ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
LOUISVILLE GAS AND ELECTRIC COMPANY
To the Secretary of State of Kentucky:
Pursuant to the provisions of Chapter 271B of the Kentucky
Revised Statutes, the undersigned corporation hereby amends its
Articles of Incorporation, and for that purpose, submits the
following statement:
1. The name of the corporation is Louisville Gas and
Electric Company.
2. On May 13, 1993, the Executive Committee of the Board of
Directors, acting on behalf of the corporation, duly
adopted the following Amendments to its Articles of
Incorporation. A copy of the text is attached hereto as
Exhibit A and incorporated by reference herein as the
text of a new subarticle B of Article Thirteenth.
3. If not contained in the amendment itself, the manner in
which any exchange, reclassification, or cancellation of
issued shares provided for in the Amendment shall be
implemented as follows:
4. The amendment is to be effective upon the filing of these
articles by the Secretary of State.
5. The amendment was duly adopted by the Executive Committee
of the Board of Directors without shareholder approval
pursuant to 271B.10-020 and 271B.6-020 of the Kentucky
Revised Statutes, and shareholder action was not
required.
Dated: May 19, 1993 LOUISVILLE GAS AND ELECTRIC COMPANY
s/C.A. Markel
Charles A. Markel, III
Treasurer
AMENDMENT
The Restated Articles of Incorporation are hereby amended by
adding thereto a new subarticle B to Article Thirteenth which
subarticle B shall read in its entirety as follows:
B. Terms of $5.875 Cumulative Preferred Stock
(without par value).
The Company has classified 250,000 shares of the Preferred Stock
(without par value) as a series of such Preferred Stock designated
as "$5.875 Cumulative Preferred Stock (without par value)." The
preferences, rights, qualifications and restrictions of the shares
of the "$5.875 Cumulative Preferred Stock (without par value),"
shall be as follows:
(1) The annual dividend payable in respect of each share
of said series shall be $5.875; and the initial dividend in
respect of each share of said series shall be payable on July
15, 1993, when and as declared by the Board of Directors of
this Company, to holders of record on June 30, 1993, and will
accrue from the date of original issuance of said series;
thereafter, such dividends shall be payable on January 15,
April 15, July 15 and October 15 in each year (or the next
business date thereafter in each case), when and as declared
by the Board of Directors of this Company, for the quarter-
yearly period ending on the last business day of the preceding
month.
(2) The shares of said series are not subject to
redemption prior to July 1, 1998. On and after July 1, 1998,
the shares of said series shall be subject to redemption, in
whole or in part, in the manner and with the effect provided
in these Articles; and the redemption price or prices
applicable to shares of said series shall be $105.875 per
share plus accrued and unpaid dividends to the date of
redemption if such date of redemption is on or subsequent to
July 1, 1998, and prior to July 1, 1999; $104.700 per share
plus accrued and unpaid dividends to the date of redemption if
such date of redemption is on or subsequent to July 1,1999,
and prior to July 1, 2000; $103.525 per share plus accrued and
unpaid dividends to the date of redemption if such date of
redemption is on or subsequent to July 1, 2000, and prior to
July 1, 2001; $102.350 per share plus accrued and unpaid
dividends to the date of redemption if such date of redemption
is on or subsequent to July 1, 2001, and prior to July 1,
2002; $101.175 per share plus accrued and unpaid dividends to
the date of redemption if such date of redemption is on or
subsequent to July 1, 2002, and prior to July 1, 2003; and
$100.000 per share plus accrued and unpaid dividends
thereafter.
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Notice of every such redemption shall be mailed at least
thirty (30) days prior to redemption to the holders of record
of the $5.875 Cumulative Preferred Stock (without par value)
so to be redeemed, at their respective addresses as the same
shall appear on the books of the Company, but no failure to
mail a particular notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings
for the redemption of those shares of $5.875 Cumulative
Preferred Stock (without par value) for which proper notice
has been given.
(3) So long as any shares of said series shall remain
outstanding, the Company shall on or before July 15, 2003, and
on or before July 15 of each year thereafter to and including
July 15, 2007, set aside, separate and apart from its other
funds, an amount equal to $1,250,000 (or such lesser amount as
may be sufficient to redeem all of the shares of said series
then outstanding) and shall on or before July 15, 2008 (each
such July 15 being hereinafter in this Section 3 called a
"Sinking Fund Redemption Date"), set aside, separate and apart
from its other funds, an amount equal to $18,750,000 (or such
lesser amount as may be sufficient to redeem all the shares of
said series then outstanding) as a mandatory sinking fund
payment for the exclusive benefit of shares of said series,
plus such further amount as shall equal the accrued and unpaid
dividends on the shares of said series to be redeemed out of
such payment (as hereinafter in this Section 3 provided)
through the day preceding the applicable Sinking Fund
Redemption Date. The obligation of the Company to make such
payment shall be cumulative, so that if for any reason the
full amount thereof shall not be set aside for any year, the
amount of the deficiency from time to time shall be added to
the amount due from the Company on subsequent Sinking Fund
Redemption Dates (or, if such deficiency exists on July 15,
2008, on subsequent quarterly dividend payment dates
thereafter for such series) until the deficiency shall have
been fully satisfied. The Company shall be entitled to credit
against any such mandatory sinking fund payment shares of said
series redeemed by the Company at the Company's option,
purchased by the Company in the open market or otherwise
acquired by the Company, except through application of any
sinking fund payment, and not theretofore so credited, at the
sinking fund redemption price hereinafter specified in this
Section 3.
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Any amounts set aside by the Company pursuant to this
Section 3 shall be applied on the date of such setting aside
if a Sinking Fund Redemption Date or otherwise on the first
Sinking Fund Redemption Date occurring thereafter to the
redemption of shares of said series at $100.000 per share,
plus accrued and unpaid dividends through the day preceding
the applicable Sinking Fund Redemption Date, in the manner and
upon the notice provided in Section 2 of this sub article B.
If any Sinking Fund Redemption Date shall be a Saturday,
Sunday or other day on which banking institutions in
Louisville, Kentucky are authorized or obligated to remain
closed, such term shall be construed to refer to the next
preceding business day.
Notwithstanding anything to the contrary set forth above,
no sinking fund payments on the shares of said series of
$5.875 Cumulative Preferred Stock shall be made: (i) unless
the full dividends on all shares of Preferred Stock and
Preferred Stock (without par value) at the time outstanding
for all past dividend periods shall have been paid or declared
and set apart for payment or (ii) if such sinking fund payment
would be contrary to applicable law.
(4) The preferential amounts to which the holders of
shares of such series shall be entitled upon any liquidation,
dissolution or winding up of the Company, in addition to
dividends accumulated but unpaid thereon, shall be $100.000
per share, in the event of any voluntary liquidation,
dissolution or winding up of the Company, except that if such
voluntary liquidation, dissolution or winding up of the
Company shall have been approved by the vote in favor thereof
given at a meeting called for that purpose or by the written
consent of the holders of a majority of the total shares of
the $5.875 Cumulative Preferred Stock (without par value) then
outstanding, the amount so payable on such voluntary
liquidation, dissolution or winding up shall be $100.000 per
share; or $100.000 per share, in the event of any involuntary
liquidation, dissolution or winding up of the Company.
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(5) The shares of said series of $5.875 Cumulative
Preferred Stock (without par value) shall be subject to all
other terms, provisions and restrictions set forth in these
Articles with respect to the shares of the Preferred Stock
(without par value) and, excepting only as to the rates of
dividend payable in respect of the shares of said series, the
dividend periods and dividend payment dates, the redemption
price or prices applicable to the shares of said series, the
sinking fund provisions applicable to the shares of said
series, and the liquidation price applicable to shares of said
series, shall have the same relative rights and preferences
as, shall be of equal rank with, and shall confer rights equal
to those conferred by, all other shares of the Preferred Stock
(without par value) of the Company.
(6) The stated value of the shares of said series shall
be $100.000 per share.
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RESTATED
ARTICLES OF INCORPORATION
OF
LOUISVILLE GAS AND ELECTRIC COMPANY
These Restated Articles of Incorporation of Louisville Gas and
Electric Company correctly set forth without change the
corresponding provisions of the Articles of Incorporation as
theretofore amended of Louisville Gas and Electric Company and
supersede the original Articles of Incorporation and all amendments
thereto of Louisville Gas and Electric Company.
The Articles of Incorporation of Louisville Gas and Electric
Company, as originally filed and as thereafter amended from time to
time, are hereby restated to read as follows:
FIRST. The corporate name is
LOUISVILLE GAS AND ELECTRIC COMPANY.
SECOND. The principal office or place of business of the
Company is in the City of Louisville, County of Jefferson, State of
Kentucky.
THIRD. The purpose of the Company is the transaction of any
or all lawful business for which corporations may be incorporated
under the Business Corporation Law of Kentucky, as amended.
FOURTH. The Capital stock of the Company shall be divided
into (a) one million, seven hundred twenty thousand (1,720,000)
shares of Preferred Stock of the par value of $25 each, (b) six
million, seven hundred fifty thousand (6,750,000) shares of
Preferred Stock (without par value) (the aggregate stated value
thereof not to exceed $225,000,000), and (c) seventy-five million
(75,000,000) shares of Common Stock without par value. The
Preferred Stock and Preferred Stock (without par value) shall be
issued in series having the preferences, rights, qualifications and
restrictions hereinafter provided for.
PREFERRED STOCK AND PREFERRED STOCK (WITHOUT PAR VALUE)
(1) In addition to the series of Cumulative Preferred Stock,
described in paragraphs (10) through (13) hereof, the Board of
Directors is hereby authorized, subject to and in accordance with
the provisions of paragraphs (1) through (9), inclusive, to cause
Preferred Stock (without par value) to be issued in series, each
such series to have such variations in respect thereof as may be
determined by the Board of Directors prior to the issuance thereof.
The shares of the Preferred Stock of different series may vary
as to:
(a) The distinctive serial designations and number of shares
of such series;
(b) The rate of dividends (within such limits as shall be
permitted by law not exceeding 8% per annum) payable on the shares
of the particular series;
(c) The prices (not less than the amount limited by law) and
terms upon which the shares of the particular series may be
redeemed; and
(d) The amount or amounts which shall be paid to the holders
of the shares of the particular series in case of voluntary or
involuntary dissolution or any distribution of assets.
The shares of the Preferred Stock (without par value) of
different series may vary as to:
(a) The distinctive serial designations and number of shares
of such series;
(b) The stated value thereof;
(c) The rate of dividends (within such limits as shall be
permitted by law) payable on the shares of the particular series;
(d) The prices (not less than the amount limited by law) and
terms (including sinking fund provisions) upon which the shares of
the particular series may be redeemed; and
(e) The amount or amounts which shall be paid to the holders
of the shares of the particular series in case of voluntary or
involuntary dissolution or any distribution of assets.
The shares of all series of Preferred Stock and Preferred Stock
(without par value) shall in all other respects be identical,
except that the Preferred Stock (without par value) shall not have
the voting rights of the Preferred Stock provided by paragraph 9(A)
hereof.
(2) The holders of each series of the Preferred Stock and the
Preferred Stock (without par value) at the time outstanding shall
be entitled, pari passu with the holders of every other series of
the Preferred Stock and the Preferred Stock (without par value), to
receive, but only when and as declared by the Board of Directors,
out of funds legally available for the payment of dividends,
cumulative preferential dividends, at the annual dividend rate for
the particular series fixed therefore as herein provided, payable
quarter-yearly in substantially equal amounts, on dates to be fixed
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in the by-laws, to stockholders of record on the respective dates,
not exceeding thirty (30) days and not less than ten (10) days
preceding such dividend payment dates, fixed for the purpose by the
Board of Directors. No dividends shall be declared on any series of
the Preferred Stock or the Preferred Stock (without par value) in
respect of any quarter-yearly dividend period unless there shall
likewise be declared on all shares of all other series of the
Preferred Stock and the Preferred Stock (without par value) at the
time outstanding, like proportionate dividends, ratably, in
proportion to the respective annual dividend rates fixed therefore,
in respect of the same quarter-yearly dividend period, to the
extent that such shares are entitled to receive dividends for such
quarter-yearly dividend period. The dividends on shares of all
series of the Preferred Stock and the Preferred Stock (without par
value) shall be cumulative. In the case of all shares of each
particular series, the dividends on shares of such series shall be
cumulative from the date of issue thereof unless the Company shall
have established regular quarter-yearly dividend periods with
respect to such series, in which case such dividends shall be
cumulative from the first day of the current quarter-yearly
dividend period in which shares of such series shall have been
issued, so that unless dividends on all outstanding shares of each
series of the Preferred Stock and the Preferred Stock (without par
value), at the annual dividend rate and from the dates for
accumulation thereof fixed as herein provided shall have been paid
for all past quarter-yearly dividend periods, but without interest
on cumulative dividends, no dividends shall be paid or declared and
no other distribution shall be made on the Common Stock and no
Common Stock shall be purchased or otherwise acquired for value.
The holders of the Preferred Stock and the Preferred Stock (without
par value) of any series shall not be entitled to receive any
dividends thereon other than the dividends referred to in this
paragraph (2).
(3) The Company, by action of its Board of Directors, may
redeem the whole or any part of any series of the Preferred Stock
or the Preferred Stock (without par value), at any time or from
time to time, by paying in cash the redemption price of the shares
of the particular series, fixed therefore as herein provided,
together with a sum in the case of each share of each series so to
be redeemed, computed at the annual dividend rate for the series of
which the particular share is a part, from the date from which
dividends on such share became cumulative to the date fixed for
such redemption, less the aggregate of the dividends theretofore or
on such redemption date paid thereon. Notice of every such
redemption shall be given by publication at least once in one daily
newspaper printed in the English language and of general
circulation in Louisville, Kentucky, the first publication in such
newspaper to be at least thirty (30) days prior to the date fixed
for such redemption. At least thirty (30) days' previous notice of
every such redemption shall also be mailed to the holders of record
of the shares of the Preferred Stock or the Preferred Stock
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(without par value) so to be redeemed, at their respective
addresses as the same shall appear on the books of the Company; but
no failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for
the redemption of any shares of the Preferred Stock or the
Preferred Stock (without par value) so to be redeemed. In case of
redemption of a part only of any series of the Preferred Stock or
the Preferred Stock (without par value) at the time outstanding,
the Board of Directors shall fix and determine the stock to be so
redeemed either by lot or by redemption pro rata or by designation
of particular shares for redemption or in any other manner the
Board of Directors may see fit. The Board of Directors shall have
full power and authority, subject to the limitations and provisions
herein contained, to prescribe the manner in which, and the terms
and conditions upon which, the shares of the Preferred Stock or the
Preferred Stock (without par value) shall be redeemed from time to
time. If such notice of redemption shall have been duly given by
publication, and if on or before the redemption date specified in
such notice all funds necessary for such redemption shall have been
set aside by the Company, separate and apart from its other funds,
in trust for the account of the holders of the shares to be
redeemed, so as to be and continue to be available therefore, then,
notwithstanding that any certificate for such shares so called for
redemption shall not have been surrendered for cancellation, from
and after the date fixed for redemption, the shares represented
thereby shall no longer be deemed outstanding, the right to receive
dividends thereon shall cease to accrue and all rights with respect
to such shares so called for redemption shall forthwith on such
redemption date cease and terminate, except only the right of the
holders thereof to receive out of the funds so set aside in trust,
the amount payable upon redemption thereof, without interest;
provided, however, that the Company may, after giving notice by
publication of any such redemption as hereinbefore provided or
after giving to the bank or trust company hereinafter referred to
irrevocable authorization to give such notice by publication, and
at any time prior to the redemption date specified in such notice,
deposit in trust, for the account of the holders of the shares to
be redeemed, so as to be and continue to be available therefore,
funds necessary for such redemption with a bank or trust company in
good standing, organized under the laws of the United States of
America or of the Commonwealth of Kentucky or of the State of New
York doing business in the City of Louisville, or in the Borough of
Manhattan, The City of New York, and having capital, surplus and
undivided profits aggregating at least $1,000,000, designated in
such notice of redemption, and, upon such deposit in trust, all
shares with respect to which such deposit shall have been made
shall no longer be deemed to be outstanding, and all rights with
respect to such shares shall forthwith cease and terminate, except
only the right of the holders thereof to receive at any time from
and after the date of such deposit, the amount payable upon the
redemption thereof, without interest.
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(4) Before any amount shall be paid to, or any assets
distributed among, the holders of the Common Stock or any other
stock ranking junior to the Preferred Stock and the Preferred Stock
(without par value) of each series, upon any liquidation,
dissolution or winding up of the Company, and after paying or
providing for the payment of all creditors of the Company, the
holders of each series of the Preferred Stock and the Preferred
Stock (without par value) at the time outstanding shall be
entitled, pari passu with the holders of every other series of the
Preferred Stock and the Preferred Stock (without par value), to be
paid in cash the amount for the particular series fixed therefore
as herein provided, together with a sum in the case of each share
of each series, computed at the annual dividend rate for the series
of which the particular share is a part, from the date from which
dividends on such share became cumulative to the date fixed for the
payment of such distributive amount, less the aggregate of the
dividends theretofore or on such date paid thereon; but no payments
on account of such distributive amounts shall be made to the
holders of any series of the Preferred Stock or the Preferred Stock
(without par value) unless there shall likewise be paid at the same
time to the holders of each other series of the Preferred Stock and
the Preferred Stock (without par value) at the time outstanding,
like proportionate distributive amounts, ratably, in proportion to
the full distributive amounts to which they are respectively
entitled as herein provided. The holders of the Preferred Stock and
the Preferred Stock (without par value) of any series shall not be
entitled to receive any amounts with respect thereto upon any
liquidation, dissolution or winding up of the Company other than as
provided in this paragraph. Neither the consolidation or merger of
the Company with any other corporation or corporations, nor the
sale or transfer by the Company of all or any part of its assets,
shall be deemed to be a liquidation, dissolution or winding up of
the Company.
(5) Whenever the full dividends on all series of the
Preferred Stock and the Preferred Stock (without par value) at the
time outstanding for all past quarter-yearly dividend periods shall
have been paid or declared and set apart for payment, then such
dividends as may be determined by the Board of Directors may be
declared and paid on the Common Stock or any other stock ranking
junior to the Preferred Stock and the Preferred Stock (without par
value) of each series, but only out of funds legally available for
the payment of dividends; provided, however, that no dividend shall
be declared or paid and no other distributions shall be made on the
Common Stock or on any such other stock and no shares of the Common
Stock or of any such other stock shall be purchased or otherwise
acquired for value out of capital surplus arising from a reduction
in capital.
(6) In the event of any liquidation, dissolution or winding
up of the Company, all assets and funds of the Company remaining
after paying or providing for the payment of all creditors of the
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Company and after paying or providing for the payment to the
holders of all series of the Preferred Stock and the Preferred
Stock (without par value) of the full distributive amounts to which
they are respectively entitled as herein provided, shall be divided
among and paid to the holders of the Common Stock or any other
stock ranking junior to the Preferred Stock and the Preferred Stock
(without par value) of each series, according to their respective
rights and interests.
(7)(A) So long as any shares of the Preferred Stock or the
Preferred Stock (without par value) of any series are outstanding,
the Company shall not, without the affirmative vote or written
consent of the holders of at least two-thirds of the total number
of shares of such Preferred Stock and Preferred Stock (without par
value) then outstanding:
Amend, alter, change or repeal any of the express terms
of any series of the Preferred Stock or the Preferred Stock
(without par value) then outstanding in a manner prejudicial
to the holders thereof; provided, however, that if any such
amendment, alteration, change or repeal shall be prejudicial
to the holders of one or more, but not all, of the series of
Preferred Stock or the Preferred Stock (without par value) at
the time outstanding, only such consent of the holders of two-
thirds of the total number of shares of all series so affected
shall be required.
(B) So long as any shares of the Preferred Stock or the
Preferred Stock (without par value) of any series are out-
standing, the Company shall not, without the affirmative vote
or written consent of the holders of a majority of the total
number of shares of such Preferred Stock and Preferred Stock
(without par value) then outstanding:
(a) Create or authorize any class of stock ranking
prior to or (other than a series of the 1,720,000
authorized shares of Preferred Stock or 6,750,000
authorized shares of Preferred Stock (without par value))
ranking on a parity with any series of the Preferred
Stock and the Preferred Stock (without par value) as to
dividends or distributions, or create or authorize any
obligation or security convertible into shares of stock
of any such class; or
(b) Issue, sell or otherwise dispose of any shares
of the Preferred Stock or the Preferred Stock (without
par value), or of any class of stock ranking prior to or
on a parity with the Preferred Stock and the Preferred
Stock (without par value) of each series as to dividends
or distributions, unless the net income of the Company,
determined in accordance with generally accepted
accounting practices, to be available for the payment of
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dividends on the Preferred Stock, the Preferred Stock
(without par value) and any class of stock ranking prior
thereto or on a parity therewith as aforesaid, for a
period of twelve (12) consecutive calendar months within
the fifteen (15) calendar months immediately preceding
the issuance, sale or disposition of such stock, is at
least equal to twice the annual dividend requirements on
the entire amount of all Preferred Stock, all Preferred
Stock (without par value), and of all such other classes
of stock ranking prior thereto or on a parity therewith,
as to dividends or distributions to be outstanding
immediately after the issuance, sale or disposition of
such additional shares; or
(c) Merge or consolidate with or into any other
corporation or corporations, unless such merger or
consolidation, or the issuance or assumption of all
securities, to be issued or assumed in connection with
any such merger or consolidation, shall have been
ordered, approved, or permitted by the Securities and
Exchange Commission under the provisions of the Public
Utility Holding Company Act of 1935 or by any successor
commission or regulatory authority of the United States
of America having jurisdiction in the premises; provided
that the provisions of this clause (c) shall not apply to
a purchase or other acquisition by the Company of
franchises or assets of another corporation in any manner
which does not involve a merger or consolidation.
(C) So long as any shares of the Preferred Stock or
Preferred Stock (without par value) of any series are
outstanding, the Company shall not without written consent of
the holders of a majority of the total number of shares of
such Preferred Stock and Preferred Stock (without par value)
then outstanding or, in the alternative and subject to the
proviso hereinafter set forth in this subdivision 7(C), the
affirmative vote of the holders of a majority of the total
number of the shares of such Preferred Stock and Preferred
Stock (without par value) which are represented, by the
attendance of the holders thereof in person or by proxy, at a
meeting duly called for the purpose:
Issue or assume any unsecured notes, debentures or other
securities representing unsecured indebtedness for any purpose
other than (1) the refunding of outstanding unsecured
securities theretofore issued or assumed by the Company, (2)
the financing of pollution control facilities (as defined in
the Internal Revenue Code, as amended or as hereafter amended,
and the regulations and rulings thereunder) through the
issuance or assumption of unsecured notes, debentures or other
securities representing unsecured indebtedness the receipt of
interest on which is exempt from federal income
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tax at the time of such issuance or assumption, or (3) the
redemption or other retirement of outstanding shares of one or
more series of the Preferred Stock or Preferred Stock (without
par value) if, immediately after such issuance or assumption,
the total principal amount of all unsecured notes, debentures
or other unsecured securities representing unsecured
indebtedness issued or assumed by the Company and then
outstanding (including unsecured securities then to be issued
or assumed but excluding unsecured securities theretofore
consented to by the holders of such Preferred Stock and
Preferred Stock (without par value)) will exceed 20% of the
sum of (i) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed
by the Company and then to be outstanding, and (ii) the
capital and surplus of the Company as then to be stated on the
books of account of the Company.
Provided, however, that if, at any such meeting, at least
one-third of all shares of such Preferred Stock and Preferred
Stock (without par value) then outstanding shall be voted
against the action then proposed, of the character aforesaid,
such action may be taken only with the affirmative vote of a
majority of all shares of such Preferred Stock and Preferred
Stock (without par value) then outstanding.
If at any meeting of such Preferred Stock and Preferred
Stock (without par value) for the purpose of taking action on
matters set forth in this subdivision 7(C), the presence in
person or by proxy of the holders of a majority of such stock
shall not have been obtained and shall not be obtained for a
period of thirty days from the date of such meeting, the
presence in person or by proxy of the holders of one-third of
such stock then outstanding shall be sufficient to constitute
a quorum.
(8) No holder of shares of Preferred Stock or Preferred Stock
(without par value) shall be entitled as such as a matter of right
to subscribe for or purchase any part of any new or additional
issue of stock, or securities convertible into stock, of any class
whatsoever, whether now or hereafter authorized, and whether issued
for cash, property, services, by way of dividends, or otherwise.
(9)(A)Every holder of Preferred Stock of any series shall have
one vote for each share of such Preferred Stock held by him, and
every holder of the Common Stock shall have one vote for each share
of Common Stock held by him, for the election of Directors and upon
all other matters, except as otherwise provided in this paragraph
(9) hereof. At all elections of directors, any stockholder may vote
cumulatively. The foregoing shall not modify or affect the special
votes and consents provided for in paragraph (7) hereof.
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(B) If and when dividends shall be in default in an
amount equivalent to six (6) full quarter-yearly dividends on
all shares of all series of the Preferred Stock and the
Preferred Stock (without par value) at the time outstanding,
and until all dividends in default on such Preferred Stock and
such Preferred Stock (without par value) shall have been paid,
the holders of all shares of the Preferred Stock and all
shares of the Preferred Stock (without par value), voting
separately as one class, shall be entitled to elect the
smallest number of Directors necessary to constitute a
majority of the full Board of Directors, and the holders of
the Common Stock, voting separately as a class, shall be
entitled to elect the remaining Directors of the Company. At
all elections of directors held pursuant to this subdivision
9(B), any stockholder may vote cumulatively. The terms of
office of all persons who may be Directors of the Company at
the time shall terminate upon the election of a majority of
the Board of Directors by the holders of the Preferred Stock
and the Preferred Stock (without par value), whether or not
the holders of the Common Stock shall then have elected the
remaining Directors of the Company.
(C) If and when all dividends then in default on the
Preferred Stock and the Preferred Stock (without par value) at
the time outstanding shall be paid (and such dividends shall
be declared and paid, or declared and funds set aside for that
purpose out of any funds legally available therefore as soon
as reasonably practicable), the Preferred Stock and the
Preferred Stock (without par value) shall thereupon be
divested of any special right with respect to the election of
Directors provided in subparagraph (B) hereof, and the voting
power of the Preferred Stock, the Preferred Stock (without par
value) and the Common Stock shall revert to the status
existing before the occurrence of such default; but always
subject to the same provisions for vesting such special rights
in the Preferred Stock and the Preferred Stock (without par
value) in case of further like default or defaults in
dividends thereon.
(D) In case of any vacancy in the Board of Directors
occurring among the Directors elected by the holders of the
Preferred Stock and the Preferred Stock (without par value),
as a class, pursuant to subparagraph (B) hereof, a majority of
the remaining Directors elected by the holders of the
Preferred Stock and the Preferred Stock (without par value)
(including, as elected by such holders, any Directors then in
office who were chosen by other Directors as successor
Directors to fill vacancies as provided in this sentence) may
elect a successor to hold office for the unexpired term of the
Director whose place shall be vacant. In case of a vacancy in
the Board of Directors occurring among the Directors elected
by the holders of the Common Stock, as a
9
class, pursuant to subparagraph (B) hereof, a majority of the
remaining Directors elected by the holders of the Common Stock
(including, as elected by such holders, any Directors then in
office who were chosen by other directors as successor
directors to fill vacancies as provided in this sentence) may
elect a successor to hold office for the unexpired term of the
Director whose place shall be vacant. In all other cases, any
vacancy occurring among the Directors shall be filled by the
vote of a majority of the remaining Directors.
(E) At all meetings of stockholders held for the purpose
of electing directors during such times as the holders of
shares of the Preferred Stock and the Preferred Stock (without
par value) shall have the special right, voting separately as
one class, to elect directors pursuant to subparagraph (B)
hereof, the presence in person or by proxy of the holders of
a majority of the outstanding shares of the Common Stock shall
be required to constitute a quorum of such class for the
election of directors, and the presence in person or by proxy
of the holders of Preferred Stock and Preferred Stock (without
par value) entitled to cast a majority of all the votes to
which the holders of the Preferred Stock and the Preferred
Stock (without par value) are entitled, shall be required to
constitute a quorum of such class for the election of
directors; provided, however, that the absence of a quorum
(according to votes, as aforesaid) of the holders of stock of
any such class shall not prevent the election at any such
meeting or adjournment thereof of directors by the other such
class if such quorum of the holders of stock of such other
class is present in person or by proxy at such meeting; and
provided further that in the absence of such quorum of the
holders of stock of any such class, a majority (according to
votes, as aforesaid) of those holders of the stock of such
class who are present in person or by proxy shall have power
to adjourn the election of the directors to be elected by such
class from time to time without notice other than announcement
at the meeting until the holders of the requisite number of
shares of such class shall be present in person or by proxy.
(F) Except when some mandatory provision of law shall be
controlling and except as otherwise provided in paragraph (7)
hereof whenever shares of two or more series of the Preferred
Stock or of the Preferred Stock (without par value) are
outstanding, no particular series shall be entitled to vote as
a separate series on any matter and all shares of the
Preferred Stock and the Preferred Stock (without par value)
shall be deemed to constitute but one class for any purpose
for which a vote of the stockholders of the Company by classes
may now or hereafter be required.
10
5% CUMULATIVE PREFERRED STOCK, $25 PAR VALUE
(10) The Company has classified $21,519,300 par value of the
Preferred Stock as a series of such Preferred Stock designated as
"5% Cumulative Preferred Stock, $25 Par Value," consisting of
860,772 shares of the par value of $25 per share.
(11) The preferences, rights, qualifications and restric-
tions of the shares of the "5% Cumulative Preferred Stock, $25 Par
Value," shall be as follows:
(a) The annual dividend rate for such series shall be 5%
per annum;
(b) The redemption price for such series shall be $28.00
per share; and
(c) The preferential amounts to which the holders of
shares of such series shall be entitled upon any liquidation,
dissolution or winding up of the Company, in addition to
dividends accumulated but unpaid thereon, shall be:
$27.25 per share, in the event of any voluntary
liquidation, dissolution or winding up of the Company, except
that if such voluntary liquidation, dissolution or winding up
of the Company shall have been approved by the vote in favor
thereof given at a meeting called for that purpose or by the
written consent of the holders of a majority of the total
shares of the 5% Cumulative Preferred Stock, $25 Par Value
then outstanding, the amount so payable on such voluntary
liquidation, dissolution, or winding up shall be $25 per
share; or
$25 per share, in the event of any involuntary liqui-
dation, dissolution or winding up of the Company.
7.45% CUMULATIVE PREFERRED STOCK, PAR VALUE $25 PER SHARE
(12) The Company has classified $21,480,700 Par Value of the
Preferred Stock as a series of such Preferred Stock designated as
"7.45% Cumulative Preferred Stock, Par Value $25 per share,"
consisting of 859,228 shares with par value of $25 per share.
(13) The preferences, rights, qualifications and restric-
tions of shares of the "7.45% Cumulative Preferred Stock, Par Value
$25 per share," shall be as follows:
(a) The annual dividend rate for such series shall
be 7.45% per annum;
(b) The redemption price for such series will be
$27.50 per share prior to April 15, 1978; $26.75 per share
11
thereafter and prior to April 15, 1983; $26.00 per share thereafter
and prior to April 15, 1988; and $25.75 per share thereafter.
However, no shares of such series may be redeemed prior to April
15, 1978 from proceeds received through the incurring of debt, or
through the issuance of preferred stock ranking equal or prior to
the stock of such series as to dividends or on liquidation, where
such debt has an effective interest cost or such preferred stock
has an effective dividend cost to the Company of less than the
effective dividend cost to the Company of the stock of such series;
and
(c) The preferential amounts to which the holders
of shares of such series shall be entitled upon any liquida-
tion, dissolution or winding up of the Company, in addition to
dividends accumulated but unpaid thereon, shall be:
$25.50 per share, in the event of any voluntary liqui-
dation, dissolution or winding up of the Company, except that
if such voluntary liquidation, dissolution or winding up of
the Company shall have been approved by the vote in favor
thereof given at a meeting called for that purpose or by the
vote in favor thereof given at a meeting called for that
purpose or by the written consent of the holders of a majority
of the total shares of the 7.45% Cumulative Preferred Stock,
Par Value $25 per share, then outstanding, the amount so
payable on such voluntary liquidation, dissolution, or winding
up shall be $25 per share; or
$25 per share, in the event of any involuntary
liquidation, dissolution or winding up of the Company.
COMMON STOCK
(Without par value)
The Board of Directors is hereby authorized to cause shares of
Common Stock, without par value, to be issued from time to time for
such consideration as may be fixed from time to time by the Board
of Directors, or by way of stock split pro rata to the holders of
the Common Stock. The Board of Directors may also determine the
proportion of the proceeds received from the sale of such stock
which shall be credited upon the books of the Company to Capital or
Capital Surplus.
Each share of the Common Stock shall be equal in all respects
to every other share of the Common Stock.
No holder of shares of Common Stock shall be entitled as such
as a matter of right to subscribe for or purchase any part of any
new or additional issue of stock, or securities convertible into
12
stock, of any class whatsoever, whether now or hereafter
authorized, and whether issued for cash, property, services or
otherwise.
FIFTH. The Company shall commence business as soon as
authorized as provided by law and shall continue for a period of
nine hundred ninety-nine (999) years from July 2, 1913.
SIXTH. The private property of the stockholders of the
Company shall not be subject to the payment of corporate debts.
SEVENTH. A. CERTAIN DEFINITIONS. For purposes of this Article
Seventh:
(1) "Affiliate," including the term "affiliated person,"
means a person who directly, or indirectly through one (1) or more
intermediaries, controls, or is controlled by, or is under common
control with, a specified person.
(2) "Associate," when used to indicate a relationship with
any person, means:
(a) Any corporation or organization (other than the
Company or a Subsidiary), of which such person is an officer,
director 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 capacity; and
(c) Any relative or spouse of such person, or any
relative of such spouse, any one (1) of whom has the same home
as such person or is a director or officer of the corporation
or any of its Affiliates.
(3) "Beneficial Owner," when used with respect to any Voting
Stock, means a person:
(a) Who, individually or with any of its Affiliates or
Associates, beneficially owns Voting Stock, directly or
indirectly; or
(b) Who, individually or with any of its Affiliates or
Associates has:
1. The right to acquire Voting Stock, whether such
right is exercisable immediately or only after the
passage of time and whether or not such right is
exercisable only after specified conditions are met,
pursuant to any agreement, arrangement, or understanding
13
or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise;
2. The right to vote Voting Stock pursuant to any
agreement, arrangement, or understanding; or
3. Any agreement, arrangement, or understanding for
the purpose of acquiring, holding, voting or disposing of
Voting Stock with any other person who beneficially owns,
or whose Affiliates or Associates beneficially own,
directly or indirectly, such shares of Voting Stock.
(4) "Business Combination" means:
(a) Any merger or consolidation of the Company or any
Subsidiary with any Interested Shareholder, or any other
corporation, whether or not itself an Interested Shareholder,
which is, or after the merger or consolidation would be, an
Affiliate of an Interested Shareholder who was an Interested
Shareholder prior to the transaction;
(b) Any sale, lease, transfer, or other disposition,
other than in the ordinary course of business, in one (1)
transaction or a series of transactions in any twelve-month
period, to any Interested Shareholder or any Affiliate of any
Interested Shareholder, other than the Company or any
Subsidiary, of any assets of the Company or any Subsidiary
having, measured at the time the transaction or transactions
are approved by the Board of Directors of the Company, an
aggregate book value as of the end of the Company's most
recently ended fiscal quarter of five percent (5%) or more of
the total Market Value of the outstanding stock of the Company
or of its net worth as of the end of its most recently ended
fiscal quarter;
(c) The issuance or transfer by the Company, or any
Subsidiary, in one transaction or a series of transactions in
any twelve-month period, of any Equity Securities of the
Company or any Subsidiary which have an aggregate Market Value
of five percent (5%) or more of the total Market Value of the
outstanding stock of the Company, determined as of the end of
the Company's most recently ended fiscal quarter prior to the
first such issuance or transfer, to any Interested Shareholder
or any Affiliate of any Interested Shareholder, other than the
Company or any of its Subsidiaries, except pursuant to the
exercise of warrants or rights to purchase securities offered
pro rata to all holders of the Company's Voting Stock or any
other method affording substantially proportionate treatment
to the holders of Voting Stock;
14
(d) The adoption of any plan or proposal for the
liquidation or dissolution of the Company in which any thing
other than cash will be received by an Interested Shareholder
or any Affiliate of any Interested Shareholder; or
(e) Any reclassification of securities, including any
reverse stock split; or recapitalization of the Company; or
any merger or consolidation of the Company with any of its
Subsidiaries; or any other transaction which has the effect,
directly or indirectly, in one transaction or a series of
transactions, of increasing by five percent (5%) or more the
proportionate amount of the outstanding shares of any class of
Equity Securities of the Company or any Subsidiary which is
directly or indirectly beneficially owned by any Interested
Shareholder or any Affiliate of any Interested Shareholder.
(5) "Common Stock" means any stock of the Company other than
preferred or preference stock of the Company.
(6) "Continuing Director" means any member of the Company's
Board of Directors who is not an Interested Shareholder or an
Affiliate or Associate of an Interested Shareholder or any of its
Affiliates, other than the Company or any of its Subsidiaries, and
who was a director of the Company prior to the time the Interested
Shareholder became an Interested Shareholder, and any successor to
such Continuing Director who is not an Interested Shareholder or an
Affiliate or Associate of an Interested Shareholder or any of its
Affiliates, other than the Company or any of its Subsidiaries, and
was recommended or elected by a majority of the Continuing
Directors at a meeting at which a quorum consisting of a majority
of the Continuing Directors is present.
(7) "Control," including the terms "controlling," "controlled
by" and "under common control with," means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership
of voting securities, by contract, or otherwise, and the beneficial
ownership of ten percent (10%) or more of the votes entitled to be
cast by a corporation's Voting Stock creates a presumption of
control.
(8) "Equity Security" means:
(a) Any stock or similar security, certificate of
interest, or participation in any profit-sharing agreement,
voting trust certificate, or certificate of deposit for the
foregoing;
15
(b) Any security convertible, with or without consid-
eration, into an Equity Security, or any warrant or other
security carrying any right to subscribe to or purchase an
Equity Security; or
(c) Any put, call, straddle, or other option, right or
privilege of acquiring an Equity Security from or selling an
Equity Security to another without being bound to do so.
(9) "Interested Shareholder" means any person, other than the
Company or any of its Subsidiaries, who:
(a) Is the Beneficial Owner, directly or indirectly, of
ten percent (10%) or more of the voting power of the
outstanding Voting Stock of the Company; or is an Affiliate of
the Company and at any time within the two-year period
immediately prior to the date in question was the Beneficial
Owner directly or indirectly, of ten percent (10%) or more of
the voting power of the then outstanding Voting Stock of the
Company.
(b) For the purpose of determining whether a person is
an Interested Shareholder, the number of shares of Voting
Stock deemed to be outstanding shall include shares deemed
owned by the person through application of Subsection (3) of
this Paragraph A of Article Seventh but shall not include any
other shares of Voting Stock which may be issuable pursuant to
any agreement, arrangement, or understanding, or upon exercise
of conversion rights, warrants or options or otherwise.
(10) "Market Value" means:
(a) In the case of stock, the highest closing sale price
during the thirty-day period immediately preceding the date in
question of a share of such stock on the composite tape for
New York Stock Exchange listed stocks, or, if such stock is
not quoted on the composite tape, on the New York Stock
Exchange, or if such stock is not listed on such exchange, on
the principal United States securities exchange registered
under the Securities Exchange Act of 1934 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 thirty-day period preceding the
date in question on the National Association of Securities
Dealers, Inc., Automated Quotations System or any 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 at a
meeting of the Board of Directors at which a quorum consisting
of at least a majority of the Continuing Directors is present;
and
16
(b) In the case of property other than cash or stock, the
fair market value of such property on the date in question as
determined by a majority of the Continuing Directors at a
meeting of the Board of Directors at which a quorum consisting
of at least a majority of the Continuing Directors is present.
(11) "Subsidiary" means any corporation of which Voting Stock
having a majority of the votes entitled to be cast is owned,
directly or indirectly, by the Company.
(12) "Voting Stock" means shares of capital stock of a
corporation entitled to vote generally in the election of its
directors.
B. MINIMUM SHARE VOTE REQUIREMENTS FOR APPROVAL OF BUSINESS
COMBINATIONS.
(1) In addition to any vote otherwise required by law or
these Articles of Incorporation, a Business Combination shall
be recommended by the Board of Directors of the Company and
approved by the affirmative vote of at least:
(a) Eighty percent (80%) of the votes entitled to
be cast by outstanding shares of Voting Stock of the
Company, voting together as a single voting group; and
(b) Two-thirds of the votes entitled to be cast by
holders of Voting Stock other than Voting Stock
beneficially owned by the Interested Shareholder who is,
or whose Affiliate is, a party to the Business
Combination or by an Affiliate or Associate of such
Interested Shareholder, voting together as a single
voting group.
(2) Unless a Business Combination is exempted from the
operation of this Paragraph B in accordance with Paragraph C of
this Article Seventh, the failure to comply with the voting
requirements of Subsection (1) of this Paragraph B shall render
such Business Combination void.
C. EXEMPTIONS FROM MINIMUM SHARE VOTE REQUIREMENTS.
(1) For purposes of Section (2) of this Paragraph C:
(a) "Announcement Date" means the first general public
announcement of the proposal or intention to make a proposal
of the Business Combination or its first communication
generally to stockholders of the Company, whichever is
earlier;
17
(b) "Determination Date" means the date on which an
Interested Shareholder first became an Interested Shareholder;
and
(c) "Valuation Date" means
1. For a Business Combination voted upon by
stockholders, the latter of the day prior to the date of
the stockholders' vote or the date twenty (20) days prior
to the consummation of the Business Combination; and
2. For a Business Combination not voted upon by
stockholders, the date of the consummation of the
Business Combination.
(2) The vote required by Section B of this Article Seventh
does not apply to a Business Combination if each of the following
conditions is met:
(a) The aggregate amount of the cash and the Market
Value as of the Valuation Date of consideration other than
cash to be received per share by holders of Common Stock in
such Business Combination is at least equal to the highest of
the following:
1. The highest per share price (including any
brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Shareholder for any
shares of Common Stock of the same class or series
acquired by it:
a. Within the two-year period immediately
prior to the Announcement Date of the proposal of
the Business Combination; or
b. In the transaction in which it became an
Interested Shareholder, whichever is higher; or
2. The Market Value per share of Common Stock of
the same class or series on the Announcement Date or on
the Determination Date, whichever is higher; or
3. The price per share equal to the Market Value
per share of Common Stock of the same class or series
determined pursuant to clause 2 of this Subsection (a),
multiplied by the fraction of:
a. The highest per share price, including
any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested
Shareholder for any shares of Common Stock of the
18
same class or series acquired by it within the two-
year period immediately prior to the Announcement
Date, over
b. The Market Value per share of Common
Stock of the same class or series on the first day
in such two-year period on which the Interested
Shareholder acquired any shares of Common Stock.
(b) The aggregate amount of the cash and the Market Value as
of the Valuation Date of consideration other than cash to be
received per share by holders of shares of any class or series of
outstanding stock other than Common Stock is at least equal to the
highest of the following, whether or not the Interested Shareholder
has previously acquired any shares of a particular class or series
of stock:
1. The highest per share price, including any brokerage
commissions, transfer taxes and soliciting dealers' fees,
paid by the Interested Shareholder for any shares of such
class of stock acquired by it:
a. Within the two-year period immediately
prior to the Announcement Date of the proposal of
the Business Combination; or
b. In the transaction in which it became an
Interested Shareholder, whichever is higher; or
2. The highest preferential amount per share to which
the holders of shares of such class of stock are entitled in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company; or
3. The Market Value per share of such class of stock on
the Announcement Date or on the Determination Date, whichever
is higher; or
4. The price per share equal to the Market Value per
share of such class of stock determined pursuant to clause 3
of this Subsection (b), multiplied by the fraction of:
a. The highest per share price, including any
brokerage commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Shareholder for any
shares of any class of Voting Stock acquired by it within
the two-year period immediately prior to the Announcement
Date, over
19
b. The Market Value per share of the same class of
Voting Stock on the first day in such two-year period on
which the Interested Shareholder acquired any shares of
the same class of Voting Stock.
(c) In making any price calculation under Section (2) of this
Paragraph C, appropriate adjustments shall be made to reflect any
reclassification, including any reverse stock split;
recapitalization; reorganization; or any similar transaction which
has the effect of reducing the number of outstanding shares of the
stock. The consideration to be received by holders of any class or
series of outstanding stock is to be in cash or in the same form as
the Interested Shareholder has previously paid for shares of the
same class or series of stock. If the Interested Shareholder has
paid for shares of any class of stock with varying forms of
consideration, the form of consideration for such class of stock
shall be either cash or the form used to acquire the largest number
of shares of such class or series of stock previously acquired by
it.
(d) 1. After the Interested Shareholder has become an
Interested Shareholder and prior to the consummation of such
Business Combination:
a. There shall have been no failure to declare
and pay at the regular date therefore any full
periodic dividends, whether or not cumulative, on
any outstanding preferred stock of the Company;
b. There shall have been no reduction in the
annual rate of dividends paid on any class or
series of stock of the Company that is not pre-
ferred stock, except as necessary to reflect any
subdivision of the stock; and an increase in such
annual rate of dividends as necessary to reflect
any reclassification, including any reverse stock
split; recapitalization; reorganization; or any
similar transaction which has the effect of
reducing the number of outstanding shares of the
stock; and
c. The Interested Shareholder shall not
become the Beneficial owner of any additional
shares of stock of the Company except as part of
the transaction which resulted in such Interested
Shareholder becoming an Interested Shareholder or
by virtue of proportionate stock splits or stock
dividends.
2. The provisions of subclauses a and b of clause
1 do not apply if no Interested Shareholder or an
Affiliate or Associate of the Interested Shareholder
20
voted as a director of the Company in a manner
inconsistent with such subclauses and the Interested
Shareholder, within ten (10) days after any act or
failure to act inconsistent with such subclauses,
notifies the Board of Directors of the Company in writing
that the Interested Shareholder disapproves thereof and
requests in good faith that the Board of Directors
rectify such act or failure to act.
(e) After the Interested Shareholder has become an Interested
Shareholder, the Interested Shareholder may not have received the
benefit, directly or indirectly, except proportionately as a
stockholder, of any loans, advances, guarantees, pledges or other
financial assistance provided by the Company or any Subsidiary,
whether in anticipation of or in connection with such Business
Combination or otherwise.
(3) (a) The vote required by Section B of this Article
Seventh does not apply to any Business Combination that is
approved by a majority of Continuing Directors at a meeting of
the Board of Directors at which a quorum consisting of at
least a majority of the Continuing Directors is present.
(b) Unless by its terms a resolution adopted under the
foregoing subsection (a) of this Section (3) is made
irrevocable, it may be altered or repealed by the Board of
Directors, but this shall not affect any Business Combinations
that have been consummated, or are the subject of an existing
agreement entered into, prior to the alteration or repeal.
D. Powers of the Board of Directors. A majority of the
Continuing Directors of the Company shall have the power and
duty to determine, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine
compliance with this Article Seventh, including without
limitation, (a) whether a person is an Interested Shareholder,
(b) the number of shares of Voting Stock beneficially owned by
any person, (c) whether a person is an Affiliate or Associate
of another, (d) whether the assets which are the subject of
any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the
Company or any Subsidiary in any Business Combination has, an
aggregate book value or Market Value of five percent (5%) or
more of the total Market Value of the outstanding stock of the
Company or of its net worth, and (e) whether the requirements
of Paragraph C of this Article Seventh have been met.
21
E. No Effect on Fiduciary Obligations of Interested
Shareholders. Nothing contained in this Article Seventh shall
be construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
F. Amendment or Repeal. Notwithstanding any other
provisions of this Article Seventh or of any other Article
hereof, or of the By-Laws of the Company (and notwithstanding
the fact that a lesser percentage may be specified from time
to time by law, this Article Seventh, any other Article
hereof, or the By-Laws of the Company), the provisions of this
Article Seventh may not be altered, amended or repealed in any
respect, nor may any provision inconsistent therewith be
adopted, unless such alteration, amendment, repeal or adoption
is approved by the affirmative vote of the holders of at
least: (i) 80% of the combined voting power of the then
outstanding Voting Stock of the Company, voting together as a
single class and (ii) 66-2/3% of the combined voting power of
the then outstanding Voting Stock (which is not beneficially
owned by any Interested Shareholder), voting together as a
single class.
EIGHTH. A. Number, Election and Terms of Directors. The
business of the Company shall be managed by a Board of
Directors. The number of directors of the Company shall be
fixed from time to time by or pursuant to the By-Laws of the
Company. Except as otherwise provided in or fixed by or
pursuant to the provisions of Article Fourth hereof relating
to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or
upon liquidation to elect directors under specified
circumstances, the directors 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 shall be
provided in the manner specified in the By-Laws of the
Company, one class to be originally elected for a term
expiring at the annual meeting of stockholders to be held in
1988, another class to be originally elected for a term
expiring at the annual meeting of stockholders to be held in
1989, and another class to be originally elected for a term
expiring at the annual meeting of stockholders to be held in
1990, with each member of each class to hold office until his
successor is elected and qualified. At each annual meeting of
stockholders of the Company and except as otherwise provided
in or fixed by or pursuant to the provisions of Article Fourth
hereof relating to the rights of the holders of any class or
series of stock having a preference over the Common Stock as
to dividends or upon liquidation to elect directors under
specified circumstances, the successors of the class of
directors whose term expires at that meeting shall be elected
22
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. Stockholder Nomination of Director Candidates and
Introduction of Business. Advance notice of stockholder
nominations for the election of directors, and advance notice
of business to be brought by stockholders before an annual
meeting of stockholders, shall be given in the manner provided
in the By-Laws of the Company.
C. Newly Created Directorships and Vacancies. Except
as otherwise provided in or fixed by or pursuant to the
provisions of Article Fourth hereof relating to the rights of
the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon
liquidation to elect directors under specified circumstances:
(i) newly created directorships resulting from any increase in
the number of directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors; (ii) any
director elected in accordance with the preceding clause (i)
shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created
or the vacancy occurred and until such director's successor
shall have been elected and qualified; and (iii) no decrease
in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
D. Removal. Except as otherwise provided in or fixed
by or pursuant to the provisions of Article Fourth hereof
relating to the rights of the holders of any class or series
of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under
specified circumstances, any director may be removed from
office, with or without cause, only by the affirmative vote of
the holders of at least 80% of the combined voting power of
the then outstanding shares of the Company's stock entitled to
vote generally, voting together as a single class.
Notwithstanding the foregoing provisions of this Paragraph D,
if at any time any stockholders of the Company have cumulative
voting rights with respect to the election of directors and
less than the entire Board of Directors is to be removed, no
director may be removed from office if the votes cast against
his removal would be sufficient to elect him as a director if
then cumulatively voted at an election of the class of
directors of which he is a part. Whenever in this Article
Eighth or in Article Ninth hereof or in Article Tenth hereof,
the phrase, "the then outstanding shares of the
23
Company's stock entitled to vote generally" is used, such
phrase shall mean each then outstanding share of any class or
series of the Company's stock that is entitled to vote
generally in the election of the Company's directors.
E. Amendment or Repeal. Notwithstanding any other
provisions of this Article Eighth or of any other Article
hereof or of the By-Laws of the Company (and notwithstanding
the fact that a lesser percentage may be specified from time
to time by law, this Article Eighth, any other Article hereof,
or the By-Laws of the Company), the provisions of this Article
Eighth may not be altered, amended or repealed in any respect,
nor may any provision inconsistent therewith be adopted,
unless such alteration, amendment, repeal or adoption is
approved by the affirmative vote of at least 80% of the
combined voting power of the then outstanding shares of the
Company's stock entitled to vote generally, voting together as
a single class.
NINTH. Any action required or permitted to be taken by
the stockholders of the Company at a meeting of such holders
may be taken without such a meeting only if a consent in
writing setting forth the action so taken shall be signed by
all of the stockholders entitled to vote with respect to the
subject matter thereof. Except as otherwise mandated by
Kentucky law and except as otherwise provided in or fixed by
or pursuant to the provisions of Article Fourth hereof
relating to the rights of the holders of any class or series
of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under
specified circumstances, special meetings of stockholders of
the Company may be called only by the Board of Directors
pursuant to a resolution approved by a majority of the entire
Board of Directors or by the President of the Company.
Notwithstanding any other provisions of this Article Ninth or
of any other Article hereof or of the By-Laws of the Company
(and notwithstanding the fact that a lesser percentage may be
specified from time to time by law, this Article Ninth, any
other Article hereof, or the By-Laws of the Company), the
provisions of this Article Ninth may not be altered, amended
or repealed in any respect, nor may any provision inconsistent
therewith be adopted, unless such alteration, amendment,
repeal or adoption is approved by the affirmative vote of the
holders of at least 80% of the combined voting power of the
then outstanding shares of the Company's stock entitled to
vote generally, voting together as a single class.
TENTH. The Board of Directors shall have power to adopt,
amend and repeal the By-Laws of the Company to the maximum
extent permitted from time to time by Kentucky law; provided,
however, that any By-Laws adopted by the Board of
24
Directors under the powers conferred hereby may be amended or
repealed by the Board of Directors or by the holders of at
least a majority of the combined voting power of the then
outstanding shares of the Company's stock entitled to vote
generally, voting together as a single class, except that, and
notwithstanding any other provisions of this Article Tenth or
of any other Article hereof or of the By-Laws of the Company
(and notwithstanding the fact that a lesser percentage may be
specified from time to time by law, this Article Tenth, any
other Article hereof or the By-Laws of the Company), no
provision of Section 2, Section 4 or Section 5 of Article I of
the By-Laws or of Section 1 of Article II of the By-Laws or of
Section 2 of Article IV of the By-Laws or of Article IX of the
By-Laws may be altered, amended or repealed in any respect,
nor may any provision inconsistent therewith be adopted,
unless such alteration, amendment, repeal or adoption is
approved by the affirmative vote of the holders of at least
80% of the combined voting power of the then outstanding
shares of the Company's stock entitled to vote generally,
voting together as a single class. Notwithstanding any other
provisions of this Article Tenth or of any other Article
hereof or of the By-Laws of the Company (and notwithstanding
the fact that a lesser percentage may be specified from time
to time by law, this Article Tenth, any other Article hereof
or the By-Laws of the Company), the provisions of this Article
Tenth may not be altered, amended or repealed in any respect,
nor may any provision inconsistent therewith be adopted,
unless such alteration, amendment, repeal or adoption is
approved by the affirmative vote of the holders of at least
80% of the combined voting power of the then outstanding
shares of the Company's stock entitled to vote generally,
voting together as a single class.
[The following are resolutions that were duly adopted by the
Company's Board of Directors and that set forth in accordance with
the Kentucky Business Corporation Act certain of the terms of
several series of the Company's Preferred Stock (without par
value).]
PREFERRED STOCK RESOLUTIONS
RESOLVED, By the Board of Directors of Louisville Gas and
Electric Company, a Kentucky corporation,
(1) That a series consisting of 250,000 shares of the
Preferred Stock (without par value) of the Company is hereby
created and established out of the authorized and unissued shares
of the Preferred Stock (without par value) of the Company; said
series, and each share thereof, shall be designated "$8.72
25
Cumulative Preferred Stock (without par value)"; and all of said
two hundred and fifty thousand (250,000) shares of said series are
hereby authorized to be issued by the Company;
(2) That the annual dividend payable in respect of each
share of said series shall be $8.72; the initial dividend in
respect of such share of said series shall be payable on October
15, 1976, when and as declared by the Board of Directors of this
Company, to holders of record on September 30, 1976, and will
accrue from the date of original issuance of said series;
thereafter, such dividends shall be payable on January 15, April
15, July 15, and October 15 in each year (or the next business date
thereafter in each case), when and as declared by the Board of
Directors of this Company, for the quarter-yearly period ending on
the last business day of the preceding month;
(3) That the shares of said series shall be subject to
redemption, in whole at any time or in part from time to time, upon
the notice and in the manner and with the effect provided in the
Articles of Incorporation (as amended) of the Company; and the
redemption price or prices applicable to shares of said series
shall be $108.72 per share plus accrued and unpaid dividends to the
date of redemption if such date of redemption is prior to July 1,
1981; $105.00 per share plus accrued and unpaid dividends to the
date of redemption if such date of redemption is on or subsequent
to July 1, 1981, and prior to July 1, 1986; $103.00 per share plus
accrued and unpaid dividends to the date of redemption if such date
of redemption is on or subsequent to July 1, 1986, and prior to
July 1, 1991; and $101.00 per share plus accrued and unpaid
dividends to the date of redemption if such date of redemption is
on or subsequent to July 1, 1991; provided, that none of the shares
of said series may be redeemed by the Company prior to July 1,
1981, from the proceeds received through the incurring of debt, or
through the issuance of preferred stock ranking equally with or
prior to said series as to dividends or on liquidation, where such
debt has an effective interest cost or such preferred stock has an
effective dividend cost to the Company of less than the effective
dividend cost to the Company of said series.
(4) That the preferential amounts to which the holders of
shares of such series shall be entitled upon any liquidation,
dissolution or winding up of the Company, in addition to dividends
accumulated but unpaid thereon, shall be $100 per share, in the
event of any voluntary liquidation, dissolution or winding up of
the Company, except that if such voluntary liquidation, dissolution
or winding up of the Company shall have been approved by the vote
in favor thereof given at a meeting called for that purpose or by
the written consent of the holders of a majority of the total
shares of the $8.72 Cumulative Preferred Stock (without par value)
26
then outstanding, the amount so payable on such voluntary
liquidation, dissolution or winding up shall be $100 per share; or
$100 per share, in the event of any involuntary liquidation,
dissolution or winding up of the Company.
(5) That the shares of said series shall be subject to all
the terms, provisions and restrictions set forth in the Articles of
Incorporation (as amended) of the Company with respect to shares of
the Preferred Stock (without par value) of the Company and,
excepting only as to the rate of dividend per annum payable in
respect of the shares of said series, the redemption price or
prices applicable to the shares of said series, and the liquidation
price applicable to shares of said series, shall have the same
relative rights and preferences as, shall be of equal rank with,
and shall confer rights equal to those conferred by, all other
shares of the Preferred Stock (without par value) of the Company.
(6) That the stated value of the shares of said series
shall be $100 per share.
AND FURTHER RESOLVED: That prior to the issuance by the
Company of any shares of said $8.72 Cumulative Preferred Stock
(without par value), the Company shall execute and file in the
office of the Secretary of State of the State of Kentucky such
statement or certificate with respect to said shares as is required
by statutes of the State of Kentucky; and, after such filing of
said statement or certificate, the officers of the Company shall
cause the duplicate original thereof, when returned to the Company
by the Secretary of State, to be filed for record in the office of
the Clerk of the County Court of Jefferson County being the county
in which the registered office of the Company is situated.
____________________________
RESOLVED, By the Board of Directors of Louisville Gas and
Electric Company, a Kentucky corporation,
(1) That a series consisting of 250,000 shares of the
Preferred Stock (without par value) of the Company is hereby
created and established out of the authorized and unissued shares
of the Preferred Stock (without par value) of the Company; said
series, and each share thereof, shall be designated "$8.90
Cumulative Preferred Stock (without par value)"; and all of said
two hundred and fifty thousand (250,000) shares of said series are
hereby authorized to be issued by the Company;
(2) That the annual dividend payable in respect of each
share of said series shall be $8.90; the initial dividend in
respect of such share of said series shall be payable on October
16, 1978, when and as declared by the Board of Directors of this
Company, to holders of record on September 29, 1978, and will
accrue from the date of original issuance of said series;
27
thereafter, such dividends shall be payable on January 15, April
15, July 15, and October 15 in each year (or the next business date
thereafter in each case), when and as declared by the Board of
Directors of this Company, for the quarter-yearly period ending on
the last business day of the preceding month;
(3) That the shares of said series shall be subject to
redemption, in whole at any time or in part from time to time, upon
the notice and in the manner and with the effect provided in the
Articles of Incorporation (as amended) of the Company; and the
redemption price or prices applicable to shares of said series
shall be $108.90 per share plus accrued and unpaid dividends to the
date of redemption if such date of redemption is prior to July 1,
1983; $106.68 per share plus accrued and unpaid dividends to the
date of redemption if such date of redemption is on or subsequent
to July 1, 1983, and prior to July 1, 1988; $104.45 per share plus
accrued and unpaid dividends to the date of redemption if such date
of redemption is on or subsequent to July 1, 1988, and prior to
July 1, 1993; and $102.23 per share plus accrued and unpaid
dividends to the date of redemption if such date of redemption is
on or subsequent to July 1, 1993; provided, that none of the shares
of said series may be redeemed by the Company prior to July 1,
1983, from the proceeds received through the incurring of debt, or
through the issuance of preferred stock ranking equally with or
prior to said series as to dividends or on liquidation, where such
debt has an effective interest cost or such preferred stock has an
effective dividend cost to the Company of less than the effective
dividend cost to the Company of said series.
(4) That the preferential amounts to which the holders of
shares of such series shall be entitled upon any liquidation,
dissolution or winding up of the Company, in addition to dividends
accumulated but unpaid thereon, shall be $100 per share, in the
event of any voluntary liquidation, dissolution or winding up of
the Company, except that if such voluntary liquidation, dissolution
or winding up of the Company shall have been approved by the vote
in favor thereof given at a meeting called for that purpose or by
the written consent of the holders of a majority of the total
shares of the $8.90 Cumulative Preferred Stock (without par value)
then outstanding, the amount so payable on such voluntary
liquidation, dissolution or winding up shall be $100 per share; or
$100 per share, in the event of any involuntary liquidation,
dissolution or winding up of the Company.
(5) That the shares or said series shall be subject to all
the terms, provisions and restrictions set forth in the Articles of
Incorporation (as amended) of the Company with respect to shares of
the Preferred Stock (without par value) of the Company and,
excepting only as to the rate of dividend per annum payable in
respect of the shares of said series, the redemption price or
prices applicable to the shares of said series, and the liquidation
price applicable to shares of said series, shall have the same
28
relative rights and preferences as, shall be of equal rank with,
and shall confer rights equal to those conferred by, all other
shares of the Preferred Stock (without par value) of the Company.
(6) That the stated value of the shares of said series
shall be $100 per share.
AND FURTHER RESOLVED: That prior to the issuance by the
Company of any shares of said $8.90 Cumulative Preferred Stock
(without par value), the Company shall execute and file in the
office of the Secretary of State of the State of Kentucky such
statement or certificate with respect to said shares as is required
by statutes of the State of Kentucky; and, after such filing of
said statement or certificate, the officers of the Company shall
cause the duplicate original thereof, when returned to the Company
by the Secretary of State, to be filed for record in the office of
the Clerk of the County Court of Jefferson County being the county
in which the registered office of the Company is situated.
__________________________
RESOLVED, By the Board of Directors of Louisville Gas and
Electric Company, a Kentucky corporation,
(1) That a series consisting of 250,000 shares of the
Preferred Stock (without par value) of the Company is hereby
created and established out of the authorized and unissued shares
of the Preferred Stock (without par value) of the Company; said
series, and each share thereof, shall be designated "$9.54
Cumulative Preferred Stock (without par value)"; and all of said
two hundred and fifty thousand (250,000) shares of said series are
hereby authorized to be issued by the Company;
(2) That the annual dividend payable in respect of each
share of said series shall be $9.54, the initial dividend in
respect of such share of said series shall be payable on January
15, 1980, when and as declared by the Board of Directors of this
Company, to holders of record on December 31, 1979, and will accrue
from the date of original issuance of said series; thereafter, such
dividends shall be payable on January 15, April 15, July 15, and
October 15 in each year (or the next business date thereafter in
each case), when and as declared by the Board of Directors of this
Company, for the quarter-yearly period ending on the last business
day of the preceding month;
(3) That the shares of said series shall be subject to
redemption, in whole at any time or in part from time to time, upon
the notice and in the manner and with the effect provided in the
Articles of Incorporation (as amended) of the Company; and the
redemption price or prices applicable to shares of said series
shall be $109.54 per share plus accrued and unpaid dividends to the
date of redemption if such date of redemption is prior to October
1, 1984; $107.16 per share plus accrued and unpaid dividends to the
29
date of redemption if such date of redemption is on or subsequent
to October 1, 1984, and prior to October 1, 1989; $104.77 per share
plus accrued and unpaid dividends to the date of redemption if such
date of redemption is on or subsequent to October 1, 1989, and
prior to October 1, 1994; and $102.39 per share plus accrued and
unpaid dividends to the date of redemption if such date of
redemption is on or subsequent to October 1, 1994; provided, that
none of the shares of said series may be redeemed by the Company
prior to October 1, 1984, from the proceeds received through the
incurring of debt, or through the issuance of preferred stock
ranking equally with or prior to said series as to dividends or on
liquidation, where such debt has an effective interest cost or such
preferred stock has an effective dividend cost to the Company of
less than the effective dividend cost to the Company of said
series.
(4) That the preferential amounts to which the holders of
shares of such series shall be entitled upon any liquidation,
dissolution or winding up of the Company, in addition to dividends
accumulated but unpaid thereon, shall be $100 per share, in the
event of any voluntary liquidation, dissolution or winding up of
the Company, except that if such voluntary liquidation, dissolution
or winding up of the Company shall have been approved by the vote
in favor thereof given at a meeting called for that purpose or by
the written consent of the holders of a majority of the total
shares of the $9.54 Cumulative Preferred Stock (without par value)
then outstanding, the amount so payable on such voluntary
liquidation, dissolution or winding up shall be $100 per share; or
$100 per share, in the event of any involuntary liquidation,
dissolution or winding up of the Company.
(5) That the shares of said series shall be subject to all
the terms, provisions and restrictions set forth in the Articles of
Incorporation (as amended) of the Company with respect to shares of
the Preferred Stock (without par value) of the Company and,
excepting only as to the rate of dividend per annum payable in
respect of the shares of said series, the redemption price or
prices applicable to the shares of said series, and the liquidation
price applicable to shares of said series, shall have the same
relative rights and preferences as, shall be of equal rank with,
and shall confer rights equal to those conferred by, all other
shares of the Preferred Stock (without par value) of the Company.
(6) That the stated value of the shares of said series
shall be $100 per share.
AND FURTHER RESOLVED: That prior to the issuance by the
Company of any shares of said $9.54 Cumulative Preferred Stock
(without par value), the Company shall execute and file in the
office of the Secretary of State of the State of Kentucky such
statement or certificate with respect to said shares as is required
by statutes of the State of Kentucky; and, after such filing of
30
said statement or certificate, the officers of the Company shall
cause the duplicate original thereof, when returned to the Company
by the Secretary of State, to be filed for record in the office of
the Clerk of the County Court of Jefferson County being the county
in which the registered office of the Company is situated.
STATE OF KENTUCKY
COUNTY OF JEFFERSON
I, C.M. HAYS, a notary public, do hereby certify that on this
7th day of October, 1987, personally appeared before me R. L. Royer
and W. W. Hancock, Jr., who, being by me first duly sworn,
severally declared and acknowledged before me that they are
President and Secretary, respectively, of Louisville Gas and
Electric Company, that they signed foregoing document as President
and Secretary, respectively, of the Corporation and that the
statements therein contained are true.
My Commission Expires: September 20, 1988
C. M. HAYS
Notary Public
This instrument prepared by:
______________________________
Charles G. Middleton, III
MIDDLETON & REUTLINGER
2500 Brown & Williamson Tower
Louisville, Kentucky 40242
(502) 584-1135
IN WITNESS WHEREOF, Louisville Gas and Electric Company has
caused these Restated Articles of Incorporation to be duly executed
by its President and its Secretary this 7th day of October 1987.
LOUISVILLE GAS AND ELECTRIC COMPANY
By: R. L. ROYER
President
By: W. W. HANCOCK, JR.
Secretary
31
ARTICLES OF AMENDMENT TO
THE RESTATED ARTICLES OF INCORPORATION OF
LOUISVILLE GAS AND ELECTRIC COMPANY
Pursuant to the provisions of Kentucky Revised Statutes
271B.10-060, et seq., the undersigned Corporation adopts the
following Articles of Amendment to its Restated Articles of
Incorporation:
1. The name of the Corporation is Louisville Gas and
Electric Corporation.
2. The following Amendment to the Restated Articles of
Incorporation of Louisville Gas and Electric Company was
recommended by the Board of Directors and adopted at its Annual
Meeting of Shareholders on May 9, 1989 by its shareholders in the
manner prescribed by the Kentucky Business Corporation Act:
The Restated Articles of Incorporation of Louisville Gas and
Electric Company shall be amended by adding the following as
Article Eleventh and Twelfth:
ELEVENTH. A director of the Company shall not be
personally liable to the Company or its stockholders for
monetary damages for breach of his duties as a director,
except for liability (i) for any transaction in which the
director's personal financial interest is in conflict
with the financial interests of the Company or its
stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or are
known to the director to be a violation of law, (iii)
under Kentucky Revised Statutes 271B.8-330, or (iv) for
any transaction from which the director derived any
improper personal benefit. If the Kentucky Business
Corporation Act is amended after approval by the
stockholders of this Article to authorize corporate
action further eliminating or limiting the personal
liability of directors, then the liability of a director
of the Company shall be eliminated or limited to the
fullest extent permitted by the Kentucky Business
Corporation Act, as so amended.
Any repeal or modification of the foregoing
1
paragraph by the stockholders of the Company shall not
adversely affect any right or protection of a director of the
Company existing at the time of such repeal or modification.
TWELFTH. A. RIGHT TO INDEMNIFICATION. Each person who was or is a
director of the Company and who was or is made a party or is
threatened to be made a party to or is otherwise involved
(including, without limitation, as a witness) in any action, suit
or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact
that he or she is or was a director or officer of the Company or is
or was serving at the request of the Company as a director,
officer, partner, trustee, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan
(hereinafter an "Indemnified Director"), whether the basis of such
proceeding is alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or
officer, shall be indemnified and held harmless by the Company to
the fullest extent permitted by the Kentucky Business Corporation
Act, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than
such law permitted the Company to provide prior to such amendment),
against all liability, all reasonable expense and all loss
(including, without limitation, judgments, fines, reasonable
attorneys' fees, ERISA excise taxes or penalties and amounts paid
in settlement) incurred or suffered by such Indemnified Director in
connection therewith and such indemnification shall continue as to
an Indemnified Director who has ceased to be a director and shall
inure to the benefit of the Indemnified Director's heirs, executors
and administrators. Each person who was or is an officer of the
Company and not a director of the Company and who was or is made a
party or is threatened to be made a party to or is otherwise
involved (including, without limitation, as a witness) in any
proceeding, by reason of the fact that he or she is or was an
officer of the Company or is or was serving at the request of the
Company as a director, officer, partner, trustee, employee or agent
of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee
benefit plan (hereinafter an "Indemnified Officer"), whether the
basis of such proceeding is alleged action in an official capacity
as an officer or in any other capacity while serving as an officer,
shall be indemnified and held harmless by the Company against all
liability, all reasonable expense and all loss (including, without
limitation, judgments, fines, reasonable attorneys' fees, ERISA
excise taxes or penalties and amounts paid in settlement) incurred
or suffered by such Indemnified Officer to the same extent and
under the same conditions that the Company must indemnify an
Indemnified Director pursuant to the immediately preceding sentence
and to such further extent as is not contrary to public policy and
2
such indemnification shall continue as to an Indemnified Officer
who has ceased to be an officer and shall inure to the benefit of
the Indemnified Officer's heirs, executors and administrators.
Notwithstanding the foregoing and except as provided in Paragraph
B of this Article Twelfth with respect to proceedings to enforce
rights to indemnification, the Company shall indemnify any
Indemnified Director or Indemnified Officer in connection with a
proceeding (or part thereof) initiated by such Indemnified Director
or Indemnified Officer only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Company. As
hereinafter used in this Article Twelfth, the term "indemnitee"
means any Indemnified Director or Indemnified Officer. Any person
who is or was a director or officer of a subsidiary of the Company
shall be deemed to be serving in such capacity at the request of
the Company for purposes of this Article Twelfth. The right to
indemnification conferred in this Article shall include the right
to be paid by the Company the expenses incurred in defending any
such proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"); provided, however, that, if the
Kentucky Business Corporation Act requires, an advancement of
expenses incurred by an indemnitee who at the time of receiving
such advance is a director of the Company shall be made only upon:
(i) delivery to the Company of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal
(hereinafter, a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Article or
otherwise; (ii) delivery to the Company of a written affirmation of
the indemnitee's good faith belief that he or she has met the
standard of conduct that makes indemnification by the Company
permissible under the Kentucky Business Corporation Act; and (iii)
determination that the facts then known to those making the
determination would not preclude indemnification under the Kentucky
Business Corporation Act. The right to indemnification and
advancement of expenses conferred in this Paragraph A shall be a
contract right.
B. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
Paragraph A of this Article Twelfth is not paid in full by the
Company within sixty days after a written claim has been received
by the Company (except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty
days), the indemnitee may at any time thereafter bring suit against
the Company to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit
brought by the Company to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee also shall
be entitled to be paid the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right
to indemnification hereunder (other than a suit to enforce a right
to an advancement of expenses brought by an indemnitee who will not
3
be a director of the Company at the time such advance is made) it
shall be a defense that, and in (ii) any suit by the Company to
recover an advancement of expenses pursuant to the terms of an
undertaking the Company shall be entitled to recover such expenses
upon a final adjudication that, the indemnitee has not met the
standard that makes it permissible hereunder or under the Kentucky
Business Corporation Act (the "applicable standard") for the
Company to indemnify the indemnitee for the amount claimed. Neither
the failure of the Company (including its Board of Directors, a
committee of the Board of Directors, independent legal counsel or
its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the
applicable standard, nor an actual determination by the Company
(including its Board of Directors, a committee of the Board of
Directors, independent legal counsel or its stockholders) that the
indemnitee has not met the applicable standard, shall create a
presumption that the indemnitee has not met the applicable standard
or, in the case of such a suit brought by the indemnitee, shall be
a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses
hereunder, or by the Company to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that
the indemnitee is not entitled to be indemnified or to such
advancement of expenses under this Article Twelfth or otherwise
shall be on the Company.
C. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification
and to the advancement of expenses conferred in this Article
Twelfth shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, these Articles of
Incorporation, any By-Law, any agreement, any vote of stockholders
or disinterested directors or otherwise.
D. INSURANCE. The Company may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Company or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability
or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under
the Kentucky Business Corporation Act.
E. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Company
may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement
of expenses to any employee or agent of the Company and to any
person serving at the request of the Company as an agent or
employee of another corporation or of a joint venture, trust or
other enterprise to the fullest extent of the provisions of this
Article Twelfth with respect to the indemnification and advancement
of expenses of either directors or officers of the Company.
4
F. REPEAL OR MODIFICATION. Any repeal or modification of any
provision of this Article Twelfth shall not adversely affect any
rights to indemnification and to advancement of expenses that any
person may have at the time of such repeal or modification with
respect to any acts or omissions occurring prior to such repeal or
modification.
G. SEVERABILITY. In case any one or more of the provisions
of this Article Twelfth, or any application thereof, shall be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions in this
Article Twelfth, and any other application thereof, shall not in
any way be affected or impaired thereby.
3. The only voting group entitled to vote on the foregoing
amendment was owners of record on March 24, 1989 of the
Corporation's Common Stock (without par value) and Preferred Stock
($25 par value), voting together as one class.
4. The designation, number of outstanding shares, number of
votes entitled to be cast by the voting group entitled to vote on
the amendments and number of votes of the voting group indisputably
represented at the meeting were as follows:
Number of votes
Designation Number of Number of indisputably
(voting together outstanding votes represented at
as one class) shares entitled to the meeting
be cast
Common Stock
(without par
value) and
Preferred Stock
($25 par value) 22,442,261 22,442,261 19,098,496
5. The total number of votes cast for the amendment, against
the amendment and abstaining regarding the amendment by the voting
group entitled to vote on the amendment was as follows: 17,726,543
votes for, 960,522 votes against and 411,431 votes abstaining.
Therefore, the amendment passed by a favorable vote of 78.9%.
5
IN TESTIMONY WHEREOF, witness the signatures of the duly
qualified officers of Louisville Gas and Electric Company this 25th
day of May 1989.
LOUISVILLE GAS AND ELECTRIC COMPANY
By:________________________________
R. L. Royer
President
By:________________________________
W. W. Hancock, Jr.
Secretary
STATE OF KENTUCKY
COUNTY OF JEFFERSON
I, C.M. HAYS, a notary public, do hereby certify that on this
25th day of May, 1989, personally appeared before me R. L. Royer
and W. W. Hancock, Jr., who, being by me first duly sworn,
severally declared and acknowledged before me that they are
President and Secretary, respectively, of Louisville Gas and
Electric Company, that they signed foregoing document as President
and Secretary, respectively, of the Corporation and that the
statements therein contained are true.
My Commission Expires: September 20, 1988
C. M. HAYS
Notary Public
This instrument prepared by:
______________________________
Charles G. Middleton, III
MIDDLETON & REUTLINGER
2500 Brown & Williamson Tower
Louisville, Kentucky 40242
(502) 584-1135
6
ARTICLE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
LOUISVILLE GAS AND ELECTRIC COMPANY
To the Secretary of State of Kentucky:
Pursuant to the provisions of Chapter 271B of the Kentucky
Revised Statutes, the undersigned corporation hereby amends its
Articles of Incorporation, and for that purpose, submits the
following statement:
1. The name of the corporation is Louisville Gas and
Electric Company.
2. On February 5, 1992, the Board of Directors, acting on
behalf of the corporation, duly adopted the Amendment to
the Company's Articles of Incorporation attached hereto
as Exhibit A.
3. If not contained in the Amendment itself, the manner in
which any exchange, reclassification, or cancellation of
issued shares provided for in the Amendment shall be
implemented as follows:
Not Applicable
4. The Amendment is to be effective upon the filing of these
articles by the Secretary of State.
5. The amendment was duly adopted by the Board of Directors
without shareholder approval pursuant to 271B.10-020 and
271B.6-020 of the Kentucky Revised Statutes, and
shareholder action was not required.
Dated: February 5, 1992 LOUISVILLE GAS AND ELECTRIC COMPANY
Charles A. Markel, III
Senior Vice President and
Chief Financial Officer
7
EXHIBIT A
AMENDMENT
The Restated Articles of Incorporation are hereby amended by
adding thereto a new Article Thirteenth which shall read in its
entirety as follows:
THIRTEENTH. A. Terms of Preferred Stock, Auction Series A (without
par value). The Company has classified 500,000 shares of the
Preferred Stock (without par value) as a series of such Preferred
Stock designated as "Preferred Stock, Auction Series A (without
par value)." The preferences, rights, qualifications and
restrictions of the shares of the "Preferred Stock, Auction Series
A (without par value)" shall be as follows:
(1) Authorized Shares: Units.
The shares of Preferred Stock, Auction Series A (without par
value) (hereinafter referred to as the "Series A Stock") shall be
purchased, sold, transferred and redeemed only in Units of 1,000
shares per unit (a "Unit"), except as provided in subsection (d)
of Section (5).
(2) Dividends.
(a) The Holders shall be entitled to receive, when and as
declared by the Board of Directors of the Company, out
of funds legally available therefor, cumulative cash
dividends at the dividend rate per annum, determined as,
and payable on the respective dates, set forth below.
(b) The dividend rate on shares of Series A Stock shall be
3.30% per annum during the period (the "Initial Dividend
Period") from February 11, 1992 (the "Date of Original
Issue") and ending on April 14, 1992 and shall be
payable on April 15, 1992 (the "Initial Dividend Payment
Date"). Subsequent dividends shall be equal to the rate
per annum that results from implementation of the
Auction Procedures, except in the case of a Payment
Failure. Notwithstanding the results of any Auction,
however, and subject to subsection (1) of this Section
(2), the dividend rate on the Series A Stock will not
exceed 25% per annum for any Dividend Period (as
hereinafter defined). Dividends on shares of Series A
Stock shall accrue from February 11, 1992.
(c) As of the end of the Initial Dividend Period and any
subsequent Dividend Period, the Board of Directors of
the Company may designate either (i) a Dividend Period
of three months which shall commence on the day imme-
1
diately following the last day of the preceding Dividend
Period and shall end on the fourteenth day of January,
April, July or October next succeeding (a "Quarterly
Period") or (ii) a Dividend Period of either 49 days or
13 weeks (in either case, subject to adjustment for non-
Business Days and to meet the Minimum Holding Period, as
provided in subsection (g) of this Section (2)) (a
"Short-Term Period"). (The Initial Dividend Period, each
subsequent Quarterly Period and any Short-Term Period,
individually, is referred to herein as a "Dividend
Period".) If and when the Board of Directors designates
a Short-Term Period, each subsequent Dividend Period
shall be a Short-Term Period. In the event of a change
in law altering the minimum holding period (currently
found in Section 246(c) of the Internal Revenue Code of
1986, as amended (the "code")) (the "Minimum Holding
Period") required for taxpayers to be entitled to the
Dividends-Received Deduction, the length of each Short-
Term Period commencing after the effective date of such
change in law shall be adjusted so that the number of
days in such Short-Term Periods shall exceed the then-
current Minimum Holding Period; provided that, (i) the
Short-Term Period that originally was a 49-day Short-
Term Period shall not exceed by more than nine days the
length of the then-current Minimum Holding Period, (ii)
the number of days in any Short Term Period shall be
evenly divisible by seven, and (iii) the maximum number
of days in any Short-Term Period shall in no event
exceed 98 days. Upon any such change in the number of
days in a Short-Term Period, the Company shall give
notice of such change to the Trust Company, the
Securities Depository and each Existing Holder.
Notwithstanding the provisions of this subsection (c),
designation of a Short-Term Period shall be permitted
only after such amendments to these Articles as are
necessary to accommodate the payment of dividends for a
Short-Term Period have been duly adopted.
(d) The initial Short-Term Period shall end on a Wednesday
designated by the Board of Directors of the Company
which will be no earlier than the 46th day and no later
than the 98th day after the last day of the preceding
Quarterly Period (in any case, subject to adjustment for
non-Business Days and to meet the Minimum Holding
Period, as provided in subsection (g) of this Section
(2)). Each subsequent Short-Term Period will commence on
the day immediately following the last day of the
preceding Short-Term Period and will end (i) on the
seventh Wednesday thereafter, in the case of a 49-day
Short-Term Period or (ii) on the thirteenth Wednesday
thereafter, in the case of a 13-week Short-Term Period
(in each case, subject to adjustment for non-Business
2
Days and to meet the Minimum Holding Period as provided
in subsection (g) of this Section (2)). In the absence
of a designation by the Board of Directors of the
Company to the contrary, each 49-day Short-Term Period
will be followed by a 49-day Short-Term Period and each
13-week Short Term Period will be followed by a 13-week
Short-Term Period.
(e) Following any amendment of these Articles to permit
dividend payments on a basis other than quarterly, and
without regard to the designation by the Board of
Directors of the Company of the duration of the next
succeeding Dividend Period, (i) if Sufficient Clearing
Bids do not result from an Auction, then the Dividend
Period to which such Auction relates will be a 49-day
Short-Term Period or (ii) if a Payment Failure has
occurred, then the Dividend Period during which such
Payment Failure has occurred, and each subsequent
Dividend Period until such Payment Failure has been
cured, will be a 49-day Short-Term Period (in each case,
subject to adjustment for non-Business Days and to meet
the Minimum Holding Period, as described in subsection
(g) of this Section (2)).
(f) Dividends with respect to any Quarterly Period will be
payable in arrears, when and as declared, on the
fifteenth day of each January, April, July and October,
unless such day is not a Business Day, in which case
they shall be payable on the next succeeding Business
Day (each a "Quarterly Dividend Payment Date").
Dividends with respect to any Short-Term Period shall be
payable in arrears, when and as declared, on the
Thursday next following the last day of the Short-Term
Period (a "Short-Term Dividend Payment Date"), except as
provided in subsection (g) of this Section (2). (Each
Quarterly Dividend Payment Date and Short-Term Dividend
Payment Date, individually, is referred to herein as a
"Dividend Payment Date.")
(g) Notwithstanding the provisions of subsections (c), (d),
(e) and (f), with respect to the Short-Term Dividend
Payment Date:
1. If the Thursday is not a Business Day, then the
Short-Term Dividend Payment Date shall be the
preceding Tuesday if both such Tuesday and the
Wednesday following such Tuesday are Business Days;
or
2. If the Friday following such Thursday is not a
Business Day, then the Short-Term Dividend Payment
Date will be the Wednesday preceding such Thursday
3
if both such Wednesday and such Thursday are
Business Days; or
3. If either (a) such Thursday is not a Business Day
and either the preceding Tuesday or Wednesday is
not a Business Day or (b) such Thursday is a
Business Day and the Friday following such Thursday
and such preceding Wednesday are not Business Days,
then the Short-Term Dividend Payment Date shall be
the first Business Day preceding such Thursday that
is next succeeded by a Business Day.
Even though any particular Short-Term Dividend Payment
Date may not occur on the originally scheduled Short-Term
Dividend Payment Date because of the adjustments provided
for in this subsection (g), the next succeeding Short-
Term Dividend Payment Date shall occur, subject to such
adjustments, on the seventh or the thirteenth Thursday,
as applicable, following the originally scheduled Short-
Term Dividend Payment Date. Notwithstanding the
foregoing, if any Short-Term Dividend Payment Date set
pursuant to this subsection (g) would occur in a number
of days after the immediately preceding Short-Term
Dividend Payment Date that is less than the number of
days in the then-current Minimum Holding Period, the
Short-Term Dividend Payment Date shall instead be the
next Business Day that (i) is at least a number of days
after the preceding Dividend Payment Date as to include
the then-current Minimum Holding Period and (ii) is next
succeeded by a Business Day. After any such adjustment
pursuant to this subsection (g) to the Dividend Payment
Date for any Short-Term Period, the last day of such
Short-Term Period shall also be adjusted so as to be the
day immediately preceding such Dividend Payment Date.
(h) Any designation by the Board of Directors of a Short Term
Period following a Quarterly Period shall be effective
upon written notice thereof given by the Company to the
Trust Company and to the Securities Depository prior to
1:00 P.M., New York City time, on the fifth Business Day
prior to the Auction Date. Any designation by the Board
of Directors of a change in the duration of the Short-
Term Period shall be effective upon written notice
thereof given by the Company to the Trust Company and to
the Securities Depository prior to 1:00 P.M., New York
City time, on the third Business Day prior to the Auction
Date.
(i) Dividends shall be payable to the Holders as their names
appear on the stock books of the Company or of the
registrar of the Series A Stock on the Business Day next
preceding the Dividend Payment Date in the case of a
4
Short-Term Period and on such date, not more than 30 days
and not less than 10 days, as may be fixed by the Board
of Directors, next preceding the Dividend Payment Date in
the case of a Quarterly Period; provided that, if a
Payment Failure exists, then such dividends shall be paid
to the Holders as their names appear on the stock books
on such date, not exceeding 15 days preceding the payment
date thereof, as may be fixed by the Board of Directors.
(j) Dividend rates for the shares of Series A Stock for each
Dividend Period (other than the Initial Dividend Period)
shall be equal to the rate per annum that results from
the Auction with respect to such Dividend Period;
provided that, (i) if a Payment Failure shall have
occurred, the dividend rate for all Dividend Periods
commencing on or after such Dividend Payment Date or
redemption date and until such Payment Failure has been
cured shall be a rate per annum equal to 250% of the
Applicable AA Composite Commercial Paper Rate on the
Business Day next preceding the commencement-of each such
Dividend Period (notwithstanding the results of any
Auction for any such Dividend Period); and (ii) if a
Payment Failure is remedied by reason of the Company
having paid all dividends accrued and unpaid, and all
unpaid redemption payments, on all shares of Series A
Stock, the dividend rate for each Dividend Period
commencing after the date on which the Payment Failure is
remedied shall again be determined by an Auction.
Notwithstanding the foregoing, and subject to subsection
(1) of this Section (2), the dividend rate for any
Dividend Period shall not exceed 25% per annum. The rate
per annum at which dividends are payable on shares of
Series A Stock for any Dividend Period (other than the
Initial Dividend Period) is hereinafter referred to as
the "Applicable Rate."
(k) The dividend per share to accrue and be payable on each
share of Series A Stock for the Initial Dividend Period
shall be computed by multiplying the product of 3.30%
(the dividend rate for the Initial Dividend Period) and
$100 by a fraction, the numerator of which shall be the
number of days in the Initial Dividend Period, including
the first and last days of such Initial Dividend Period,
and the denominator of which shall be 360. The dividend
per share to accrue and be payable on each share of
Series A Stock for each Quarterly Period shall be
computed by dividing by four the product of the
Applicable Rate for such Dividend Period and $100. The
dividend per share to accrue and be payable on each share
of Series A Stock for any Short-Term Period shall be
computed by multiplying the Applicable Rate for such
Short-Term Period by a fraction, the numerator of which
5
shall be the number of days in such Short-Term Period,
including the first and last days of such Dividend
Period, and the denominator of which shall be 360, and
multiplying by $100 the rate so obtained.
(l) Notwithstanding anything to the contrary contained in
subarticle A of this Article Thirteenth, the dividend
rate for any Dividend Period on the Series A Stock shall
not exceed 25% per annum; provided, however, that if
paragraph (7)(B)(b) of Article Fourth hereof is amended
to provide a method for computing the dividend rate on
preferred stock having dividends determined pursuant to
an adjustable, floating or variable rate, then from and
after the date such amendment becomes effective, this
subsection (l), including the 25% restriction contained
in this subsection (l), shall cease to be operative, and
shall be of no force and effect and all references to
this subsection (l) in subarticle A of this Article
Thirteenth shall be of no force and effect.
(3) Definitions.
As used with respect to the shares of Series A Stock, the
following terms shall have the following meanings, unless the
context otherwise requires:
"Affiliate" shall mean any Person known to the Trust
Company to be controlled by, in control of or under
common control with the Company.
"Agent Member" shall mean a member of the Securities
Depository that will act on behalf of a Bidder and is
identified as such in such Bidder's Master Purchaser's
Letter.
"Applicable AA Composite Commercial Paper Rate," on any date,
shall mean (i) with respect to a 49-day Short-Term Period, (A)
the Interest Equivalent of the 60-day rate on commercial paper
placed on behalf of issuers whose corporate bonds are rated
"AA" by Standard & Poor's Corporation or its successor
("S&P"), or the equivalent of such rating by S&P or another
rating agency, as such 60-day rate is made available on a
discount basis or otherwise by the Federal Reserve Bank of New
York for the Business Day immediately preceding such date, or
(B) in the event that the Federal Reserve Bank of New York
does not make available such a rate, then the arithmetic
average of the Interest Equivalent of the 60-day rate on
commercial paper placed on behalf of such issuers, and as
quoted, on a discount basis or otherwise, to the Trust Company
for the close of business on the Business Day immediately
preceding such date by the Commercial Paper Dealers or (ii)
with respect to a Quarterly Period or a 13-week Short-Term
6
Period, the Interest Equivalent of the 90-day rate on such
commercial paper as so determined. In the event that either of
the Commercial Paper Dealers does not quote a rate required to
determine the Applicable AA Composite Commercial Paper Rate,
the Applicable AA Composite Commercial Paper Rate shall be
determined on the basis of the quotations furnished by the
remaining Commercial Paper Dealer and the Substitute
Commercial Paper Dealer selected by the Company to provide
such rate or, if the Company does not select any such
Substitute Commercial Paper Dealer, the remaining Commercial
Paper Dealer. If an adjustment is made to the length of a
Short-Term Period to comply with the Minimum Holding Period
pursuant to subsection (c) of Section (2), then if the
resulting number of days in each subsequent Short-Term Period,
before any adjustment shall be (i) 70 or more days but fewer
than 85 days, such rate shall be the arithmetic average of the
Interest Equivalent of the 60-day and 90-day rates on such
commercial paper, or (ii) 85 or more days but 98 or fewer
days, such rate shall be the Interest Equivalent of the 90-day
rate on such commercial paper.
"Applicable Rate" shall have the meaning specified in Section
(2), subsection (j).
"Auction" shall mean periodic implementation of the Auction
Procedures set forth herein.
"Auction Date" shall mean the Business Day immediately
preceding a Dividend Payment Date.
"Auction Procedures" shall mean the procedures for conducting
Auctions set forth in Section (4).
"Available Units" shall have the meaning specified in Section
(4), subsection (c), paragraph 1, subparagraph a.
"Bid" and "Bids" shall have the respective meanings specified
in Section (4), subsection (a), paragraph 1, subparagraph c.
"Bidder" and "Bidders" shall have the respective meanings
specified in Section (4), subsection (a), paragraph 1,
subparagraph c.
"Board of Directors" shall mean the Board of Directors of the
Company or any committee authorized by the Board of Directors
to perform any or all of the duties of the Board with respect
to the Series A Stock.
"Broker-Dealer" shall mean any broker-dealer or other entity
permitted by law to perform the functions required of a
Broker-Dealer in Sections (4) and (5), that is a member of, or
a participant in, the Securities Depository and that has been
7
selected by the Company and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
"Broker-Dealer Agreement" shall mean an agreement between the
Trust Company and a Broker-Dealer pursuant to which such
Broker-Dealer agrees to follow the procedures specified in
Sections (4) and (5).
"Business Day" shall mean a day on which the New York Stock
Exchange, Inc. is open for trading and which is not a day on
which banks in New York City are authorized by law to close.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commercial Paper Dealers" shall mean Goldman, Sachs & Co. and
Morgan Stanley & Co. Incorporated or, in lieu thereof, their
respective affiliates or successors that are engaged in the
business of buying and selling commercial paper.
"Date of Original Issue" shall have the meaning specified in
Section (2), subsection (b).
"Dividend Payment Date" shall have the meaning specified in
Section (2), subsection (f).
"Dividend Period" shall have the meaning specified in Section
(2), subsection (c).
"Dividends-Received Deduction" shall mean the dividends-
received deduction on preferred stock held by nonaffiliate
corporations (currently found in Section 243(a) of the Code).
"Existing Holder" shall mean a Person who has executed a
Master Purchaser's Letter and who is listed as the beneficial
owner of shares of Series A Stock in the records of the Trust
Company.
"Hold Order" and "Hold Orders" shall have the respective
meanings specified in Section (4), subsection (a), paragraph
1, subparagraph c.
"Holders" shall mean the holders of shares of the Series A
Stock as the same appear on the stock books of the Company or
the registrar of the Series A Stock.
"Initial Dividend Payment Date" shall have the meaning
specified in Section (2), subsection (b).
"Initial Dividend Period" shall have the meaning specified in
Section (2), subsection (b).
8
"Interest Equivalent" shall mean the equivalent yield on a
360-day basis of a discount basis security to an interest-
bearing security.
"Master Purchaser's Letter" shall mean a letter addressed to
the Company, the Trust Company, the re-marketing agent, a
Broker-Dealer and an Agent Member in which the executing
Person agrees, among other things, to offer to purchase, to
purchase, to offer to sell and to sell shares of Series A
Stock as set forth in Section (4).
"Maximum Rate" for any Auction shall mean, subject to
subsection (1) of Section (2), the product of the Applicable
AA Composite Commercial Paper Rate on the Auction Date for
such Auction and the Rate Multiple.
"Minimum Holding Period" shall have the meaning specified in
Section (2), subsection (c).
"Minimum Rate" for any Auction shall mean, subject to
subsection (1) of Section (2), 58% of the Applicable AA
Composite Commercial Paper Rate on the Auction Date for such
Auction.
"Order" and "Orders" shall have the respective meanings
specified in Section (4), subsection (a), paragraph 1,
subparagraph c.
"Outstanding Shares" shall mean, as of any date, shares of
Series A Stock theretofore issued by the Company except,
without duplication, (i) any shares theretofore cancelled or
delivered to the Trust Company for cancellation or redeemed or
deemed to have been redeemed by the Company, (ii) any shares
as to which the Company or any Affiliate thereof shall be an
Existing Holder, and (iii) any shares represented by any
certificate in lieu of which a new certificate has been
executed and delivered by the Company.
"Outstanding Units" shall mean Units comprised of Outstanding
Shares.
"Payment Failure" shall mean a failure by the Company to pay
to the Holders on or within three Business Days (i) after any
Dividend Payment Date, the full amount of any dividends to be
paid on such Dividend Payment Date on any share of the Series
A Stock or (ii) after any redemption date, the redemption
price to be paid on that redemption date on any share of the
Series A Stock with respect to which a notice of redemption
has been given.
"Person" shall mean an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint
9
venture or other entity or a government or any agency or
political subdivision thereof.
"Potential Holder" shall mean any Person, including any
Existing Holder, (i) who shall have executed a Master
Purchaser's Letter and (ii) who may be a prospective purchaser
of Units (or, in the case of an Existing Holder, additional
Units).
"Quarterly Dividend Payment Date" shall have the meaning
specified in Section (2), subsection (f).
"Quarterly Period" shall have the meaning specified in Section
(2), subsection (c).
"Rate Multiple," on any Auction Date, shall mean the
percentage determined as set forth below based on the
Prevailing Rating (as defined below) of the Series A Stock in
effect at the close of business on the Business Day
immediately preceding such Auction Date:
Prevailing Rating Percentage
AA/aa or above........................110%
A/a...................................150%
BBB/baa...............................200%
Below BBB/baa.........................250%
For purposes of this definition, the "Prevailing Rating" of
the Series A Stock shall be (i) AA/aa or above, if the Series
A Stock has a rating of AA- or better by S&P and a rating of
aa3 or better by Moody's Investors Service, Inc. or its
successor ("Moody's"), or the equivalent of both of such
ratings by a substitute rating agency or substitute rating
agencies selected as provided below, (ii) if not AA/aa or
above, then A/a, if the Series A Stock has a rating of A- or
better by S&P and a rating of a3 or better by Moody's, or the
equivalent of both of such ratings by a substitute rating
agency or substitute rating agencies selected as provided
below, (iii) if not AA/aa or above or A/a, then BBB/baa, if
the Series A Stock has a rating of BBB- or better by S&P and
a rating of baa3 or better by Moody's, or the equivalent of
both of such ratings by a substitute rating agency or substi-
tute rating agencies selected as provided below, and (iv) if
not AA/aa or above, A/a or BBB/baa, then Below BBB/baa. If
both S&P and Moody's fail to make such a rating available,
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated, or
their successors and assigns, will select one or two
nationally recognized securities rating agencies to act as a
10
substitute rating agency or agencies. The Company will take
all reasonable action necessary to enable S&P and Moody's, or
such substitute rating agency or agencies, to provide a rating
for the Series A Stock.
"Remaining Units" shall have the meaning specified in Section
(4), subsection (d), paragraph 1, subparagraph d.
"Securities Depository" shall mean The Depository Trust
Company and its successors and assigns or any other securities
depository selected by the Company which agrees to follow the
procedures required to be followed by such securities
depository in connection with shares of the Series A Stock.
"Sell Order" and "Sell Orders" shall have the respective
meanings specified in Section (4), subsection (a), paragraph
1, subparagraph c.
"Short-Term Dividend Payment Date" shall have the meaning
specified in Section (2), subsection (f).
"Short-Term Period" shall have the meaning specified in
Section (2), subsection (c).
"Submission Deadline" shall mean 1:00 P.M., New York City
time, on any Auction Date or such other time on any Auction
Date by which Broker-Dealers are required to submit Orders to
the Trust Company as specified by the Trust Company from time
to time.
"Submitted Bid" and "Submitted Bids" shall have the respective
meanings specified in Section (4), subsection (c), paragraph
1.
"Submitted Hold Order" and "Submitted Hold Orders" shall have
the respective meanings specified in Section (4), subsection
(c), paragraph 1.
"Submitted Order" shall have the meaning specified in Section
(4), subsection (c), paragraph 1.
"Submitted Sell Order" and "Submitted Sell Orders" shall have
the respective meanings specified in Section (4), subsection
(c), paragraph 1.
"Substitute Commercial Paper Dealer" shall mean any commercial
paper dealer that is a leading dealer in the commercial paper
market.
"Sufficient Clearing Bids" shall have the meaning specified in
Section (4), subsection (c), paragraph 1, subparagraph b.
11
"Trust Company" shall mean a bank or trust company duly
appointed as such with respect to the shares of the Series A
Stock.
"Unit" shall have the meaning specified in Section (1).
"Winning Bid Rate" shall have the meaning specified in Section
(4), subsection (c), paragraph 1, subparagraph c.
(4) Auction Procedures.
(a) Orders by Existing Holders and Potential Holders.
1. Prior to the Submission Deadline on each Auction Date:
a. Each Existing Holder may submit to a Broker-Dealer
by telephone information as to:
(i) the number of Outstanding Units, if any,
held by such Existing Holder that such
Existing Holder desires to continue to hold
for the next succeeding Dividend Period
without regard to the rate determined by the
Auction Procedures;
(ii) the number of Outstanding Units, if any,
that such Existing Holder desires to
continue to hold for the next succeeding
Dividend Period, if the rate determined by
the Auction Procedures shall not be less
than the rate per annum specified by such
Existing Holder; and/or
(iii) the number of Outstanding Units, if any,
held by such Existing Holder that such
Existing Holder offers to sell without
regard to the rate determined by the Auction
Procedures for the next succeeding Dividend
Period; and
b. Each Broker-Dealer, using a list of Potential
Holders, in good faith for the purpose of
conducting a competitive Auction in a commercially
reasonable manner, shall contact Potential Holders,
including Persons that are not Existing Holders, on
such list to determine the number of Outstanding
Units, if any, that each such Potential Holder
offers to purchase, if the rate determined by the
Auction Procedures for the next succeeding Dividend
Period shall not be less than the rate per annum
specified by such Potential Holder.
12
c. For the purposes hereof, the communication to a
Broker-Dealer of information referred to in
subparagraph a or subparagraph b of this paragraph
1 is referred to hereinafter as an "Order" and
collectively as "Orders," and each Existing Holder
and each Potential Holder placing an Order is
referred to hereinafter as a "Bidder" and
collectively as "Bidders;" an Order containing the
information referred to in clause (i) of
subparagraph a of this paragraph 1 is referred to
hereinafter as a "Hold Order" and collectively as
"Hold Orders;" an Order containing the information
referred to in clause (ii) of subparagraph a or
subparagraph b of this paragraph 1 is referred to
hereinafter as a "Bid" and collectively as "Bids;"
and an Order containing the information referred
to in clause (iii) of subparagraph a of this
paragraph 1 is referred to hereinafter as a "Sell
Order" and collectively as "Sell Orders."
d. On any Auction Date, a Bid submitted by an Existing
Holder shall constitute an irrevocable offer to
sell:
(i) the number of Outstanding Units specified in
such Bid if the rate determined by the
Auction Procedures on such Auction Date
shall be less than the rate specified in
such Bid; or
(ii) such number or a lesser number of
Outstanding Units to be determined as set
forth in subsection (d), paragraph 1,
subparagraph d, of this Section (4), if the
rate determined by the Auction Procedures on
such Auction Date shall be equal to the rate
specified in such Bid; or
(iii) a lesser number of Outstanding Units than
was specified in such Bid, to be determined
as set forth in subsection (d), paragraph 2,
subparagraph c, of this Section (4), if the
rate specified therein shall be higher than
the Maximum Rate and Sufficient Clearing
Bids do not exist.
e. On any Auction Date, a Sell Order by an Existing
Holder shall constitute an irrevocable offer to
sell:
(i) the number of Outstanding Units specified in
such Sell Order; or
13
(ii) such number or a lesser number of
Outstanding Units as set forth in subsection
(d), paragraph 2, subparagraph c, of this
Section (4) if Sufficient Clearing Bids do
not exist.
f. On any Auction Date, a Bid by a Potential Holder
shall constitute an irrevocable offer to purchase:
(i) the number of Outstanding Units specified in
such Bid if the rate determined by the
Auction Procedures on such Auction Date
shall be higher than the rate specified in
such Bid; or
(ii) such number or a lesser number of
Outstanding Units as set forth in subsection
(d), paragraph 1, subparagraph e, of this
Section (4) if the rate determined by the
Auction Procedures on such Auction Date
shall be equal to the rate specified in such
Bid.
g. On each Auction Date, the Trust Company shall
determine the Applicable AA Composite Commercial
Paper Rate and the Maximum Rate and shall notify
the Company and each Broker-Dealer of each such
rate not later than 9:30 A.M. on such Auction Date
or such other time on such Auction Date as
specified by the Trust Company with the consent of
the Company (which consent shall not be
unreasonably withheld).
(b) Submission of Orders by Broker-Dealers to Trust Company.
1. Each Broker-Dealer shall submit in writing to the Trust
Company prior to the Submission Deadline on each Auction
Date all Orders obtained by such Broker-Dealer and
specifying with respect to each Order:
a. The name of the Bidder placing such Order;
b. The aggregate number of Units that are the subject
of such Order;
c. To the extent that such Bidder is an Existing
Holder:
(i) the number of Units, if any, subject to any
Hold Order placed by such Existing Holder;
(ii) the number of Units, if any, subject to any
Bid placed by such Existing Holder and the
rate specified in such Bid; and
14
(iii) the number of Units, if any, subject to any
Sell Order placed by such Existing Holder;
and
d. To the extent such Bidder is a Potential Holder,
the number of Units and the rate specified in such
Potential Holder's Bid.
2. If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Trust
Company shall round such rate up to the next highest one
thousandth (.001) of 1%.
3. If, for any reason, an Order or Orders covering all of
the Outstanding Units held by any Existing Holder is not
submitted to the Trust Company prior to the Submission
Deadline, the Trust Company shall deem a Hold Order to
have been submitted on behalf of such Existing Holder
covering the number of Outstanding Units held by such
Existing Holder and not subject to Orders submitted to
the Trust Company.
4. If one or more Orders by an Existing Holder covering in
the aggregate more than the number of Outstanding Units
held by such Existing Holder are submitted to the Trust
Company by one or more Broker-Dealers on behalf of such
Existing Holder, such Orders shall be considered valid as
follows and in the following order of priority:
a. Any Hold Orders submitted on behalf of such
Existing Holder shall be considered valid up to and
including, in the aggregate, the number of
Outstanding Units held by such Existing Holder;
provided that, if more than one Hold Order is
submitted on behalf of such Existing Holder and the
number of Units subject to such Hold Orders exceeds
the number of Outstanding Units held by such
Existing Holder, the number of Units subject to
such Hold Orders shall be reduced pro rata so that
such Hold Orders shall cover only the number of
Outstanding Units held by such Existing Holder;
b. (i) Any Bid submitted on behalf of an Existing
Holder shall be considered valid up to and
including the excess of the number of
Outstanding Units held by such Existing
Holder over the number of Units subject to
valid Hold Orders of such Existing Holder
referred to in subparagraph a of this
paragraph 4,
15
(ii) subject to clause (i) of this subparagraph
b, if more than one Bid with the same rate
is submitted on behalf of such Existing
Holder and the aggregate number of
Outstanding Units subject to such Bids is
greater than the excess referred to in
clause (i) of this subparagraph b, such Bids
shall be considered valid up to the amount
of such excess and the number of Units
subject to such Bids shall be reduced pro
rata so that such Bids shall cover only the
number of Units equal to such excess,
(iii) subject to clause (i) of this subparagraph
b, if more than one Bid with different rates
is submitted on behalf of such Existing
Holder, such Bids shall be considered valid
in their entirety up to the excess referred
to in clause (i) of this subparagraph b in
the ascending order of their respective
rates, and
(iv) in any such event specified in this
subparagraph b, the number, if any, of such
Units subject to Bids not valid under this
subparagraph b shall be treated as the
subject of a Bid by a Potential Holder; and
c. Any Sell Order shall be considered valid up to and
including, in the aggregate, the excess of the
number of Outstanding Units held by such Existing
Holder over the sum of the Units subject to valid
Hold Orders of such Existing Holder referred to in
subparagraph a of this paragraph 4 and valid Bids
by such Existing Holder referred to in subparagraph
b of this paragraph 4.
5. In any Auction, if more than one Bid is submitted on
behalf of any Potential Holder, each Bid submitted shall
be a separate Bid with the rate and number of Units
therein specified.
6. Orders by Existing Holders and Potential Holders must
specify a whole number of Units. An Order that does not
specify a whole number of Units will not be considered a
Submitted Order for purposes of the Auction.
(c) Determination of Sufficient Clearing Bids, Winning Bid Rate
and Applicable Rate.
1. Not earlier than the Submission Deadline on each Auction
Date, the Trust Company shall assemble all Orders
16
submitted or deemed submitted to it by Broker-Dealers
(each such Order as submitted or deemed submitted by a
Broker-Dealer being referred to hereinafter individually
as a "Submitted Hold Order," a "Submitted Bid" or a
"Submitted Sell Order," as the case may be, or as a
"Submitted Order") and shall determine:
a. The excess of the total number of Outstanding Units
over the number of Outstanding Units that are the
subject of Submitted Hold Orders (such excess being
hereinafter referred to as the "Available Units");
b. From the Submitted Orders, whether the number of
Outstanding Units that are the subject of Submitted
Bids by Existing Holders and Potential Holders
specifying one or more rates equal to or lower than
the Maximum Rate exceeds or is equal to the sum of:
(i) the number of Outstanding Units that are the
subject of Submitted Bids by Existing
Holders specifying one or more rates higher
than the Maximum Rate, and
(ii) the number of Outstanding Units that are
subject to Submitted Sell Orders
(in the event of such excess or of such equality
(other than because the number of Units specified
in each of clauses (i) and (ii) of this
subparagraph b is zero because all of the
Outstanding Units are the subject of Submitted Hold
Orders) such Submitted Bids in this subparagraph b
are hereinafter referred to collectively as
"Sufficient Clearing Bids"); and
c. If Sufficient Clearing Bids exist, the lowest rate
specified in the Submitted Bids (the "Winning Bid
Rate") which if:
(i) (A) Each Submitted Bid from Existing Holders
specifying such Winning Bid Rate and (B) all
other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus
entitling such Existing Holders to continue
to hold the Outstanding Units that are the
subject of such Submitted Bids, and
(ii) (A) Each Submitted Bid from Potential
Holders specifying such Winning Bid Rate and
(B) all other Submitted Bids from Potential
Holders specifying lower rates were
accepted, thus requiring the Potential
17
Holders to purchase the Outstanding Units
that are subject to such Submitted Bids,
would result in such Existing Holders described in
clause (i) of this subparagraph c continuing to
hold an aggregate number of Outstanding Units that,
when added to the number of Outstanding Units to be
purchased by such Potential Holders described in
clause (ii) of this subparagraph c, would at least
equal the Available Units.
2. In connection with any Auction and promptly after the
Trust Company has made the determinations pursuant to
paragraph 1 of this subsection (c), the Trust Company
shall advise the Company of the Applicable AA Composite
Commercial Paper Rate and the Maximum Rate and, based on
such determinations, of the Applicable Rate for the next
succeeding Dividend Period and such other information as
follows:
a. If Sufficient Clearing Bids exist, that the
Applicable Rate for the next succeeding Dividend
Period shall be equal to the Winning Bid Rate so
determined;
b. If Sufficient Clearing Bids do not exist (other
than because all of the Outstanding Units are the
subject of Submitted Hold Orders), that the
Applicable Rate for the next succeeding Dividend
Period shall be the Maximum Rate; or
c. If all of the Outstanding Units are the subject of
Submitted Hold Orders, that the Applicable Rate for
the next succeeding Dividend Period shall be equal
to the Minimum Rate.
(d) Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Units.
Based on the determinations made pursuant to subsection (c),
paragraph 1, of this Section (4), the Submitted Bids and
Submitted Sell Orders shall be accepted or rejected and the
Trust Company shall take such other action as set forth below:
1. If Sufficient Clearing Bids have been made, subject to
the provisions of paragraphs 4 and 5 of this subsection
(d), Submitted Bids and Submitted Sell Orders shall be
accepted or rejected in the following order of priority
and all other Submitted Bids shall be rejected:
a. The Submitted Sell Orders of each Existing Holder
shall be accepted and the Submitted Bids of each
18
Existing Holder specifying any rate that is higher
than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the
Outstanding Units that are the subject of such
Submitted Sell Orders or Submitted Bids;
b. The Submitted Bids of each Existing Holder
specifying any rate that is lower than the Winning
Bid Rate shall be accepted, thus entitling each
such Existing Holder to continue to hold the
Outstanding Units that are the subject of such
Submitted Bids;
c. The Submitted Bids of each Potential Holder
specifying any rate that is lower than the Winning
Bid Rate shall be accepted, thus requiring such
Potential Holder to purchase the number of
Outstanding Units that are the subject of such
Submitted Bids;
d. The Submitted Bids of each Existing Holder
specifying a rate that is equal to the Winning Bid
Rate shall be accepted, thus entitling such
Existing Holder to continue to hold the Outstanding
Units that are the subject of each such Submitted
Bid, unless the number of Outstanding Units subject
to all such Submitted Bids of Existing Holders
shall be greater than the number of Outstanding
Units ("Remaining Units") equal to the excess of
the Available Units over the number of Outstanding
Units subject to Submitted Bids described in
subparagraphs b and c of this paragraph 1, in which
event the Submitted Bids of each such Existing
Holder shall be rejected, and each such Existing
Holder shall be required to sell Units, but only in
an amount equal to the difference between (i) the
number of Outstanding Units then held by such
Existing Holder subject to such Submitted Bid and
(ii) the number of Outstanding Units obtained by
multiplying (x) the number of Remaining Units by
(y) a fraction (the numerator of which shall be the
number of Outstanding Units held by such Existing
Holder subject to such Submitted Bid and the
denominator of which shall be the sum of the number
of Outstanding Units subject to such Submitted Bids
made by all such Existing Holders that specified a
rate equal to the Winning Bid Rate); and
e. The Submitted Bid of each Potential Holder
specifying a rate that is equal to the Winning Bid
Rate shall be accepted, but only in an amount equal
to the number of Outstanding Units obtained by
19
multiplying (x) the difference between the
Available Units and the number of Outstanding Units
subject to Submitted Bids described in
subparagraphs b, c, and d of this paragraph 1 by
(y) a fraction (the numerator of which shall be the
number of Outstanding Units subject to such
Submitted Bid of such Potential Holder and the
denominator of which shall be the sum of the number
of Outstanding Units subject to Submitted Bids that
specified rates equal to the Winning Bid Rate
submitted by all such Potential Holders).
2. If Sufficient Clearing Bids have not been made (other
than because all of the Outstanding Units are subject to
Submitted Hold Orders), subject to the provisions of
paragraph 4 of this subsection (d), Submitted Orders
shall be accepted or rejected in the following order of
priority and all other Submitted Bids shall be rejected:
a. The Submitted Bids of each Existing Holder
specifying any rate that is equal to or lower than
the Maximum Rate shall be accepted, thus entitling
such Existing Holder to continue to hold the
Outstanding Units that are the subject of such
Submitted Bids;
b. The Submitted Bids of each Potential Holder
specifying any rate that is equal to or lower than
the Maximum Rate shall be accepted, thus requiring
such Potential Holder to purchase the Outstanding
Units that are the subject of such Submitted Bids;
and
c. The Submitted Bids of each Existing Holder
specifying any rate that is higher than the Maximum
Rate shall be rejected, and each Submitted Sell
Order of each Existing Holder shall be accepted,
thus requiring such Existing Holder to sell the
Outstanding Units that are the subject of each such
Submitted Bid or Submitted Sell Order, in both
cases only in an amount equal to the difference
between (i) the number of Outstanding Units then
held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (ii) the
number of Outstanding Units obtained by multiplying
(x) the difference between the Available Units and
the aggregate number of Outstanding Units subject
to Submitted Bids described in subparagraphs a and
b of this paragraph 2 by (y) a fraction (the
numerator of which shall be the number of
Outstanding Units held by such Existing Holder
subject to such Submitted Bid or Submitted Sell
20
Order and the denominator of which shall be the
number of Outstanding Units subject to all such
Submitted Bids and Submitted Sell Orders of
Existing Holders).
3. If all of the Outstanding Units are the subject of
Submitted Hold Orders, all Submitted Bids shall be
rejected.
4. If, as a result of the procedures described in paragraph
1 or 2 of this subsection (d), any Existing Holder would
be entitled to hold or required to sell, or any Potential
Holder would be required to purchase, a fraction of a
Unit on any Auction Date, the Trust Company shall, in
such manner as, in its sole discretion, it shall
determine, round up or down the number of Units to be
held or sold by any Existing Holder or purchased by any
Potential Holder on such Auction Date so that the number
of Units held or sold by each Existing Holder or
purchased by any Potential Holder on such Auction Date
shall be a whole number of Units.
5. If, as a result of the procedures described in paragraph
1 of this subsection (d), any Potential Holder would be
entitled or required to purchase less than a whole Unit
on any Auction Date, the Trust Company shall, in such
manner as, in its sole discretion, it shall determine,
allocate Units for purchase among Potential Holders so
that only whole Units are purchased on such Auction Date
by any Potential Holder, even if such allocation results
in one or more of such Potential Holders not purchasing
Units on such Auction Date.
6. Based on the results of each Auction, the Trust Company
shall determine the aggregate number of Outstanding Units
to be purchased and the aggregate number of Outstanding
Units to be sold by Potential Holders and Existing
Holders on whose behalf each Broker-Dealer submitted Bids
or Sell Orders and, with respect to each Broker-Dealer,
to the extent that such aggregate number of Units to be
sold differ, determine to which other Broker-Dealer or
Broker-Dealers acting for one or more purchasers such
Broker-Dealer shall deliver, or from which other Broker-
Dealer or Broker-Dealers acting for one or more sellers
such Broker-Dealer shall receive, as the case may be,
Units.
(5) Miscellaneous.
(a) So long as the Applicable Rate is based on the results of
an Auction, an Existing Holder (i) may sell, transfer or
otherwise dispose of shares of Series A Stock only in
21
Units and only pursuant to a Bid or Sell Order in
accordance with the Auction Procedures, or to or through
a Broker-Dealer or to a Person that has delivered a
signed copy of a Master Purchaser's Letter to the Trust
Company; provided that, in the case of all transfers
other than pursuant to Auctions, Such Existing Holder or
its Broker-Dealer or its Agent Member advises the Trust
Company of Such transfer, and (ii) shall have the
ownership of the shares of Series A Stock held by it
maintained in book entry form by the Securities
Depository in the account of its Agent Member, which in
turn will maintain account records of Such Existing
Holder's beneficial ownership.
(b) Neither the Company nor any Affiliate thereof may submit
an Order in any Auction.
(c) All references to time of day refer to New York City
time.
(d) From and during the continuance of a Payment Failure and
during any period in which there shall not be a
Securities Depository, shares of Series A Stock may be
registered for transfer or exchange and new certificates
issued upon surrender of the old certificates properly
endorsed for transfer, with (i) all necessary endorsers'
signatures guaranteed in such manner and form as the
Trust Company (or such other transfer agent or registrar)
may require by a guarantor reasonably believed by the
Trust Company (or such other transfer agent or registrar)
to be responsible, (ii) accompanied by such assurances as
the Trust Company (or such other transfer agent or
registrar) shall deem necessary or appropriate to
evidence the genuineness and effectiveness of each
necessary endorsement and (iii) satisfactory evidence of
compliance with all applicable laws relating to the
collection of taxes or funds necessary for the payment of
such taxes.
(e) Commencing with the Dividend Payment Date for which a
Payment Failure occurs, the Company or an Affiliate
thereof, at the option of the Company, may perform any of
the functions to be performed by the Trust Company or the
Securities Depository set forth herein.
(f) The Board of Directors of the Company may interpret the
provisions of the Auction Procedures as set forth herein
to resolve any inconsistency or ambiguity which may arise
or be revealed in connection therewith, and, if such
inconsistency or ambiguity reflects an inaccurate
22
provision hereof, the Board of Directors of the Company
may, in appropriate circumstances, authorize the filing
of a corrected Articles of Amendment.
(g) Shares of Series A Stock which have been redeemed or
otherwise acquired by the Company or any Affiliate are
not subject to reissuance as Series A Stock.
(6) Redemption.
The shares of Series A Stock shall be subject to
redemption, in whole or in part on any Dividend Payment Date,
upon the notice and in the manner and with the effect provided
in Article Fourth of these Articles; provided that if such
Article Fourth is amended to grant the Company's Board of
Directors in certain instances the authority to determine the
time, form and manner of a notice of redemption, from and
after the date such amendment becomes effective, publication
of notice of the redemption of the Series A Stock shall not be
required and notice of such redemption shall be sufficient if
mailed at least thirty (30) days prior to redemption to the
holders of record of the Series A Stock so to be redeemed, at
their respective addresses as the same shall appear on the
books of the Company, but no failure to mail a particular
notice nor any defect therein or in the mailing thereof shall
affect the validity of the proceedings for the redemption of
those shares of Series A Stock for which proper notice has
been given; provided further that all other terms of Article
Fourth, as amended, relating to the redemption of shares of
Preferred Stock and Preferred Stock (without par value) shall
continue to apply to the redemption of the Series A Stock. The
notice of redemption shall include a statement setting forth
(i) the number of shares of the Series A Stock to be redeemed
(if applicable to be denominated in Units), (ii) the date
fixed for redemption and (iii) the redemption price. So long
as shares of Series A Stock are held of record by the nominee
of the Securities Depository, the Company need only give
notice to the Securities Depository of any such redemption.
The redemption price or prices applicable to shares of said
series shall be $100.00 per share plus accrued and unpaid
dividends to the date of redemption. Unless the shares of
Series A Stock shall have been registered for transfer and
exchange as provided in subsection (d) of Section (5),
redemptions shall be made only in whole Units.
(7) Voluntary or Involuntary Liquidation.
The preferential amounts to which the holders of Series
A Stock shall be entitled upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, in
addition to dividends accumulated but unpaid thereon, shall be
$100 per share.
23
(8) Stated Value.
The stated value of the Series A Stock shall be $100 per
share.
* * *
24
ARTICLE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
LOUISVILLE GAS AND ELECTRIC COMPANY
To the Secretary of State of Kentucky:
Pursuant to the provisions of Chapter 271B of the Kentucky
Revised Statutes, the undersigned corporation hereby amends its
Articles of Incorporation, and for that purpose, submits the
following statement:
1. The name of the corporation is Louisville Gas and
Electric Company.
2. On April 21, 1992, the stockholders of the corporation
duly adopted the Amendment to the Company's Articles of
Incorporation attached hereto as Exhibit A.
3. If not contained in the Amendment itself, the manner in
which any exchange, reclassification, or cancellation of
issued shares provided for in the Amendment shall be
implemented as follows:
Not Applicable
4. The Amendment was duly adopted on April 21, 1992, to be
effective from the date of filing with the Secretary of
State.
5. The Amendment was duly adopted by the shareholders of the
corporation and:
(i) the designation, number of outstanding shares and
number of votes entitled to be cast by each voting
group entitled to vote separately on the Amendment
were:
Number of Number of Votes
Designation Outstanding Shares Entitled to be Cast
Common Stock 21,294,223 21,294,223
Preferred Stock 750,000 750,000
(without par value)
Preferred Stock 1,718,415 1,718,415
(par value $25 per
share)
Preferred Stock 2,468,415 2,468,415
(without par value
and par value $25
per share)
25
(ii) the total number of undisputed votes cast for the
plan by each voting group entitled to vote
separately on the Amendment was:
Total Number of Undisputed
Voting Group Votes Case for the Amendment
Common Stock 21,294,223
Preferred Stock 488,246
(without par value)
Preferred Stock 1,231,844
(par value $25 per
share)
Preferred Stock 1,720,090
(without par value
and par value $25
per share)
and the number of votes cast for the Amendment by each voting
group was sufficient for approval by that group.
Dated: March 24, 1993 LOUISVILLE GAS AND ELECTRIC COMPANY
Charles A. Markel, III
Treasurer
26
EXHIBIT A
AMENDMENTS TO ARTICLE FOURTH OF
RESTATED ARTICLES OF INCORPORATION OF
LOUISVILLE GAS AND ELECTRIC COMPANY
1. Paragraph (1) of Article Fourth shall be amended to read as
follows:
PREFERRED STOCK AND PREFERRED STOCK (WITHOUT PAR VALUE)
(1) In addition to the series of Cumulative Preferred
Stock, described in paragraphs (10) through (13)
hereof, the Board of Directors is hereby authorized,
subject to and in accordance with the provisions of
paragraphs (1) through (9), inclusive, to cause
Preferred Stock (without par value) to be issued in
series, each such series to have such variations in
respect thereof as may be determined by the Board of
Directors prior to the issuance thereof.
The shares of the Preferred Stock of different
series may vary as to:
(a) The distinctive serial designations and
number of shares of such series;
(b) The rate of dividends (within such
limits as shall be permitted by law not exceeding
8% per annum) payable on the shares of the
particular series;
(c) The prices (not less than the amount
limited by law) and terms upon which the shares of
the particular series may be redeemed; and
(d) The amount or amounts which shall be
paid to the holders of the shares of particular
series in case of voluntary or involuntary
dissolution or any distribution of assets.
The shares of the Preferred Stock (without par
value) of different series may vary as to:
(a) The distinctive serial designations and
number of shares of such series;
(b) The stated value thereof;
(c) The rate or rates of dividends (within
such limits as shall be permitted by law) payable
on the shares of the particular series, which may
be expressed in terms of a formula or other method
by which such rate or rates shall be calculated
from time to time, and the dividend periods,
1
including the date or dates on which dividends are
payable;
(d) The prices (not less than the amount
limited by law) and terms (including sinking fund
provisions) upon which the shares of the
particular series may be redeemed; and
(e) The amount or amounts which shall be
paid to the holders of the shares of the
particular series in case of voluntary or
involuntary dissolution or any distribution of
assets.
The shares of all series of Preferred Stock and
Preferred Stock (without par value) shall in all
other respects be identical, except that the
Preferred Stock (without par value) shall not have
the voting rights of the Preferred Stock provided
by paragraph 9(A) hereof.
2. Paragraph (2) of Article Fourth shall be amended to read as
follows:
(2) The holders of each series of the Preferred Stock and
the Preferred Stock (without par value) at the time
outstanding shall be entitled, pari passu with the holders
of every other series of the Preferred Stock and the
Preferred Stock (without par value), to receive, but only
when and as declared by the Board of Directors, out of funds
legally available for the payment of dividends, cumulative
preferential dividends, at the dividend rate or rates for
the particular series fixed therefor as herein provided,
payable on such dates or for such period or periods as may
be specified by the Board of Directors at the time of
establishment of such series, to stockholders of record on
the respective dates, not exceeding thirty (30) days
preceding such dividend payment dates, fixed for the purpose
by the Board of Directors. No dividends shall be declared on
any series of the Preferred Stock or the Preferred Stock
(without par value) in respect of any dividend period unless
there shall likewise be declared on all shares of all other
series of the Preferred Stock and the Preferred Stock
(without par value) at the time outstanding, like
proportionate dividends, ratably, in proportion to the
respective dividend rates fixed therefor, in respect of the
same dividend period, to the extent that such shares are
entitled to receive dividends for such dividend period. The
dividends on shares of all series of the Preferred Stock and
the Preferred Stock (without par value) shall be cumulative.
In the case of all shares of each particular series, the
dividends on shares of such series shall be cumulative from
2
the date of issue thereof unless the Board of Directors at
the time of establishing such series specifies that such
dividends shall be cumulative from the first day of the
current dividend period in which shares of such series shall
have been issued, so that unless dividends on all
outstanding shares of each series of the Preferred Stock and
the Preferred Stock (without par value), at the dividend
rate or rates and from the dates for accumulation thereof
fixed as herein provided shall have been paid for all past
dividend periods, but without interest on cumulative
dividends, no dividends shall be paid or declared and no
other distribution shall be made on the Common Stock and no
Common Stock shall be purchased or otherwise acquired for
value. The holders of the Preferred Stock and the Preferred
Stock (without par value) of any series shall not be
entitled to receive any dividends thereon other than the
dividends referred to in this paragraph (2).
3. The first sentence of paragraph (3) of Article Fourth shall
be amended by deleting the phrase "annual dividend rate" and
inserting in lieu thereof the phrase "dividend rate or
rates."
4. The second and third sentences of paragraph (3) of Article
Fourth shall be amended to read as follows:
Notice of every such redemption shall be given (i) at
such time, in such form and in such manner as may have been
determined and fixed for each series of Preferred Stock and
Preferred Stock (without par value) at the time of
establishment of such series or (ii) if such matters shall
not have been so fixed by the Board of Directors, by
publication at least once in one daily newspaper printed in
the English language and of general circulation in
Louisville, Kentucky, the first publication in such
newspaper to be at least thirty (30) days prior to the date
fixed for such redemption, and at least thirty (30) days'
previous notice of every such redemption shall also be
mailed to the holders of record of the shares of the
Preferred Stock or the Preferred Stock (without par value)
so to be redeemed, at their respective addresses as the same
shall appear on the books of the Company; but no failure to
mail such notice nor any defect therein or in the mailing
thereof shall affect the validity of the proceedings for the
redemption of any shares of the Preferred Stock or the
Preferred Stock (without par value) so to be redeemed.
5. The last sentence of paragraph (3) of Article Fourth shall
be amended by deleting the phrase "by publication" wherever
it appears.
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6. The first sentence of paragraph (4) of Article Fourth shall
be amended by deleting the phrase "annual dividend rate" and
inserting in lieu thereof the phrase "dividend rate or
rates."
7. Paragraph 5 of Article Fourth shall be amended by deleting
the phrase "quarterly-yearly."
8. Subdivision 7(B)(b) of Article Fourth shall be amended to
read as follows:
(b) Issue, sell or otherwise dispose of any shares of
the Preferred Stock or the Preferred Stock (without par
value), or of any class of stock ranking prior to or on a
parity with the Preferred Stock and the Preferred Stock
(without par value) of each series as to dividends or
distributions, unless the net income of the Company,
determined in accordance with generally accepted accounting
practices, to be available for the payment of dividends on
the Preferred Stock, the Preferred Stock (without par value)
and any class of stock ranking prior thereto or on a parity
therewith as aforesaid, for a period of twelve (12)
consecutive calendar months within the fifteen (15) calendar
months immediately preceding the issuance, sale or
disposition of such stock, is at least equal to twice the
annual dividend requirements on the entire amount of all
Preferred Stock, all Preferred Stock (without par value),
and of all such other classes of stock ranking prior thereto
or on a parity therewith, as to dividends or distributions
to be outstanding immediately after the issuance, sale or
disposition of such additional shares; provided that for
purposes of calculating the annual dividend requirements
applicable to any series of Preferred Stock (without par
value) proposed to be issued which will have dividends
determined according to an adjustable, floating or variable
rate, the dividend rate used shall be the higher of (1) the
dividend rate applicable to such series of Preferred Stock
(without par value) on the date of such calculation or (2)
the average dividend rate payable on all series of Preferred
Stock and Preferred Stock (without par value) during the
twelve month period immediately preceding the date of such
calculation; provided further that for purposes of
calculating the annual dividend requirements applicable to
any series of Preferred Stock (without par value)
outstanding at the date of such proposed issue and having
dividends determined according to an adjustable, floating or
variable rate, the dividend rate used shall be: (1) if such
series of Preferred Stock (without par value) has been
outstanding for at least twelve months, the actual amount of
dividends paid on account of such series of Preferred Stock
(without par value) for the twelve-month period immediately
preceding the date of such calculation, or (2) if such
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series of Preferred Stock (without par value) has been
outstanding for less than twelve months, the average
dividend rate payable on such series of Preferred Stock
(without par value) during the period immediately preceding
the date of such calculation; or
9. The first sentence of Subdivision 9(B) of Article Fourth
shall be amended to read as follows:
(B) If and when dividends shall be in default in an amount
equivalent to dividends for the immediately preceding
eighteen months on all shares of all series of the Preferred
Stock and the Preferred Stock (without par value) at the
time outstanding, and until all dividends in default on such
Preferred Stock and such Preferred Stock (without par value)
shall have been paid, the holders of all shares of the
Preferred Stock and all shares of the Preferred Stock
(without par value), voting separately as one class, shall
be entitled to elect the smallest number of Directors
necessary to constitute a majority of the full Board of
Directors, and the holders of the Common Stock, voting
separately as a class, shall be entitled to elect the
remaining Directors of the Company.
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ARTICLE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
LOUISVILLE GAS AND ELECTRIC COMPANY
To the Secretary of State of Kentucky:
Pursuant to the provisions of Chapter 271B of the Kentucky
Revised Statutes, the undersigned corporation hereby amends its
Articles of Incorporation, and for that purpose, submits the
following statement:
1. The name of the corporation is Louisville Gas and
Electric Company.
2. On May 13, 1993, the Executive Committee of the Board
of Directors, acting on behalf of the corporation, duly
adopted the following Amendments to its Articles of
Incorporation. A copy of the text is attached hereto
as Exhibit A and incorporated by reference herein as
the text of a new subarticle B of Article Thirteenth.
3. If not contained in the Amendment itself, the manner in
which any exchange, reclassification, or cancellation
of issued shares provided for in the Amendment shall be
implemented as follows:
Not Applicable
4. The Amendment is to be effective upon the filing of
these articles by the Secretary of State.
5. The amendment was duly adopted by the Executive
Committee of the Board of Directors without shareholder
approval pursuant to 271B.10-020 and 271B.6-020 of the
Kentucky Revised Statutes, and shareholder action was
not required.
Dated: May 19, 1993 LOUISVILLE GAS AND ELECTRIC COMPANY
Charles A. Markel, III
Treasurer
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AMENDMENT
The Restated Articles of Incorporation are hereby amended
by adding thereto a new subarticle B to Article Thirteenth which
subarticle B shall read in its entirety as follows:
B. Terms of $5.875 Cumulative Preferred Stock
(without par value).
The Company has classified 250,000 shares of the Preferred Stock
(without par value) as a series of such Preferred Stock
designated as "$5.875 Cumulative Preferred Stock (without par
value)." The preferences, rights, qualifications and restrictions
of the shares of the "$5.875 Cumulative Preferred Stock (without
par value)," shall be as follows:
(1) The annual dividend payable in respect of each
share of said series shall be $5.875; and the initial
dividend in respect of each share of said series shall be
payable on July 15, 1993, when and as declared by the Board
of Directors of this Company, to holders of record on June
30, 1993, and will accrue from the date of original issuance
of said series; thereafter, such dividends shall be payable
on January 15, April 15, July 15 and October 15 in each year
(or the next business date thereafter in each case), when
and as declared by the Board of Directors of this Company,
for the quarter-yearly period ending on the last business
day of the preceding month.
(2) The shares of said series are not subject to
redemption prior to July 1, 1998. On and after July 1, 1998,
the shares of said series shall be subject to redemption, in
whole or in part, in the manner and with the effect provided
in these Articles; and the redemption price or prices
applicable to shares of said series shall be $105.875 per
share plus accrued and unpaid dividends to the date of
redemption if such date of redemption is on or subsequent to
July 1, 1998, and prior to July 1, 1999; $104.700 per share
plus accrued and unpaid dividends to the date of redemption
if such date of redemption is on or subsequent to July
1,1999, and prior to July 1, 2000; $103.525 per share plus
accrued and unpaid dividends to the date of redemption if
such date of redemption is on or subsequent to July 1, 2000,
and prior to July 1, 2001; $102.350 per share plus accrued
and unpaid dividends to the date of redemption if such date
of redemption is on or subsequent to July 1, 2001, and prior
to July 1, 2002; $101.175 per share plus accrued and unpaid
dividends to the date of redemption if such date of
redemption is on or subsequent to July 1, 2002, and prior to
July 1, 2003; and $100.000 per share plus accrued and unpaid
dividends thereafter.
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Notice of every such redemption shall be mailed at
least thirty (30) days prior to redemption to the holders of
record of the $5.875 Cumulative Preferred Stock (without par
value) so to be redeemed, at their respective addresses as
the same shall appear on the books of the Company, but no
failure to mail a particular notice nor any defect therein
or in the mailing thereof shall affect the validity of the
proceedings for the redemption of those shares of $5.875
Cumulative Preferred Stock (without par value) for which
proper notice has been given.
(3) So long as any shares of said series shall remain
outstanding, the Company shall on or before July 15, 2003,
and on or before July 15 of each year thereafter to and
including July 15, 2007, set aside, separate and apart from
its other funds, an amount equal to $1,250,000 (or such
lesser amount as may be sufficient to redeem all of the
shares of said series then outstanding) and shall on or
before July 15, 2008 (each such July 15 being hereinafter in
this Section 3 called a "Sinking Fund Redemption Date"), set
aside, separate and apart from its other funds, an amount
equal to $18,750,000 (or such lesser amount as may be
sufficient to redeem all the shares of said series then
outstanding) as a mandatory sinking fund payment for the
exclusive benefit of shares of said series, plus such
further amount as shall equal the accrued and unpaid
dividends on the shares of said series to be redeemed out of
such payment (as hereinafter in this Section 3 provided)
through the day preceding the applicable Sinking Fund
Redemption Date. The obligation of the Company to make such
payment shall be cumulative, so that if for any reason the
full amount thereof shall not be set aside for any year, the
amount of the deficiency from time to time shall be added to
the amount due from the Company on subsequent Sinking Fund
Redemption Dates (or, if such deficiency exists on July 15,
2008, on subsequent quarterly dividend payment dates
thereafter for such series) until the deficiency shall have
been fully satisfied. The Company shall be entitled to
credit against any such mandatory sinking fund payment
shares of said series redeemed by the Company at the
Company's option, purchased by the Company in the open
market or otherwise acquired by the Company, except through
application of any sinking fund payment, and not theretofore
so credited, at the sinking fund redemption price
hereinafter specified in this Section 3.
Any amounts set aside by the Company pursuant to this
Section 3 shall be applied on the date of such setting aside
if a Sinking Fund Redemption Date or otherwise on the first
Sinking Fund Redemption Date occurring thereafter to the
redemption of shares of said series at $100.000 per share,
plus accrued and unpaid dividends through the day preceding
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the applicable Sinking Fund Redemption Date, in the manner
and upon the notice provided in Section 2 of this sub
article B. If any Sinking Fund Redemption Date shall be a
Saturday, Sunday or other day on which banking institutions
in Louisville, Kentucky are authorized or obligated to
remain closed, such term shall be construed to refer to the
next preceding business day.
Notwithstanding anything to the contrary set forth
above, no sinking fund payments on the shares of said series
of $5.875 Cumulative Preferred Stock shall be made: (i)
unless the full dividends on all shares of Preferred Stock
and Preferred Stock (without par value) at the time
outstanding for all past dividend periods shall have been
paid or declared and set apart for payment or (ii) if such
sinking fund payment would be contrary to applicable law.
(4) The preferential amounts to which the holders of
shares of such series shall be entitled upon any
liquidation, dissolution or winding up of the Company, in
addition to dividends accumulated but unpaid thereon, shall
be $100.000 per share, in the event of any voluntary
liquidation, dissolution or winding up of the Company,
except that if such voluntary liquidation, dissolution or
winding up of the Company shall have been approved by the
vote in favor thereof given at a meeting called for that
purpose or by the written consent of the holders of a
majority of the total shares of the $5.875 Cumulative
Preferred Stock (without par value) then outstanding, the
amount so payable on such voluntary liquidation, dissolution
or winding up shall be $100.000 per share; or $100.000 per
share, in the event of any involuntary liquidation,
dissolution or winding up of the Company.
(5) The shares of said series of $5.875 Cumulative
Preferred Stock (without par value) shall be subject to all
other terms, provisions and restrictions set forth in these
Articles with respect to the shares of the Preferred Stock
(without par value) and, excepting only as to the rates of
dividend payable in respect of the shares of said series,
the dividend periods and dividend payment dates, the
redemption price or prices applicable to the shares of said
series, the sinking fund provisions applicable to the shares
of said series, and the liquidation price applicable to
shares of said series, shall have the same relative rights
and preferences as, shall be of equal rank with, and shall
confer rights equal to those conferred by, all other shares
of the Preferred Stock (without par value) of the Company.
(6) The stated value of the shares of said series
shall be $100.000 per share.
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