SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
CENTRAL AND SOUTH WEST CORPORATION
CENTRAL AND SOUTH WEST CORPORATION, a Delaware
corporation (the "Corporation"), certifies as follows:
Pursuant to the provisions of Section 242 and 245
of Title 8 of the Delaware Code Annotated, the stockholders
of the Corporation have duly adopted the following Second
Restated Certificate of Incorporation. The Corporation
filed its original Certificate of Incorporation under the
name of Central and South West Utilities on July 31, 1925,
and on February 3, 1947, filed a merger agreement with
American Public Service by which the name of the Corporation
was changed to Central and South West Corporation. The
Corporation filed a Restated Certificate of Incorporation on
April 30, 1974. This Second Restated Certificate of
Incorporation restates and integrates the provisions of the
Restated Certificate of Incorporation of April 30, 1974 as
heretofore amended or supplemented and effects the following
further amendments thereto:
(i The provisions of Article FOURTH have been
amended to (a) increase the total number of shares of
Common Stock which the Corporation shall have authority
to issue from 120,000,000 shares of Common Stock of the
par value of $3.50 per share to 150,000,000 shares of
Common Stock of the par value of $3.50 per share in the
first paragraph of
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Article Fourth; (b) delete the cumulative voting
provisions in the second paragraph of Article FOURTH;
and (c) delete the provisions which grant the
stockholders preemptive rights on certain issues of the
Corporation's Common Stock in the third paragraph of
Article FOURTH;
(ii) The provisions of Article SEVENTH have been
amended to (a) adopt a staggered board of directors,
divided into three classes and serving three year terms
with only one class of directors to be elected at each
annual meeting of the stockholders and (b) provide that
the board of directors shall appoint to fill any
vacancies on the board or appoint directors to the
board of directors in the event the number of directors
on the board of directors is increased;
(iii) Article EIGHT has been deleted in its
entirety;
(iv) Articles NINTH, TENTH, ELEVENTH and TWELFTH
have been renumbered as Articles EIGHT, NINTH, TENTH
and ELEVENTH, respectively; and
(v) A "fair price" provision, designed to insure
that all of the stockholders are treated fairly and
equitably in the event of certain unsolicited takeover
actions has been adopted by the stockholders and
included as Article TWELFTH.
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FIRST: The name of the Corporation is Central and
South West Corporation.
SECOND: The registered office of the Corporation
in the State of Delaware is located at 1209 Orange Street,
New
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Castle County, Wilmington, Delaware 19801, and the name of
its registered agent at that address is The Corporation
Trust Company.
THIRD: The nature of the business of the
Corporation or object or purposes to be transacted, promoted
or carried on by it are:
(1) To acquire in any lawful manner and to own,
hold, sell, assign, transfer, exchange or otherwise
dispose of, any stocks, bonds, debentures, obligations,
notes, evidences of indebtedness, warrants, securities
of any kind and property, both real and personal, of
any kind; and while the owner of any such stocks,
bonds, notes, debentures or other securities or
obligations, to exercise all the powers, rights and
privileges, including among other things the right to
vote thereon for any and all purposes; and to invest
and deal with the moneys of the Corporation in any
lawful manner;
(2) To aid in any lawful manner by loan,
contribution, guaranty or otherwise, the issuer of any
stocks, bonds, debentures, evidences of indebtedness,
obligations, warrants or securities of any kind at any
time held, or controlled directly or indirectly, by the
Corporation, and to do any and all lawful acts or
things designed to protect, preserve, enhance or
improve the value of any securities or property held by
the Corporation; and to use the funds, assets and
credit of the Corporation for any of said purposes;
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(3) To guarantee and to assume the payment of any
dividends on any shares of capital stock of any company
in which the Corporation may, either directly or
indirectly, have an interest as a stockholder or
otherwise; and to assume and to guarantee, by
endorsement or otherwise, the payment of the principal
of and the interest on bonds, notes or other
obligations created or to be created by any such
company;
(4) To borrow money, to issue bonds, debentures,
notes or other obligations, secured or unsecured, of
the Corporation; to secure the same by mortgage or deed
of trust or pledge or other lien upon any or all of the
property, rights, privileges and franchises of the
Corporation wheresoever situated, acquired or to be
acquired; to confer upon the holders of any debentures,
bonds, notes or other obligations of the Corporation,
secured or unsecured, the right to convert the same
into any class of stock of any series of the
Corporation now or hereafter to be issued upon such
terms as shall be fixed by the Board of Directors
subject to the provisions hereof; to purchase and
otherwise acquire shares of its own capital stock and
to hold, sell, assign, transfer and reissue any or all
of such shares; provided that the Corporation shall not
use its funds or property for the purchase of its own
shares of capital stock when such use shall cause any
impairment of the capital of the Corporation, except as
such purchase out of capital may be permitted by law;
and provided further that shares of its
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own capital stock owned by the Corporation shall not be
voted upon, directly or indirectly;
(5) To conduct business in the State of Delaware
and other states, the District of Columbia, territories
and colonies of the United States and in foreign
countries, and to have one or more offices out of the
State of Delaware as well as within said state;
provided, however, that nothing herein contained shall
be deemed to authorize the Corporation to conduct,
maintain or operate public utilities within the State
of Delaware;
(6) To have and to exercise all the powers now or
hereafter conferred by the laws of the State of
Delaware upon corporations organized under the laws
under which the Corporation is organized and any and
all Acts amendatory thereof and supplemental thereto.
The foregoing clauses shall be construed both as
objects and powers; and it is hereby expressly provided that
the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the power of the
Corporation, and that the Corporation shall possess such
incidental powers as are reasonably necessary or convenient
for the accomplishment of any of the objects or powers
hereinbefore enumerated, either alone or in association with
other corporations, associations, firms or individuals, to
the same extent and as fully as individuals might or could
do as principals, agents, contractors or otherwise.
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FOURTH: The total number of shares of stock which
the Corporation shall have authority to issue is 150,000,000
shares of Common Stock of the par value of $3.50 each.
Each share of Common Stock shall entitle the
holder thereof to one vote at all meetings of stockholders.
In the election of directors of the Corporation, the
principle of cumulative voting shall not apply.
Any shares of Common Stock now or hereafter
authorized, and any securities convertible into Common
Stock, may be issued without first being offered to
stockholders. The Common Stock may be issued and sold to
such persons, and at a price, not less than the par value
thereof, whether stockholders or not, and for such corporate
purposes, as may be determined by the Board of Directors.
The Corporation may from time to time, when
authorized by the Board of Directors, issue scrip for
fractional shares of stock. Such scrip shall not confer
upon the holder any right to dividends, or any voting or
other rights of a stockholder of the Corporation, but the
Corporation shall from time to time upon the surrender of
such scrip for fractional share within such time as the
Board of Directors may determine, or without limit of time
if the Board of Directors so determines, issue one or more
whole shares of stock aggregating the number of whole shares
issuable in respect of the scrip so surrendered; provided
that the scrip so surrendered shall be properly endorsed for
transfer if in registered form. The scrip may also at the
option of the Board of Directors provide that, at the option
of the Board of
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Directors, there may be sold by the Corporation at public or
private sale at any time on or after any determined date, in
such manner and on such terms as the Board of Directors may
in its absolute discretion determine, the number of shares
of stock of the Corporation in respect of which such scrip
certificates are then outstanding and thereafter the bearer
of such scrip certificates, upon surrender thereof at the
office or agency of the Corporation, shall be entitled to
receive their proper proportion of the net proceeds of such
sale but without interest and on and after the date of such
sale shall be entitled to no other rights in respect of such
scrip certificates.
The Corporation reserves the right to increase or
decrease its authorized capital stock or to reclassify the
same and to amend, alter, change or repeal any provision
contained in this Second Restated Certificate of
Incorporation, or any amendment hereto, in the manner now or
hereafter prescribed by law, and all rights conferred upon
stockholders in this Second Restated Certificate of
Incorporation, or any amendment hereto, are granted subject
to this reservation.
FIFTH: The Corporation shall have perpetual
existence.
SIXTH: The private property of the stockholders of
the Corporation shall not be subject to the payment of
corporate debts to any extent whatever.
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SEVENTH:
(1) At each annual meeting of stockholders,
directors of the Corporation shall be elected to hold
office until the expiration of the term for which they
are elected, and until their successors have been duly
elected and qualified; except that if any such election
shall not be so held, such election shall take place at
a stockholders' meeting called and held in accordance
with the Delaware General Corporation Law. The
directors of the Corporation shall be divided into
three classes as nearly equal in size as is
practicable, hereby designated Class I, Class II and
Class III. The term of office of the initial Class I
directors shall expire at the next succeeding annual
meeting of stockholders, the term of office of the
initial Class II directors shall expire at the second
succeeding annual meeting of stockholders and the term
of office of the initial Class III directors shall
expire at the third succeeding annual meeting of
stockholders. For the purposes hereof, the initial
Class I, Class II and Class III directors shall be
those directors elected at the April 19, 1990 annual
meeting and designated as members of such Class. At
each annual meeting after the April 19, 1990 annual
meeting, directors to replace those of a Class whose
terms expire at such annual meeting shall be elected to
hold office until the third succeeding annual meeting
and until their respective successors shall have been
duly elected and shall qualify. If the number of
directors is hereafter changed, any newly created
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directorships or decrease in directorships shall be so
apportioned among the classes as to make all classes as
nearly equal in number as is practicable.
(2) Any director may be removed from office by the
stockholders of the Corporation only for cause and only
by the affirmative vote of the holders of eighty
percent (80%) of the voting power of the outstanding
shares of Common Stock.
(3) The number of directors constituting the
entire Board of Directors shall be not less than nine
(9) nor more than fifteen (15) as may be fixed from
time to time by resolution adopted by a majority of the
entire Board of Directors; provided, however, that no
decrease in the number of directors constituting the
entire Board of Directors shall shorten the term of any
incumbent director. A majority of the entire Board of
Directors may adopt a resolution at any time to
increase the number of directors to not more than
fifteen (15) and, by vote of a majority of the Board of
Directors, elect a new director or directors to fill
any such newly created directorship. Any such new
director shall hold office until the next annual
meeting of stockholders and until his successor shall
have been duly elected and qualified.
(4) Vacancies occurring on the Board of Directors
for any reason may be filled by vote of a majority of
the remaining members of the Board of Directors,
although less than a quorum, at any meeting of the
Board of Directors. A
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person so elected by the Board of Directors to fill a
vacancy shall hold office until the next succeeding
annual meeting of stockholders of the Corporation and
until his or her successor shall have been duly elected
and qualified.
EIGHT: The following additional provisions are
inserted for the management of the business and for the
conduct of the affairs of this Corporation and for the
creation, definition, limitation and regulation of the
powers of the Corporation, the directors and the
stockholders:
(1) The Board of Directors shall have power from
time to time to fix and determine and to vary the
amount to be reserved as working capital of the
Corporation and, before the payment of any dividends or
making any distribution of profits, it may set aside
out of the net profits of the Corporation such sum or
sums as it may from time to time in its absolute
discretion think proper whether as a reserve fund to
meet contingencies or for the equalizing of dividends
or for repairing or maintaining any property of the
Corporation or for such corporate purposes as the Board
shall think conducive to the interests of the
Corporation, subject only to such limitations as the
Bylaws of the Corporation may from time to time impose.
(2) The Board of Directors shall also have power
without the assent or vote of the stockholders to make,
alter, amend and repeal the Bylaws of the Corporation;
to fix the times for the declaration and payment of
dividends; to authorize and cause to be executed and
delivered
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mortgages on and instruments of pledge, or any other
instruments creating liens, on the real and personal
property of the Corporation; and to make and determine
the use and disposition of any surplus or net profits
over and above the capital of the Corporation.
(3) Subject to direction by resolution of a
majority of the stockholders, the Board of Directors
shall have power from time to time to determine whether
and to what extent and at what times and places and
under what conditions and regulations the accounts and
books of the Corporation (other than the stock ledger)
or any of them, shall be open to the inspection of
stockholders; and no stockholder shall have any right
to inspect any account or book or document of the
Corporation except as conferred by statute or
authorized by the directors or by a resolution of the
stockholders.
(4) The Board of Directors shall have the power
to appoint an Executive Committee from among their
number, which Committee, to the extent and in the
manner provided in the Bylaws of the Corporation, shall
have and may exercise all of the powers of the Board of
Directors, so far as may be permitted by law, in the
management of the business and affairs of the
Corporation whenever the Board of Directors is not in
session. The fact that the Executive Committee has
acted shall be conclusive evidence that the Board of
Directors was not in session at the time of such
action.
(5) The Corporation shall be entitled to treat
the person in whose name any share, right or option is
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registered and the bearer of any scrip or right payable
to bearer, as the owner thereof for all purposes, and
shall not be bound to recognize any equitable or other
claim to or interest in such share, right, option or
scrip on the part of any other person, whether or not
the Corporation shall have notice thereof, save as may
be expressly provided by the laws of the State of
Delaware.
NINTH: Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any
class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the
application in a summary way of this Corporation or of any
creditor or stockholder thereof, or on the application of
any receiver or receivers appointed for this Corporation
under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for
this Corporation under the provisions of Section 279 of
Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders
or class of stockholders of this Corporation, as the case
may be, to be summoned in such manner as the said Court
directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this
Corporation, as the case may be, agrees to any compromise or
arrangement and to any reorganization of this Corporation as
a consequence of such compromise or arrangement, the said
compromise or arrangement and
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the said reorganization shall, if sanctioned by the Court of
which the said application has been made, be binding on all
the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation,
as the case may be, and also on this Corporation.
TENTH: Authorized shares of Common Stock of the
Corporation shall be issued in exchange for any remaining
outstanding shares of Common Stock of Central and South West
Utilities on the following basis:
(1) There shall be issued to each holder of such
shares of Common Stock of Central and South West
Utilities a number of shares of Common Stock of the
Corporation computed by (i) multiplying the number of
shares of Common Stock of Central and South West
Utilities held by such holder by .8095, (ii) rounding
the resulting product to the next lower number in the
event such product is not a whole number, and (iii)
multiplying such product as so rounded by four.
(2) There shall be paid to each holder of such
shares of Common Stock of Central and South West
Utilities, in any case in which the product of the
number of shares of Common Stock of Central and South
West Utilities held by him multiplied by .8095 is not a
whole number, cash equal to $12.00 multiplied by the
fraction by which such product exceeds the next lower
whole number, in lieu of shares of Common Stock of the
Corporation.
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(3) Such shares of Common Stock of the
Corporation shall be issued, and such cash paid, upon
the surrender for cancellation, to the Corporation, of
the certificates representing such shares of Common
Stock of Central and South West Utilities, duly
endorsed for transfer if required, and in satisfaction
of all dividend and other rights in respect of such
shares.
ELEVENTH: To the full extent permitted by the
General Corporation Law of the State of Delaware or any
other applicable laws as presently or hereafter in effect,
no director of the Corporation shall be personally liable to
the Corporation or its stockholders for or with respect to
any acts or omissions in the performance of his or her
duties as a director of the Corporation. No amendment to or
repeal of this Article ELEVENTH shall apply to or have any
effect on the liability or alleged liability of any director
of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such
amendment.
TWELFTH. A. Higher Vote for Certain Business
Transactions. In addition to any affirmative vote required
by law or this Second Restated Certificate of Incorporation
of the Bylaws of the Corporation, and except as otherwise
expressly provided in Section C of this Article TWELFTH:
(1) any merger or consolidation of the Corporation
or any Subsidiary (as hereinafter defined) with (a) any
Interested Stockholders (as hereinafter defined) or (b)
any other company (whether or not itself an Interested
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Stockholder) which is or after such merger or
consolidation would be an Affiliate (as hereinafter
defined) or Associate (as hereinafter defined) of an
Interested Stockholder; or
(2) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of transactions) to or with any Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder, involving any assets or
securities of the Corporation, any Subsidiary or any
Interested Stockholder or any Affiliate or Associate of
any Interested Stockholder, having an aggregate Fair
Market Value (as hereinafter defined) in excess of
$25,000,000; or
(3) the adoption of any plan or proposal for the
termination, liquidation or dissolution of the
Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(4) any reclassification of securities (including
any reverse stock split) or recapitalization of the
Corporation or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other
transaction (whether or not with or otherwise involving
an Interested Stockholder) that has the effect,
directly of indirectly, of increasing the proportionate
share of any class or series of Common Stock (as
hereinafter defined), or any securities convertible
into Common Stock or into equity securities of the
Corporation or any Subsidiary, that is beneficially
owned by any Interested
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Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(5) any tender offer or exchange offer made by the
Corporation for shares of Common Stock which may have
the effect of increasing an Interested Stockholder's
percentage beneficial ownership (as hereinafter
defined) so that following the completion of the tender
offer or exchange offer the Interested Stockholder's
percentage beneficial ownership of the outstanding
Common Stock may exceed 110% of the Interested
Stockholder's percentage beneficial ownership
immediately prior to the commencement of such tender
offer or exchange offer; or
(6) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or
any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder having an
aggregate Fair Market Value in excess of $25,000,000;
or
(7) any agreement, contract or other arrangement
providing for any one or more of the actions specified
in the foregoing clauses (1) to (6) shall require: (1)
the affirmative vote of the holders of Voting Stock (as
hereinafter defined) representing shares equal to at
least eighty percent (80%) of the then issued and
outstanding Voting Stock of the Corporation authorized
to be issued from time to time under Article FOURTH of
this Second Restated Certificate of Incorporation; and
(2) the affirmative vote
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of a majority of the then issued and outstanding Voting
Stock of the Corporation, excluding any shares of
Voting Stock beneficially owned by such Interested
Stockholder. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required,
or that a lesser percentage may be specified, by law or
any agreement with any national securities exchange or
otherwise.
B. Definition of "Business Combination". For the
purposes of this Article TWELFTH the term "Business
Combination" shall mean any transaction that is referred to
in any one or more of clauses (1) through (6) of Section A
of this Article TWELFTH.
C. When Higher Vote is Not Required. The provisions
of the preceding Section A shall not be applicable to any
particular Business Combination, and such Business
Combination shall require only such affirmative vote, if
any, as is required by law or by any other provision of this
Second Restated Certificate of Incorporation or the Bylaws
of the Corporation or any agreement with any national
securities exchange, if all of the conditions specified in
either of the following Paragraphs (1) or (2) are met or, in
the case of a Business Combination not involving the payment
of consideration to the holders of the Corporation's
outstanding Common Stock, if the condition specified in the
following Paragraph (1) is met:
(1) The Business Combination shall have been
approved by a majority (whether such approval is made
prior to or subsequent to the acquisition of beneficial
ownership of the Voting Stock that caused the
Interested Stockholder to
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become an Interested Stockholder) of the Continuing
Directors (as hereinafter defined).
(2) All of the following conditions shall have
been met with respect to the outstanding Common Stock,
whether or not the Interested Stockholder has
previously acquired beneficial ownership of any shares
of the Common Stock:
(a) The aggregate amount of cash and the Fair
Market Value, as of the date of the consummation
of the Business Combination, of consideration
other than cash to be received per share by
holders of the Common Stock in such Business
Combination shall be at least equal to the highest
amount determined under clauses (i), (ii), (iii),
and (iv) below:
(i) (if applicable) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid by or on behalf of the Interested
Stockholder of beneficial ownership of shares
of the Common Stock (x) within the two-year
period immediately prior to the first public
announcement of the proposed Business
Combination (the "Announcement Date") or (y)
in the transaction in which it became an
Interested Stockholder, whichever is higher,
in either case as adjusted for any
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subsequent stock split, stock dividend,
subdivision or reclassification with respect
to the Common Stock;
(ii) the Fair Market Value per share of the
Common Stock on the Announcement Date or on
the date on which the Interested Stockholder
became an Interested Stockholder (the
"Determination Date"), whichever is higher, as
adjusted for any subsequent stock split, stock
dividend, subdivision or reclassification with
respect to the Common Stock;
(iii) (if applicable) the price per share
equal to the Fair Market Value per share of
the Common Stock determined pursuant to the
immediately preceding clause (ii), multiplied
by the ratio of (x) the highest price per
share (including any brokerage commission,
transfer taxes and soliciting dealers' fees)
paid by or on behalf of the Interested
Stockholders for any share of the Common Stock
in connection with the acquisition by the
Interested Stockholder of beneficial ownership
of shares of the Common Stock within the two-
year period immediately prior to the
Announcement Date, as adjusted for any
subsequent stock split, stock dividend,
subdivision or reclassification with respect
to the Common Stock to (y) the Fair Market
Value per share of the Common Stock on the
first day in such two-year period on which the
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Interested Stockholder acquired beneficial
ownership of any shares of the Common Stock,
as adjusted for any subsequent stock split,
stock dividend, subdivision or
reclassification with respect to Common
Stock; and
(iv) the Corporation's net income per share
of the Common Stock for the four full
consecutive fiscal quarters immediately
preceding the Announcement Date, multiplied
by the higher of the then price/earnings
multiple (if any) of such Interested
Stockholder or the highest price/earnings
multiple of the Corporation within the two-
year period immediately preceding the
Announcement Date (such price/earnings
multiples being determined by dividing (x) an
amount equal to the highest price per share
during a day as reported in The Wall Street
Journal from the Composite Tape for the New
York Stock Exchange by (y) the immediately
preceding publicly reported twelve-months
earnings per share).
(b) The consideration to be received by holders of
the Common Stock shall be in cash or in the same
form as previously has been paid by or on behalf of
the Interested Stockholder in connection with its
direct or indirect acquisition of beneficial
ownership of shares of such Common Stock. If the
consideration previously paid by the Interested
Stockholder to acquire Common
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Stock varied among the recipients thereof as to
form, the form of consideration to be paid for
such Common Stock in connection with the Business
Combination shall be either cash or the form used
to acquire beneficial ownership of the largest
number of shares of such Common Stock previously
acquired by the Interest Stockholder.
(c) After the Determination Date and prior to the
consummation of such Business Combination: (1)
there shall have been no reduction in the annual
rate of dividends paid on the Common Stock (except
as necessary to reflect any stock split, stock
dividend or subdivision of the Common Stock),
except as provided by a majority of the Continuing
Directors; (ii) there shall have been an increase
in the annual rate of dividends paid on the Common
Stock as necessary to reflect any reclassification
(including any reverse stock split),
recapitalization, reorganization or any similar
transaction that has the effect of reducing the
number of outstanding shares of Common Stock,
unless the failure so to increase such annual rate
is approved by a majority of the Continuing
Directors; and (iii) such Interested Stockholders
shall not have become the beneficial owner of any
additional shares of Common Stock except as part
of the transaction that results in such Interested
Stockholder becoming an Interested Stockholder and
except in a transaction that, after
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giving effect thereto, would not result in any
increase in the Interested Stockholder's
percentage of beneficial ownership of Common
Stock.
(d) After the Determination Date, such Interested
Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as
a stockholder of the Corporation), of any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such
Business Combination or otherwise.
(e) A proxy or information statement describing
the proposed Business Combination and complying
with the requirements of the Securities Exchange
Act of 1934, as amended, and the rules and
regulations thereunder (the "Act") (or any
subsequent provisions amending or replacing such
Act, rules or regulations) shall be mailed to all
stockholders of the Corporation at least 30 days
prior to the consummation of such Business
Combination (whether or not such proxy or
information statement is required to be mailed
pursuant to such Act or subsequent provisions).
The proxy or information statement shall contain on
the first page thereof, in a prominent place, any
statement as to the advisability of the Business
Combination that the Continuing Directors, or any
of them, may choose to make and, if
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deemed advisable by a majority of the Continuing
Directors, the opinion of an investment banking
firm selected by a majority of the Continuing
Directors as to the fairness (or not) of the terms
of the Business Combination from a financial point
of view to the holders of the outstanding shares
of Common Stock other than the Interested
Stockholder and its Affiliates or Associates (as
hereinafter defined), such investment banking firm
to be paid a reasonable fee for its service by the
Corporation.
(f) Such Interested Stockholder shall not have
made any major change in the Corporation's
business or equity capital structure without the
approval of a majority of the Continuing
Directors.
D. Certain Definitions. The following definitions
shall apply with respect to this Article TWELFTH:
(1) The term "Common Stock" or "Voting Stock"
shall mean all common stock of the Corporation
authorized to be issued from time to time under Article
FOURTH of the Second Restated Certificate of
Incorporation that by its terms may be voted on all
matters submitted to stockholders of the Corporation
generally.
(2) The term "person" shall mean any individual,
firm, company or other entity and shall include any
group comprised of any person and any other person with
whom such person or any Affiliate or Associate of such
person has any agreement, arrangement or understanding,
directly or
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indirectly, for the purpose of acquiring, holding,
voting or disposing of the Common Stock.
(3) The term "Interested Stockholder" shall mean
any person (other than the Corporation or any
Subsidiary and other than any profit-sharing, employee
stock ownership or other employee benefit or dividend
reinvestment plan of the Corporation or any Subsidiary
or any trustee of or fiduciary with respect to any such
plan when acting in such capacity) who (a) is the
beneficial owner of Voting Stock representing five
percent (5%) or more of the votes entitled to be cast
by the holders of all then outstanding shares of Voting
Stock; or (b) is an Affiliate or Associate of the
Corporation and at any time within the two-year period
immediately prior to the Announcement Date was the
beneficial owner of Voting Stock representing five
percent (5%) or more of the votes entitled to be cast
by the holders of all then outstanding shares of Voting
Stock.
(4) A person shall be a "beneficial owner" of any
Common Stock (a) which such person or any of its
Affiliates or Associates beneficially owns, directly or
indirectly; (b) which such person or any of its
Affiliates or Associates has, directly or indirectly,
(i) the right to acquire (whether such right is
exercisable immediately or subject only to 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 (ii) the right to vote pursuant to any
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agreement, arrangement or understanding; or (c) which
is 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. For
purposes of determining whether a person is an
Interested Stockholder pursuant to Paragraph 4 of this
Section D, the number of shares of Common Stock deemed
to be outstanding shall include shares deemed
beneficially owned by such person through application
of Paragraph 5 of this Section D, but shall not include
any other shares of Common Stock that may be issuable
pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights,
warrants, or options, or otherwise.
(5) An "Affiliate" of a specified person is a
person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is
under common control with, the person specified. The
term "Associate", used to indicate a relationship with
any person, means (a) any company (other than the
Corporation or any Subsidiary) of which such person is
an officer or partner or is, directly or indirectly,
the beneficial owner of ten percent (10%) or more of
any class of equity securities, (b) any trust or other
estate in which such person has a substantial
beneficial interest or as to which such person serves
as trustee or in a similar fiduciary
- 26 -
capacity, and (c) any relative or spouse of such
person, or any relative of such spouse, who has the
same home as such person or who is a director or
officer of the Corporation or any of its parents or
Subsidiaries.
(6) The term "Subsidiary" means any company of
which a majority of any class of equity security is
beneficially owned by the Corporation; provided
however, that for the purposes of the definition of
Interested Stockholder set forth in Paragraph (3) of
this Section D, the term "Subsidiary" shall mean only a
company of which a majority of each class of equity
security is beneficially owned by the Corporation.
(7) The term "Continuing Director" means any
member of the Board of Directors of the Corporation
(the "Board of Directors"), who, while such person is a
member of the Board of Directors, is not an Affiliate
or Associate or representative of any Interested
Stockholder and who was a member of the Board of
Directors prior to the time that any Interested
Stockholder became an Interested Stockholder, and any
successor of a Continuing Director, who, while such
successor is a member of the Board of Directors, is not
an Affiliate or Associate or representative of any
Interested Stockholder and who is recommended or
elected to succeed the Continuing Director by a
majority of Continuing Directors.
(8) The term "Fair Market Value" means (a) in the
case of cash, the amount of such cash; (b) in the case
of stock, the highest closing sale price during the 30-
day period
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immediately preceding the date in question of a share
of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted
on the Composite Tape, on the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on
the principal United States securities exchange
registered under the Act on which such stock is listed,
or, if such stock is not listed on any such exchange,
the highest closing bid quotation with respect to a
share of such stock during the 30-day period preceding
the date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System or
any similar system then in use, or if no such
quotations are available, the fair market value on the
date in question of a share of such stock as determined
by a majority of the Continuing Directors in good
faith; and (c) in the case of property on the date in
question as determined in good faith by a majority of
the Continuing Directors.
(9) In the event of any Business Combination in
which the Corporation survives, the phrase
"consideration other than cash to be received" as used
in Paragraphs 2(a) and 2(b) of Section C of this
Article TWELFTH shall include the shares of Common
Stock and/or the shares of any other class of Voting
Stock retained by the holders of such shares.
E. Powers of the Continuing Directors. A majority of
the Continuing Directors shall have the power and duty to
determine
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for purposes of this Article TWELFTH, on the basis of
information known to them after reasonable inquiry, (1)
whether a person is an Interested Stockholder, (2) the
number of shares of Common Stock or other securities
beneficially owned by any person, (3) whether a person is an
Affiliate or Associate of another, and (4) whether the
assets that are the subject of any Business Combination
have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate
Fair Market Value in excess of the amounts set forth in
clauses (2) and (6) of Section A of this Article TWELFTH.
Any such determination made in good faith by a majority of
the Continuing Directors shall be binding and conclusive for
all the purposes of this Article TWELFTH.
F. No Effect on Fiduciary Obligations of Interested
Stockholders. Nothing contained in this Article TWELFTH
shall be construed to relieve any Interested Stockholder
from any fiduciary obligation imposed by law.
G. No Effect on Fiduciary Obligation of Directors.
The fact that any Business Combination complies with the
provisions of Section C, Paragraph 2 of this Article TWELFTH
shall not be construed to impose any fiduciary duty,
obligation or responsibility on the Board of Directors, or
any member thereof, to approve such Business Combination or
recommend its adoption or approval to the stockholders of
the Corporation, nor shall such compliance limit, prohibit
or otherwise restrict in any manner the Board of Directors,
or any member thereof, with respect to
- 29 -
evaluations of or actions and responses taken with respect
to such Business Combination.
--------------------
IN WITNESS WHEREOF, said CENTRAL AND SOUTH WEST
CORPORATION has caused this Restated Certificate of
Incorporation to be signed by Ferd. C. Meyer, Jr., its Vice
President and General Counsel, and its corporate seal to be
hereunto affixed and attested by Philip I. McConnell, its
Secretary, this 23 day of April, 1990.
CENTRAL AND SOUTH WEST CORPORATION
Ferd C. Meyer, Jr.
Vice President
(Corporate Seal)
ATTEST:
Philip I. McConnell
Secretary