-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dBHqF6b8ueti86bJDxWZsYBGOyisc9dzuzQdbcMpb+ckY4aBSAy4yYBeIGhp1f+a +QhvvMzkfXPFFeT4ZpoVzQ== 0000831259-95-000010.txt : 19950814 0000831259-95-000010.hdr.sgml : 19950814 ACCESSION NUMBER: 0000831259-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN COPPER & GOLD INC CENTRAL INDEX KEY: 0000831259 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 742480931 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11307-01 FILM NUMBER: 95561843 BUSINESS ADDRESS: STREET 1: ONE E FIRST ST STE 1600 STREET 2: FIRST INTERSTATE BANK BLDG CITY: RENO STATE: NV ZIP: 89509 BUSINESS PHONE: 7026883000 FORMER COMPANY: FORMER CONFORMED NAME: FREEPORT MCMORAN COPPER COMPANY INC DATE OF NAME CHANGE: 19910114 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 1995 Commission File Number: 1-9916 Freeport-McMoRan Copper & Gold Inc. Incorporated in Delaware 74-2480931 (IRS Employer Identification No.) First Interstate Bank Building, One East First Street, Suite 1600, Reno, Nevada 89501 Registrant's telephone number, including area code: (702) 688-3000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- On June 30, 1995, there were issued and outstanding 83,132,408 shares of the registrant's Class A Common Stock, par value $0.10 per share, and 120,309,323 shares of its Class B Common Stock, par value $0.10 per share. FREEPORT-McMoRan COPPER & GOLD INC. TABLE OF CONTENTS Page Part I. Financial Information Financial Statements: Condensed Balance Sheets 3 Statements of Income 4 Statements of Cash Flow 5 Notes to Financial Statements 6 Remarks 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information 12 Signature 13 Exhibit Index E-1 FREEPORT-McMoRan COPPER & GOLD INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements. --------------------- FREEPORT-McMoRan COPPER & GOLD INC. CONDENSED BALANCE SHEETS (Unaudited) June 30, December 31, 1995 1994 ---------- ------------ ASSETS (In Thousands) Current assets: Cash and short-term investments $ 31,154 $ 44,252 Accounts receivable 252,913 234,224 Inventories 340,301 314,022 Prepaid expenses and other 12,157 10,896 ---------- ---------- Total current assets 636,525 603,394 Property, plant and equipment, net 2,672,547 2,360,489 Other assets 79,654 76,314 ---------- ---------- Total assets $3,388,726 $3,040,197 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 443,615 $ 407,478 Current portion of long-term debt and short-term borrowings 44,671 24,098 ---------- ---------- Total current liabilities 488,286 431,576 Long-term debt, less current portion 831,139 525,612 Accrued postretirement benefits and other liabilities 177,690 213,043 Deferred income taxes 320,984 292,580 Minority interests 93,657 82,404 Mandatory redeemable preferred stock 500,007 500,007 Stockholders' equity 976,963 994,975 ---------- ---------- Total liabilities and stockholders' equity $3,388,726 $3,040,197 ========== ========== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, -------------------- --------------------- 1995 1994 1995 1994 -------- -------- -------- -------- (In Thousands, Except Per Share Amounts) Revenues $421,469 $281,452 $830,275 $547,605 Cost of sales: Production and delivery 221,534 172,695 445,736 337,138 Depreciation and amortization 28,211 18,319 50,108 35,440 -------- ------- -------- -------- Total cost of sales 249,745 191,014 495,844 372,578 Exploration expenses 11,654 11,564 19,610 19,584 General and administrative expenses 29,354 26,361 62,204 49,441 -------- -------- -------- -------- Total costs and expenses 290,753 228,939 577,658 441,603 -------- -------- -------- -------- Operating income 130,716 52,513 252,617 106,002 Interest expense, net (11,799) - (11,799) - Other expense, net (920) (427) (1,638) (901) -------- -------- -------- -------- Income before income taxes and minority interests 117,997 52,086 239,180 105,101 Provision for income taxes (50,528) (24,359) (101,923) (47,501) Minority interests in net income of consolidated subsidiaries (13,285) (5,426) (25,677) (9,435) -------- -------- -------- -------- Net income 54,184 22,301 111,580 48,165 Preferred dividends (13,559) (12,583) (26,962) (24,888) -------- -------- -------- -------- Net income applicable to common stock $ 40,625 $ 9,718 $ 84,618 $ 23,277 ======== ======== ======== ======== Net income per share of common stock $.20 $.05 $.41 $.11 ==== ==== ==== ==== Average common shares outstanding 205,157 205,933 205,555 205,572 ======= ======= ======= ======= Dividends per common share $.15 $.15 $.30 $.30 ==== ==== ==== ==== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF CASH FLOW (Unaudited) Six Months Ended June 30, ---------------------- 1995 1994 -------- -------- (In Thousands) Cash flow from operating activities: Net income $111,580 $ 48,165 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 50,108 35,440 Deferred income taxes 28,404 16,234 Recognition of unearned revenue (36,207) - Minority interests' share of net income 25,677 9,435 (Increase) decrease in working capital: Accounts receivable (7,537) 23,773 Inventories (30,817) (43,563) Prepaid expenses and other (1,229) (9,065) Accounts payable and accrued liabilities 503 22,394 Other (1,893) (6,887) -------- -------- Net cash provided by operating activities 138,589 95,926 -------- -------- Cash flow from investing activities: Capital expenditures: PT-FI (240,245) (312,273) RTM, including acquisition cost (67,854) (19,436) Other - 2,047 -------- -------- Net cash used in investing activities (308,099) (329,662) -------- -------- Cash flow from financing activities: Net proceeds from sale of: Gold-denominated preferred stock - 158,476 9 3/4% senior notes - 116,276 Proceeds from debt, net 81,339 63,220 Proceeds from infrastructure financing, net 228,899 - Cash dividends paid: Common stock (61,774) (61,723) Preferred stock (25,124) (22,221) Minority interests (15,461) (12,107) Purchase of FCX common shares (52,841) - Other 1,374 - -------- -------- Net cash provided by financing activities 156,412 241,921 -------- -------- Net increase (decrease) in cash and short-term investments (13,098) 8,185 Cash and short-term investments at beginning of year 44,252 13,798 -------- -------- Cash and short-term investments at end of period $ 31,154 $ 21,983 ======== ======== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. NOTES TO FINANCIAL STATEMENTS 1. OWNERSHIP OF FCX COMMON STOCK In May 1994, Freeport-McMoRan Inc. (FTX) announced that it was taking steps to effect the tax-free distribution to its common stockholders of all the Class B common stock of Freeport-McMoRan Copper & Gold Inc. (FCX) which FTX owned. FTX recently completed the final steps of its restructuring and, on July 5, 1995, the FTX Board of Directors declared a distribution of all shares of FCX Class B common stock to FTX common stockholders of record on July 17, 1995. As a result of this distribution, FTX no longer owns any interest in FCX. As part of FTX's restructuring, the RTZ Corporation PLC (RTZ) purchased 23.9 million shares of FCX Class A common stock (approximately 12 percent of the outstanding common stock of FCX) from FTX. Additionally, FCX and RTZ have agreed in principle to establish joint ventures whereby RTZ is to become a 40 percent joint venture partner in FCX's future production expansions and exploration and development activities in Indonesia. Subject to completing the contractual arrangements, RTZ has agreed to pay the next $100 million of exploration expenses (including $6 million expensed by FCX during the second quarter of 1995) with expenditures beyond $100 million shared 60 percent by FCX and 40 percent by RTZ. In FCX's Block A, RTZ will fund up to $750 million of the costs of future expansion projects and receive 100 percent of incremental cash flow until RTZ recoups its costs with interest, after which the cash flow would be shared 60 percent by PT-FI and 40 percent by RTZ. RTZ is also expected to acquire a 25 percent interest in both the Rio Tinto Minera, S.A. smelter and mineral exploration program. 2. CREDIT FACILITIES In July 1995, the FTX credit agreement in which P.T. Freeport Indonesia Company (PT-FI) participated was modified to become a separate $550 million facility for PT-FI ($530 million available at July 31, 1995) and a new $200 million facility was arranged for FCX and PT-FI ($79 million available at July 31, 1995). FCX repaid an intercompany loan from FTX ($97.7 million at June 30, 1995) by borrowing funds under the new facility. The new variable rate facilities mature in December 1999 and have covenants and security requirements which are similar to the previous FTX credit agreement. As part of FTX's restructuring, FCX assumed the guarantee of $90 million of FM Properties Inc. debt previously guaranteed by FTX and will receive an annual 3 percent fee from FTX on the amount guaranteed. 3. INTEREST COSTS Interest expense excludes capitalized interest of $11.2 million and $6.9 million in the second quarter of 1995 and 1994, respectively, and $29.1 million and $12.8 million in the first six months of 1995 and 1994, respectively. 4. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges for the first six months of 1995 and 1994 was 6 to 1 and 7.4 to 1, respectively. For this calculation, earnings are income from continuing operations before income taxes, minority interests and fixed charges. Fixed charges include interest and that portion of rent deemed representative of interest. ---------------------- Remarks The information furnished herein should be read in conjunction with FCX's financial statements contained in its 1994 Annual Report to stockholders and incorporated by reference in its Annual Report on Form 10-K. The information furnished herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the periods. All such adjustments are, in the opinion of management, of a normal recurring nature. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS Freeport-McMoRan Copper & Gold Inc. (FCX) operates through its majority-owned subsidiaries, P.T. Freeport Indonesia Company (PT-FI), Rio Tinto Minera, S.A. (RTM) and P.T. Irja Eastern Minerals Corporation (Eastern Mining). PT-FI's operations involve the exploration for and development, mining and milling of ore containing copper, gold and silver in Irian Jaya, Indonesia. RTM is engaged in the smelting and refining of copper concentrates in Spain. Eastern Mining conducts exploration activities in Irian Jaya. Second Quarter Six Months ----------------- ----------------- 1995 1994 1995 1994 ------ ------ ------ ------ (In Millions, Except Per Share Amounts) Revenues $421.5 $281.5 $830.3 $547.6 Operating income 130.7 a 52.5 252.6 a 106.0 Net income to common stock 40.6 a 9.7 84.6 a 23.3 Net income per share .20 a .05 .41 a .11 Operating income (loss) by subsidiary: PT-FI $146.3 a $ 63.3 $276.3 a $114.1 RTM (7.2) 1.0 (9.8) 2.7 Eastern Mining (3.0) (1.5) (6.1) (1.5) Intercompany eliminations and other (5.4) (10.3) (7.8) (9.3) ------ ------ ------ ------ $130.7 $ 52.5 $252.6 $106.0 ====== ====== ====== ====== a. Includes a $12.5 million charge ($7 million to net income or $0.03 per share) for a materials and supplies inventory reserve adjustment in connection with the completion of PT-FI's expansion program. FCX's second-quarter and six-month 1995 revenues rose significantly compared to the 1994 periods reflecting higher copper realizations, record copper production levels and improved gold grades. Mill throughput averaged 113,100 metric tons of ore per day (MTPD) for the 1995 quarter and 119,200 MTPD for the month of June 1995, as PT-FI substantially completed its expansion to 118,000 MTPD. PT-FI expects to sustain production levels of at least 118,000 MTPD for the remainder of 1995 and is likely to exceed this level of output. Treatment charges, royalties and other increased because of the higher copper sales volumes. A reconciliation of revenues between the periods follows (in millions): Second Six Quarter Months ------- ------ Revenues - 1994 $281.5 * $547.6 * Increases (decreases): RTM revenues, net of eliminations 16.0 36.5 PT-FI revenues: Price realizations: Copper 53.7 116.2 Gold 1.2 (.1) Volumes: Copper 51.6 90.8 Gold 31.8 58.4 Treatment charges, royalties and other (14.3) (19.1) ------ ------ Revenues - 1995 $421.5 * $830.3 * ====== ====== * Includes net reductions totaling $1.7 million and $5 million for the second quarter and six-month period of 1994, respectively, and $19.9 million and $32.3 million for the second quarter and six-month period of 1995, respectively, recognized under PT-FI's copper price protection program and RTM's gold hedging program. PT-FI OPERATIONS Second Quarter Six Months ------------------ ------------------- 1995 1994 1995 1994 ------- ------- ------- ------- Ore milled (MTPD) 113,100 71,300 99,100 72,300 Copper grade (%) 1.26 1.39 1.31 1.38 Gold grade (grams per MT) 1.28 1.13 1.35 1.24 Recovery rate (%) Copper 86.0 84.0 84.1 83.7 Gold 72.7 73.0 72.7 70.9 Copper (000s of recoverable pounds) Production 237,200 161,000 420,100 321,500 Sales 219,300 168,800 415,600 324,500 Average realized price a $1.27 $1.02 $1.28 $1.00 Gold (recoverable ounces) Production 295,800 165,700 545,300 356,500 Sales 269,500 185,400 540,500 386,700 Average realized price $382.41 $378.00 $379.39 $379.53 Gross profit per pound of copper (cents): Average realized price a 126.7 102.2 127.6 99.6 ----- ----- ----- ----- Production costs: Site production and delivery 54.3 b 61.4 58.4 b 60.4 Gold and silver credits (47.9) (42.5) (50.3) (45.6) Treatment charges 19.9 24.2 19.7 23.7 Royalty on metals 4.1 2.0 4.3 1.7 ----- ----- ----- ----- Cash production costs 30.4 45.1 32.1 40.2 Depreciation and amortization 11.0 7.5 9.6 7.5 ----- ----- ----- ----- Total production costs 41.4 52.6 41.7 47.7 ----- ----- ----- ----- Revenue adjustments c 1.1 5.2 (1.4) (0.3) ----- ----- ----- ----- Gross profit per pound of copper 86.4 54.8 84.5 51.6 ===== ===== ===== ===== a. Excluding amounts recognized under PT-FI's copper price protection program, realizations would have been $1.36 and $0.99 per pound for the second quarter of 1995 and 1994, respectively, and $1.35 and $0.98 per pound for the six-month periods of 1995 and 1994, respectively. b. Excludes the materials and supplies inventory reserve adjustment discussed earlier (5.7 cents and 3 cents per pound for the second-quarter and six-month 1995 periods, respectively). c. Reflects adjustments primarily for prior period concentrate sales and amortization of the cost of the copper price protection program. With the expansion completed, PT-FI is focusing on maximizing efficiencies and, as expected, unit site production and delivery costs have declined. PT-FI intends to continue to fine-tune its operations to achieve cost efficiencies and maximum cash flows from its expanded operations. Gold and silver credits increased primarily because of a rise in comparative gold grades. Per pound treatment charges declined because of reduced rates negotiated at the end of 1994 resulting from the overall tightness in the copper concentrates market, somewhat offset by higher price participation payments. Unit royalties rose because of increased copper prices, as PT-FI's copper royalty rate varies from 1.5 percent to 3.5 percent depending on the price of copper. The second-quarter 1995 depreciation rate of 11 cents per pound includes the additional capital expenditures to support current operating levels of 118,000 MTPD. Future changes to the depreciation rate will depend on future capital costs, together with consideration of any changes in ore reserve estimates. PT-FI has commitments from various parties to purchase virtually all of its estimated 1995 production of approximately 900 million pounds of copper and 1.2 million ounces of gold, at market prices. With the completion of the 118,000 MTPD expansion, management's present intention is to provide a floor price for its future sales, when attainable at an acceptable cost, to protect operating cash flow from the impact of potentially significant declines in copper prices while providing for full participation in potentially higher prices. During the second half of 1995, PT-FI will realize $1.15 per pound on 241.4 million pounds of copper sales and has established a minimum average price of $0.83 per pound on the remaining second half copper sales with full participation in prices above that amount. For 1996 and the first quarter of 1997, PT-FI has established a minimum average price of $0.90 per pound on 1.2 billion pounds of copper sales, with full participation in prices above that amount. As conditions warrant, PT-FI may modify or extend its existing programs. At June 30, 1995, the unrecognized cost to unwind its hedging positions (including $36 million of cost included in inventory) was approximately $40 million. At June 30, 1995, copper sales totaling 290.2 million pounds remained to be contractually priced in 1995. As a result of PT-FI's hedging activities, 124.4 million of those pounds, which are currently recorded at $1.37 per pound, are subject to changes in the price of copper. During the first quarter of 1995, PT-FI implemented a gold pricing strategy designed to take advantage of the premium which exists between the spot and futures gold price. As of June 30, 1995, PT-FI will earn an additional $2.7 million on 585,000 ounces of gold sales in September 1995 through February 1996. RTM OPERATIONS Second Quarter Six Months ------------------- ------------------ 1995 1994 1995 1994 ------ ------- ------- ------- Concentrate treated (MT) 55,900 126,400 174,300 244,400 Anode production (000s of pounds) 39,200 91,900 123,100 175,500 Cathode production (000s of pounds) 55,100 77,800 130,500 154,100 RTM's 1995 results were adversely affected by significantly lower treatment charge rates somewhat offset by higher price participation. Second quarter smelter operations were negatively affected by the shutdown of RTM's smelter for approximately half of the quarter to tie-in expansion equipment and for maintenance turnarounds. In late July 1995, RTM's smelter was shutdown for approximately one week because of a labor strike at an adjacent facility which resulted in the temporary curtailment of cooling water at RTM's facilities. Also in July 1995 RTM completed the sale of its mining operations to a group of its employees. This sale, which involves certain payments by RTM as discussed below, is not expected to result in significant gain or loss being recognized by FCX. RTM's results for the six-month 1995 period were also negatively impacted by the strengthening of the Spanish peseta against the U.S. dollar which, at current operating levels, has an approximately $1 million impact on RTM's annual earnings and cash flow for each one peseta change in the exchange rate. OTHER FINANCIAL RESULTS FCX's exploration costs totaled $11.7 million for the 1995 quarter and $11.6 million for the 1994 quarter while the six-month periods both totaled $19.6 million. FCX and RTZ Corporation PLC (RTZ) are in the process of completing agreements to establish exploration joint ventures whereby RTZ would be a 40 percent joint venture partner and will pay for approved exploration expenditures until it has paid an aggregate $100 million, including $6 million charged to expense in the second quarter of 1995 (Note 1). FCX (60 percent) and RTZ (40 percent) will then pay ratably for any additional exploration costs and costs to develop projects within PT-FI's Block B Contract of Work (COW) area and Eastern Mining's COW area. FCX's general and administrative expenses were $62.2 million for the six months ended June 30, 1995 compared with $49.4 million in the 1994 period. The increase results from the additional personnel and administrative efforts required to manage the expanded operations. Third quarter general and administrative expenses may increase because of the impact of the higher share price of FCX Class B common stock on FCX's established management incentive compensation program. If the price of FCX Class B shares were to remain at $24.75 per share, the price on August 10, 1995, third quarter general and administrative expense would increase by approximately $15 million. FCX's total interest cost (before capitalization) rose to $40.9 million for the six-month 1995 period from $12.8 million in the 1994 period primarily caused by higher average debt levels. Because of the significant expansion projects at PT-FI and RTM, all interest was capitalized through the first quarter of 1995. As expansion activities are completed, interest costs are charged as expense prospectively. The 118,000 MTPD expansion was completed during the second quarter of 1995. Standard & Poor's has recently upgraded FCX's senior debt to the investment grade rating of BBB- as a result of the RTZ joint venture and the elimination of uncertainties regarding future financial needs for exploration and expansion related activities. This debt rating upgrade will reduce future interest costs for FCX and PT-FI. FCX's effective tax rate was 43 percent for the six-month period of 1995 and 1994. PT-FI's COW provides a 35 percent income tax rate and a 15 percent withholding on dividends paid to FCX by PT-FI and on interest for debt incurred after the signing of the COW. No income tax provision or benefit is recorded at RTM, which is subject to taxation in Spain, because it has not generated taxable income in recent years and has significant tax benefit carryforwards. CAPITAL RESOURCES AND LIQUIDITY Net cash provided by operating activities rose to $138.6 million for the first six months of 1995, compared with $95.9 million for the 1994 period, primarily because of higher net income. Cash flow used in investing activities reflects a decrease in PT-FI expenditures to $240.2 million, compared with $312.3 million in the 1994 period, with the completion of the 118,000 MTPD expansion during the second quarter, 1995. RTM expenditures increased to $67.9 million for the six-month 1995 period because of the smelter expansion, compared with $19.4 million in the 1994 period. Cash flow provided by financing activities totaled $156.4 million in 1995 compared with $241.9 million in 1994. During the second quarter of 1995, FCX acquired 2.5 million of its shares for an aggregate $52.8 million under its program to acquire shares when warranted by market conditions. In July 1995, FCX acquired another 0.9 million of its shares for an aggregate $17.6 million. The 1995 period included $228.9 million of proceeds from infrastructure financing and the 1994 period included $274.8 million from issuances of public securities. PT-FI's capital expenditures for the remainder of 1995 are expected to approximate $200 million for completion of the expansion and infrastructure assets. Expenditures will be funded by operating cash flow, further sales of infrastructure assets, the bank credit facility (Note 2) and other financing sources. PT-FI and RTZ are undertaking feasibility studies for an expansion of PT-FI's current milling capacity to 175,000-200,000 MTPD. For further expansion projects in the current Block A mining area, beyond the current 118,000 MTPD expansion, RTZ will provide up to $750 million to develop such projects. RTZ will receive the incremental cash flow attributed to PT-FI's interest in the expansion projects until it has received an amount equal to the funds it had provided with respect to PT-FI's interest plus interest based on RTZ's cost of borrowing. Subsequently, incremental cash flow will be shared by FCX (60 percent) and RTZ (40 percent). In March 1995, PT-FI sold certain of its port, marine, logistics and construction equipment and facilities for $100 million. In June 1995, PT-FI sold $100 million of its power-related assets and $48 million of its aviation assets bringing the total sales of infrastructure assets to $542.9 million through June 30, 1995 and leaving approximately $115 million for the remainder of 1995. PT-FI has guaranteed certain minimum rates of return in each of the above transactions. RTM has a turnkey contract to expand its smelter capacity to 270,000 metric tons of metal per year by early 1996 and has obtained $290 million of project financing, nonrecourse to FCX, including a working capital line. During June 1995, RTM entered into interest rate swaps, maturing in five years, on $80 million of its project financing at an average fixed rate of 6.1 percent. The expansion project continues on schedule and within budget and is approximately 75 percent complete. As discussed earlier, RTM sold its mining operations during the third quarter and, in exchange for assuming certain RTM liabilities, RTM will make cash payments to the buyers. RTM has arranged a loan to cover the initial payment of $19.5 million. The remaining approximately $19 million, which is payable over the next 2 1/2 years, may be funded by operating cash flow, bank loans or funding from FCX. RTM's future operating cash flow will be determined by the supply and demand for copper smelter capacity, smelter and refining production rates and the exchange rate between the U.S. dollar and Spanish peseta. PT-FI has a long-term contract to provide the smelter with a significant portion of its copper concentrate requirements. In January 1995, FCX agreed in principle to form a joint venture, 20 percent owned by FCX, to develop a 200,000 metric tons of metal per year copper smelter in Gresik, Indonesia. A feasibility study is expected to be completed this year and alternatives for financing the estimated $550 million aggregate project cost, plus approximately $100 million of working capital, are being reviewed. Upon completion of RTM's smelter expansion and the proposed Gresik smelter, FCX anticipates that approximately 70 percent of PT- FI's expanded annual concentrate production will be sold to affiliates at market prices. On July 5, 1995, the FCX Board of Directors declared a cash dividend of $0.15 per share on FCX's Class A common stock and Class B common stock, payable August 1, 1995. The declaration and amount of future dividends, if any, will depend upon appropriate action of the Board of Directors and economic and market factors which cannot be predicted. -------------------- The results of operations reported and summarized above are not necessarily indicative of future operating results. FREEPORT-McMoRan COPPER & GOLD INC. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- (a) The annual meeting of the security holders (the "Annual Meeting") of the registrant, for which proxies were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, was held on May 4, 1995. Matters voted upon were (i) the election of directors (there was no solicitation in opposition to management's nominees, all of whom were elected) and (ii) the ratification of the appointment of independent auditors. (c) The first matter voted upon at the Annual Meeting was the election of Leland O. Erdahl, Ronald Grossman, Rene L. Latiolais, George A. Mealey, James R. Moffett, Wolfgang F. Siegel, Elwin E. Smith and Eiji Umene as directors, each to serve for one year and until his successor is elected and qualified. The numbers of votes cast for or withheld from each nominee were as follows: FOR WITHHELD --- -------- Mr. Erdahl 194,441,852 389,383 Mr. Grossman 194,448,528 382,707 Mr. Latiolais 194,449,809 381,426 Mr. Mealey 194,452,336 378,899 Mr. Moffett 194,443,615 387,620 Mr. Siegel 194,306,225 525,010 Mr. Smith 194,430,817 400,418 Mr. Umene 194,297,447 533,788 The second matter voted upon at the Annual Meeting was the ratification of the appointment of Arthur Andersen LLP to act as the independent auditor of the registrant for 1995. The numbers of votes cast for or against and the number of abstentions as to such matter were as follows: FOR AGAINST ABSTENTIONS --- ------- ----------- 194,503,508 86,024 241,703 Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) The exhibits to this report are listed in the Exhibit Index appearing on Page E-1 hereof. (b) No reports on Form 8-K were filed by the registrant during the quarter for which this report is filed. FREEPORT-McMoRan COPPER & GOLD INC. SIGNATURE ---------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FREEPORT-McMoRan COPPER & GOLD INC. By: /s/ John T. Eads -------------------------------- John T. Eads Controller - Financial Reporting (authorized signatory and Principal Accounting Officer) Date: August 11, 1995 FREEPORT-McMoRan COPPER & GOLD INC. EXHIBIT INDEX -------------- Sequentially Numbered Number Description Page - ------ ------------ ------------ 2.1 AGREEMENT, dated as of May 2, 1995, by and between Freeport-McMoRan Inc.("FTX") and Freeport-McMoRan Copper & Gold Inc. ("FCX") on the one hand, and The RTZ Corporation PLC, a company organized under the laws of England ("RTZ"), RTZ Indonesia Limited, a company organized under the laws of England and a subsidiary of RTZ, and RTZ America, Inc., a Delaware corporation and a subsidiary of RTZ, on the other hand (the "Agreement"). Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of FTX dated as of May 26, 1995. 2.2 Amendment dated May 31, 1995 to the Agreement. Incorporated by reference to Exhibit 2.1 to the Quarterly Report on Form 10-Q of FTX for the quarter ended June 30, 1995. 3.1 Certificate of Incorporation of FCX, as amended. 3.2 By-Laws of FCX, as amended. 4.1 Certificate of Designations of the 7% Convertible Exchangeable Preferred Stock. 4.2 Certificate of Designations of the Step-Up Convertible Preferred Stock, as amended. 4.3 Certificate of Designations of the Gold-Denominated Preferred Stock, as amended. 4.4 Certificate of Designations of the Gold-Denominated Preferred Stock, Series II, as amended. 4.5 Certificate of Designations of the Silver-Denominated Preferred Stock, as amended. 27.1 Financial Data Schedule EX-3 2 Exhibit 3.1 FREEPORT-McMoRan COPPER & GOLD INC. CERTIFICATE OF INCORPORATION FIRST: The name of the corporation is Freeport-McMoRan Copper & Gold Inc. SECOND: The address of the registered office of the corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, and the name of its registered agent at such address is The Corporation Trust Company. THIRD: The nature of the business or purposes to be conducted or promoted are: (a) To enter into, maintain, operate and carry on the business of mining in all its branches in the United States of America and in any other part of the world, and to quarry, mine, pump, extract, remove and otherwise produce, and to grind, treat, concentrate, smelt, refine, dress and otherwise prepare, produce, buy, sell and in every way deal in and with minerals, ores, concentrates and other mineral and chemical substances of all kinds, metallic and nonmetallic, including, but without in any way limiting the generality of the foregoing, antimony, barite, chromium, coal, cobalt, copper, gas, gold, iron, lead, molybdenum, nickel, oil, potash, salt, silica, sand, silver, sulphur, tantalum, tin, titanium, tungsten, uranium, zinc, and ores and concentrates thereof. (b) To purchase, locate, denounce or otherwise acquire, take, hold and own, and to assign, transfer, lease, exchange, mortgage, pledge, sell or otherwise dispose of and in any manner deal with and contract with reference to, mines, wells, mining claims, mining rights, mineral lands, mineral leases, mineral rights, royalty rights, water rights, timber lands, timber and timber rights, and real and personal property of every kind, and any interest therein, in the United States of America or in any other country, to prospect, explore, work, exercise, develop, manage, operate and turn the same to account, and to engage in mining, geological, economic, feasibility, development, and other studies in the United States of America or in any other country. (c) To make, manufacture, treat, process, produce, buy, sell and in every way deal in and with minerals, ores, concentrates and chemicals of every description, organic or inorganic, natural or synthetic, in the form of raw materials, intermediate or finished products and any other related products and substances whatsoever related thereto or of a like or similar nature or which may enter into the manufacture of any of the foregoing or be used in connection therewith, and derivatives and by-products derived from the manufacture thereof and products to be made therefrom and generally without limitation by reference of the foregoing, all other products and substances of every kind, character and description. (d) To engage in any lawful act or activity, whether or not related to the foregoing, for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: (a) Authorized Stock. The total number of shares of capital stock that the corporation shall have authority to issue is 473,600,000 shares, consisting of 50,000,000 shares of Preferred Stock, par value $0.10 per share, 211,800,000 shares of Class A Common Stock, par value $0.10 per share, and 211,800,000 shares of Class B Common Stock, par value $0.10 per share. The Class A Common Stock and the Class B Common Stock are collectively referred to herein as the "Common Stock". Of the authorized number of shares of Preferred Stock, 447,800 of such shares shall be a series of Preferred Stock designated as "7% Convertible Exchangeable Preferred Stock"; 700,000 of such shares shall be a series of Preferred Stock designated as "Step-Up Convertible Preferred Stock"; 300,000 of such shares shall be a series of Preferred Stock designated as "Gold-Denominated Preferred Stock"; 215,279 of such shares shall be a series of Preferred Stock designated as "Gold-Denominated Preferred Stock, Series II"; and 119,000 of such shares shall be a series of Preferred Stock designated as "Silver-Denominated Preferred Stock" (collectively referred to herein as the "Existing Preferred Stock"). (b) Common Stock. The Class A Common Stock and the Class B Common Stock shall be identical in all respects, except as otherwise expressly provided herein, and the relative powers, preferences, rights, qualifications, limitations and restrictions of the shares of Class A Common Stock and Class B Common Stock shall be as follows: (1) Cash or Property Dividends. Subject to the rights and preferences of the Preferred Stock as set forth in any resolution or resolutions of the Board of Directors providing for the issuance of such stock pursuant to Section (c) of this Article FOURTH, and except as otherwise provided for herein, the holders of Class A Common Stock and Class B Common Stock are entitled to receive dividends out of assets legally available therefor at such times and in such equal per share amounts as the Board of Directors may from time to time determine. (2) Stock Dividends. If at any time a dividend is to be paid in shares of Class A Common Stock or shares of Class B Common Stock (a "stock dividend"), such stock dividend may be declared and paid only as follows: only Class A Common Stock may be paid to holders of Class A Common Stock and only Class B Common Stock may be paid to holders of Class B Common Stock, and whenever a stock dividend is paid, the same rate or ratio of shares shall be paid in respect of each outstanding share of Class A Common Stock and Class B Common Stock. (3) Stock Subdivisions and Combinations. The corporation shall not subdivide, reclassify or combine stock of either class of Common Stock without at the same time making a proportionate subdivision or combination of the other class. (4) Voting. Voting power shall be divided between the classes and series of stock as follows: (A) Subject to Section (b)(4)(B) of this Article FOURTH, with respect to the election of directors, holders of Class A Common Stock and holders of Voting Preferred Stock (as defined below), voting together, shall be entitled to elect that number of directors which constitutes 20% of the authorized number of members of the Board of Directors (or, if such 20% is not a whole number, then the nearest lower whole number of directors that is closest to 20% of such membership). Each share of Class A Common Stock and each share of Voting Preferred Stock shall have one vote in the election of such directors. Subject to Section (b)(4)(B) of this Article FOURTH, holders of Class B Common Stock shall be entitled to elect the remaining directors. Each share of Class B Common Stock shall have one vote in the election of such directors. For purposes of this Section (b)(4) and Section (b)(5) of this Article FOURTH, references to the authorized number of members of the Board of Directors (or the remaining directors) shall not include any directors which the holders of any shares of Preferred Stock have the exclusive right to elect as granted in accordance with Section (c)(6) of this Article FOURTH. For purposes of this Section (b)(4), "Special Voting Rights" means the different voting rights of the holders of Class A Common Stock, holders of Class B Common Stock and holders of Voting Preferred Stock with respect to the election of the applicable percentage of the authorized number of members of the Board of Directors as described in this Section (b)(4)(A). The "Voting Preferred Stock" means (i) each series of the Existing Preferred Stock, in each case so long as such series remains outstanding and (ii) any other series of Preferred Stock upon which the right to vote for directors pursuant to this Section (b)(4) has been conferred in accordance with Section (c)(6) of this Article FOURTH. (B) In the event that a majority of the shares of Class A Common Stock and Class B Common Stock present and voting at any annual or special meeting of stockholders of the corporation are voted to eliminate the Special Voting Rights, then Section (b)(4)(A) of this Article FOURTH shall have no further force or effect, and thereafter holders of Common Stock and holders of Voting Preferred Stock, voting together, shall be entitled to elect all members of the Board of Directors. (C) Any director may be removed, with cause, by a vote of the holders of Class A Common Stock, holders of Class B Common Stock, and holders of Voting Preferred Stock, voting together. (D) Except as otherwise specified herein, the holders of Class A Common Stock and holders of Class B Common Stock (i) shall in all matters not otherwise specified in this Section (b)(4) or Section (b)(5) of this Article FOURTH vote together (including, without limitation, with respect to increases or decreases in the authorized number of shares of any class of Common Stock), with each share of Class A Common Stock and Class B Common Stock having one vote, and (ii) shall be entitled to vote as separate classes only when required by law to do so under mandatory statutory provisions that may not be excluded or overridden by a provision in the certificate of incorporation or as provided herein. (E) Except as set forth in this Section (b)(4) or Section (b)(5) of this Article FOURTH, the holders of Class A Common Stock shall have exclusive voting power (except for any voting powers of any Preferred Stock) on all matters at any time when no Class B Common Stock is issued and outstanding, and the holders of Class B Common Stock shall have exclusive voting power (except for any voting powers of any Preferred Stock) on all matters at any time when no Class A Common Stock is issued and outstanding. (5) Vacancies; Increases or Decreases in Size of the Board of Directors. Any vacancy in the office of a director created by the death, resignation or removal of a director elected by (or appointed on behalf of) the holders of a class or classes of stock may be filled by a vote of holders of such class of stock, or if applicable, classes of stock, voting together, unless the Special Voting Rights have been eliminated in accordance with Section (b)(4)(B) of this Article FOURTH. Notwithstanding anything in this Section (b)(5) or Section (b)(4) of this Article FOURTH to the contrary, any vacancy in the office of a director may also be filled by the vote of the majority of the directors (or the sole remaining director) elected by (or appointed on behalf of) the same class or classes of stock that elected that director (or on behalf of which that director was appointed) whose death, resignation or removal created the vacancy, unless there are no such directors or the Special Voting Rights have been eliminated in accordance with Section (b)(4)(B) of this Article FOURTH, in which case such vacancy may be filled by the vote of the majority of the directors or by the sole remaining director, regardless, in each instance, of any quorum requirements set out in the by- laws. Any director elected by some or all of the directors or by the stockholders to fill a vacancy shall hold office for the remainder of the full term of the director whose vacancy is being filled and until such director's successor shall have been elected and qualified unless removed and replaced pursuant to Section (b)(4)(C) of this Article FOURTH and this Section (b)(5). The Board may increase the number of directors and any newly-created directorship so created may be filled by the Board, provided that (unless the Special Voting Rights have been eliminated in accordance with Section (b)(4)(B) of this Article FOURTH) the Board may be so enlarged by the Board only to the extent that 20% (or, if such 20% is not a whole number, then the nearest lower whole number of directors that is closest to 20%) of the authorized number of members of the enlarged Board consists of directors elected by (or appointed on behalf of) the holders of Class A Common Stock and Voting Preferred Stock. Any director elected (or appointed) in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created and until such director's successor shall have been elected and qualified unless removed and replaced pursuant to Section (b)(4)(C) of this Article FOURTH and this Section (b)(5). No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. If the number of directors is changed, any increase or decrease shall be apportioned among the classes of directors established pursuant to Article FIFTH so as to maintain the number of directors in each class as nearly equal as possible. (6) Merger or Reorganization. In case of any reorganization or any consolidation of the corporation with one or more other corporations or a merger of the corporation with another corporation, each holder of a share of Class A Common Stock shall be entitled to receive with respect to such share the same kind and amount of shares of stock and other securities and property (including cash) receivable upon such reorganization, consolidation or merger by a holder of a share of Class B Common Stock, and each holder of a share of Class B Common Stock shall be entitled to receive with respect to such share the same kind and amount of shares of stock and other securities and property (including cash) receivable upon such reorganization, consolidation or merger by a holder of a share of Class A Common Stock; provided that, in any such transaction, the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock may receive different kinds of shares of stock if the only difference in such shares is the inclusion of voting rights which continue the Special Voting Rights. (7) Liquidation. In the event of any liquidation, dissolution or winding up of the corporation, the holders of the Class A Common Stock and Class B Common Stock shall participate equally per share in any distribution to stockholders, without distinction between classes. (c) Preferred Stock. The Preferred Stock may be divided into and issued in series. The Board of Directors is hereby expressly authorized, at any time or from time to time, to divide any or all of the shares of the Preferred Stock into series, and in the resolution or resolutions establishing a particular series, before issuance of any of the shares thereof, to fix and determine the powers, designations, preferences and relative, participating, optional or other rights, and any qualifications, limitations or restrictions, of the series so established, to the fullest extent now or hereafter permitted by the laws of the State of Delaware, including, but not limited to, the variations between the different series in the following respects: (1) The distinctive serial designation of such series; (2) The annual dividend rate for such series, and the date or dates from which dividends shall commence to accrue; (3) The redemption price or prices, if any, for shares of such series and the terms and conditions on which such shares may be redeemed; (4) The sinking fund provisions, if any, for the redemption or purchase of shares of such series; (5) The preferential amount or amounts payable upon shares of such series in the event of the voluntary or involuntary liquidation of the corporation; (6) The voting rights of shares of such series; (7) The terms and conditions, if any, upon which shares of such series may be converted and the class or classes or series of shares of the corporation into which such shares may be converted; and (8) Such other terms, limitations and relative rights and preferences, if any, of shares of such series as the Board of Directors may, at the time of such resolutions, lawfully fix and determine under the laws of the State of Delaware. All shares of the Preferred Stock shall be of equal rank with each other, regardless of series. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the 7% Convertible Exchangeable Preferred Stock shall be as set forth in Exhibit A attached hereto. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the Step- Up Convertible Preferred Stock shall be as set forth in Exhibit B attached hereto. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the Gold- Denominated Preferred Stock shall be as set forth in Exhibit C attached hereto. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the Gold- Denominated Preferred Stock, Series II shall be as set forth in Exhibit D attached hereto. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the Silver-Denominated Preferred Stock shall be as set forth in Exhibit E attached hereto. (d) General. (1) Except as otherwise required by law and except for such voting powers with respect to the election of directors as are provided for herein for the Existing Preferred Stock or as may be stated in the resolution or resolutions of the Board of Directors providing for the issue of any series of Preferred Stock, the holders of any such series of Preferred Stock shall have no voting power whatsoever. Subject to such restrictions as may be stated in the resolution or resolutions of the Board of Directors providing for the issue of any series of Preferred Stock, any amendment to the Certificate of Incorporation which shall increase or decrease the authorized stock of any class or classes may be adopted by the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock of the corporation irrespective of the provisions of Section 242(b)(2) of Delaware General Corporation Law. (2) No holder of stock of any series or class of stock of the corporation shall as such holder have under this Certificate of Incorporation any preemptive or preferential right of subscription to any stock of any series or class of stock of the corporation or to any obligations convertible into stock of the corporation, issued or sold, or to any right of subscription to, or to any warrant or option for the purchase of any thereof. (3) Except as otherwise stated in this Certificate of Incorporation, the corporation may from time to time issue and dispose of any of the authorized and unissued shares of Common Stock or of Preferred Stock for such consideration, not less than its par value, as may be fixed from time to time by the Board of Directors, without action by the stockholders. The Board of Directors may provide for payment therefor to be received by the corporation in cash, property or services rendered. Any and all such shares of Common Stock or Preferred Stock the issuance of which has been so authorized, and for which consideration so fixed by the Board of Director has been paid or delivered, shall be deemed fully paid stock and shall not be liable to any further call or assessment thereon. FIFTH: (a) Subject to such rights to elect additional directors under specified circumstances as may be granted to holders of any shares of the Preferred Stock pursuant to the provisions of Article FOURTH, the number of directors of the corporation shall be fixed from time to time by the Board of Directors but shall not be less than five. The directors, other than those who may be elected solely by the holders of any class or series of Preferred Stock, if any, shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, as determined by the Board of Directors, one class ("Class I") to hold office initially for a term expiring at the first annual meeting of stockholders to be held after the date this Certificate of Incorporation is initially filed with the Delaware Secretary of State (the "Initial Filing Date"), another class ("Class II") to hold office initially for a term expiring at the second annual meeting of stockholders to be held after the Initial Filing Date, and another class ("Class III") to hold office initially for a term expiring at the third annual meeting of stockholders to be held after the Initial Filing Date, with the members of each class to hold office until their successors are elected and qualified. Directors elected by a class of stock, or if applicable, classes of stock voting together, shall be divided as evenly as possible, as determined by the Board of Directors, among Class I, Class II and Class III. Notwithstanding the foregoing, each Director initially appointed on behalf of the Class A Common Stock and Existing Preferred Stock, shall hold office initially for a term expiring at the first annual meeting of stockholders to be held after the Initial Filing Date. Subject to the immediately preceding sentence, at each annual meeting of stockholders, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. (b) Notwithstanding any other provision of this certificate of incorporation or any provision of law which might otherwise permit a lesser vote or no vote, the affirmative vote of the holders of 66 2/3% or more of the outstanding shares of Common Stock shall be required to amend, alter, change or repeal this Article FIFTH. SIXTH: In furtherance and not in limitation of the powers conferred by law, (a) the Board of Directors is expressly authorized to adopt, amend or repeal the by-laws of the corporation in any manner not inconsistent with the laws of the State of Delaware or the certificate of incorporation of the corporation, subject to the power of the stockholders to adopt, amend or repeal the by-laws or to limit or restrict the power of the Board of Directors to adopt, amend or repeal the by-laws, and (b) the corporation may in its by-laws confer powers and authorities upon its Board of Directors in addition to those conferred upon it by statute. SEVENTH: The affirmative vote of the holders of not less than 66 2/3% of the outstanding shares of Common Stock shall be required for the approval or authorization of any Business Combination; provided, however, that the 66 2/3% voting requirement shall not be applicable if (a) the Board of Directors of the corporation by affirmative vote which shall include not less than a majority of the entire number of Continuing Directors (1) has approved in advance the acquisition of those outstanding shares of Common Stock which caused the Interested Party to become an Interested Party or (2) has approved the Business Combination; (b) the Business Combination is solely between the corporation and one or more other corporations all of the common stock of each of which other corporations is owned directly or indirectly by the corporation or between two or more of such other corporations; or (c) the Business Combination is a merger or consolidation and the cash and/or fair market value of the property, securities or other consideration to be received per share by holders of Common Stock in the Business Combination is at least equal to the highest price per share (after giving effect to appropriate adjustments for any recapitalizations and for any stock splits, stock dividends and like distributions) paid by the Interested Party in acquiring any shares of Common Stock on the date when last acquired or during a period of two years prior thereto. (d) For purposes of this Article SEVENTH: (1) The terms "affiliate" and "associate" shall have the respective meanings assigned to those terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such Rule was in effect on the Initial Filing Date. (2) A person shall be deemed to be a "beneficial owner" of any Common Stock (A) which such person or any of its affiliates or associates beneficially owns, directly or indirectly; or (B) which such person or any of its affiliates or associates has the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or has the right to vote pursuant to any agreement, arrangement or understanding; or (C) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Common Stock. (3) The term "Business Combination" shall mean (A) any merger or consolidation of the corporation or a subsidiary of the corporation with or into an Interested Party, (B) any merger or consolidation of an Interested Party with or into the corporation or a subsidiary, (C) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) of all or any Substantial Part of the assets either of the corporation (including without limitation any voting securities of a subsidiary) or of a subsidiary, in which an Interested Party is involved, (D) the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by or on behalf of any Interested Party, (E) the issuance or transfer (in one transaction or a series of transactions) by the corporation or a subsidiary of the corporation to an Interested Party of any securities of the corporation or such subsidiary, which securities have a fair market value of $10,000,000 or more, or (F) any recapitalization, reclassification, merger or consolidation involving the corporation or a subsidiary of the corporation that would have the effect of increasing, directly or indirectly, the Interested Party's voting power in the corporation or such subsidiary. (4) The term "Interested Party" shall mean and include (A) any individual, corporation, partnership, trust or other person or entity which, together with its affiliates and associates, is (or with respect to a Business Combination was within two years prior thereto) a beneficial owner of shares aggregating 20% or more of the outstanding Common Stock or any class thereof, and (B) any affiliate or associate of any such individual, corporation, partnership, trust or other person or entity. For the purposes of determining whether a person is an Interested Party the number of shares deemed to be outstanding shall include shares deemed beneficially owned through application of subclause (B) of the foregoing clause (2) but shall not include any other shares of Common Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. (5) The term "Substantial Part" shall mean more than 10% of the fair market value of the total assets of the particular corporation. (6) The term "Continuing Director" shall mean a director who is not an affiliate of an Interested Party and who was a member of the Board of Directors of the corporation immediately prior to the time that the Interested Party involved in a Business Combination became an Interested Party, and any successor to a Continuing Director who is not such an affiliate and who is nominated to succeed a Continuing Director by a majority of the Continuing Directors in office at the time of such nomination. (7) For the purposes of Section (c) of this Article SEVENTH, the term "other consideration to be received" shall include without limitation Common Stock retained by its existing public stockholders in the event of a Business Combination in which the corporation is the surviving corporation. (e) The provisions of this Article SEVENTH shall be construed liberally to the end that the consideration paid to holders whose Common Stock is acquired by an Interested Party in connection with a Business Combination to which Section (c) of this Article SEVENTH is applicable shall be not less favorable than that paid to holders of such Common Stock prior to such Business Combination. Nothing contained in this Article SEVENTH shall be construed to relieve any Interested Party from any fiduciary duties or obligations imposed by law, nor shall anything herein be deemed to supersede any vote of holders of any series or class of stock other than Common Stock that shall be required by law, by or pursuant to this certificate of incorporation or by the by-laws of the corporation. (f) Notwithstanding any other provisions of this certificate of incorporation or the by-laws of the corporation and notwithstanding the fact that a lesser percentage may be specified by law, this certificate of incorporation or the by-laws of the corporation, the affirmative vote of the holders of 66 2/3% or more of the shares of the outstanding Common Stock shall be required to amend or repeal, or adopt any provisions inconsistent with, this Article SEVENTH. EIGHTH: (a) A director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the director's duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (3) under Section 174 of the Delaware General Corporation Law, or (4) for any transaction from which the director derived an improper personal benefit. (b) The corporation shall indemnify any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent permitted by applicable law. The determination as to whether such person has met the standard required for indemnification shall be made in accordance with applicable law. Expenses incurred by such a director, officer, employee or agent in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article EIGHTH. (c) The provisions of this Article EIGHTH shall be deemed to be a contract between the corporation and each person who serves as such director, officer, employee or agent of the corporation in any such capacity at any time while this Article EIGHTH is in effect. No repeal or modification of the foregoing provisions of this Article EIGHTH nor, to the fullest extent permitted by law, any modification of law shall adversely affect any right or protection of a director, officer, employee or agent of the corporation existing at the time of such repeal or modification. The foregoing indemnification shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any applicable law, by-law, agreement, vote of stockholders or disinterested directors or otherwise. NINTH: The name and mailing address of the incorporator are: Name Mailing Address R. Blain Andrus 6110 Plumas Street Reno, Nevada 89509 TENTH: The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. EXHIBITS TO THE CERTIFICATE OF INCORPORATION EXHIBIT A - CERTIFICATE OF DESIGNATIONS OF THE 7% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK EXHIBIT B - CERTIFICATE OF DESIGNATIONS OF THE STEP-UP CONVERTIBLE PREFERRED STOCK EXHIBIT C - CERTIFICATE OF DESIGNATIONS OF THE GOLD- DENOMINATED PREFERRED STOCK EXHIBIT D - CERTIFICATE OF DESIGNATIONS OF THE GOLD- DENOMINATED PREFERRED STOCK, SERIES II EXHIBIT E - CERTIFICATE OF DESIGNATIONS OF THE SILVER- DENOMINATED PREFERRED STOCK EX-3 3 Exhibit 3.2 FREEPORT-McMoRan COPPER & GOLD INC. BY-LAWS Article I NAME The name of the corporation is Freeport-McMoRan Copper & Gold Inc. Article II OFFICES 1. The location of the registered office of the corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, and the name of its registered agent at such address is The Corporation Trust Company. 2. The corporation shall in addition to its registered office in the State of Delaware establish and maintain an office or offices at such place or places as the Board of Directors may from time to time find necessary or desirable. Article III CORPORATE SEAL The corporate seal of the corporation shall have inscribed thereon the name of the corporation and the year of its creation (1987) and the words "Corporate Seal Delaware". Such seal may be used by causing it or a facsimile thereof to be impressed, affixed, printed or otherwise reproduced. Article IV MEETING OF STOCKHOLDERS 1. Meetings of the stockholders shall be held at the registered office of the corporation in the State of Delaware, or at such other place as shall be determined, from time to time, by the Board of Directors. 2. The annual meeting of stockholders shall be held on the Monday immediately preceding the third Tuesday of April at one o'clock in the afternoon, or on such other day or at such other time as may be determined from time to time by resolution of the Board of Directors. At each annual meeting of the stockholders they shall elect by plurality vote, by written ballot, and subject to the voting powers set forth in the Certificate of Incorporation, the successors of the class of directors whose term expires at such meeting, to hold office until the annual meeting of the stockholders held in the third year following the year of their election and their successors are respectively elected and qualified or until their earlier resignation or removal. Any other proper business may be transacted at the annual meeting. 3. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute, by the Certificate of Incorporation or by these By-Laws. If, however, such majority shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (except as otherwise provided by statute), until the requisite amount of voting stock shall be present. At such adjourned meeting at which the requisite amount of voting stock shall be represented any business may be transacted which might have been transacted at the meeting as originally notified. 4. At all meetings of the stockholders, each stockholder having the right to vote shall be entitled to vote in person, or by proxy appointed by an instrument in writing subscribed by such stockholder and bearing a date not more than six months prior to said meeting, unless such instrument provides for a longer period. All proxies shall be filed with the secretary of the meeting before being voted. 5. At each meeting of the stockholders each stockholder shall have one vote for each share of stock having voting power, registered in his name on the books of the corporation at the record date fixed in accordance with these By- Laws, or otherwise determined, with respect to such meeting. Except as otherwise expressly provided by statute, by the Certificate of Incorporation or by these By-Laws, all matters coming before any meeting of the stockholders shall be decided by the vote of a majority of the number of shares of stock present in person or represented by proxy at such meeting and entitled to vote thereat, a quorum being present. 6. Notice of each meeting of the stockholders shall be given to each stockholder entitled to vote thereat not less than 10 nor more than 60 days before the date of the meeting. Such notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. 7. Subject to such rights to call special meetings of stockholders under specified circumstances as may be granted to holders of any shares of Preferred Stock of the corporation pursuant to the provisions of Section (c) of Article FOURTH of the Certificate of Incorporation, special meetings of the stockholders may be called only by the Chairman of the Board, the Vice Chairman of the Board or the President of the corporation, or at the request in writing or by vote of a majority of the Board of Directors, and not by any other persons. Any request for a special meeting made by the Board of Directors shall state the purpose or purposes of the proposed meeting. 8. Business transacted at each special meeting shall be confined to the purpose or purposes stated in the notice of such meeting. 9. The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting. 10. At an annual meeting of the stockholders, only business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the corporation who complies with the notice procedures set forth in this Section 10. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the stockholder and (d) any material interest of the stockholder in such business. Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 10. The chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of the By-Laws, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 10, a stockholder seeking to have a proposal included in the corporation's proxy statement shall comply with the requirements of Regulation 14A under the Securities Exchange Act of 1934, as amended (including, but not limited to, Rule 14a-8 or its successor provision). 11. Only persons who are nominated in accordance with the procedures set forth in the By-Laws shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 11. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation's books, of such stockholder and (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in the By-Laws. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the By-Laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. 12. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by stockholders having not less than a minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Article V DIRECTORS 1. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors which may exercise all such powers and authority for and on behalf of the corporation as shall be permitted by law, the Certificate of Incorporation or these By-Laws. 2. The directors may hold their meeting and have one or more offices, and, subject to the laws of the State of Delaware, keep the stock ledger and other books and records of the corporation outside of said State, at such place or places as they may from time to time determine. 3. Any director may resign at any time by giving written notice of his resignation to the Board of Directors, to the Chairman of the Board, the Vice Chairman of the Board or the President. Any such resignation shall take effect upon receipt thereof by the Board, the Chairman of the Board, the Vice Chairman of the Board or the President, as the case may be, or at such later date as may be specified therein. Any such notice to the Board shall be addressed to it in care of the Secretary. Article VI COMMITTEES OF DIRECTORS 1. By resolutions adopted by a majority of the whole Board of Directors, the Board may designate an Executive Committee, an Audit Committee, a Corporate Personnel Committee, a Nominating Committee and a Public Policy Committee, and may designate one or more other committees, each such committee to consist of one or more directors of the corporation. The Executive Committee shall have and may exercise all the powers of the Board in the management of the business and affairs of the corporation (except as otherwise expressly limited by statute), including the power and authority to declare dividends and to authorize the issuance of stock, and may authorize the seal of the corporation to be affixed to all papers which may require it. The Audit Committee, the Corporate Personnel Committee, the Nominating Committee, the Public Policy Committee and each such other committee shall have such of the powers and authority of the Board as may be provided from time to time in resolutions adopted by a majority of the whole Board. Each committee shall report its proceedings to the Board when required. 2. The requirements with respect to the manner in which the Executive Committee and each such other committee shall hold meetings and take actions shall be set forth in the resolutions of the Board of Directors designating the Executive Committee or such other committee. Article VII COMPENSATION OF DIRECTORS The directors shall receive such compensation for their services as may be authorized by resolution of the Board of Directors, which compensation may include an annual fee and a fixed sum and expenses for attendance at regular or special meetings of the Board or any committee thereof. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Article VIII MEETINGS OF DIRECTORS; ACTION WITHOUT A MEETING 1. Regular meetings of the Board of Directors may be held without notice at such time and place, either within or without the State of Delaware, as may be determined from time to time by resolution of the Board. 2. Special meetings of the Board of Directors may be called by the Chairman of the Board, by the Vice Chairman of the Board or by the President on at least 24 hours' notice to each director, and shall be called by the President or the Secretary on like notice on the request in writing of any director. Except as may be otherwise specifically provided by statute, by the Certificate of Incorporation or by these By-Laws, the purpose or purposes of any such special meeting need not be stated in such notice. 3. At all meetings of the Board of Directors the presence in person of a majority of the total number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business and, except as may be otherwise specifically provided by statute, by the Certificate of Incorporation or by these By-Laws, if a quorum shall be present the act of a majority of the directors present at any meeting shall be the act of the Board. 4. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all the members of the Board or such committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee. Any director may participate in a meeting of the Board, or of any committee designated by the Board, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this sentence shall constitute presence in person at such meeting. Article IX OFFICERS 1. The officers of the corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, a President, one or more Vice Presidents, a Secretary, and a Treasurer. The Board of Directors may also choose a Vice Chairman of the Board, one or more Executive Vice Presidents, one or more Senior Vice Presidents, a General Counsel, one or more Assistant Vice Presidents, a Controller and one or more Assistant Secretaries, Assistant Treasurers or Assistant Controllers, and such other officers as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be prescribed from time to time by the Board or by the Chairman of the Board. Any number of offices may be held by the same person. 2. The Board of Directors, at its first meeting after the annual meeting of stockholders shall choose a Chairman of the Board from among the directors, and shall choose the remaining officers who need not be members of the Board except in the event they choose a Vice Chairman of the Board. 3. The salaries of all officers of the corporation shall be fixed by the Board of Directors, or in such manner as the Board may prescribe. 4. The officers of the corporation shall hold office until their successors are respectively chosen and qualified, except that any officer may at any time resign or be removed by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board. 5. Any officer may resign at any time by giving written notice of his resignation to the Board of Directors, the Chairman of the Board, the Vice Chairman of the Board or the President. Any such resignation shall take effect upon receipt thereof by the Board, the Chairman of the Board, the Vice Chairman of the Board or the President, as the case may be, or at such later date as may be specified therein. Any such notice to the Board shall be addressed to it in care of the Secretary. Article X CHAIRMAN OF THE BOARD The Chairman of the Board shall be the Chief Executive Officer of the corporation and shall preside at meetings of the stockholders and of the Board of Directors. Subject to the supervision and direction of the Board of Directors, he shall be responsible for managing the affairs of the corporation. He shall have general supervision and direction of all of the other officers of the corporation and shall have powers and duties usually and customarily associated with the office of Chairman of the Board and the position of Chief Executive Officer. Article XI PRESIDENT The President shall be the Chief Operating Officer of the corporation, and he shall have the powers and duties usually and customarily associated with the Office of the President and the position of Chief Operating Officer. He shall have such other powers and duties as may be delegated to him by the Chairman of the Board. Article XII VICE CHAIRMAN OF THE BOARD, EXECUTIVE VICE PRESIDENTS, SENIOR VICE PRESIDENTS, VICE PRESIDENTS AND ASSISTANT VICE PRESIDENTS The Vice Chairman of the Board, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice Presidents shall have such powers and duties as may be delegated to them by the Board of Directors or the Chairman of the Board. The Vice Chairman of the Board shall, in the absence of the Chairman of the Board, preside at meetings of the stockholders and of the Board of Directors. Article XIII GENERAL COUNSEL, SECRETARY AND ASSISTANT SECRETARIES 1. The General Counsel shall have the powers and duties usually and customarily associated with the position of General Counsel. He shall have such other powers and duties as may be delegated to him by the Board of Directors or the Chairman of the Board. 2. The Secretary shall attend all meetings of the Board of Directors and of the stockholders, and shall record the minutes of all proceedings in a book to be kept for that purpose. He shall perform like duties for the committees of the Board when required. 3. The Secretary shall give, or cause to be given, notice of meetings of the stockholders and of the Board of Directors and of committees of the Board. He shall keep in safe custody the seal of the corporation, and when authorized by the Chairman of the Board, the Vice Chairman of the Board, the President, an Executive Vice President, a Senior Vice President, a Vice President or the General Counsel, shall affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of an Assistant Secretary. He shall have such other powers and duties as may be delegated to him by the Board of Directors or the Chairman of the Board. 4. The Assistant Secretaries shall, in case of the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary, and shall have such other powers and duties as may be delegated to them by the Board of Directors or the Chairman of the Board. Article XIV TREASURER AND ASSISTANT TREASURERS 1. The Treasurer shall have the custody of the corporate funds and securities, and shall deposit or cause to be deposited under his direction all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors or pursuant to authority granted by it. He shall render to the Chairman of the Board and the Board of Directors, whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall have such other powers and duties as may be delegated to him by the Board of Directors or the Chairman of the Board. 2. The Assistant Treasurers shall, in case of the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer, and shall have such other powers and duties as may be delegated to them by the Board of Directors or the Chairman of the Board. Article XV CONTROLLER AND ASSISTANT CONTROLLERS 1. The Controller shall maintain adequate records of all assets, liabilities and transactions of the corporation, and shall see that adequate audits thereof are currently and regularly made. He shall disburse the funds of the corporation in payment of the just obligations of the corporation, or as may be ordered by the Board of Directors, taking proper vouchers for such disbursements. He shall have such other powers and duties as may be delegated to him by the Board of Directors or the Chairman of the Board. 2. The Assistant Controllers shall, in case of the absence of the Controller, perform the duties and exercise the powers of the Controller, and shall have such other powers and duties as may be delegated to them by the Board of Directors or the Chairman of the Board. Article XVI AGENTS AND REPRESENTATIVES The Chairman of the Board, the Vice Chairman of the Board, the President, any Executive Vice President, any Senior Vice President or any Vice President, the General Counsel, together with the Secretary or any Assistant Secretary, are authorized and empowered in the name of and as the act and deed of the corporation, to name and appoint general and special agents, representatives, and attorneys to represent the corporation in the United States or in any foreign country, and to prescribe, limit and define the powers and duties of such agents, representatives and attorneys, and to grant, substitute, revoke, or cancel, in whole or in part, any power of attorney or other authority conferred on any such agent, representative, or attorney. All powers of attorney or other instruments which may be executed pursuant to this provision shall be signed by the Chairman of the Board, the Vice Chairman of the Board, the President, any Executive Vice President, any Senior Vice President, or any Vice President, the General Counsel, and by the Secretary or an Assistant Secretary and the seal of the corporation shall be affixed thereto. No further authorization by the Board of Directors shall be necessary in connection with the foregoing, it being intended that this By-Law shall constitute full and complete authority by which the officers above mentioned may act for the purposes aforesaid. Article XVII CERTIFICATES OF STOCK The certificates for shares of stock of the corporation shall be numbered and shall be entered on the books of the corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the Chairman of the Board, the Vice Chairman of the Board, the President, an Executive Vice President, a Senior Vice President or a Vice President and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary. The signature of any of such officers may be facsimile if such certificate is countersigned by a transfer agent other than the corporation or its employee or by a registrar other than the corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed on any such certificate shall have ceased to be such officer before such certificate is issued, then, unless the Board of Directors shall otherwise determine and cause notification thereof to be given to such transfer agent and registrar, such certificate may be issued by the corporation (and by its transfer agent) and registered by its registrar with the same effect as if he were such officer at the date of issue. ARTICLE XVIII TRANSFERS OF STOCK 1. All transfers of shares of the stock of the corporation shall be made on the books of the corporation by the registered holders of such shares in person or by their attorneys lawfully constituted in writing, or by their legal representatives. 2. Certificates for shares of stock shall be surrendered and canceled at the time of transfer. ARTICLE XIX FIXING RECORD DATE In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (1) in the case of determination of stockholders entitled to vote on any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than 10 days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than 60 days prior to such other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day preceding the day on which notice is given, or, if notice is waived, at the close of business on the day preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. ARTICLE XX REGISTERED STOCKHOLDERS The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware. Article XXI CHECKS All checks, drafts and other orders for the payment of money, and all promissory notes and other evidences of the corporation shall be signed by such officer or officers or such other person or persons as may be designated by the Board of Directors or pursuant to authority granted by it. Article XXII FISCAL YEAR The fiscal year shall begin the first day of January in each year. Article XXIII NOTICES AND WAIVERS 1. Whenever by statute or by the Certificate of Incorporation or by these By-Laws it is provided that notice shall be given to any director or stockholder, such provision shall not be construed to require personal notice, but such notice may also be given in writing, by mail, by depositing the same in the United States mail, postage prepaid, directed to such stockholder or director at his address as it appears on the records of the corporation, or in default of such address, to such director or stockholder at the General Post Office in the City of Wilmington, Delaware, and such notice shall be deemed to be given at the time when the same shall be thus deposited. Notice of special meetings of the Board of Directors may also be given to any director by (i) telephone, (ii) telecopier, (iii) telex or (iv) telegraph or cable, and in the latter event the notice shall be deemed to be given at the time such notice, addressed to such director at the address hereinbefore provided, shall be transmitted or delivered to and accepted by an authorized telegraph or cable office. 2. Whenever by statute or by the Certificate of Incorporation or by these By-Laws a notice is required to be given, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of any stockholder or director at any meeting thereof shall constitute a waiver of notice of such meeting by such stockholder or director, as the case may be, except as otherwise provided by statute. Article XXIV ALTERATION OF BY-LAWS These By-Laws may be altered, amended, changed or repealed by vote of the stockholders or at any meeting of the Board of Directors by the vote of a majority of the directors present or as otherwise provided by statute. Article XXV INDEMNIFICATION OF CORPORATE PERSONNEL The corporation shall indemnify any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise as provided in the Certificate of Incorporation. Expenses incurred by such a director, officer, employee or agent in defending a civil or criminal action, suit or proceeding shall be paid by the corporation as provided in the Certificate of Incorporation. The corporation shall have power to purchase and maintain insurance on behalf of any such persons against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of the Certificate of Incorporation. The indemnification provisions of this Article XXV and the Certificate of Incorporation shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any applicable law, by-law, agreement, vote of stockholders or disinterested directors or otherwise. The provisions of this Article XXV and Article EIGHTH of the Certificate of Incorporation shall be deemed to be a contract between the corporation and each person who serves as such director, officer, employee or agent of the corporation in any such capacity at any time while this Article XXV and Article EIGHTH of the Certificate of Incorporation are in effect. No repeal or modification of the provisions of this Article XXV and Article EIGHTH of the Certificate of Incorporation nor, to the fullest extent permitted by law, any modification of law shall adversely affect any right or protection of a director, officer, employee or agent of the corporation then existing at the time of such repeal or modification. EX-4 4 EXHIBIT 4.1 CERTIFICATE OF DESIGNATIONS OF 7% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the corporation's 7% Convertible Exchangeable Preferred Stock are as set forth below: 1. Designation. (a) 447,800 shares of Preferred Stock of the corporation are hereby constituted as a series of Preferred Stock designated as "7% Convertible Exchangeable Preferred Stock" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series except as to the dates from and after which dividends thereon shall be cumulative. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been redeemed, converted into Class A Common Stock, exchanged into Debentures (as hereinafter defined), as hereinafter provided, or purchased by the corporation shall be canceled, and shall revert to authorized but unissued Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new or existing series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock (including the Gold-Denominated Preferred Stock, the Gold-Denominated Preferred Stock, Series II, the Silver- Denominated Preferred Stock and the Step-Up Convertible Preferred Stock) and any other class or series of stock of the corporation ranking, as to dividends, on a parity with the shares of this Series (the shares of any other class or series of Preferred Stock and any other class or series of stock of the corporation ranking as to dividends, on a parity with the shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock of the corporation, the Class B Common Stock of the corporation or any other stock of the corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. For purposes of this Section 2, if any depositary shares have been issued with respect to any series of stock, actions with respect to such depositary shares, including acquisition of and payments on or with respect to such depositary shares, shall be regarded as actions with respect to such series of stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. The Dividend Rate on the shares of this Series for each Dividend Period shall be $35.00 per annum. The term "Dividend Period", as used herein, means, with respect to any Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The shares of this Series shall not be redeemable prior to August 1, 1995. On and after that date, the corporation may, at its option, redeem the shares of this Series, in whole or in part, at any time or from time to time, upon notice given as hereinafter specified, at the following redemption prices per share if redeemed during the twelve month period commencing on August 1 of the years indicated: Year Price 1995 $524.50 1996 521.00 1997 517.50 1998 514.00 1999 510.50 2000 507.00 2001 503.50 and at $500.00 per share thereafter, plus, in each case, an amount equal to all accrued and unpaid dividends on the shares being redeemed to and including the date fixed for such redemption. Notwithstanding any provision of this Section 4 to the contrary, any accrued and unpaid dividends in respect of shares of this Series to be redeemed shall be payable to the holder of record of such shares, as determined on the relevant record date. (b) Notice of redemption shall be mailed by the corporation by first class mail, postage prepaid, not less than 30 nor more than 60 days before the date fixed for redemption, to each transfer agent for the shares of this Series to be redeemed and to each holder of record of such shares addressed to such holder at his address shown on the registry books of the corporation. Such notice of redemption shall set forth the date fixed for redemption, the number of shares of this Series to be redeemed and, if less than all of the shares held by such holder are to be redeemed, the number of shares to be redeemed from such holder, the applicable redemption price and the place or places (including a place in the Borough of Manhattan, The City of New York) at which stockholders may obtain payment of such redemption price plus accrued dividends upon the surrender of the certificates representing their shares. Failure to mail such notice, or any defect therein or in the mailing thereof, to any particular holder shall not affect the validity of the proceeding for the redemption of any shares so to be redeemed from any other holder. (c) If less than all the outstanding shares of this Series are to be redeemed, the number of shares of this Series to be redeemed and the method of effecting such redemption, whether by lot or pro rata, shall be as determined by the Board of Directors. (d) At any time after a notice of redemption has been given in the manner prescribed herein and prior to the date fixed for redemption, the corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the corporation which shall not be required for the redemption for which they were deposited because of the exercise of rights of conversion subsequent to the date of deposit shall be returned to the corporation forthwith, and any funds deposited by the corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the corporation for payment of the appropriate amount. (e) From and after the date fixed for redemption (unless the corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and from and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(d) hereof, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the corporation (except the right to receive from the corporation the amount payable upon such redemption and, up to the close of business on the date fixed for such redemption, the right to convert such shares as set forth in Section 7 hereof) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the Board of Directors shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. If less than all of the shares represented by any such surrendered certificate are redeemed, the corporation shall execute and deliver to the holder thereof, or to his written order, a certificate or certificates representing the unredeemed shares. (f) In no event shall the corporation redeem less than all the outstanding shares of this Series and shares of any other series of stock of the corporation ranking, as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, on a parity with the shares of this Series ("Parity Stock") pursuant to this Section 4 unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of such Parity Stock. (g) In connection with any redemption of shares of this Series, the corporation may enter into an agreement with one or more investment bankers or other purchasers for the purchase of the shares to be redeemed from the holders thereof and the conversion of such purchased shares into shares of Class A Common Stock as provided in Section 7 hereof. Such agreement shall provide that the amount to be paid by such purchasers to the holders of the shares of this Series to be redeemed shall not be less than the redemption price for such shares together with all accrued and unpaid dividends thereon to and including the date fixed for redemption and may provide further that such amount be deposited in trust, on or before the close of business on the date fixed for redemption, with a bank or trust company designated by the corporation meeting the requirements set forth in Section 4(d) hereof. Notwithstanding anything to the contrary contained in this Section, the obligation of the corporation to pay the redemption price of the shares of this Series to be redeemed, together with accrued and unpaid dividends thereon to the date fixed for redemption, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, any shares of this Series to be redeemed that have not been duly surrendered for conversion by the holders thereof may, at the option of the corporation, be deemed, to the fullest extent permitted by law, acquired by such purchasers from such holders and (notwithstanding anything to the contrary contained in this subsection (g) or in Section 7 hereof) surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the date fixed for redemption, subject to payment of the above amount as aforesaid. (h) For purposes of this Section 4, "accrued and unpaid dividends" in respect of any share of this Series shall mean an amount computed at the Dividend Rate for this Series from the date on which dividends on such share became cumulative to and including the date to which such dividends are to be accrued, less the aggregate amount of all dividends theretofore paid thereon. The amount accrued subsequent to the most recent Dividend Period shall be computed by dividing the quarterly dividend payment by the actual number of days in the uncompleted quarter, and thereafter multiplying this figure by the number of days in such quarter up to and including the date to which dividends are to be accrued. 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise required by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the corporation. (b) The shares of this Series shall be entitled to vote with respect to the election of directors in accordance with Sections (b)(4) and (b)(5) of Article FOURTH of the certificate of incorporation. (c) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the corporation ranking on a parity with shares of this Series either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of Preferred Stock of such series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(d) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (d) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(c) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the corporation, upon the written request of holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the corporation within 20 days after personal service of such written request upon the Secretary of the corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection 5(d). Notwithstanding anything to the contrary contained in this subsection 5(d), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the corporation. (e) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(c) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(c). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(c) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (f) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(c) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the corporation irrespective of any increase pursuant to the provisions of Section 5(c) hereof. (g) In addition to any other vote required by law, the corporation shall not change the preferences, rights or limitations with respect to this Series, if such action would materially adversely affect the interests of the holders thereof, without the affirmative vote or consent of the holders of at least two-thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that nothing herein contained shall require such a class vote in connection with any increase in the total number of authorized shares of Common Stock (or any series thereof) or Preferred Stock (or any series thereof), or the creation, authorization or issuance of any Junior Stock or any series of stock of the corporation ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, prior to or on a parity with the shares of this Series; provided, further, that no such vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in this subsection 5(g) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any stock of the corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the corporation, the amount of $500.00 in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any stock of the corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of any other class or series of Preferred Stock and holders of shares of any stock of the corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this subsection (a) and Section 6(b) hereof, a consolidation or merger of the corporation with one or more other corporations or the sale of all or substantially all of the assets of the corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation. (b) Subject to the rights of the holders of shares of any series or class of stock ranking prior to this Series and of the holders of shares of any stock of the corporation ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, after payment shall have been made in full to the holders of this Series as provided in Section 6(a) hereof and this subsection (b), the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Section 7, at the option of the holder thereof, each share of this Series may, at any time (unless shares of this Series shall be called for redemption, then, with respect to shares of this Series so called, until and including, but, if the corporation shall not default in making payment of the amount payable on such redemption, not after, the close of business on the date fixed for redemption), be converted into a number of fully paid and nonassessable shares of Class A Common Stock equal to the quotient obtained by dividing $500.00 by the Conversion Price (as hereinafter defined) in effect at the Date of Conversion (as hereinafter defined). (b) In order to exercise the conversion privilege, any holder of shares of this Series to be converted shall surrender such shares to the corporation at any time during usual business hours at the place or places (including a place in the Borough of Manhattan, The City of New York) maintained for such purpose, accompanied by a fully executed written notice, in substantially the form set forth on the reverse of the certificate representing shares of this Series, that the holder elects to convert such shares. Such notice shall also state the name or names (with address) in which the certificate or certificates for shares of Class A Common Stock shall be issued. Shares of this Series surrendered for conversion shall (if so required by the corporation) be properly endorsed or assigned for transfer by the holder or his attorney duly authorized in writing. The holders of shares of this Series at the close of business on any record date for the payment of dividends on such shares will be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof or the corporation's default in the payment of the dividend due on such Dividend Payment Date. Shares of this Series surrendered for conversion during the period from the close of business on any record date for the payment of dividends on such shares to the opening of business on the corresponding Dividend Payment Date (except shares called for redemption on a redemption date during the period from such record date to and including the Dividend Payment Date) 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 record date for the payment of dividends on such shares who converts such shares on a Dividend Payment Date will receive the dividend payable on such shares by the corporation on such date, and the converting holder need not include a payment in the amount of any such dividend upon surrender of such shares for conversion. As promptly as practicable after the receipt of such notice and the surrender of such shares of this Series as aforesaid, the corporation shall, subject to the provisions of Section 10 hereof, issue and deliver at such place or places referred to in this subsection (b) to such holder, or on his written order, a certificate or certificates for the number of full shares of Class A Common Stock issuable on such conversion of shares of this Series in accordance with the provisions of this Section 7, and cash, as provided in Section 7(c) hereof, in respect of any fraction of a share of Class A Common Stock otherwise issuable upon such conversion. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date (herein called, the "Date of Conversion") on which such notice shall have been received by the corporation and such shares of this Series shall have been surrendered as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Class A Common Stock shall be issuable upon such conversion shall be deemed to have become on the Date of Conversion the holder or holders of record of the shares of Class A Common Stock represented thereby; provided, that any such surrender on any date when the registry books of the corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates for such shares are to be issued as the record holder or holders thereof for all purposes at the opening of business on the next succeeding day on which such registry books are open, but such conversion shall nevertheless be at the Conversion Price in effect at the close of business on the date when such shares of this Series shall have been so surrendered with the conversion notice. In the case of conversion of a portion, but less than all, of the shares of this Series represented by a certificate surrendered for conversion, the corporation shall execute, and deliver to the holder thereof, or on his written order, a certificate or certificates representing the shares of this Series which the holder has not elected to convert into shares of Class A Common Stock. No payment or adjustment shall be made for dividends accrued on the shares of this Series converted as provided in this Section 7 or for dividends or distributions accrued on any Class A Common Stock. (c) No fractions of shares or scrip representing fractions of shares shall be issued upon conversion of shares of this Series. If more than one share of this Series shall be surrendered for conversion at one time by the same holder, the number of full shares of Class A Common Stock which shall be issuable upon conversion of such shares shall be computed on the basis of the aggregate number of shares of this Series surrendered for conversion. If any fraction of a share of Class A Common Stock would, except for the provisions of this subsection (c), be issuable on the conversion of any shares of this Series, the corporation shall make payment in lieu thereof in an amount of United States dollars equal to the value of such fraction computed on the basis of the closing price of the Class A Common Stock as reported on the Composite Tape for New York Stock Exchange - Listed Stocks (or if the Class A Common Stock is not listed or admitted to trading on such exchange on the Date of Conversion, then on the principal national or regional securities exchange on which the Class A Common Stock is then listed or admitted to trading, or, if not listed or admitted to trading on any national or regional securities exchange, then as reported by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting information) on the last Trading Day (as hereinafter defined) prior to the Date of Conversion or if no such sale takes place on such day, the last sale price for such day shall be the average of the closing bid and asked prices regular way on the New York Stock Exchange (or if the Class A Common Stock is not listed or admitted to trading on such exchange, on the principal national securities exchange on which the Class A Common Stock is then listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the highest bid and lowest asked prices as reported by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting information) (any such last sale price being herein referred to as the "Last Sale Price"). If on such Trading Day the Class A Common Stock is not quoted by any such organization, the fair value of such Class A Common Stock on such day, as determined by the Board of Directors, shall be used. For the purpose of this subsection (c), the term "Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are not traded on such exchange or in such market. (d) The Conversion Price per share of Class A Common Stock issuable upon conversion of shares of this Series (herein called the "Conversion Price") shall initially be $24.49 as of the Initial Filing Date (as defined in the Certificate of Incorporation). The Conversion Price shall be subject to adjustment from time to time as follows: (i) In case the corporation shall (1) pay a dividend or make a distribution in shares of Class A Common Stock, (2) subdivide its outstanding shares of Class A Common Stock into a greater number of shares or (3) combine its outstanding shares of Class A Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such action shall be adjusted so that the holder of any shares of this Series thereafter surrendered for conversion shall be entitled to receive the number of shares of Class A Common Stock which he would have owned or have been entitled to receive immediately following such action had such shares been converted immediately prior thereto. An adjustment made pursuant to this subsection (d)(i) shall become effective immediately, except as provided in subsection (d)(v) below, after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. (ii) In case the corporation shall issue rights, warrants or options to all holders of Class A Common Stock entitling them (for a period not exceeding 45 days from the date of such issuance) to subscribe for or purchase shares of Class A Common Stock at a price per share less than the Recent Market Price per share (as determined pursuant to subsection (d)(iv) below) of the Class A Common Stock on the record date mentioned below, the Conversion Price shall be adjusted to a price, computed to the nearest cent, so that the same shall equal the price determined by multiplying: (1) the Conversion Price in effect immediately prior to the date of issuance of such rights or warrants by a fraction, of which (2) the numerator shall be (A) the number of shares of Class A Common Stock outstanding on the date of issuance of such rights, warrants or options, immediately prior to such issuance, plus (B) the number of shares which the aggregate offering price of the total number of shares so offered for subscription or purchase would purchase at such Recent Market Price (determined by multiplying such total number of shares by the exercise price of such rights, warrants or options and dividing the product so obtained by such Recent Market Price), and of which (3) the denominator shall be (A) the number of shares of Class A Common Stock outstanding on the date of issuance of such rights, warrants or options, immediately prior to such issuance, plus (B) the number of additional shares of Class A Common Stock which are so offered for subscription or purchase. Such adjustment shall become effective immediately, except as provided in subsection (d)(v) below, after the record date for the determination of holders entitled to receive such rights, warrants or options. (iii) In case the corporation shall distribute to substantially all holders of Class A Common Stock evidences of indebtedness, equity securities (including equity interests in the corporation's Subsidiaries (as hereinafter defined)) other than Class A Common Stock, or other assets (other than cash dividends paid out of earned surplus of the corporation or, if there shall be no earned surplus, out of net profits for the fiscal year in which the dividend is made and/or the preceding fiscal year), or shall distribute to substantially all holders of Class A Common Stock rights or warrants to subscribe for securities (other than those referred to in subsection (d)(ii) above), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying: (1) the Conversion Price in effect immediately prior to the date of such distribution by a fraction, of which (2) the numerator shall be the Recent Market Price per share (as determined as provided in subsection (d)(iv) below) of the Class A Common Stock on the record date mentioned below less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value, and described in a resolution of the Board of Directors filed with the transfer agent for the shares of this Series) of the portion of the assets, evidences of indebtedness and equity securities so distributed or of such subscription rights or warrants applicable to one share of Class A Common Stock, and of which (3) the denominator shall be such Recent Market Price per share of the Class A Common Stock. Such adjustment shall become effective immediately, except as provided in subsection (d)(v) below, after the record date for the determination of stockholders entitled to receive such distribution. As used herein, the term "Subsidiary" means (i) any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the Board of Directors or other persons performing similar functions are at the time directly or indirectly owned by the corporation or (ii) any partnership of which more than 50% of the partnership interests are owned by the corporation or any Subsidiary. (iv) For purposes of any computation under subsections (d)(ii) and (d)(iii) above, the Recent Market Price per share of Class A Common Stock on any date shall be deemed to be the average of the Last Sale Prices of a share of Class A Common Stock for the five consecutive Trading Days commencing not more than 20 Trading Days before and ending not later than the earliest of the date in question and the date before the "ex" date with respect to the issuance or distribution requiring such computation. If on any such Trading Day the Class A Common Stock is not quoted by any organization referred to in the definition of Last Sale Price in Section 7(c) hereof, the fair value of the Class A Common Stock on such day, as determined by the Board of Directors, shall be used. For purposes of this paragraph, the term "'ex' date", when used with respect to any issuance or distribution, means the first date on which the Class A Common Stock trades regular way on the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading (or, if not so listed or admitted, on NASDAQ or a similar organization if NASDAQ is no longer reporting trading information) without the right to receive such issuance or distribution. (v) In any case in which this subsection (d) shall require that an adjustment be made immediately following a record date, the corporation may elect to defer the effectiveness of such adjustment (but in no event until a date later than the effective time of the event giving rise to such adjustment), in which case the corporation shall, with respect to any shares of this Series converted after such record date and before such adjustment shall have become effective (1) defer paying any cash payment pursuant to Section 7(c) hereof or issuing to the holder of shares of this Series the number of shares of Class A Common Stock issuable upon conversion in excess of the number of shares of Class A Common Stock issuable thereupon only on the basis of the Conversion Price prior to adjustment and (2) not later than five business days after such adjustment shall have become effective, pay to such holder the appropriate cash payment pursuant to Section 7(c) hereof and issue to such holder the additional shares of Class A Common Stock and other capital stock of the corporation issuable on such conversion. (vi) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price; provided, that any adjustments which by reason of this subsection (d)(vi) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. (vii) Whenever the Conversion Price is adjusted as herein provided, the corporation shall promptly (1) file with the transfer agent for the shares of this Series a certificate of an officer of the corporation (an "Officer's Certificate") setting forth the Conversion Price after such adjustment and setting forth in reasonable detail the facts requiring such adjustment and the calculations on which the adjustment is based, which certificate shall be conclusive evidence of the correctness of such adjustment and (2) mail or cause to be mailed a notice of such adjustment to each holder of shares of this Series at his address as the same appears on the registry books of the corporation. Notwithstanding anything in this Section 7 to the contrary, the corporation shall be entitled to make such reductions in the Conversion Price, in addition to those required by this Section 7, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision or combination of shares, distribution of rights or warrants to purchase stock or securities, distribution of securities convertible into or exchangeable for stock, or distribution of assets (other than cash dividends) hereafter made by the corporation to its stockholders shall not be taxable. (e) In case of any reclassification or change of outstanding shares of Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any consolidation of the corporation with, or merger of the corporation into, any other Person, or any merger of another Person into the corporation (other than a merger which does not result in any reclassification, change, conversion, exchange or cancellation of outstanding shares of Class A Common Stock) or any sale or transfer of all or substantially all of the assets of the corporation, the corporation, or the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall make effective provision in the articles or certificate of incorporation, providing that the holder of each share of this Series then outstanding shall have the right thereafter to convert such share only into the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer, by a holder of the number of shares of Class A Common Stock into which such shares of this Series might have been converted immediately prior to such reclassification, change, consolidation, merger, sale or transfer, assuming such holder of Class A Common Stock of the corporation (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 ("constituent Person"), or an Affiliate (as hereinafter defined) of a constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer is not the same for each share of Class A Common Stock of the corporation held immediately prior to such reclassification, change, consolidation, merger, sale or transfer by others 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 subsection (e) the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer 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). Such articles or certificate of incorporation shall provide for adjustments which, for events subsequent to the effective date of such articles or certificate of incorporation, shall be as nearly equivalent as may be practicable to the adjustments provided for herein. The above provisions of this subsection (e) shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales or transfers. For the purpose of this subsection (e), the term "Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof, and the term "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of the definition of "Affiliate", the term "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. (f) The corporation shall reserve, free from preemptive rights, out of its authorized but unissued shares, sufficient shares of Class A Common Stock to provide for the conversion of the shares of this Series from time to time outstanding as such shares of this Series are presented for conversion. (g) The corporation covenants that all shares of Class A Common Stock which may be issued upon conversion of shares of this Series will upon issue be duly and validly issued, fully paid and nonassessable by the corporation and except as provided in Section 10 hereof free from all taxes, liens and charges with respect to the issue thereof. 8. Exchange. (a) The shares of this Series are exchangeable in whole, but not in part, at the option only of the corporation on any Dividend Payment Date for the corporation's 7% Convertible Subordinated Debentures Due 2007 issued under the Subordinated Indenture dated as of July 21, 1992, as amended (the "Indenture"), between the corporation and Chemical Bank, as trustee (the "Debentures"); provided that on or prior to the date of exchange the corporation shall have paid to or declared and set aside for payment to the holders of outstanding shares of this Series all accrued and unpaid dividends on shares of this Series through the Exchange Date (as hereinafter defined). The holders of shares of this Series will be entitled to receive $500.00 principal amount of Debentures in exchange for each share of this Series held by them at the time of exchange. The corporation will mail to each holder of record of the shares of this Series written notice of its intention to exchange not less than 30 nor more than 60 days prior to the date fixed for the exchange (the "Exchange Date"). Each such notice shall state: (i) the Exchange Date, (ii) the place or places where certificates for shares of this Series are to be surrendered for exchange into Debentures and (iii) that dividends on the shares of this Series to be exchanged will cease to accrue on the Exchange Date. Prior to giving notice of intention to exchange, the corporation shall execute and deliver with a bank or trust company selected by the corporation an Indenture in substantially the form filed as an exhibit to the Registration Statement on Form S-3 (Registration No. 33-45787) filed with the Securities and Exchange Commission (the "Commission") on February 18, 1992, as amended as declared effective by the Commission on June 26, 1992 referred to above with such changes as may be required by law or usage. The corporation will cause the Debentures to be authenticated on the Dividend Payment Date on which the exchange is effective, and will pay interest on the Debentures at the rate and on the dates specified in such Indenture from the Exchange Date. (b) The corporation will not give notice of its intention to exchange under Section 8(a) hereof unless it shall file at the place or places (including a place in the Borough of Manhattan, The City of New York) maintained for such purpose an opinion of counsel (who may be an employee of the corporation) to the effect that (i) the Indenture has been duly authorized, executed and delivered by the corporation, has been duly qualified under the Trust Indenture Act of 1939 (or that such qualification is not necessary) and constitutes a valid and binding instrument enforceable against the corporation in accordance with its terms (subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles, and subject to such other qualifications as are then customarily contained in opinions of counsel experienced in such matters), (ii) the Debentures have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered in exchange for the shares of this Series, will constitute valid and binding obligations of the corporation entitled to the benefits of the Indenture (subject as aforesaid), (iii) neither the execution nor delivery of the Indenture or the Debentures nor compliance with the terms, conditions or provisions of such instruments will result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or agreement or instrument, known to such counsel to which the corporation or any of its Subsidiaries is a party or by which it or any of them is bound, or any decree, judgment, order, rule or regulation, known to such counsel, of any court or governmental agency or body having jurisdiction over the corporation and such Subsidiaries or any of their properties, and (iv) the Debentures have been duly registered for such exchange with the Securities and Exchange Commission under a registration statement that has become effective under the Securities Act of 1933 (the "Act") or that the exchange of the Debentures for the shares of this Series is exempt from registration under the Act. (c) If notice has been mailed as aforesaid, from and after the Exchange Date (unless the corporation shall default in issuing Debentures in exchange for shares of this Series or in making or providing for the payment of accrued and unpaid dividends on the outstanding shares of this Series to the Exchange Date) dividends on the shares of this Series shall cease to accrue, and such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the corporation shall cease and terminate. Upon surrender in accordance with said notice of the certificates for shares of this Series so exchanged (properly endorsed or assigned for transfer if the Board of Directors shall so require and the notice shall so state), such shares shall be exchanged by the corporation into Debentures as aforesaid. 9. Notice of Certain Events. In case: (a) the corporation shall declare a dividend (or any other distribution) payable to the holders of Class A Common Stock (otherwise than cash dividends paid out of the earned surplus of the corporation or, if there shall be no earned surplus, out of net profits for the fiscal year in which the dividend is made and/or the preceding fiscal year, and dividends payable in Class A Common Stock); or (b) the corporation shall authorize the granting to the holders of Class A Common Stock of rights to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; or (c) the corporation shall authorize any reclassification or change of the Class A Common Stock (other than a subdivision or combination of its outstanding shares of Class A Common Stock or a change in par value, or from par value to no par value, or from no par value to par value), or any consolidation, merger or share exchange to which the corporation is a party and for which approval of any stockholders of the corporation is required, or the sale or conveyance of all or substantially all the property or business of the corporation; or (d) there shall be proposed any voluntary or involuntary dissolution, liquidation or winding-up of the corporation; then, the corporation shall cause to be filed at the place or places maintained for the purpose of conversion of shares of this Series as provided in Section 7(b) hereof, and shall cause to be mailed to each holder of shares of this Series, at his address as it shall appear on the registry books of the corporation, as promptly as possible but in any event at least 20 days before the date hereinafter specified (or the earlier of the dates hereinafter specified, in the event that more than one date is specified), a notice stating the date on which (i) a record is expected to be taken for the purpose of such dividend, distribution, rights or warrants, or if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined, or (ii) such reclassification, change, consolidation, merger, share exchange, sale, transfer, conveyance, dissolution, liquidation or winding-up is expected to become effective and the date, if any is to be fixed, as of which it is expected that holders of Class A Common Stock of record shall be entitled to exchange their shares of Class A Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, share exchange, sale, transfer, conveyance, dissolution, liquidation or winding-up. 10. Taxes. The corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of (a) certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or (b) certificates for shares of Class A Common Stock on conversion of shares of this Series pursuant to Section 7 hereof; provided, that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series or Class A Common Stock, as the case may be, in a name other than that of the holder of shares of this Series to be redeemed or 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 has established, to the satisfaction of the corporation, that such tax has been paid. The corporation extends no protection with respect to any other taxes imposed in connection with such redemption or conversion of shares of this Series. 11. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. 12. Miscellaneous. Capitalized terms which are defined in this Exhibit are defined only for the purposes of this Exhibit, and not for the purposes of other Exhibits to the certificate of incorporation. Unless otherwise indicated, section references contained in this Exhibit refer to the corresponding sections of this Exhibit. EX-4 5 EXHIBIT 4.2 CERTIFICATE OF DESIGNATIONS OF STEP-UP CONVERTIBLE PREFERRED STOCK (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the corporation's Step-Up Convertible Preferred Stock are as set forth below: 1. Designation. (a) 700,000 shares of Preferred Stock of the corporation are hereby constituted as a series of Preferred Stock designated as "Step-Up Convertible Preferred Stock" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series except as to the dates from and after which dividends thereon shall be cumulative. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been converted into Class A Common Stock of the corporation, redeemed for cash, Class A Common Stock or a combination thereof, as hereinafter provided, or purchased by the corporation shall be canceled, and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new or existing series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock (including the Gold-Denominated Preferred Stock, the Gold-Denominated Preferred Stock, Series II, the Silver- Denominated Preferred Stock and the 7% Convertible Exchangeable Preferred Stock) and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series (the shares of any other class or series of Preferred Stock and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock of the corporation, Class B Common Stock of the corporation or any other stock of the corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. For purposes of this Section 2, if any depositary shares have been issued with respect to any series of stock, actions with respect to such depositary shares, including acquisition of and payments on or with respect to such depositary shares, shall be regarded as actions with respect to such series of stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. The Dividend Rate on the shares of this Series for the period from the date of original issue thereof to and including August 1, 1996, shall be $25.00 per annum per share and for each Dividend Period thereafter shall be $35.00 per annum per share. The term "Dividend Period", as used herein, means, with respect to any Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The shares of this Series shall not be redeemable prior to August 1, 1996. On and after that date, the corporation may, at its option, redeem the shares of this Series, in whole or in part, at any time or from time to time, as set forth herein, subject to the provisions described below. (b)(i) The shares of this Series may be redeemed for Class A Common Stock, at the option of the corporation, at any time on or after August 1, 1996 and prior to August 1, 1999 only if, for 20 Trading Days within any period of 30 consecutive Trading Days, including the last Trading Day of such period, the Current Market Price of the Class A Common Stock on each of such 20 Trading Days exceeds 125% of the Conversion Price in effect on such Trading Day. In order to exercise this redemption option, the corporation must issue a press release announcing the redemption (the "Press Release") prior to the opening of business on the third Trading Day after the condition in the preceding sentence has been met but in no event prior to August 1, 1996. The Press Release shall announce the redemption and set forth the number of shares of this Series which the corporation intends to redeem. The corporation may redeem shares of this Series pursuant to this Section subsection (b) only if the Class A Common Stock is listed or admitted to trading on a national or regional securities exchange in the United States or reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). (ii) Upon redemption of shares of this Series by the corporation in accordance with Section 4(b)(i) hereof on the date specified in the notice to holders required under Section 4(b)(iii) hereof (the "Redemption Date"), each share of this Series so redeemed shall be redeemed for a number of shares of Class A Common Stock equal to $500.00 divided by the Conversion Price as of the opening of business on the Redemption Date. The Redemption Date shall be selected by the corporation, shall be specified in the notice of redemption and shall be not less than 15 days or more than 60 days after the date on which the corporation issues the Press Release. Upon any redemption of this Series for Common Stock pursuant to this subsection (b), the corporation shall pay any accrued and unpaid dividends for any Dividend Period ending on or prior to the Redemption Date. If a Redemption Date falls after a dividend payment record date and prior to the corresponding Dividend Payment Date, then each holder of shares of this Series at the close of business on such dividend payment record date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment Date. In the case of any Redemption Date occurring prior to the record date for the November 1, 1996 Dividend Payment Date, the holders of the shares of this Series to be redeemed on such Redemption Date shall be entitled to any accrued and unpaid dividends through August 1, 1996 but not thereafter. Except as provided above, the corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of this Series called for redemption under this subsection (b) for Class A Common Stock or on the shares of Class A Common Stock issued upon such redemption. (iii) If the corporation elects to redeem shares of this Series pursuant to Section 4(b)(i) hereof, notice of such redemption shall be given not more than four Business Days after the date on which the corporation issues the Press Release, to each holder of record of the shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the corporation, and shall state, as appropriate: (1) the Redemption Date; (2) the number of shares of this Series (expressed in one- twentieths of a share 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 (expressed in one-twentieths of a share of this Series) to be redeemed from such holder; (3) the number of shares of Class A Common Stock to be issued with respect to each one-twentieth of a share of this Series; (4) the place or places at which certificates for such shares are to be surrendered for certificates representing shares of Class A Common Stock; and (5) the date on which dividends on the shares to be redeemed shall cease to accrue as provided herein. Failure to mail such notice, or any defect therein or in the mailing thereof, to any particular holder shall not affect the validity of the proceeding for the redemption of any shares so to be redeemed from any other holder. At the close of business on the Redemption Date, each holder of shares of this Series to be redeemed (unless the corporation defaults in the delivery of the shares of Class A Common Stock or cash payable on such Redemption Date) shall be deemed to be the record holder of the number of shares of Class A Common Stock into which such shares of this Series are to be redeemed, regardless of whether such holder has surrendered the certificates representing such holder's shares of this Series that have been redeemed. As promptly as practicable after the surrender in accordance with said notice of the certificates for any such shares so redeemed (properly endorsed or assigned for transfer, if the corporation shall so require and the notice shall so state), such shares shall be exchanged for certificates of shares of Class A Common Stock and any cash (without interest thereon) for which such shares have been redeemed. (c)(i) At any time on or after August 1, 1999, the shares of this Series may be redeemed, in whole or in part, at the option of the corporation at a redemption price of $ $500.00 per share, plus an amount equal to all accrued and unpaid dividends to and including the date fixed for redemption. The corporation may, except as provided below, pay the redemption price in cash, Class A Common Stock or any combination thereof; provided that the corporation may elect to pay the redemption price in whole or in part in Class A Common Stock only if the Class A Common Stock is listed or admitted to trading on a national or regional securities exchange in the United States or reported by NASDAQ; and provided, further that any accrued and unpaid dividends must be paid in cash. (ii) At least 15 days but no more than 60 days prior to the date fixed for the redemption of the shares of this Series in accordance with Section 4(c)(i) hereof (the "Call Date"), a written notice will be mailed to each holder of record (and each beneficial owner to the extent required by law) of shares of this Series to be redeemed, notifying such holder of the corporation's election to redeem such shares, stating the Call Date, stating the corporation's election with respect to whether the payment of the redemption price is to be made in cash, Class A Common Stock or a combination thereof, and calling upon such holder to surrender to the corporation on the Call Date at the place designated in such notice the certificate or certificates representing the shares called for redemption. On or after the Call Date, each holder of shares of this Series to be redeemed must present and surrender his certificate or certificates for such shares to the corporation at the place designated in such notice and thereupon the redemption price of such shares, in the manner elected by the corporation, will be paid and/or delivered to or on the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate will be canceled. Except as provided in Section 4(c)(iv) hereof, the corporation may not change the form of consideration (or components or percentages of components thereof) to be paid by the corporation in respect of such redemption once the corporation has given, or caused to be given, the applicable redemption notice. At the close of business on the Redemption Date, each holder of shares of this Series to be redeemed (unless the corporation defaults in the delivery of the shares of Class A Common Stock or cash payable on such Redemption Date) shall be deemed to be the record holder of the number of shares of Class A Common Stock into which such shares of this Series are to be redeemed, regardless of whether such holder has surrendered the certificates representing such holder's shares of this Series that have been redeemed, dividends on the shares of this Series so redeemed shall cease to accrue, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as holders of shares of this Series shall cease and terminate. (iii) If the corporation elects to pay the redemption price by the delivery of Class A Common Stock, in whole or in part, the number of shares to be delivered in respect of the specified percentage of the redemption price to be paid in Class A Common Stock shall be equal to the dollar amount of such specified percentage of the redemption price divided by the Market Price of a share of Class A Common Stock. (iv) If the Market Price of the Class A Common Stock is less than 90 per cent of the Weighted Average Price of the Class A Common Stock over the five Trading Days immediately prior to the date of the notice of redemption provided for in Section 4(c)(ii) hereof, the corporation, at its option, may elect to pay the entire redemption price on such Call Date in cash, rather than in whole or in part with the shares of Class A Common Stock specified in the notice of redemption; provided that, if the corporation so elects to pay the entire redemption price in cash, the payment thereof shall be deferred until as of the tenth Business Day following publication of the notice of such election (the "Adjourned Call Date"), and in such event the corporation shall pay, in addition to the redemption price, all accrued and unpaid dividends on the shares of this Series to be redeemed through the Adjourned Call Date. Upon determination of the actual number of shares of Class A Common Stock issuable in accordance with the foregoing provisions, the corporation will publish such determination (and, if it is entitled to and so elects, notification of any exercise of the election provided for in the preceding sentence, of the Adjourned Call Date) promptly in The Wall Street Journal or another daily newspaper of national circulation. (d) No fractional shares or scrip representing fractions of shares of Class A Common Stock shall be issued upon redemption of this Series. Instead of any fractional interest in a share of Class A Common Stock that would otherwise be deliverable upon the redemption of a share of this Series, the corporation shall pay to the holder of such share an amount in cash (computed to the nearest cent) based upon the Market Price of Class A Common Stock. If more than one share shall be surrendered for redemption at one time by the same holder, the number of full shares of Class A Common Stock issuable upon redemption thereof shall be computed on the basis of the aggregate number of shares of this Series so surrendered. (e) The corporation covenants that any shares of Class A Common Stock issued upon redemption of this Series shall be duly and validly issued, fully paid and non-assessable, shall be issued from its authorized but unissued shares and, except as provided in Section 9 hereof, will be free from all taxes, liens and charges with respect to the issue thereof. The corporation shall endeavor to list the shares of Class A Common Stock required to be delivered upon redemption of this Series, prior to such redemption, upon each national securities exchange, if any, upon which the outstanding Class A Common Stock is listed at the time of such delivery. The corporation shall endeavor to take any action necessary to ensure that any shares of Class A Common Stock issued upon the redemption of this Series are freely transferable and not subject to any resale restrictions under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities or blue sky laws. (f) If less than all the outstanding shares of this Series are to be redeemed, the number of shares of this Series to be redeemed and the method of effecting such redemption, whether by lot or pro rata, shall be as determined by the Board of Directors. (g) At any time after a notice of redemption has been given in the manner prescribed herein with respect to a redemption in which the corporation has elected to pay the redemption price in whole in cash, and prior to the date fixed for redemption, the corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the corporation which shall not be required for the redemption for which they were deposited because of the exercise of rights of conversion subsequent to the date of deposit shall be returned to the corporation forthwith, and any funds deposited by the corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the corporation for payment of the appropriate amount. (h) From and after the date fixed for redemption (unless the corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and from and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(g) hereof, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the corporation (except the right to receive from the corporation the amount payable upon such redemption and, up to the close of business on the date fixed for such redemption, the right to convert such shares as set forth in Section 7 hereof) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the corporation shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. If less than all of the shares represented by any such surrendered certificate are redeemed, the corporation shall execute and deliver to the holder thereof, or to his written order, a certificate or certificates representing the unredeemed shares. (i) In no event shall the corporation redeem less than all the outstanding shares of this Series and shares of any other series of stock of the corporation ranking, as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, on a parity with the shares of this Series ("Parity Stock") pursuant to this Section 4 unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of such Parity Stock. (j) In connection with any redemption of shares of this Series solely for cash, the corporation may enter into an agreement with one or more investment bankers or other purchasers for the purchase of the shares to be redeemed from the holders thereof and the conversion of such purchased shares into shares of Class A Common Stock as provided in Section 7 hereof. Such agreement shall provide that the amount to be paid by such purchasers to the holders of the shares of this Series to be redeemed shall not be less than the redemption price for such shares together with all accrued and unpaid dividends thereon to and including the date fixed for redemption and may provide further that such amount be deposited in trust, on or before the close of business on the date fixed for redemption, with a bank or trust company designated by the corporation meeting the requirements set forth in Section 4(g) hereof. Notwithstanding anything to the contrary contained in this Section 4, the obligation of the corporation to pay the redemption price of the shares of this Series to be redeemed, together with accrued and unpaid dividends thereon to the date fixed for redemption, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, any shares of this Series to be redeemed that have not been duly surrendered for conversion by the holders thereof may, at the option of the corporation, be deemed, to the fullest extent permitted by law, acquired by such purchasers from such holders and (notwithstanding anything to the contrary contained in this subsection (j) or in Section 7 hereof) surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the date fixed for redemption, subject to payment of the above amount as aforesaid. (k) Definitions. For purposes of this Section 4, the following terms shall have the meanings indicated: (i) "accrued and unpaid dividends" in respect of any share of this Series shall mean an amount computed at the Dividend Rate for this Series from the date on which dividends on such share became cumulative to and including the date to which such dividends are to be accrued, less the aggregate amount of all dividends theretofore paid thereon. The amount accrued subsequent to the most recent Dividend Period shall be computed by dividing the quarterly dividend payment by the actual number of days in the uncompleted quarter, and thereafter multiplying this figure by the number of days in such quarter up to and including the date to which dividends are to be accrued. (ii) "Business Day" shall mean any day other than a Saturday or Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. (iii) "Conversion Price" shall have the meaning set forth in, and shall be subject to adjustment from time to time as provided in, Section 7(d) hereof. (iv) "Current Market Price" in respect of the Class A Common Stock means the last reported sales price, regular way, on such day, or, if no 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 in the composite transactions for the New York Stock Exchange or, if such security is not listed or admitted for trading on the New York Stock Exchange, on the principal national or regional securities exchange in the United States on which the Class A Common Stock is listed or admitted to trading, or if the Class A Common Stock is not listed or admitted to trading on a national or regional securities exchange in the United States, on the National Market System of NASDAQ or, if the Class A 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 bid and asked prices for such security on such day shall not have been reported through NASDAQ or by the National Quotation Bureau Incorporated, the average of the bid and asked prices on such day as furnished by any New York Stock Exchange member firm regularly making a market in such security selected for such purpose by the Board of Directors of the corporation. (v) "Market Price" means the Weighted Average Price of a share of Class A Common Stock over the five Trading Day period ending on the third Business Day prior to the applicable Redemption Date or Call Date (or, if such third Business Day is not a Trading Day, on the last Trading Day prior to such Business Day), appropriately adjusted to take into account the occurrence, during the period commencing on the first of such Trading Days and ending on such Redemption Date or Call Date, of any event described in Section 7(d) hereof. (vi) "Trading Day" shall mean any day on which the securities in question are traded on the New York Stock Exchange, or if such securities are not listed or admitted for trading on the New York Stock Exchange, on the principal national or regional securities exchange on which such securities are listed or admitted, or if not listed or admitted for trading on any national or regional securities exchange, on the National Market System of NASDAQ, or if such securities are not quoted on such National Market System, in the applicable securities market in which the securities are traded. (vii) "Weighted Average Price" of a share of Class A Common Stock on any Trading Day or over any period of Trading Days means the weighted average per share sale price for all sales of shares of Class A Common Stock on such Trading Day or during such period, as the case may be (or, if the information necessary to calculate such weighted average per share sale price is not reported, the average of the high and low sale prices or, if no sales prices are reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) as reported in the composite transactions for the New York Stock Exchange, or if the Class A Common Stock is not listed or admitted to trading on such Exchange, as reported in the composite transactions for the principal national or regional securities exchange in the United States on which the Class A Common Stock is listed or admitted to trading, or if the Class A Common Stock is not listed or admitted to trading on a United States national or regional securities exchange, as reported by NASDAQ or by the National Quotation Bureau Incorporated; provided that, in the absence of such quotations, the corporation shall be entitled to determine the Weighted Average Price on the basis of such quotations as it considers appropriate. 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise required by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the corporation. Each share of Preferred Stock of this Series will be entitled to one vote on matters which holders of such series are entitled to vote. (b) The shares of this Series shall be entitled to vote with respect to the election of directors in accordance with Sections (b)(4) and (b)(5) of Article FOURTH of the certificate of incorporation. (c) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the Company ranking on a parity with shares of this Series either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of shares of this Series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(d) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (d) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(c) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the corporation, upon the written request of the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the corporation within 20 days after personal service of such written request upon the Secretary of the corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection (d). Notwithstanding anything to the contrary contained in this subsection (d), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the corporation. (e) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(c) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(c). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(c) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (f) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(c) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the corporation irrespective of any increase pursuant to the provisions of Section 5(c) hereof. (g) In addition to any other vote required by law, the corporation shall not (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of the certificate of incorporation (including the terms of this Series) so as to materially and adversely affect any right, preference, privilege or voting power of this Series or (ii) create, authorize or issue any series or class of stock ranking prior, either as to payment of dividends or distributions of assets upon liquidation, dissolution or winding up, to this Series, without the affirmative vote or consent of the holders of at least two- thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that any increase in the total number of authorized shares of Common Stock (or any series thereof) or Preferred Stock (or any series thereof), or the creation, authorization or issuance of any series of stock ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, on a parity with the shares of this Series will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers; provided, further, that no class vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in clause (i) or (ii) of this subsection (g) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the corporation, the amount of $500.00 in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of any other class or series of Preferred Stock and holders of shares of any other stock of the corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this subsection (a) and Section 6(b) hereof, a consolidation or merger of the corporation with one or more other corporations or the sale of all or substantially all of the assets of the corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation. (b) Subject to the rights of the holders of shares of any series or class of stock ranking prior to this Series and of the holders of any stock of the corporation ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, after payment shall have been made in full to the holders of this Series as provided in Section 6(a) hereof and this subsection (b), the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Section 7, at the option of the holder thereof, each share of this Series may, at any time (unless shares of this Series shall be called for redemption, then, with respect to shares of this Series so called, until and including, but, if the corporation shall not default in making payment of the amount payable on such redemption, not after, the close of business on the date fixed for redemption), be converted into a number of fully paid and nonassessable shares of Class A Common Stock equal to the quotient obtained by dividing $500.00 by the Conversion Price (as hereinafter defined) in effect at the Date of Conversion (as hereinafter defined). (b) In order to exercise the conversion privilege, any holder of shares of this Series to be converted shall surrender such shares to the corporation at any time during usual business hours at the place or places (including a place in the Borough of Manhattan, The City of New York) maintained for such purpose, accompanied by a fully executed written notice, in substantially the form set forth on the reverse of the certificate representing shares of this Series, that the holder elects to convert such shares. Such notice shall also state the name or names (with address) in which the certificate or certificates for shares of Class A Common Stock shall be issued. Shares of this Series surrendered for conversion shall (if so required by the corporation) be properly endorsed or assigned for transfer by the holder or his attorney duly authorized in writing. The holders of shares of this Series at the close of business on any record date for the payment of dividends on such shares will be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof or the corporation's default in the payment of the dividend due on such Dividend Payment Date. Shares of this Series surrendered for conversion during the period from the close of business on any record date for the payment of dividends on such shares to the opening of business on the corresponding Dividend Payment Date (except shares called for redemption on a Redemption Date or Call Date during the period from such record date to and including the Dividend Payment Date) 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 record date for the payment of dividends on such shares who converts such shares on a Dividend Payment Date will receive the dividend payable on such shares by the corporation on such date, and the converting holder need not include a payment in the amount of any such dividend upon surrender of such shares for conversion. As promptly as practicable after the receipt of such notice and the surrender of such shares of this Series as aforesaid, the corporation shall, subject to the provisions of Section 9 hereof, issue and deliver at such place or places referred to in this subsection (b) to such holder, or on his written order, a certificate or certificates for the number of full shares of Class A Common Stock issuable on such conversion of shares of this Series in accordance with the provisions of this Section 7, and cash, as provided in Section 7(c) hereof, in respect of any fraction of a share of Class A Common Stock otherwise issuable upon such conversion. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date (herein called the "Date of Conversion") on which such notice shall have been received by the corporation and such shares of this Series shall have been surrendered as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Class A Common Stock shall be issuable upon such conversion shall be deemed to have become on the Date of Conversion the holder or holders of record of the shares of Class A Common Stock represented thereby; provided, that any such surrender on any date when the registry books of the corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates for such shares are to be issued as the record holder or holders thereof for all purposes at the opening of business on the next succeeding day on which such registry books are open, but such conversion shall nevertheless be at the Conversion Price in effect at the close of business on the date when such shares of this Series shall have been so surrendered with the conversion notice. In the case of conversion of a portion, but less than all, of the shares of this Series represented by a certificate surrendered for conversion, the corporation shall execute, and deliver to the holder thereof, or on his written order, a certificate or certificates representing the shares of this Series which the holder has not elected to convert into shares of Class A Common Stock. No payment or adjustment shall be made for dividends accrued on the shares of this Series converted as provided in this Section 7 or for dividends or distributions accrued on any Class A Common Stock. (c) No fractions of shares or scrip representing fractions of shares shall be issued upon conversion of shares of this Series. If more than one share of this Series shall be surrendered for conversion at one time by the same holder, the number of full shares of Class A Common Stock which shall be issuable upon conversion of such shares shall be computed on the basis of the aggregate number of shares of this Series surrendered for conversion. If any fraction of a share of Class A Common Stock would, except for the provisions of this subsection (c), be issuable on the conversion of any shares of this Series, the corporation shall make payment in lieu thereof in an amount of United States dollars equal to the value of such fraction computed on the basis of the closing price of the Class A Common Stock as reported on the Composite Tape for New York Stock Exchange - Listed Stocks (or if the Class A Common Stock is not listed or admitted to trading on such exchange on the Date of Conversion, then on the principal national or regional securities exchange on which the Class A Common Stock is then listed or admitted to trading, or, if not listed or admitted to trading on any national or regional securities exchange, then as reported by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting information) on the last Trading Day (as hereinafter defined) prior to the Date of Conversion or if no such sale takes place on such day, the last sale price for such day shall be the average of the closing bid and asked prices regular way on the New York Stock Exchange (or if the Class A Common Stock is not listed or admitted to trading on such exchange, on the principal national securities exchange on which the Class A Common Stock is then listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the highest bid and lowest asked prices as reported by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting information) (any such last sale price being herein referred to as the "Last Sale Price"). If on such Trading Day the Class A Common Stock is not quoted by any such organization, the fair value of such Class A Common Stock on such day, as determined by the Board of Directors, shall be used. For the purpose of this subsection (c), the term "Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are not traded on such exchange or in such market. (d) The Conversion Price per share of Class A Common Stock issuable upon conversion of shares of this Series (herein called the "Conversion Price") initially shall be $29.94 as of the Initial Filing Date (as defined in the Certificate of Incorporation). The Conversion Price shall be subject to adjustment from time to time as follows: (i) In case the corporation shall (1) pay a dividend or make a distribution in shares of Class A Common Stock, (2) subdivide its outstanding shares of Class A Common Stock into a greater number of shares or (3) combine its outstanding shares of Class A Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such action shall be adjusted so that the holder of any shares of this Series thereafter surrendered for conversion shall be entitled to receive the number of shares of Class A Common Stock which he would have owned or have been entitled to receive immediately following such action had such shares been converted immediately prior thereto. An adjustment made pursuant to this subsection (d)(i) shall become effective immediately, except as provided in subsection (d)(v) below, after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. (ii) In case the corporation shall issue rights, warrants or options to all holders of Class A Common Stock entitling them (for a period not exceeding 45 days from the date of such issuance) to subscribe for or purchase shares of Class A Common Stock at a price per share less than the Recent Market Price per share (as determined pursuant to subsection (d)(iv) below) of the Class A Common Stock on the record date mentioned below, the Conversion Price shall be adjusted to a price, computed to the nearest cent, so that the same shall equal the price determined by multiplying: (1) the Conversion Price in effect immediately prior to the date of issuance of such rights or warrants by a fraction, of which (2) the numerator shall be (A) the number of shares of Class A Common Stock outstanding on the date of issuance of such rights, warrants or options, immediately prior to such issuance, plus (B) the number of shares which the aggregate offering price of the total number of shares so offered for subscription or purchase would purchase at such Recent Market Price, (determined by multiplying such total number of shares by the exercise price of such rights, warrants or options and dividing the product so obtained by such Recent Market Price), and of which (3) the denominator shall be (A) the number of shares of Class A Common Stock outstanding on the date of issuance of such rights, warrants or options, immediately prior to such issuance, plus (B) the number of additional shares of Class A Common Stock which are so offered for subscription or purchase. Such adjustment shall become effective immediately, except as provided in subsection (d)(v) below, after the record date for the determination of holders entitled to receive such rights, warrants or options. (iii) In case the corporation shall distribute to all or substantially all holders of Class A Common Stock evidences of indebtedness, equity securities (including equity interests in the corporation's Subsidiaries (as hereinafter defined)) other than Class A Common Stock, or other assets (other than cash dividends paid out of earned surplus of the corporation or, if there shall be no earned surplus, out of net profits for the fiscal year in which the dividend is made and/or the preceding fiscal year), or shall distribute to all or substantially all holders of Class A Common Stock rights or warrants to subscribe for securities (other than those referred to in subsection (d)(ii) above), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying: (1) the Conversion Price in effect immediately prior to the date of such distribution by a fraction, of which (2) the numerator shall be the Recent Market Price per share (as determined pursuant to subsection (d)(iv) below) of the Class A Common Stock on the record date mentioned below less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value, and described in a resolution of the Board of Directors filed with the transfer agent for the shares of this Series) of the portion of the assets, evidences of indebtedness and equity securities so distributed or of such subscription rights or warrants applicable to one share of Class A Common Stock, and of which (3) the denominator shall be such Recent Market Price per share of the Class A Common Stock. Such adjustment shall become effective immediately, except as provided in subsection (d)(v) below, after the record date for the determination of stockholders entitled to receive such distribution. As used herein, the term "Subsidiary" means (i) any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the Board of Directors or other persons performing similar functions are at the time directly or indirectly owned by the corporation or (ii) any partnership of which more than 50% of the partnership interests are owned by the corporation or any Subsidiary. (iv) For purposes of any computation under subsections (d)(ii) and (d)(iii) above, the Recent Market Price per share of Class A Common Stock on any date shall be deemed to be the average of the Last Sale Prices of a share of Class A Common Stock for the five consecutive Trading Days selected by the corporation commencing not more than 20 Trading Days before and ending not later than the earliest of the date in question and the date before the "ex" date with respect to the issuance or distribution requiring such computation. If on any such Trading Day the Class A Common Stock is not quoted by any organization referred to in the definition of Last Sale Price in Section 7(c) hereof, the fair value of the Class A Common Stock on such day, as determined by the Board of Directors, shall be used. For purposes of this paragraph, the term "'ex' date", when used with respect to any issuance or distribution, means the first date on which the Class A Common Stock trades regular way on the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading (or, if not so listed or admitted, on NASDAQ or a similar organization if NASDAQ is no longer reporting trading information) without the right to receive such issuance or distribution. (v) In any case in which this subsection (d) shall require that an adjustment be made immediately following a record date, the corporation may elect to defer the effectiveness of such adjustment (but in no event until a date later than the effective time of the event giving rise to such adjustment), in which case the corporation shall, with respect to any shares of this Series converted after such record date and before such adjustment shall have become effective (1) defer paying any cash payment pursuant to Section 7(c) hereof or issuing to the holder of shares of this Series the number of shares of Class A Common Stock issuable upon conversion in excess of the number of shares of Class A Common Stock issuable thereupon only on the basis of the Conversion Price prior to adjustment and (2) not later than five business days after such adjustment shall have become effective, pay to such holder the appropriate cash payment pursuant to Section 7(c) hereof and issue to such holder the additional shares of Class A Common Stock issuable on such conversion. (vi) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price; provided, that any adjustments which by reason of this subsection (d)(vi) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. (vii) Whenever the Conversion Price is adjusted as herein provided, the corporation shall promptly (1) file with the transfer agent for the shares of this Series a certificate of an officer of the corporation (an "Officer's Certificate") setting forth the Conversion Price after such adjustment and setting forth in reasonable detail the facts requiring such adjustment and the calculations on which the adjustment is based, which certificate shall be conclusive evidence of the correctness of such adjustment and (2) mail or cause to be mailed a notice of such adjustment to each holder of shares of this Series at his address as the same appears on the registry books of the corporation. Notwithstanding anything in this Section 7 to the contrary, the corporation shall be entitled to make such reductions in the Conversion Price, in addition to those required by this Section 7, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision or combination of shares, distribution of rights or warrants to purchase stock or securities, distribution of securities convertible into or exchangeable for stock, or distribution of assets (other than cash dividends) hereafter made by the corporation to its stockholders shall not be taxable. (e) In case of any reclassification or change of outstanding shares of Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any consolidation of the corporation with, or merger of the corporation into, any other Person, or any merger of another Person into the corporation (other than a merger which does not result in any reclassification, change, conversion, exchange or cancellation of outstanding shares of Class A Common Stock) or any sale or transfer of all or substantially all of the assets of the corporation, the corporation, or the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall make effective provision in the articles or certificate of incorporation, providing that the holder of each share of this Series then outstanding shall have the right thereafter to convert such share only into the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer, by a holder of the number of shares of Class A Common Stock into which such shares of this Series might have been converted immediately prior to such reclassification, change, consolidation, merger, sale or transfer, assuming such holder of Class A Common Stock of the corporation (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 ("constituent Person"), or an Affiliate (as hereinafter defined) of a constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer is not the same for each share of Class A Common Stock of the corporation held immediately prior to such reclassification, change, consolidation, merger, sale or transfer by others 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 subsection (e) the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer 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). Such articles or certificate of incorporation shall provide for adjustments which, for events subsequent to the effective date of such articles or certificate of incorporation, shall be as nearly equivalent as may be practicable to the adjustments provided for herein. The above provisions of this subsection (e) shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales or transfers. For the purpose of this subsection (e), the term "Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof, and the term "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of the definition of "Affiliate", the term "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. (f) The corporation shall reserve, free from preemptive rights, out of its authorized but unissued shares, sufficient shares of Class A Common Stock to provide for the conversion of the shares of this Series from time to time outstanding as such shares of this Series are presented for conversion. (g) The corporation covenants that all shares of Class A Common Stock which may be issued upon conversion of shares of this Series will upon issue be duly and validly issued, fully paid and nonassessable by the corporation and except as provided in Section 9 hereof free from all taxes, liens and charges with respect to the issue thereof. 8. Notice of Certain Events. In case: (a) the corporation shall declare a dividend (or any other distribution) payable to the holders of Class A Common Stock (otherwise than cash dividends paid out of the earned surplus of the corporation or, if there shall be no earned surplus, out of net profits for the fiscal year in which the dividend is made and/or the preceding fiscal year, and dividends payable in Class A Common Stock); or (b) the corporation shall authorize the granting to the holders of Class A Common Stock of rights to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; or (c) the corporation shall authorize any reclassification or change of the Class A Common Stock (other than a subdivision or combination of its outstanding shares of Class A Common Stock or a change in par value, or from par value to no par value, or from no par value to par value), or any consolidation, merger or share exchange to which the corporation is a party and for which approval of any stockholders of the corporation is required, or the sale or conveyance of all or substantially all the property or business of the corporation; or (d) there shall be proposed any voluntary or involuntary dissolution, liquidation or winding-up of the corporation; then, the corporation shall cause to be filed at the place or places maintained for the purpose of conversion of shares of this Series as provided in Section 7(b) hereof, and shall cause to be mailed to each holder of shares of this Series, at his address as it shall appear on the registry books of the corporation, as promptly as possible but in any event at least 20 days before the date hereinafter specified (or the earlier of the dates hereinafter specified, in the event that more than one date is specified), a notice stating the date on which (i) a record is expected to be taken for the purpose of such dividend, distribution, rights, or warrants, or if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such dividend, distribution, rights, or warrants are to be determined, or (ii) such reclassification, change, consolidation, merger, share exchange, sale, transfer, conveyance, dissolution, liquidation or winding-up is expected to become effective and the date, if any is to be fixed, as of which it is expected that holders of Class A Common Stock of record shall be entitled to exchange their shares of Class A Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, share exchange, sale, transfer, conveyance, dissolution, liquidation or winding-up. 9. Taxes. The corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of (a) certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or (b) certificates for shares of Class A Common Stock on redemption or conversion of shares of this Series pursuant to Section 4 or Section 7 hereof; provided, that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series or Class A Common Stock, as the case may be, in a name other than that of the holder of shares of this Series to be redeemed or 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 has established, to the satisfaction of the corporation, that such tax has been paid. The corporation extends no protection with respect to any other taxes imposed in connection with such redemption or conversion of shares of this Series. 10. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. 11. Miscellaneous. Capitalized terms which are defined in this Exhibit are defined only for the purposes of this Exhibit, and not for the purposes of other Exhibits to the certificate of incorporation. Unless otherwise indicated, section references contained in this Exhibit refer to the corresponding sections of this Exhibit. EX-4 6 EXHIBIT 4.3 CERTIFICATE OF DESIGNATIONS OF GOLD-DENOMINATED PREFERRED STOCK (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the corporation's Gold-Denominated Preferred Stock are as set forth below: 1. Designation. (a) 300,000 shares of Preferred Stock of the corporation are hereby constituted as a series of Preferred Stock designated as "Gold-Denominated Preferred Stock" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been redeemed for cash as hereinafter provided or purchased by the corporation shall be canceled, and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new or existing series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year until and including August 1, 2003 (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend; provided that dividends payable on August 1, 2003 (the "Mandatory Redemption Date") shall be paid as provided in Section 4 hereof. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock (including the Gold-Denominated Preferred Stock, Series II, the Silver-Denominated Preferred Stock, the Step-Up Convertible Preferred Stock and the 7% Convertible Exchangeable Preferred Stock) and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series (the shares of any other class or series of Preferred Stock and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock of the corporation, the Class B Common Stock of the corporation or any other stock of the corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. For purposes of this Section 2 and of Section 4(f) hereof, if any depositary shares have been issued with respect to any series of stock, actions with respect to such depositary shares, including acquisition of and payments on or with respect to such depositary shares, shall be regarded as actions with respect to such series of stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. (a) The Dividend Rate per quarter on each share of this Series shall be an amount equal to the Dollar Equivalent Value (as defined below) of 0.0175 ounces of gold. "Dollar Equivalent Value" means the applicable Reference Gold Price multiplied by the applicable number of ounces of gold. "Reference Gold Price" means, when used to calculate the amount of any dividend payable on any Dividend Payment Date (other than the Mandatory Redemption Date, as to which the calculation shall be made as provided in Section 4(k)(iv) hereof) the arithmetic average of the London P.M. gold fixing price (or A.M. gold fixing price if there is no P.M. gold fixing price on the applicable trading date) for an ounce of gold in the London bullion market on each of the five trading days ending on the second trading day prior to the last day of the calendar quarter immediately preceding such Dividend Payment Date, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal, as published in the Financial Times). If for any reason gold is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, gold will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for gold as determined by the corporation's Board of Directors. On or before the fifth business day preceding each record date for the payment of a dividend in respect of the shares of this Series, the corporation will cause to be published in The Wall Street Journal (Eastern Edition) or, if such newspaper is not then published, in a newspaper or other publication of national circulation, the amount of (and if the shares of this Series are represented by depositary shares, the amount so payable per depositary share) the dividend payable in respect of each share of this Series on the next succeeding Dividend Payment Date. (b) Dividends shall be calculated on the basis of a year of 360 days consisting of 12 30-day months. The term "Dividend Period", as used herein, means, with respect to any Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The shares of this Series shall be subject to mandatory redemption by the corporation, out of funds legally available therefor, on the Mandatory Redemption Date at the Dollar Equivalent Value of 2.0 ounces of gold per share plus accrued and unpaid dividends (as hereinafter defined) to the Mandatory Redemption Date. (b) The shares of this Series shall not be subject to redemption at the option of the corporation except as described in this subsection (b). If on any Dividend Payment Date the total number of shares of this Series outstanding shall be less than 15% of the total number of shares of this Series outstanding on the 40th day following the date of original issuance of the shares of this Series, the corporation shall have the option to redeem the outstanding shares of this Series, in whole but not in part, out of funds legally available therefor, at an amount equal to the Dollar Equivalent Value of 2.0 ounces of gold per share plus accrued and unpaid dividends (as hereinafter defined) to the date fixed for redemption. For purposes of determining the number of shares of this Series outstanding on any Dividend Payment Date, the shares of this Series acquired by the corporation on or prior to such Dividend Payment Date and not theretofore canceled (or in the case of any shares of this Series represented by depositary shares, the depositary shares representing shares of this Series acquired by the corporation on or prior to such Dividend Payment Date and not theretofore delivered to the depositary for the depositary shares for cancellation) shall be deemed to be outstanding. Notice of any such redemption as described in this Section 4(b) shall be mailed to holders of the shares of this Series within 30 days after such Dividend Payment Date in accordance with the provisions of Section 4(c) hereof. (c) At least 30 days but no more than 60 days prior to the date fixed for redemption of the shares of this Series in accordance with Section 4(a) or (b) hereof (the "Call Date"), a written notice will be mailed to each holder of record (and each beneficial owner to the extent required by law) of shares of this Series to be redeemed, notifying such holder of the corporation's election to redeem such shares if such redemption is pursuant to Section 4(b) hereof, setting forth the method for determining the amount payable per share of this Series on the Call Date, stating the Call Date and calling upon such holder to surrender to the corporation on the Call Date at the place designated in such notice the certificate or certificates representing the shares called for redemption. (d) At any time after a notice of redemption has been given in the manner prescribed in Section 4(a) or (b) and the amount payable on the date fixed for redemption can be determined by the corporation, and prior to the date fixed for redemption, the corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the corporation for payment of the appropriate amount. (e) From and after the date fixed for redemption (unless the corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and from and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(d) hereof, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the corporation (except the right to receive from the corporation the amount payable upon such redemption) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the corporation shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. (f) If the corporation shall have failed to redeem all outstanding shares of this Series on the Mandatory Redemption Date then, until it shall have redeemed all outstanding Shares of this Series, the corporation may not (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, any Junior Stock other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock or (iv) purchase, redeem or otherwise acquire for value any shares of stock of the corporation ranking on a parity with the shares of this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up ("Parity Stock"). (g) (i) Within 90 days following each Calculation Date (as defined below), the corporation shall be required to prepare a certificate (a "Corporation Certificate") setting forth its determination of the Reserve Coverage Ratio (as defined below) as of such Calculation Date. If the Reserve Coverage Ratio, as shown on the Corporation Certificate prepared with respect to any Calculation Date is less than 5.0, the corporation will be required to make an offer (a "Reserve Coverage Offer") to purchase, out of funds legally available therefor, at a price equal to the liquidation preference thereof as of the Purchase Date (as hereinafter defined), plus accrued and unpaid dividends (as defined below) to the Purchase Date, the smallest number of shares of this Series (rounded to the nearest 500 shares) such that, if all such shares had been repurchased on the relevant Calculation Date, the Reserve Coverage Ratio on that date would have been greater than or equal to 5.0. If the Corporation Certificate prepared with respect to any Calculation Date shows that the Reserve Coverage Ratio is less than 5.0, the corporation shall include on such Corporation Certificate its calculation of the number of shares of this Series for which it is required to make an offer (the "Offer Amount"). (ii) If required to make a Reserve Coverage Offer, the corporation will commence such offer not more than 60 days after the date of the Corporation Certificate prepared with respect to the applicable Calculation Date, by mailing a notice to all holders of record of the shares of this Series setting forth (A) that such notice is being given pursuant to a Reserve Coverage Offer, (B) the Offer Amount, (C) the method for determining the amount payable per share of this Series on the Purchase Date, (D) the last date ("the Purchase Date"), which shall not be less than 30 nor more 60 days after the date of such notice, by which a holder must elect whether to accept the Reserve Coverage Offer, (E) the procedures that such holder must follow to exercise its rights and (F) the procedures for withdrawing an election. The corporation shall also cause a copy of such notice to be published in The Wall Street Journal (Eastern Edition) or another daily newspaper of national circulation. (iii) Holders electing to have shares of this Series purchased by the corporation pursuant to a Reserve Coverage Offer will be required to surrender the certificates representing such shares, with an appropriate form duly completed, to the corporation prior to the Purchase Date. Holders will be entitled to withdraw an election by a written notice of withdrawal delivered to the corporation prior to the close of business on the Purchase Date. The notice of withdrawal shall state the number of shares of this Series and certificate numbers to which the notice of withdrawal relates and the number of shares and certificate numbers, if any, which remain subject to the election. If the aggregate number of shares of this Series tendered exceeds the Offer Amount, the corporation will select the shares of this Series to be purchased on a pro rata basis as nearly as practicable. The corporation shall, as promptly as reasonably practicable after the Purchase Date, cause payment to be mailed or delivered to each tendering holder in the amount of the purchase price, and any unpurchased shares of this Series to be returned to the holder thereof. (h) If, at the time of the mandatory redemption on the Mandatory Redemption Date or a Reserve Coverage Offer, the funds of the corporation legally available for redemption or repurchase of the shares of this Series are insufficient to redeem or repurchase such shares, and all of the shares of any other series of Parity Stock which the corporation is then obligated to redeem) or repurchase, (i) the total legally available funds shall be allocated among the shares of this Series and of such other series in proportion to the aggregate dollar amount of redemption or other repurchase obligations with respect to this Series and such other series and (ii) the portion of such funds allocated to this Series will be used to redeem or repurchase the maximum possible number of shares, pro rata based upon the number of shares to be redeemed or delivered for purchase, as the case may be. At any time thereafter when additional funds of the corporation become legally available for such purpose, after giving effect to the foregoing allocation provisions, such funds shall immediately be used to redeem or purchase, as the case may be, any additional shares of this Series which the corporation is obligated to redeem or purchase, as the case may be, but which it has not so redeemed or purchased. (i) The corporation shall not have the right to redeem shares of this Series pursuant to Section 4(a) or (b) hereof unless full cumulative dividends for all past dividend periods shall have been paid or declared and set aside for payment upon all outstanding shares of this Series and all outstanding shares of other series of stock of the corporation ranking, as to dividends, on a parity with the shares of this Series. (j) The corporation will not consummate or permit any subsidiary to consummate any transaction involving the corporation which would cause the Reserve Coverage Ratio to fall below 5.0 unless, immediately following consummation of such transaction, the corporation will have sufficient legally available funds immediately following consummation of such transaction to complete any Reserve Coverage Offer required as a result thereof. (k) Definitions. For purposes of this Section 4, the following terms shall have the meanings indicated: (i) "accrued and unpaid dividends" per share of this Series (A) upon redemption on the Mandatory Redemption Date, (B) in the case of any Reserve Coverage Offer, (C) in the case of any optional redemption and (D) in the case of a liquidation event, shall be equal to the sum of (x) the aggregate amount of any accrued and unpaid dividends on such share through the next preceding Dividend Payment Date (calculated as provided in Section 3 hereof) plus (y) a proportionate amount of the regular quarterly dividend at the Dividend Rate for the period from the day following the immediately preceding Dividend Payment Date through the redemption date, Purchase Date or date of liquidating distribution (calculated on the basis of a year of 360 days consisting of twelve 30-day months) multiplied by the Reference Gold Price used to calculate the other amounts payable to holders of the shares of this Series in connection with such redemption, purchase or liquidation event. If a quarterly dividend is not declared and paid as provided in Section 3 hereof, the unpaid dividend that shall cumulate for such Dividend Period will be the amount of the dividend that would have been payable on the Dividend Payment Date if such dividend had been timely paid. (ii) "Calculation Date" means (i) December 31 of each year and (ii) the date of the consummation of each transaction undertaken by the corporation or any subsidiary of the corporation which would either (a) cause the Reserve Amount, as estimated by the corporation, to decrease by 50% or more from the preceding Calculation Date or (b) cause the Reserve Coverage Ratio, as estimated by the corporation, to fall below 5.0. (iii) The "Gold Amount" as of any Calculation Date means the product of (x) 2.0 ounces of gold and (y) the number of shares of this Series issued and outstanding as of such Calculation Date less the number of shares of this Series acquired by the corporation on or prior to the date of preparation of a Corporation Certificate with respect to such Calculation Date. (iv) The "Reference Gold Price," when used to calculate any amount payable with respect to the shares of this Series (other than dividends payable on any Dividend Payment Date other than the Mandatory Redemption Date) or to purchase any shares of this Series on any date means the arithmetic average of the London P.M. gold fixing price (or A.M. gold fixing price if there is no P.M. gold fixing price on the applicable trading date) for an ounce of gold in the London bullion market, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal (Eastern Edition), as published in the Financial Times) on each of the twenty trading days ending on the second trading day prior to (i) in the case of the mandatory redemption of shares of this Series, the Mandatory Redemption Date, (ii) in the case of any offer to purchase shares of this Series due to a failure to meet the minimum Reserve Coverage Ratio on any Calculation Date, the date of commencement of such Reserve Coverage Offer, (iii) in the case of any optional redemption of shares of this Series, the date fixed for such redemption and (iv) in the case of a liquidation event, the date 30 days prior to the date fixed for the liquidating distribution. If for any reason gold is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, gold will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for gold as determined by the corporation's Board of Directors. (v) The "Reserve Amount" as of any Calculation Date means the corporation's Proportionate Interest in the estimated proved and probable gold reserves of the corporation and of any entity in which the corporation has a direct or indirect beneficial ownership interest. The estimated proved and probable gold reserves shall be determined based upon evaluation methods generally applied by the mining industry. The corporation's "Proportionate Interest" in any estimated proved and probable gold reserves shall be the corporation's direct or indirect beneficial ownership interest in such reserves, giving effect to reductions required to reflect any beneficial ownership interest of any person other than the corporation in such reserves. (vi) The "Reserve Coverage Ratio" shall be determined as of each Calculation Date by dividing (i) the Reserve Amount as of such Calculation Date by (ii) the Gold Amount as of such date. 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise provided by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the corporation. Each share of Preferred Stock of this Series will be entitled to one vote on matters which holders of such Series are entitled to vote. (b) The shares of this Series shall be entitled to vote with respect to the election of directors in accordance with Sections (b)(4) and (b)(5) of Article FOURTH of the certificate of incorporation. (c) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the Company ranking on a parity with shares of this Series either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of shares of this Series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(d) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (d) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(c) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the corporation, upon the written request of the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the corporation within 20 days after personal service of such written request upon the Secretary of the corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection (c). Notwithstanding anything to the contrary contained in this subsection (d), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the corporation. (e) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(c) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(c). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(c) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (f) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(c) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the corporation irrespective of any increase pursuant to the provisions of Section 5(c) hereof. (g) In addition to any other vote required by law, the corporation shall not (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of its certificate of incorporation (including the terms of this Series) so as to materially and adversely affect any right, preference, privilege or voting power of this Series or (ii) create, authorize or issue any series or class of stock ranking prior, either as to payment of dividends or distributions of assets upon liquidation, dissolution or winding up, to this Series, without the affirmative vote or consent of the holders of at least two- thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that any increase in the total number of authorized shares of Common Stock (or any series thereof) or Preferred Stock (or any series thereof), or the creation, authorization or issuance of any series of stock ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, on a parity with the shares of this Series will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers; provided, further, that no class vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in clause (i) or (ii) of this subsection (g) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the corporation, the Dollar Equivalent Value of 2.0 ounces of gold in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of any other class or series of Preferred Stock, and holders of shares of any other stock of the corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this subsection (a) and Section 6(b) hereof, a consolidation or merger of the corporation with one or more other corporations or the sale of all or substantially all of the assets of the corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation. (b) Subject to the rights of the holders of shares of any series or class of stock ranking prior to this Series and of the holders of shares of any stock of the corporation ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, after payment shall have been made in full to the holders of this Series as provided in Section 6(a) hereof and this subsection (b), the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Taxes. The corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or pursuant to a Reserve Coverage Offer; provided, that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series in a name other than that of the holder of shares of this Series to be redeemed or repurchased 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 has established, to the satisfaction of the corporation, that such tax has been paid. The corporation extends no protection with respect to any other taxes imposed in connection with such redemption or repurchase of shares of this Series. 8. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. 9. Miscellaneous. Capitalized terms which are defined in this Exhibit are defined only for the purposes of this Exhibit, and not for the purposes of other Exhibits to the certificate of incorporation. Unless otherwise indicated, section references contained in this Exhibit refer to the corresponding sections of this Exhibit. EX-4 7 EXHIBIT 4.4 CERTIFICATE OF DESIGNATIONS OF GOLD-DENOMINATED PREFERRED STOCK, SERIES II (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the corporation's Gold-Denominated Preferred Stock, Series II are as set forth below: 1. Designation. (a) 215,279 shares of Preferred Stock of the corporation are hereby constituted as a series of Preferred Stock designated as "Gold-Denominated Preferred Stock, Series II" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been redeemed for cash as hereinafter provided or purchased by the corporation shall be canceled, and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new or existing series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year until and including February 1, 2006 (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend; provided that dividends payable on February 1, 2006 (the "Mandatory Redemption Date") shall be paid as provided in Section 4 hereof. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock (including the Gold-Denominated Preferred Stock, the Silver-Denominated Preferred Stock, the Step-Up Convertible Preferred Stock and the 7% Convertible Exchangeable Preferred Stock) and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series (the shares of any other class or series of Preferred Stock and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock of the corporation, the Class B Common Stock of the corporation or any other stock of the corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. For purposes of this Section 2 and of Section 4(f) hereof, if any depositary shares have been issued with respect to any series of stock, actions with respect to such depositary shares, including acquisition of and payments on or with respect to such depositary shares, shall be regarded as actions with respect to such series of stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. (a) The Dividend Rate per quarter on each share of this Series shall be an amount equal to the Dollar Equivalent Value (as defined below) of 0.01625 ounces of gold. "Dollar Equivalent Value" means the applicable Reference Gold Price multiplied by the applicable number of ounces of gold. "Reference Gold Price" means, when used to calculate the amount of any dividend payable on any Dividend Payment Date (other than the Mandatory Redemption Date, as to which the calculation shall be made as provided in Section 4(k)(v) hereof), the arithmetic average of the London P.M. gold fixing price (or A.M. gold fixing price if there is no P.M. gold fixing price on the applicable trading date) for an ounce of gold in the London bullion market on each of the five trading days ending on the second trading day prior to the last day of the calendar quarter immediately preceding such Dividend Payment Date, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal, as published in the Financial Times). If for any reason gold is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, gold will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for gold as determined by the corporation's Board of Directors. On or before the fifth business day preceding each record date for the payment of a dividend in respect of the shares of this Series, the corporation will cause to be published in The Wall Street Journal (Eastern Edition) or, if such newspaper is not then published, in a newspaper or other publication of national circulation, the amount of the dividend payable in respect of each share of this Series (and if the shares of this Series are represented by depositary shares, the amount so payable per depositary share) on the next succeeding Dividend Payment Date. (b) Dividends shall be calculated on the basis of a year of 360 days consisting of 12 30-day months. The term "Dividend Period", as used herein, means, with respect to any Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The shares of this Series shall be subject to mandatory redemption by the corporation, out of funds legally available therefor, on the Mandatory Redemption Date at the Dollar Equivalent Value of 2.0 ounces of gold per share plus accrued and unpaid dividends (as hereinafter defined) to the Mandatory Redemption Date. (b) The shares of this Series shall not be subject to redemption at the option of the corporation except as described in this subsection (b). If on any Dividend Payment Date the total number of shares of this Series outstanding shall be less than 15% of the total number of shares of this Series outstanding on the 40th day following the date of original issuance of the shares of this Series, the corporation shall have the option to redeem the outstanding shares of this Series, in whole but not in part, out of funds legally available therefor, at an amount equal to the Dollar Equivalent Value of 2.0 ounces of gold per share plus accrued and unpaid dividends (as hereinafter defined) to the date fixed for redemption. For purposes of determining the number of shares of this Series outstanding on any Dividend Payment Date, the shares of this Series acquired by the corporation on or prior to such Dividend Payment Date and not theretofore canceled (or in the case of any shares of this Series represented by depositary shares, the depositary shares representing shares of this Series acquired by the corporation on or prior to such Dividend Payment Date and not theretofore delivered to the depositary for the depositary shares for cancellation) shall be deemed to be outstanding. Notice of any such redemption as described in this Section 4(b) shall be mailed to holders of the shares of this Series within 30 days after such Dividend Payment Date in accordance with the provisions of Section 4(c) hereof. (c) At least 30 days but no more than 60 days prior to the date fixed for redemption of the shares of this Series in accordance with Section 4(a) or (b) hereof (the "Call Date"), a written notice will be mailed to each holder of record (and each beneficial owner to the extent required by law) of shares of this Series to be redeemed, notifying such holder of the corporation's election to redeem such shares if such redemption is pursuant to Section 4(b) hereof, setting forth the method for determining the amount payable per share of this Series on the Call Date, stating the Call Date and calling upon such holder to surrender to the corporation on the Call Date at the place designated in such notice the certificate or certificates representing the shares called for redemption. (d) At any time after a notice of redemption has been given in the manner prescribed in Section 4(a) or (b) hereof and the amount payable on the date fixed for redemption can be determined by the corporation, and prior to the date fixed for redemption, the corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the corporation for payment of the appropriate amount. (e) From and after the date fixed for redemption (unless the corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and from and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(d) hereof, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the corporation (except the right to receive from the corporation the amount payable upon such redemption) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the corporation shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. (f) If the corporation shall have failed to redeem all outstanding shares of this Series on the Mandatory Redemption Date then, until it shall have redeemed all outstanding Shares of this Series, the corporation may not (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, any Junior Stock other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock or (iv) purchase, redeem or otherwise acquire for value any shares of stock of the corporation ranking on a parity with the shares of this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up ("Parity Stock"). (g) (i) Within 90 days following each Calculation Date (as defined below), the corporation shall be required to prepare a certificate (a "Corporation Certificate") setting forth its determination of the Reserve Amount (as defined below) as of such Calculation Date. If the Reserve Amount, as shown on the Corporation Certificate prepared with respect to any Calculation Date is less than the Aggregate Reserve Requirement (as defined below) as of such Calculation Date, the corporation will be required to make an offer (a "Reserve Coverage Offer") to purchase, out of funds legally available therefor, at a price equal to the liquidation preference thereof as of the Purchase Date (as hereinafter defined), plus accrued and unpaid dividends (as defined below) thereon to the Purchase Date, a sufficient number of shares of this Series and of other Gold Parity Stock (as defined below) (or the depositary shares, if any, issued with respect thereto) such that, if all such shares had been repurchased on the relevant Calculation Date, the Reserve Amount on that date would have been greater than or equal to the Aggregate Reserve Requirement on such date. If the Corporation Certificate prepared with respect to any Calculation Date shows that the Reserve Amount is less than the Aggregate Reserve Requirement on such date, the corporation shall include in such Corporation Certificate its calculation of the number of shares of this Series (or related depositary shares) and the number of shares of other Parity Stock (or related depositary shares) it intends to offer to purchase to satisfy the foregoing requirements (such number with respect to any series being referred to as the "Offer Amount" with respect to such series). The corporation, in its sole discretion, may determine the number of shares, if any, of this Series (or related depositary shares) and the number of shares, if any, of each other series of Gold Parity Stock (or related depositary shares) to which a Reserve Coverage Offer will be made so long as such requirements are satisfied. (ii) If required to make a Reserve Coverage Offer, the corporation will commence such offer not more than 60 days after the date of the Corporation Certificate prepared with respect to the applicable Calculation Date, by mailing a notice to all holders of record of the shares of each series included in such Reserve Coverage Offer setting forth (A) that such notice is being given pursuant to a Reserve Coverage Offer, (B) the Offer Amount with respect to such series, (C) the method for determining the amount payable per share of such series on the Purchase Date, (D) the last date (the "Purchase Date"), which shall not be less than 30 nor more 60 days after the date of such notice, by which a holder must elect whether to accept the Reserve Coverage Offer, (E) the procedures that such holder must follow to exercise its rights and (F) the procedures for withdrawing an election. The corporation shall also cause a copy of such notice to be published in The Wall Street Journal (Eastern Edition) or another daily newspaper of national circulation. (iii) Holders of shares of any series electing to have shares of such series purchased by the corporation pursuant to a Reserve Coverage Offer will be required to surrender the certificates representing such shares, with an appropriate form duly completed, to the corporation prior to the Purchase Date. Holders will be entitled to withdraw an election by a written notice of withdrawal delivered to the corporation prior to the close of business on the Purchase Date. The notice of withdrawal shall state the number of shares and certificate numbers to which the notice of withdrawal relates and the number of shares and certificate numbers, if any, which remain subject to the election. If the aggregate number of shares of any series tendered exceeds the Offer Amount with respect to such series, the corporation will select the shares of such series to be purchased on a pro rata basis as nearly as practicable. The corporation shall, as promptly as reasonably practicable after the Purchase Date, cause payment to be mailed or delivered to each tendering holder in the amount of the purchase price, and any unpurchased shares to be returned to the holder thereof. (h) If, at the time of the mandatory redemption on the Mandatory Redemption Date or of a Reserve Coverage Offer, the funds of the corporation legally available for redemption or repurchase of the shares of this Series are insufficient to redeem or repurchase all of such shares and all of the shares of any other series of Parity Stock which the corporation is then obligated to redeem or repurchase, (i) the total legally available funds shall be allocated among the shares of this Series and of such other series in proportion to the aggregate dollar amount of redemption or other repurchase obligations with respect to this Series and such other series and (ii) the portion of such funds allocated to this Series will be used to redeem or repurchase the maximum possible number of shares of this Series, pro rata based upon the number of shares to be redeemed or delivered for repurchase, as the case may be. At any time thereafter when additional funds of the corporation become legally available for such purpose, after giving effect to the foregoing allocation provisions, such funds shall immediately be used to redeem or repurchase, as the case may be, any additional shares of this Series which the corporation is obligated to redeem or repurchase, as the case may be, but which it has not so redeemed or repurchased. (i) The corporation shall not have the right to redeem shares of this Series pursuant to Section 4(a) or (b) hereof unless full cumulative dividends for all past dividend periods shall have been paid or declared and set aside for payment upon all outstanding shares of this Series and all outstanding shares of other series of stock of the corporation ranking, as to dividends, on a parity with the shares of this Series. (j) The corporation will not consummate or permit any subsidiary to consummate any transaction involving the corporation which would cause the Reserve Amount to fall below the Aggregate Reserve Requirement immediately after consummation of such transaction unless the corporation will have sufficient legally available funds immediately following consummation of such transaction to complete any Reserve Coverage Offer required as a result thereof. (k) Definitions. For purposes of this Section 4, the following terms shall have the meanings indicated: (i) "accrued and unpaid dividends" per share of this Series (A) upon redemption on the Mandatory Redemption Date, (B) in the case of any Reserve Coverage Offer, (C) in the case of any optional redemption and (D) in the case of a liquidation event, shall be equal to the sum of (x) the aggregate amount of any accrued and unpaid dividends on such share through the next preceding Dividend Payment Date (calculated as provided in Section 3 hereof) plus (y) a proportionate amount of the regular quarterly dividend at the Dividend Rate for the period from the day following the immediately preceding Dividend Payment Date through the redemption date, Purchase Date or date of liquidating distribution (calculated on the basis of a year of 360 days consisting of twelve 30-day months) multiplied by the Reference Gold Price used to calculate the other amounts payable to holders of the shares of this Series in connection with such redemption, purchase or liquidation event. If a quarterly dividend is not declared and paid as provided in Section 3, the unpaid dividend that shall cumulate for such Dividend Period will be the amount of the dividend that would have been payable on the Dividend Payment Date if such dividend had been timely paid. (ii) "Aggregate Reserve Requirement" as of any Calculation Date means the sum of the individual Reserve Coverage Requirements with respect to each series of Gold Parity Stock, including this Series. (iii) "Calculation Date" means (i) December 31 of each year and (ii) the date of the consummation of each transaction undertaken by the corporation or any subsidiary of the corporation which would either (a) cause the Reserve Amount, as estimated by the corporation, to decrease by 50% or more from the preceding Calculation Date or (b) cause the Reserve Amount, as estimated by the corporation, to fall below the Aggregate Reserve Requirement on such date. (iv) "Gold Parity Stock" means any series of Parity Stock the liquidation preference of which is based on specified amounts of gold or the Dollar Equivalent Value thereof. (v) "Reference Gold Price", when used to calculate any amount payable with respect to the shares of this Series (other than dividends payable on any Dividend Payment Date other than the Mandatory Redemption Date) or to purchase any shares of this Series on any date means the arithmetic average of the London P.M. gold fixing price (or A.M. gold fixing price if there is no P.M. gold fixing price on the applicable trading date) for an ounce of gold in the London bullion market, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal (Eastern Edition), as published in the Financial Times) on each of the twenty trading days ending on the second trading day prior to (i) in the case of the mandatory redemption of shares of this Series, the Mandatory Redemption Date, (ii) in the case of any Reserve Coverage Offer, the date of commencement thereof, (iii) in the case of any optional redemption of shares of this Series, the date fixed for such redemption and (iv) in the case of a liquidation event, the date 30 days prior to the date fixed for the liquidating distribution. If for any reason gold is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, gold will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for gold as determined by the corporation's Board of Directors. (vi) "Required Coverage Multiplier" means (x) 5.0 with respect to this Series, (y) with respect to any other series of Gold Parity Stock having the benefit of a provision requiring an offer similar to the Reserve Coverage Offer, the multiplier applicable thereto by the terms of such other series, and (z) 1.0 with respect to any other series of Gold Parity Stock. (vii) "Reserve Amount" as of any Calculation Date means the corporation's Proportionate Interest in the estimated proved and probable gold reserves of the corporation and of any entity in which the corporation has a direct or indirect beneficial ownership interest. The estimated proved and probable gold reserves shall be determined based upon evaluation methods generally applied by the mining industry. The corporation's "Proportionate Interest" in any estimated proved and probable gold reserves shall be the corporation's direct or indirect beneficial ownership interest in such reserves, giving effect to reductions required to reflect any beneficial ownership interest of any person other than the corporation in such reserves. (viii) "Reserve Coverage Requirement" with respect to any series of Gold Parity Stock shall mean the product of (x) the aggregate liquidation preference of all outstanding shares of such series (expressed in ounces of gold) times (y) the Required Coverage Multiplier applicable to such series. With respect to any series with respect to which depositary shares have been issued, the aggregate liquidation preference of such series shall be determined on the basis of the number of such depositary shares as are issued and outstanding as of the applicable Calculation Date (excluding any depositary shares which have been acquired by the corporation on or prior to the date of the preparation of the corporation Certificate with respect to such Calculation Date). 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise required by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the corporation. Each share of Preferred Stock of this Series will be entitled to one vote on matters which holders of such Series are entitled to vote. (b) The shares of this Series shall be entitled to vote with respect to the election of directors in accordance with Sections (b)(4) and (b)(5) of Article FOURTH of the certificate of incorporation. (c) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the Company ranking on a parity with shares of this Series either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of shares of this Series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(d) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (d) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(c) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the corporation, upon the written request of the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the corporation within 20 days after personal service of such written request upon the Secretary of the corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection (d). Notwithstanding anything to the contrary contained in this subsection (d), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the corporation. (e) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(c) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(c). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(c) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (f) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(c) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the corporation irrespective of any increase pursuant to the provisions of Section 5(c) hereof. (g) In addition to any other vote required by law, the corporation shall not (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of its certificate of incorporation (including the terms of this Series) so as to materially and adversely affect any right, preference, privilege or voting power of this Series or (ii) create, authorize or issue any series or class of stock ranking prior, either as to payment of dividends or distributions of assets upon liquidation, dissolution or winding up, to this Series, without the affirmative vote or consent of the holders of at least two- thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that any increase in the total number of authorized shares of Common Stock (or any series thereof) or Preferred Stock (or any series thereof), or the creation, authorization or issuance of any series of stock ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, on a parity with the shares of this Series will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers; provided, further, that no class vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in clause (i) or (ii) of this subsection 5(g) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the corporation, the Dollar Equivalent Value of 2.0 ounces of gold in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of any other class or series of Preferred Stock and holders of shares of any other stock of the corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this subsection (a) and Section 6(b) hereof, a consolidation or merger of the corporation with one or more other corporations or the sale of all or substantially all of the assets of the corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation. (b) Subject to the rights of the holders of shares of any series or class of stock ranking prior to this Series and of the holders of shares of any stock of the corporation ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, after payment shall have been made in full to the holders of this Series as provided in Section 6(a) hereof and this subsection (b), the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Taxes. The corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or pursuant to a Reserve Coverage Offer; provided, that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series in a name other than that of the holder of shares of this Series to be redeemed or repurchased 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 has established, to the satisfaction of the corporation, that such tax has been paid. The corporation extends no protection with respect to any other taxes imposed in connection with such redemption or repurchase of shares of this Series. 8. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. 9. Miscellaneous. Capitalized terms which are defined in this Exhibit are defined only for the purposes of this Exhibit, and not for the purposes of other Exhibits to the certificate of incorporation. Unless otherwise indicated, section references contained in this Exhibit refer to the corresponding sections of this Exhibit. EX-4 8 EXHIBIT 4.5 CERTIFICATE OF DESIGNATIONS OF SILVER-DENOMINATED PREFERRED STOCK (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. The number, voting powers, designations, preferences, rights, qualifications, limitations and restrictions of the corporation's Silver-Denominated Preferred Stock are as set forth below: 1. Designation. (a) 119,000 shares of Preferred Stock of the corporation are hereby constituted as a series of Preferred Stock designated as "Silver-Denominated Preferred Stock" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been redeemed for cash as hereinafter provided or purchased by the corporation shall be canceled, and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new or existing series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year until and including August 1, 2006 (or, if any shares of this Series remain outstanding after August 1, 2006, the last such date thereafter on which any shares of this Series remain outstanding) (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock (including the Gold-Denominated Preferred Stock, the Gold-Denominated Preferred Stock, Series II, the Step-Up Convertible Preferred Stock and the 7% Convertible Exchangeable Preferred Stock) and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series (the shares of any other class or series of Preferred Stock and any other class or series of stock of the corporation ranking, as to dividends, on a parity with shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock of the corporation, the Class B Common Stock of the corporation or any other stock of the corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. For purposes of this Section 2 and of Section 4(f) hereof, if any depositary shares have been issued with respect to any series of stock, actions with respect to such depositary shares, including acquisition of and payments on or with respect to such depositary shares, shall be regarded as actions with respect to such series of stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. (a) The Dividend Rate per quarter on each share of this Series shall be an amount equal to the Dollar Equivalent Value (as defined below) of 1.65 ounces of silver. "Dollar Equivalent Value" means the applicable Reference Silver Price multiplied by the applicable number of ounces of silver. "Reference Silver Price" means, when used to calculate the amount of any dividend payable on any Dividend Payment Date, the arithmetic average of the London silver fixing spot price for an ounce of silver in the London bullion market on each of the twenty trading days ending on the second trading day prior to the last day of the calendar quarter immediately preceding such Dividend Payment Date, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal, as published in the Financial Times). If for any reason silver is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, silver will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for silver as determined by the corporation's Board of Directors. On or before the fifth business day preceding each record date for the payment of a dividend in respect of the shares of this Series, the corporation will cause to be published in The Wall Street Journal (Eastern Edition) or, if such newspaper is not then published, in a newspaper or other publication of national circulation, the amount of the dividend payable in respect of each share of this Series (and, if the shares of this Series are represented by depositary shares, the amount so payable per depositary share) on the next succeeding Dividend Payment Date. (b) Dividends shall be calculated on the basis of a year of 360 days consisting of 12 30-day months. The term "Dividend Period", as used herein, means, with respect to any Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The Company will redeem annually on August 1 beginning in 1999, out of funds legally available therefor, a number of shares of this Series equal to one eighth of the total number of shares of this Series outstanding immediately after the date of original issuance of the shares of this Series (including any shares issued pursuant to underwriters' over-allotment options) (the "Original Shares"), at the Dollar Equivalent Value per share of 160 ounces of silver. (b) The shares of this Series shall not be subject to redemption at the option of the corporation except as described in this subsection (b). If at any time the total number of outstanding depositary shares representing shares of this Series (the "Depositary Shares") shall be less than 15% of the total number of Depositary Shares representing shares of this Series outstanding immediately after the date of original issuance of the shares of this Series, the corporation shall have the option to redeem the outstanding shares of this Series, in whole but not in part, on any subsequent Dividend Payment Date out of funds legally available therefor, at an amount equal to the Dollar Equivalent Value of 160 ounces of silver per share plus accrued and unpaid dividends (as hereinafter defined) to the date fixed for redemption. For purposes of determining the number of shares of this Series outstanding on any Dividend Payment Date, the shares of this Series acquired by the corporation on or prior to such Dividend Payment Date and not theretofore canceled (or in the case of any shares of this Series represented by depositary shares, the depositary shares representing shares of this Series acquired by the corporation on or prior to such Dividend Payment Date and not theretofore delivered to the depositary for the depositary shares for cancellation) shall be deemed to be outstanding. Notice of any such redemption as described in this subsection (b) shall be mailed to holders of the shares of this Series within 30 days after such Dividend Payment Date in accordance with the provisions of Section 4(c) hereof. In connection with any redemption pursuant to this subsection (b), the corporation shall instruct the depositary in respect of any Depositary Shares representing shares of this Series to redeem such Depositary Shares on the same date as the redemption of shares of this Series. (c) At least 30 days but no more than 60 days prior to the date fixed for redemption of the shares of this Series in accordance with Section 4(a) hereof or this subsection (b) (the "Call Date"), a written notice will be mailed to each holder of record (and each beneficial owner to the extent required by law) of shares of this Series to be redeemed, notifying such holder of the corporation's election to redeem such shares if such redemption is pursuant to Section 4(b) hereof, setting forth the method for determining the amount payable per share of this Series on the Call Date, stating the Call Date and calling upon such holder to surrender to the corporation on the Call Date at the place designated in such notice the certificate or certificates representing the shares called for redemption. (d) At any time after a notice of redemption has been given in the manner prescribed in Section 4(a) or (b) hereof and the amount payable on the date fixed for redemption can be determined by the corporation, and prior to the date fixed for redemption, the corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the corporation for payment of the appropriate amount. (e) From and after the date fixed for redemption (unless the corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and, from and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(d) hereof, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the corporation (except the right to receive from the corporation the amount payable upon such redemption) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the corporation shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. (f) If the corporation shall have failed to make any required annual redemption then, until it shall have redeemed all outstanding shares of this Series then required to be redeemed, the corporation may not (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, any Junior Stock other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisi- tion for value of any shares of Junior Stock or (iv) purchase, redeem or otherwise acquire for value any shares of stock of the corporation ranking on a parity with the shares of this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up ("Parity Stock"). (g) (i) Within 90 days following each Calculation Date (as defined below), the corporation shall be required to prepare a certificate (a "Corporation Certificate") setting forth its determination of the Reserve Amount (as defined below) as of such Calculation Date. If the Reserve Amount, as shown on the Corporation Certificate prepared with respect to any Calculation Date is less than the Aggregate Reserve Requirement (as defined below) as of such Calculation Date, the corporation will be required to make an offer (a "Reserve Coverage Offer") to purchase, out of funds legally available therefor, at a price equal to the liquidation preference thereof as of the Purchase Date (as hereinafter defined), plus accrued and unpaid dividends (as defined below) thereon to the Purchase Date, a sufficient number of shares of this Series and of other Silver Parity Stock (as defined below) (or the depositary shares, if any, issued with respect thereto) such that, if all such shares had been repurchased on the relevant Calculation Date, the Reserve Amount on that date would have been greater than or equal to the Aggregate Reserve Requirement on such date. If the Corporation Certificate prepared with respect to any Calculation Date shows that the Reserve Amount is less than the Aggregate Reserve Requirement on such date, the corporation shall include in such Corporation Certificate its calculation of the number of shares of this Series (or related depositary shares) and the number of shares of other Parity Stock (or related depositary shares) it intends to offer to purchase to satisfy the foregoing requirements (such number with respect to any series being referred to as the "Offer Amount" with respect to such series). The corporation, in its sole discretion, may determine the number of shares, if any, of this Series (or related depositary shares) and the number of shares, if any, of each other series of Silver Parity Stock (or related depositary shares) to which a Reserve Coverage Offer will be made so long as such requirements are satisfied. (ii) If required to make a Reserve Coverage Offer, the corporation will commence such offer not more than 60 days after the date of the Corporation Certificate prepared with respect to the applicable Calculation Date, by mailing a notice to all holders of record of the shares of each series included in such Reserve Coverage Offer setting forth (A) that such notice is being given pursuant to a Reserve Coverage Offer, (B) the Offer Amount with respect to such series, (C) the method for determining the amount payable per share of such series on the Purchase Date, (D) the last date (the "Purchase Date"), which shall not be less than 30 nor more 60 days after the date of such notice, by which a holder must elect whether to accept the Reserve Coverage Offer, (E) the procedures that such holder must follow to exercise its rights and (F) the procedures for withdrawing an election. The corporation shall also cause a copy of such notice to be published in The Wall Street Journal (Eastern Edition) or another daily newspaper of national circulation. (iii) Holders of shares of any series electing to have shares of such series purchased by the corporation pursuant to a Reserve Coverage Offer will be required to surrender the certificates representing such shares, with an appropriate form duly completed, to the corporation prior to the Purchase Date. Holders will be entitled to withdraw an election by a written notice of withdrawal delivered to the corporation prior to the close of business on the Purchase Date. The notice of withdrawal shall state the number of shares and certificate numbers to which the notice of withdrawal relates and the number of shares and certificate numbers, if any, which remain subject to the election. If the aggregate number of shares of any series tendered exceeds the Offer Amount with respect to such series, the corporation will select the shares of such series to be purchased on a pro rata basis as nearly as practicable. The corporation shall, as promptly as reasonably practicable after the Purchase Date, cause payment to be mailed or delivered to each tendering holder in the amount of the purchase price, and any unpurchased shares to be returned to the holder thereof. (h) If, at the time of any annual redemption or of a Reserve Coverage Offer, the funds of the corporation legally available for redemption or repurchase of the shares of this Series are insufficient to redeem or repurchase all of such shares and all of the shares of any other series of Parity Stock which the corporation is then obligated to redeem or repurchase, (i) the total legally available funds shall be allocated among the shares of this Series and of such other series in proportion to the aggregate dollar amount of redemption or other repurchase obligations with respect to this Series and such other series and (ii) the portion of such funds allocated to this Series will be used to redeem or repurchase the maximum possible number of shares of this Series, pro rata based upon the number of shares to be redeemed or delivered for repurchase, as the case may be. At any time thereafter when additional funds of the corporation become legally available for such purpose, after giving effect to the foregoing allocation provisions, such funds shall immediately be used to redeem or repurchase, as the case may be, any additional shares of this Series which the corporation is obligated to redeem or repurchase, as the case may be, but which it has not so redeemed or repurchased. (i) The corporation shall not have the right to redeem shares of this Series pursuant to Section 4(a) or (b) hereof unless full cumulative dividends for all past dividend periods shall have been paid or declared and set aside for payment upon all outstanding shares of this Series and all outstanding shares of other series of stock of the corporation ranking, as to dividends, on a parity with the shares of this Series. (j) The corporation will not consummate or permit any subsidiary to consummate any transaction involving the corporation which would cause the Reserve Amount to fall below the Aggregate Reserve Requirement immediately after consummation of such transaction unless the corporation will have sufficient legally available funds immediately following consummation of such transaction to complete any Reserve Coverage Offer required as a result thereof. (k) Definitions. For purposes of this Section 4, the following terms shall have the meanings indicated: (i) "accrued and unpaid dividends" per share of this Series (A) in the case of any Reserve Coverage Offer, (B) in the case of any annual or optional redemption and (C) in the case of a liquidation event, shall be equal to the sum of (x) the aggregate amount of any accrued and unpaid dividends on such share through the next preceding Dividend Payment Date (calculated as provided in Section 3 hereof) plus (y) a proportionate amount of the regular quarterly dividend at the Dividend Rate for the period from the day following the immediately preceding Dividend Payment Date through the redemption date, Purchase Date or date of liquidating distribution (calculated on the basis of a year of 360 days consisting of twelve 30-day months) multiplied by the Reference Silver Price used to calculate the other amounts payable to holders of the shares of this Series in connection with such redemption, purchase or liquidation event. If a quarterly dividend is not declared and paid as provided in Section 3 hereof, the unpaid dividend that shall cumulate for such Dividend Period will be the amount of the dividend that would have been payable on the Dividend Payment Date if such dividend had been timely paid. (ii) "Aggregate Reserve Requirement" as of any Calculation Date means the sum of the individual Reserve Coverage Requirements with respect to each series of Silver Parity Stock, including this Series. (iii) "Calculation Date" means (i) December 31 of each year and (ii) the date of the consummation of each transaction undertaken by the corporation or any subsidiary of the corporation which would either (a) cause the Reserve Amount, as estimated by the corporation, to decrease by 50% or more from the preceding Calculation Date or (b) cause the Reserve Amount, as estimated by the corporation, to fall below the Aggregate Reserve Requirement on such date. (iv) "Silver Parity Stock" means this Series and any other series of Parity Stock the liquidation preference of which is based on specified amounts of silver or the Dollar Equivalent Value thereof. (v) "Reference Silver Price", when used to calculate the amount of any dividend payable on any Dividend Payment Date or of any annual or optional redemption payment with respect to the shares of this Series means the arithmetic average of the London silver fixing spot price for an ounce of silver in the London bullion market on each of the twenty trading days ending on the second trading day prior to the last day of the calendar quarter immediately preceding such quarterly date, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal (Eastern Edition), as published in the Financial Times). When used to calculate any other amount payable with respect to the shares of this Series or to purchase any shares of this Series on any date, the "Reference Silver Price" means the arithmetic average of the London silver fixing spot price for an ounce of silver on the London bullion market on each of the twenty trading days ending on the second trading day prior to (i) in the case of any Reserve Coverage Offer, the date of commencement thereof and (ii) in the case of a liquidation event, the date 30 days prior to the date fixed for the liquidating distribution. If for any reason silver is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, silver will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for silver as determined by the corporation's Board of Directors. (vi) "Required Coverage Multiplier" means (x) 2.0 with respect to this Series, (y) with respect to any other series of Silver Parity Stock having the benefit of a provision requiring an offer similar to the Reserve Coverage Offer, the multiplier applicable thereto by the terms of such other series, and (z) 1.0 with respect to any other series of Silver Parity Stock. (vii) "Reserve Amount" as of any Calculation Date means the corporation's Proportionate Interest in the estimated proved and probable silver reserves of the corporation and of any entity in which the corporation has a direct or indirect beneficial ownership interest. The estimated proved and probable silver reserves shall be determined based upon evaluation methods generally applied by the mining industry. The corporation's "Proportionate Interest" in any estimated proved and probable silver reserves shall be the corporation's direct or indirect beneficial ownership interest in such reserves, giving effect to reductions required to reflect any beneficial ownership interest of any person other than the corporation in such reserves. (viii) "Reserve Coverage Requirement" with respect to any series of Silver Parity Stock shall mean the product of (x) the aggregate liquidation preference of all outstanding shares of such series (expressed in ounces of silver) times (y) the Required Coverage Multiplier applicable to such series. With respect to any series with respect to which depositary shares have been issued, the aggregate liquidation preference of such series shall be determined on the basis of the number of such depositary shares as are issued and outstanding as of the applicable Calculation Date (excluding any depositary shares which have been acquired by the corporation on or prior to the date of the preparation of the Corporation Certificate with respect to such Calculation Date). 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise required by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the corporation. Each share of Preferred Stock of this Series will be entitled to one vote on matters which holders of such Series are entitled to vote. (b) The shares of this Series shall be entitled to vote with respect to the election of directors in accordance with Sections (b)(4) and (b)(5) of Article FOURTH of the certificate of incorporation. (c) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the Company ranking on a parity with shares of this Series either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of shares of this Series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(d) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (d) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(c) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the corporation, upon the written request of the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the corporation within 20 days after personal service of such written request upon the Secretary of the corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection (d). Notwithstanding anything to the contrary contained in this subsection (d), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the corporation. (e) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(c) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(c). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(c) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (f) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(c) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the corporation irrespective of any increase pursuant to the provisions of Section 5(c) hereof. (g) In addition to any other vote required by law, the corporation shall not (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of its certificate of incorporation (including the terms of this Series) so as to materially and adversely affect any right, preference, privilege or voting power of this Series or (ii) create, authorize or issue any series or class of stock ranking prior, either as to payment of dividends or distributions of assets upon liquidation, dissolution or winding up, to this Series, without the affirmative vote or consent of the holders of at least two- thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that any increase in the total number of authorized shares of Common Stock (or any series thereof) or Preferred Stock (or any series thereof), or the creation, authorization or issuance of any series of stock ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, on a parity with the shares of this Series will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers; provided, further, that no class vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in clause (i) or (ii) of this Section 5(g) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the corporation, the Dollar Equivalent Value of 160 ounces of silver in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the corporation and of dividends and liquidation preferences in respect of any other stock of the corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of any other class or series of Preferred Stock and holders of shares of any other stock of the corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this subsection (a) and Section 6(b) hereof, a consolidation or merger of the corporation with one or more other corporations or the sale of all or substantially all of the assets of the corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation. (b) Subject to the rights of the holders of shares of any series or class of stock ranking prior to this Series and of the holders of shares any stock of the corporation ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation, after payment shall have been made in full to the holders of this Series as provided in Section 6(a) hereof and this subsection (b), the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Taxes. The corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or pursuant to a Reserve Coverage Offer; provided, that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series in a name other than that of the holder of shares of this Series to be redeemed or repurchased 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 has established, to the satisfaction of the corporation, that such tax has been paid. The corporation extends no protection with respect to any other taxes imposed in connection with such redemption or repurchase of shares of this Series. 8. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. 9. Miscellaneous. Capitalized terms which are defined in this Exhibit are defined only for the purposes of this Exhibit, and not for the purposes of other Exhibits to the certificate of incorporation. Unless otherwise indicated, section references contained in this Exhibit refer to the corresponding sections of this Exhibit. EX-27 9
5 1,000 6-MOS DEC-31-1995 JUN-30-1995 31,154 0 172,273 0 340,301 636,525 3,324,923 652,376 3,388,726 488,286 831,139 20,595 500,007 573,900 382,468 3,388,726 830,275 830,275 495,844 495,844 19,610 0 11,799 239,180 101,923 111,580 0 0 0 84,618 .41 .41
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