Series N Preferred Stock (the Common Stock and any such other
stock being herein referred to as "Junior Stock"), or make any payment
on account of, or set apart money for, a sinking or other analogous
fund for the purchase, redemption or other retirement of any shares of
Junior Stock, or make any distribution in respect thereof, whether in
cash or property or in obligations or stock of the Corporation, other
than Junior Stock (such dividends, payments, setting apart and
distributions being herein called "Junior Stock Payments"), unless all
of the conditions set forth in the following subsections A and B shall
exist at the date of such declaration in the case of any such
dividend, or the date of such setting apart in the case of any such
fund, or the date of such payment or distribution in the case of any
other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or declared
and set apart for payment upon all outstanding shares of Preferred
Stock other than Junior Stock.
B. The Corporation shall not be in default or in arrears with
respect to any sinking or other analogous fund or any call for tenders
obligation or other agreement for the purchase, redemption or other
retirement of any shares of Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_________________, its _____________________, and attested to by John B. Wynne,
its Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
---------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary