As Amended December 12, 1997
BY-LAWS
of
MASSACHUSETTS ELECTRIC COMPANY
ARTICLE I.
PLACE OF STOCKHOLDERS' MEETINGS.
All meetings of the stockholders shall be held in Massachusetts either
at the principal office of the corporation or at such other place as is stated
in the call.
ARTICLE II.
ANNUAL MEETING.
The annual meeting of the stockholders shall be held at the principal
office of the corporation or such other place in Massachusetts as is stated in
the call of the meeting on the third Wednesday of March in each year, if it be
not a legal holiday, and if it be a legal holiday, then on the next succeeding
day not a legal holiday. Purposes for which the annual meeting is to be held
additional to those prescribed by law, by the agreement of association and by
these by-laws may be specified by the board of directors or by writing signed
by the president or by a majority of the directors or by stockholders who hold
at least one-tenth of the aggregate par value of the capital stock generally
entitled to vote. If such annual meeting is omitted on the day herein
provided therefor, a special meeting may be held in place thereof, and any
business transacted or elections held at such meeting shall have the same
effect as if transacted or held at the annual meeting.
ARTICLE III.
SPECIAL MEETINGS OF STOCKHOLDERS.
Except as otherwise provided in Section 4 of Article XVIII, special
meetings of the stockholders may be called by the president or by a majority
of the directors, and shall be called by the clerk, or in the case of the
death, absence, incapacity or refusal of the clerk by any other officer of the
corporation, upon written application of stockholders who hold at least one-
tenth of the aggregate par value of the capital stock entitled to vote at the
meeting, stating the time, place and purpose of the meeting.
ARTICLE IV.
NOTICE OF STOCKHOLDERS' MEETINGS.
Except as otherwise provided in Section 4 of Article XVIII, a written or
printed notice of each meeting of stockholders, stating the place, day and
hour thereof and the purpose for which the meeting is called, shall be given
by the clerk, at least seven days before such meeting, to each stockholder
entitled to vote thereat, by leaving such notice with him or at his residence
or usual place of business, or by mailing it, postage prepaid and addressed to
such stockholder at his address as it appears upon the books of the
corporation. In the absence or disability of the clerk, such notice may be
given by a person designated either by the clerk or by the person or persons
calling the meeting or by the board of directors. No notice of the time,
place or purpose of any regular or special meeting of the stockholders shall
be required if every stockholder entitled to notice thereof is present in
person or is represented at the meeting by proxy or if every such stockholder,
or his attorney thereunto authorized, by a writing which is filed with the
records of the meeting, waives such notice.
ARTICLE V.
QUORUM OF STOCKHOLDERS.
Except as otherwise provided in Section 4 of Article XVIII, at any
meeting of the stockholders, a majority in interest of all stock issued and
outstanding and entitled to vote upon a question to be considered at the
meeting shall constitute a quorum for the consideration of such question, but
a less interest may adjourn any meeting from time to time, and the meeting may
be held as adjourned without further notice. When a quorum is present at any
meeting, a majority of the stock represented thereat and entitled to vote
shall, except where a larger vote is required by law, by the agreement of
association or by these by-laws, decide any question brought before such
meeting.
ARTICLE VI.
PROXIES AND VOTING.
Stockholders who are entitled to vote shall have one vote for each share
of stock owned by them. Stockholders may vote either in person or by proxy in
writing dated not more than six (6) months before the meeting named therein,
which shall be filed with the clerk of the meeting before being voted. Such
proxies shall entitle the holders thereof to vote at any adjournment of such
meeting but shall not be valid after the final adjournment of such meeting.
ARTICLE VII.
BOARD OF DIRECTORS.
A board of not less than three directors shall be chosen by ballot at
the annual meeting of the stockholders or at the special meeting held in place
thereof, or as provided in Section 4 of Article XVIII. The number of
directors for each corporate year shall be fixed by vote at the meeting at
which they are elected but the stockholders may, at any special meeting held
for the purpose during any such year, increase or decrease (within the limit
above specified) the number of directors as thus fixed, and elect new
directors to complete the number so fixed, or remove directors to reduce the
number of directors to the number so fixed; provided, however, that while
there are four (4) full quarterly dividends in default on the Preferred Stock
and the Preferred Stock-Cumulative the number of such directors shall be fixed
in accordance with Section 4 of Article XVIII. No director need be a
stockholder.
Subject to law, to the agreement of association, to the terms of the
Preferred Stock and the Preferred Stock-Cumulative and to the other provisions
of these by-laws, each director shall hold office until the next annual
meeting of the stockholders and until his successor is chosen and qualified.
ARTICLE VIII.
POWERS OF DIRECTORS.
The board of directors shall have, and may exercise, all the powers of
the corporation, except such as are conferred upon the stockholders by law, by
the agreement of association and by these by-laws.
ARTICLE IX.
MEETINGS OF THE BOARD OF DIRECTORS.
Regular meetings of the board of directors may be held at such places
and at such times as the board may by vote from time to time determine, and if
so determined, no notice thereof need be given. A regular meeting of the
board of directors may be held without notice immediately after, and at the
same place as the annual meeting of the stockholders, or the special meeting
of the stockholders held in place of such annual meeting.
Special meetings of the board of directors may be held at any time and
at any place when called by the president, treasurer, or two or more
directors, reasonable notice thereof being given to each director, or at any
time without call or formal notice, provided all the directors are present or
waive notice thereof by a writing which is filed with the records of the
meeting. In any case it shall be deemed sufficient notice to a director to
send notice by mail or telegram at least forty-eight hours before the meeting
addressed to him at his usual or last known business or residence address.
ARTICLE X.
QUORUM OF THE BOARD OF DIRECTORS.
A majority of the board of directors shall constitute a quorum for the
transaction of business, but a less number may adjourn any meeting from time
to time, and the meeting may be held as adjourned without further notice.
Except as otherwise provided, when a quorum is present at any meeting, a
majority of the members in attendance thereat shall decide any question
brought before such meeting.
ARTICLE XI.
VACANCIES IN BOARD OF DIRECTORS.
If the office of any director, one or more, elected by the stockholders
generally entitled to vote, becomes vacant by reason of death, resignation,
removal, disqualification or otherwise, the remaining directors so elected,
though less than a quorum, may, unless such vacancy shall have been filled by
the stockholders generally entitled to vote, choose by a majority vote of
their entire number, a successor or successors, who shall hold office for the
unexpired term. Any vacancy in the office of a director elected by holders of
the Preferred Stock and the Preferred Stock-Cumulative shall be filled as
provided in Section 4 of Article XVIII.
ARTICLE XII.
OFFICERS AND AGENTS.
The officers shall be a president, a clerk, a treasurer and such other
officers and agents as the board of directors may in their discretion appoint.
The treasurer and the clerk shall be chosen by ballot at the annual meeting of
the stockholders. The president shall be elected annually by the board of
directors after its election by the stockholders. The president shall be a
director. The clerk shall be a resident of Massachusetts. So far as is
permitted by law, any two or more offices may be filled by the same person.
Subject to law, to the agreement of association and to the other provisions of
these by-laws, the treasurer and clerk shall each hold office until the next
annual meeting of stockholders and until his successor is chosen and
qualified, the president shall hold office until the first meeting of
directors after the next annual meeting of stockholders and until his
successor is chosen and qualified and the other officers and agents shall hold
office during the pleasure of the board of directors or for such term as the
board of directors shall prescribe. Each officer shall, subject to these by-
laws, have in addition to the duties and powers herein set forth such duties
and powers as are commonly incident to his office, and such duties and powers
as the board of directors shall from time to time designate.
ARTICLE XIII.
PRESIDENT AND VICE PRESIDENTS.
Except as otherwise determined by the board of directors the president
shall be the chief executive officer of the corporation and shall preside at
all meetings of the stockholders and of the board of directors at which he is
present. The president shall have custody of the treasurer's bond.
Any vice president shall have such powers as the board of directors
shall from time to time designate.
ARTICLE XIV.
CLERK.
The clerk shall keep an accurate record of the proceedings of all
meetings of the stockholders in books provided for the purpose, which books
shall be kept at the principal office of the corporation and shall be open at
all reasonable times to the inspection of any stockholder. In the absence of
the clerk or an assistant clerk at any such meeting a temporary clerk shall be
chosen, who shall record the proceedings of such meeting in the aforesaid
books. The clerk, any assistant clerk and such temporary clerk shall be
sworn.
The clerk or an assistant clerk shall also keep accurate minutes of all
meetings of the board of directors and in their absence from any such meeting
a temporary clerk shall be chosen, who shall be sworn and shall record the
proceedings of such meeting.
ARTICLE XV.
TREASURER.
The treasurer shall, subject to the direction and under the supervision
of the board of directors, have general charge of the financial concerns of
the corporation and the care and custody of the funds and valuable papers of
the corporation, except his own bond, and he shall have power to endorse for
deposit or collection all notes, checks, drafts, etc., payable to the
corporation or its order, and to accept drafts on behalf of the corporation.
He shall keep, or cause to be kept, accurate books of account which shall be
the property of the corporation. If required by the board of directors he
shall give bond for the faithful performance of his duty in such form, in such
sum, and with such sureties as the board of directors shall require.
Any assistant treasurer shall have such powers as the board of directors
shall from time to time designate.
ARTICLE XVI.
REMOVALS.
The stockholders generally entitled to vote may, at any special meeting
called for the purpose, by vote of a majority of the capital stock issued and
outstanding and generally entitled to vote, remove from office the treasurer,
clerk or any director elected by the stockholders generally entitled to vote,
and elect his successor. The board of directors may likewise, by vote of a
majority of their entire number, remove from office any officer or agent of
the corporation; provided, however, that the board of directors may remove the
treasurer or clerk for cause only.
ARTICLE XVII.
VACANCIES.
If the office of any officer or agent, one or more, becomes vacant by
reason of death, resignation, removal, disqualification or otherwise, the
directors may, unless such vacancy, if in the office of the treasurer or
clerk, shall have been filled by the stockholders generally entitled to vote,
choose by a majority vote of their entire number, a successor or successors,
who shall hold office for the unexpired term, subject to the provisions of
Article XVI.
ARTICLE XVIII.
CLASSES OF STOCK.
The capital stock of the corporation shall consist of Common Stock of
the par value of $25 a share and two classes of preferred stock, Preferred
Stock of the par value of $100 a share and Preferred Stock - Cumulative of the
par value of $25 a share, each having respectively preferences, voting rights,
restrictions and qualifications as follows:
SECTION 1. Common Stock.
Each share of the Common Stock shall be equal to every other share
thereof in every respect. Except as required by law and except as hereafter
specifically provided in Section 2 of this Article XVIII, the holders of
Common Stock shall have the exclusive right to vote.
SECTION 2. Preferred Stock.
A. The shares of Preferred Stock may be issued, as the board of
directors may determine, in one or more series each bearing such designation
as to distinguish the shares thereof from the shares of all other series and
classes of capital stock of the corporation. All shares of Preferred Stock,
irrespective of series, shall constitute one and the same class of stock and
shall be of equal rank as to dividends and assets with each other and with the
Preferred Stock - Cumulative. Subject to any applicable provisions of law,
the shares of Preferred Stock of different series may vary, as determined by
the board of directors and, if required by law, by the stockholders, as to the
following rights and preferences:
(1) The annual dividend rate, or method of calculation thereof,
and the date from which the dividends on shares issued prior to the
record date for the first dividend shall be cumulative and the date for
the first dividend;
(2) The redemption price or prices, or method of calculation
thereof, and any restriction on the exercise by the corporation of its
right to redeem such series;
(3) The amount or amounts payable upon any liquidation or
dissolution or winding up;
(4) The terms and amount of any sinking fund provided for the
purchase or redemption of shares; and
(5) The conversion, participation or other special rights.
B. Before any dividends on, or any distribution of assets (by
purchase of shares or otherwise) to holders of, the Common Stock or any other
stock ranking junior to the Preferred Stock as to dividends (both hereinafter
in this subsection B called "junior stock") shall be paid or set apart for
payment or otherwise provided for, the holders of the Preferred Stock shall be
entitled to receive, but only when and as declared by the board of directors,
out of any funds legally available for the declaration of dividends,
cumulative dividends at the annual dividend rate per share fixed for the
particular series payable quarterly on the first days of February, May, August
and November in each year commencing on a date specified for the first
dividend date as herein provided to stockholders of record on the respective
dates, not exceeding thirty (30) days preceding such dividend payment dates,
fixed in advance for the purpose by the board of directors prior to the
payment of each particular dividend. No dividends shall be declared on any
series of the Preferred Stock or on any other class of preferred stock ranking
on a parity therewith, as to dividends, in respect of any quarter-yearly
dividend period, unless there shall likewise be declared on all shares of all
series of the Preferred Stock and of any other class of such parity preferred
stock at the time outstanding, like proportionate dividends, ratably, in
proportion to the respective annual dividend rates fixed therefor, 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 shall be cumulative.
In the case of all shares of each particular series, the dividends on shares
of such series shall be cumulative:
(1) On shares issued prior to the record date for the first
dividend on the shares of such series, from the date for the particular
series fixed therefor;
(2) On shares issued after a record date for a dividend, but
prior to the dividend payment date for such dividend, from said dividend
payment; and
(3) Otherwise from the quarter-yearly dividend payment date next
preceding the date of issue of such shares;
so that dividends accrued on all outstanding shares of Preferred Stock to the
last preceding quarterly dividend payment shall have been paid in full or
declared and set apart for payment before there shall be any dividend or
distribution on, or purchase of, junior stock. The holders of the Preferred
Stock shall not be entitled to receive any dividends thereon other than the
dividends referred to in this subsection B and other than distributions
provided for in subsection D below. Whenever dividends accrued on all
outstanding shares of Preferred Stock to the last preceding quarterly dividend
payment date shall have been paid in full or declared and set apart for
payment, and subject to the limitations set forth in subsection H below and,
when applicable, in subsection E(2)(i) of Section 4 of this Article XVIII, the
board of directors may, without waiting for the expiration of the current
dividend period for the Preferred Stock, declare and pay dividends on any
junior stock out of funds legally available therefor.
As used in this Section 2, the expression "dividends accrued" shall mean
the sum of amounts with respect to all shares of Preferred Stock then
outstanding, which as to each share shall be an amount computed at the rate
per annum of the par value thereof fixed for the particular series from the
date from which dividends on such share become cumulative to the date with
reference to which the expression is used, irrespective of whether such amount
shall have been declared as dividends or there shall have existed any funds
legally available for the payment thereof, less the aggregate of all dividends
paid or declared payable on or before said last mentioned date and set aside
for such payment on such share.
C. The corporation, pursuant to action of its board of directors or
as provided in subsection A(11) of Section 4 of this Article XVIII, may redeem
the whole or any part of any series of the Preferred Stock at the time
outstanding, at any time or from time to time, by paying in cash as herein
provided the redemption price of the shares of the particular series fixed
therefor, together with dividends accrued to the date fixed for such
redemption, and by mailing, postage prepaid, at least thirty (30) days and not
more than ninety (90) days prior to the date fixed for said redemption a
notice specifying said redemption date to the holders of record of the
Preferred Stock to be redeemed, at their respective addresses as the same
shall appear on the books of the corporation; provided, however, that the
exercise by the corporation of its right to redeem shares of any particular
series may be subject to such restrictions as are determined for said series.
In case of the redemption of a part only of any series of the Preferred Stock
at the time outstanding, the corporation shall select by lot in such manner as
the board of directors determines, the shares so to be redeemed. If such
notice of redemption shall have been so mailed, 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 corporation, so as to be and
continue to be available therefor, then, on and after said redemption date,
notwithstanding that any certificate for the shares of the Preferred Stock so
called for redemption shall not have been surrendered for cancellation, the
shares represented thereby shall no longer be deemed outstanding, the right to
receive dividends thereon shall cease to accrue, and all rights of the holders
thereof shall forthwith cease and terminate, except only the right of the
holders thereof to receive the amount payable upon redemption thereof, but
without interest; provided, however, that if, after mailing said notice as
aforesaid and prior to the date of redemption specified in such notice, said
funds shall be set aside by deposit in trust, for the account of the holders
of the Preferred Stock to be redeemed, with a bank or trust company in good
standing, organized under the laws of the United States of America or The
Commonwealth of Massachusetts, having a capital, undivided profits and surplus
aggregating at least $5,000,000, thereupon all shares of the Preferred Stock
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 of
Preferred Stock shall forthwith upon such deposit in trust cease and
terminate, except only the right of the holders thereof to receive from such
deposit the amount payable upon the redemption but without interest. In case
the holders of the Preferred Stock which shall have been redeemed shall not
within four years of the date of redemption thereof claim any amount so
deposited in trust for the redemption of such shares, such bank or trust
company shall, upon demand, pay over to the corporation any such unclaimed
amount so deposited with it and shall thereupon be relieved of all
responsibility in respect thereof, and the corporation shall not be required
to hold the amount so paid over to it separate and apart from its other funds,
and thereafter the holders of such shares of Preferred Stock shall look only
to the corporation for payment of the redemption price thereof, but without
interest. If there are any dividends accrued to the last preceding quarterly
dividend payment date or dates on the outstanding Preferred Stock or any other
class of preferred stock ranking on a parity therewith as to assets, no
Preferred Stock or such parity stock shall be redeemed, purchased or otherwise
acquired by the corporation unless all series of Preferred Stock and such
parity stock which are redeemable shall be redeemed and unless an offer is
made to (a) purchase all Preferred Stock and such parity stock of any series
which is not redeemable at the time under limited restrictions then applicable
thereto at a price equal to the then redemption price for such series if such
restrictions were not applicable and (b) to purchase all Preferred Stock and
such parity stock of any series which is not redeemable at the time at a price
equal to the highest then redemption price on any outstanding shares of
Preferred Stock and such parity stock, after giving effect to the differences
in par value among classes of preferred stock, or unless a partial redemption
or any purchase or other acquisition shall have been ordered, approved or
permitted under the Public Utility Holding Company Act of 1935. All stock
redeemed or purchased under the provisions of this subsection C shall be
retired.
D. In the event of any liquidation, dissolution or winding up
(whether voluntarily or involuntarily) of the affairs of the corporation or
any distribution of its capital, then before any distribution shall be made to
the holders of Common Stock or any other stock ranking junior to the Preferred
Stock as to assets, the holders of each series of the Preferred Stock at the
time outstanding shall be entitled to be paid in cash the amount for the
particular series fixed therefor, together in each case with dividends accrued
thereon to the date fixed for payment of such distributive amounts, and no
more. No payments on account of such distributive amounts shall be made to
the holders of any series of the Preferred Stock or any other class of
preferred stock ranking on a parity therewith, as to assets, unless there
shall likewise be paid at the same time to the holders of each other series of
the Preferred Stock or such parity stock like proportionate distributive
amounts, ratably, in proportion to the full distributive amounts to which they
are respectively entitled. After such payment to the holders of Preferred
Stock or such parity stock, the remaining assets and funds of the corporation
shall be divided and distributed among the holders of Common Stock or any
other stock ranking junior to the Preferred Stock as to assets then
outstanding according to their respective rights. Neither the consolidation
nor the merger of the corporation with or into any other corporation shall be
deemed to be a liquidation, dissolution or winding up of the corporation.
E. Except as required by law and except as hereafter specifically
provided in this Section 4 of this Article XVIII, the holders of Preferred
Stock shall have no right to vote.
F. Except as otherwise expressly provided by law, no holder of
Preferred 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 warrant
carrying rights to stock, or securities convertible into stock, of any class
whatever, whether now or hereafter authorized, and whether issued for cash,
property, services or otherwise. If it is expressly required by law that such
new or additional issue be offered proportionately to the stockholders, then,
unless otherwise provided by law, the holders of all classes of preferred
stock only shall be entitled to subscribe for new or additional preferred
stock of any class and the holders of common stock only shall be entitled to
subscribe for new or additional common stock; and notice of such increase as
required by law need be given and the new shares need be offered
proportionately only to the stockholders who are so entitled to subscribe.
G. Subject to the limitations, if any, contained in Sections 4 and 5
of this Article XVIII, the corporation may from time to time issue additional
capital stock divided into classes with such preferences as to dividends,
voting power and other incidents as may be determined in accordance with
applicable provisions of law and terms of outstanding capital stock. Without
limiting the generality of the foregoing, any such additional capital stock
may be an additional series of Preferred Stock or additional shares of the
initial or any other series of Preferred Stock.
H. So long as any shares of the Preferred Stock of any series are
outstanding, the payment of dividends on Common Stock or on any other stock of
the corporation ranking junior to the Preferred Stock as to dividends or
assets (other than (i) dividends payable in stock ranking junior to the
Preferred Stock as to dividends and assets or (ii) dividends paid in cash if
immediately thereafter there shall be paid to the corporation in cash an
amount equal to such dividends for shares of or as a capital contribution with
respect to stock ranking junior to the Preferred Stock as to dividends or
assets) and the making of any distribution of assets to holders of stock
ranking junior to the Preferred Stock as to dividends or assets by purchase of
shares or otherwise (each of such actions being herein embraced within the
term "payment of junior stock dividends") shall be subject to the following
limitations:
(1) If and so long as the junior stock equity is, or as a result
of the proposed payment would become, less than twenty per cent (20%) of
total capitalization the payment of junior stock dividends, including
the proposed payment, during the twelve months ending with the last day
of the month in which the proposed payment is to be made shall not
exceed fifty per cent (50%) of the net income of the corporation
available for the payment of dividends on the stock ranking junior to
the Preferred Stock as to dividends and assets for the twelve full
calendar months immediately preceding the calendar month in which such
dividend is declared; and
(2) If and so long as the junior stock equity is, or as a result
of the proposed payment would become, less than twenty-five per cent
(25%) but is twenty per cent (20%) or more of total capitalization the
payment of junior stock dividends, including the proposed payment,
during the twelve months ending with the last day of the month in which
the proposed payment is to be made shall not exceed seventy-five per
cent (75%) of the net income of the corporation available for the
payment of dividends on the stock ranking junior to the Preferred Stock
as to dividends and assets for the twelve full calendar months
immediately preceding the calendar month in which such dividend is
declared.
For the purposes of this subsection H "net income" shall be determined
in accordance with generally accepted accounting principles, provided,
however, that the amount deducted for depreciation shall be an amount computed
in accordance with clause (c) of Section 4E hereof.
The term "junior stock equity" is defined in subsection E(2)(i) of
Section 4 of this Article XVIII. The term "total capitalization" as used in
this subsection H means the aggregate of (x) the junior stock equity, (y) the
par value of, or stated capital represented by, the outstanding shares of
Preferred Stock and any other stock ranking prior thereto or on a parity
therewith as to dividends or assets, and (z) the principal amount of all
outstanding indebtedness of the corporation represented by bonds, notes and
other evidences of indebtedness maturing by their terms more than one year
from the date of issue thereof.
I. No stockholder, director, officer or agent of the corporation
shall be held individually responsible for any action taken in good faith
though subsequently adjudged to be in violation of this Section 2.
J. The shares of Preferred Stock from time to time duly authorized
may be issued for such consideration as may be fixed from time to time either
by the board of directors or as otherwise provided by law. Any and all shares
of Preferred Stock upon receipt by the corporation of the consideration so
fixed shall be deemed fully paid stock and shall not be liable to any further
call or assessment thereon.
K. Every holder of Preferred Stock of the corporation by becoming
such shall be held to have consented to all of these provisions and to have
agreed to be bound thereby and to have waived to the full extent permitted by
law any right such holder may have either now or at any time in the future
contrary to these provisions.
SECTION 3. Preferred Stock - Cumulative.
A. The shares of Preferred Stock - Cumulative may be issued, as the
board of directors may determine, in one or more series each bearing such
designation as to distinguish the shares thereof from the shares of all other
series and classes of capital stock of the corporation. All shares of
Preferred Stock - Cumulative, irrespective of series, shall constitute one and
the same class of stock and shall be of equal rank as to dividends and assets
with each other and with the Preferred Stock. Subject to any applicable
provisions of law, the shares of Preferred Stock - Cumulative of different
series may vary, as determined by the board of directors and, if required by
law, by the stockholders, as to the following rights and preferences:
(1) The annual dividend rate, or method of calculation thereof,
and the date from which the dividends on shares issued prior to the
record date for the first dividend shall be cumulative and the date for
the first dividend;
(2) The redemption price or prices, or method of calculation
thereof, and any restriction on the exercise by the corporation of its
right to redeem such series;
(3) The amount or amounts payable upon any liquidation or
dissolution or winding up;
(4) The terms and amount of any sinking fund provided for the
purchase or redemption of shares; and
(5) The conversion, participation or other special rights.
B. Before any dividends on, or any distribution of assets (by
purchase of shares or otherwise) to holders of, the Common Stock or any other
stock ranking junior to the Preferred Stock - Cumulative as to dividends (both
hereinafter in this subsection B called "junior stock") shall be paid or set
apart for payment or otherwise provided for, the holders of the Preferred
Stock - Cumulative shall be entitled to receive, but only when and as declared
by the board of directors, out of any funds legally available for the
declaration of dividends, cumulative dividends at the annual dividend rate per
share fixed for the particular series payable quarterly on the first days of
February, May, August and November in each year commencing on a date specified
for the first dividend date as herein provided to stockholders of record on
the respective dates, not exceeding thirty (30) days preceding such dividend
payment dates, fixed in advance for the purpose by the board of directors
prior to the payment of each particular dividend. No dividends shall be
declared on any series of the Preferred Stock - Cumulative or on any other
class of preferred stock ranking on a parity therewith, as to dividends, in
respect of any quarter-yearly dividend period, unless there shall likewise be
declared on all shares of all series of the Preferred Stock - Cumulative and
of any other class of such parity preferred stock at the time outstanding,
like proportionate dividends, ratably, in proportion to the respective annual
dividend rates fixed therefor, 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 - Cumulative shall be cumulative. In the case of all
shares of each particular series, the dividends on shares of such series shall
be cumulative:
(1) On shares issued prior to the record date for the first
dividend on the shares of such series, from the date for the particular
series fixed therefor;
(2) On shares issued after a record date for a dividend, but
prior to the dividend payment date for such dividend, from said dividend
payment; and
(3) Otherwise from the quarter-yearly dividend payment date next
preceding the date of issue of such shares;
so that dividends accrued on all outstanding shares of Preferred Stock -
Cumulative to the last preceding quarterly dividend payment shall have been
paid in full or declared and set apart for payment before there shall be any
dividend or distribution on, or purchase of, junior stock. The holders of the
Preferred Stock - Cumulative shall not be entitled to receive any dividends
thereon other than the dividends referred to in this subsection B and other
than distributions provided for in subsection D below. Whenever dividends
accrued on all outstanding shares of Preferred Stock - Cumulative to the last
preceding quarterly dividend payment date shall have been paid in full or
declared and set apart for payment, and subject to the limitations set forth
in subsection H below and, when applicable, in subsection E(2)(i) of Section 4
of this Article XVIII, the board of directors may, without waiting for the
expiration of the current dividend period for the Preferred Stock -
Cumulative, declare and pay dividends on any junior stock out of funds legally
available therefor.
As used in this Section 3, the expression "dividends accrued" shall mean
the sum of amounts with respect to all shares of Preferred Stock - Cumulative
then outstanding, which as to each share shall be an amount computed at the
rate per annum of the par value thereof fixed for the particular series from
the date from which dividends on such share become cumulative to the date with
reference to which the expression is used, irrespective of whether such amount
shall have been declared as dividends or there shall have existed any funds
legally available for the payment thereof, less the aggregate of all dividends
paid or declared payable on or before said last mentioned date and set aside
for such payment on such share.
C. The corporation, pursuant to action of its board of directors or
as provided in subsection A(11) of Section 4 of this Article XVIII, may redeem
the whole or any part of any series of the Preferred Stock - Cumulative at the
time outstanding, at any time or from time to time, by paying in cash as
herein provided the redemption price of the shares of the particular series
fixed therefor, together with dividends accrued to the date fixed for such
redemption, and by mailing, postage prepaid, at least thirty (30) days and not
more than ninety (90) days prior to the date fixed for said redemption a
notice specifying said redemption date to the holders of record of the
Preferred Stock - Cumulative to be redeemed, at their respective addresses as
the same shall appear on the books of the corporation; provided, however, that
the exercise by the corporation of its right to redeem shares of any
particular series may be subject to such restrictions as are determined for
said series. In case of the redemption of a part only of any series of the
Preferred Stock - Cumulative at the time outstanding, the corporation shall
select by lot in such manner as the board of directors determines, the shares
so to be redeemed. If such notice of redemption shall have been so mailed,
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 corporation, so
as to be and continue to be available therefor, then, on and after said
redemption date, notwithstanding that any certificate for the shares of the
Preferred Stock - Cumulative so called for redemption shall not have been
surrendered for cancellation, the shares represented thereby shall no longer
be deemed outstanding, the right to receive dividends thereon shall cease to
accrue, and all rights of the holders thereof shall forthwith cease and
terminate, except only the right of the holders thereof to receive the amount
payable upon redemption thereof, but without interest; provided, however, that
if, after mailing said notice as aforesaid and prior to the date of redemption
specified in such notice, said funds shall be set aside by deposit in trust,
for the account of the holders of the Preferred Stock - Cumulative to be
redeemed, with a bank or trust company in good standing, organized under the
laws of the United States of America or The Commonwealth of Massachusetts,
having a capital, undivided profits and surplus aggregating at least
$5,000,000, thereupon all shares of the Preferred Stock - Cumulative 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 of Preferred
Stock - Cumulative shall forthwith upon such deposit in trust cease and
terminate, except only the right of the holders thereof to receive from such
deposit the amount payable upon the redemption but without interest. In case
the holders of the Preferred Stock - Cumulative which shall have been redeemed
shall not within four years of the date of redemption thereof claim any amount
so deposited in trust for the redemption of such shares, such bank or trust
company shall, upon demand, pay over to the corporation any such unclaimed
amount so deposited with it and shall thereupon be relieved of all
responsibility in respect thereof, and the corporation shall not be required
to hold the amount so paid over to it separate and apart from its other funds,
and thereafter the holders of such shares of Preferred Stock - Cumulative
shall look only to the corporation for payment of the redemption price
thereof, but without interest. If there are any dividends accrued to the last
preceding quarterly dividend payment date or dates on the outstanding
Preferred Stock - Cumulative or any other class of preferred stock ranking on
a parity therewith as to assets, no Preferred Stock - Cumulative or such
parity stock shall be redeemed, purchased or otherwise acquired by the
corporation unless all series of Preferred Stock - Cumulative and such parity
stock which are redeemable shall be redeemed and unless an offer is made to
(a) purchase all Preferred Stock - Cumulative and such parity stock of any
series which is not redeemable at the time under limited restrictions then
applicable thereto at a price equal to the then redemption price for such
series if such restrictions were not applicable and (b) to purchase all
Preferred Stock - Cumulative and such parity stock of any series which is not
redeemable at the time at a price equal to the highest then redemption price
on any outstanding shares of Preferred Stock - Cumulative and such parity
stock, after giving effect to the differences in par value among classes of
preferred stock, or unless a partial redemption or any purchase or other
acquisition shall have been ordered, approved or permitted under the Public
Utility Holding Company Act of 1935. All stock redeemed or purchased under
the provisions of this subsection C shall be retired.
D. In the event of any liquidation, dissolution or winding up
(whether voluntarily or involuntarily) of the affairs of the corporation or
any distribution of its capital, then before any distribution shall be made to
the holders of Common Stock or any other stock ranking junior to the Preferred
Stock - Cumulative as to assets, the holders of each series of the Preferred
Stock - Cumulative at the time outstanding shall be entitled to be paid in
cash the amount for the particular series fixed therefor, together in each
case with dividends accrued thereon to the date fixed for payment of such
distributive amounts, and no more. No payments on account of such
distributive amounts shall be made to the holders of any series of the
Preferred Stock - Cumulative or any other class of preferred stock ranking on
a parity therewith, as to assets, unless there shall likewise be paid at the
same time to the holders of each other series of the Preferred Stock -
Cumulative or such parity stock like proportionate distributive amounts,
ratably, in proportion to the full distributive amounts to which they are
respectively entitled. After such payment to the holders of Preferred Stock -
Cumulative or such parity stock, the remaining assets and funds of the
corporation shall be divided and distributed among the holders of Common Stock
or any other stock ranking junior to the Preferred Stock - Cumulative as to
assets then outstanding according to their respective rights. Neither the
consolidation nor the merger of the corporation with or into any other
corporation shall be deemed to be a liquidation, dissolution or winding up of
the corporation.
E. Except as required by law and except as hereafter specifically
provided in this Section 4 of this Article XVIII, the holders of Preferred
Stock - Cumulative shall have no right to vote.
F. Except as otherwise expressly provided by law, no holder of
Preferred Stock - Cumulative 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
warrant carrying rights to stock, or securities convertible into stock, of any
class whatever, whether now or hereafter authorized, and whether issued for
cash, property, services or otherwise. If it is expressly required by law
that such new or additional issue be offered proportionately to the
stockholders, then, unless otherwise provided by law, the holders of all
classes of preferred stock only shall be entitled to subscribe for new or
additional preferred stock of any class and the holders of common stock only
shall be entitled to subscribe for new or additional common stock; and notice
of such increase as required by law need be given and the new shares need be
offered proportionately only to the stockholders who are so entitled to
subscribe.
G. Subject to the limitations, if any, contained in Sections 4 and 5
of this Article XVIII, the corporation may from time to time issue additional
capital stock divided into classes with such preferences as to dividends,
voting power and other incidents as may be determined in accordance with
applicable provisions of law and terms of outstanding capital stock. Without
limiting the generality of the foregoing, any such additional capital stock
may be an additional series of Preferred Stock - Cumulative or additional
shares of the initial or any other series of Preferred Stock - Cumulative.
H. So long as any shares of the Preferred Stock - Cumulative of any
series are outstanding, the payment of dividends on Common Stock or on any
other stock of the corporation ranking junior to the Preferred Stock -
Cumulative as to dividends or assets (other than (i) dividends payable in
stock ranking junior to the Preferred Stock - Cumulative as to dividends and
assets or (ii) dividends paid in cash if immediately thereafter there shall be
paid to the corporation in cash an amount equal to such dividends for shares
of or as a capital contribution with respect to stock ranking junior to the
Preferred Stock - Cumulative as to dividends or assets) and the making of any
distribution of assets to holders of stock ranking junior to the Preferred
Stock - Cumulative as to dividends or assets by purchase of shares or
otherwise (each of such actions being herein embraced within the term "payment
of junior stock dividends") shall be subject to the following limitations:
(1) If and so long as the junior stock equity is, or as a result
of the proposed payment would become, less than twenty per cent (20%) of
total capitalization the payment of junior stock dividends, including
the proposed payment, during the twelve months ending with the last day
of the month in which the proposed payment is to be made shall not
exceed fifty per cent (50%) of the net income of the corporation
available for the payment of dividends on the stock ranking junior to
the Preferred Stock - Cumulative as to dividends and assets for the
twelve full calendar months immediately preceding the calendar month in
which such dividend is declared; and
(2) If and so long as the junior stock equity is, or as a result
of the proposed payment would become, less than twenty-five per cent
(25%) but is twenty per cent (20%) or more of total capitalization the
payment of junior stock dividends, including the proposed payment,
during the twelve months ending with the last day of the month in which
the proposed payment is to be made shall not exceed seventy-five per
cent (75%) of the net income of the corporation available for the
payment of dividends on the stock ranking junior to the Preferred Stock
- Cumulative as to dividends and assets for the twelve full calendar
months immediately preceding the calendar month in which such dividend
is declared.
For the purposes of this subsection H "net income" shall be determined
in accordance with generally accepted accounting principles, provided,
however, that the amount deducted for depreciation shall be an amount computed
in accordance with clause (c) of subsection I(2) hereof.
The term "junior stock equity" is defined in subsection E(2)(i) of
Section 4 of this Article XVIII.
The term "total capitalization" as used in this subsection H means the
aggregate of (x) the junior stock equity, (y) the par value of, or stated
capital represented by, the outstanding shares of Preferred Stock - Cumulative
and any other stock ranking prior thereto or on a parity therewith as to
dividends or assets, and (z) the principal amount of all outstanding
indebtedness of the corporation represented by bonds, notes and other
evidences of indebtedness maturing by their terms more than one year from the
date of issue thereof.
I. No stockholder, director, officer or agent of the corporation
shall be held individually responsible for any action taken in good faith
though subsequently adjudged to be in violation of this Section 3.
J. The shares of Preferred Stock - Cumulative from time to time duly
authorized may be issued for such consideration as may be fixed from time to
time either by the board of directors or as otherwise provided by law. Any
and all shares of Preferred Stock - Cumulative upon receipt by the corporation
of the consideration so fixed shall be deemed fully paid stock and shall not
be liable to any further call or assessment thereon.
K. Every holder of Preferred Stock - Cumulative of the corporation by
becoming such shall be held to have consented to all of these provisions and
to have agreed to be bound thereby and to have waived to the full extent
permitted by law any right such holder may have either now or at any time in
the future contrary to these provisions.
SECTION 4. Certain Rights of Preferred Stock and
Preferred Stock - Cumulative.
A. (1) "Equal Preference Stock" as used in this subsection A shall
mean the Preferred Stock, the Preferred Stock - Cumulative, and any
other class of preferred stock ranking on a parity therewith as to
dividends.
If dividends accrued to the last preceding quarterly dividend
payment date or dates on the outstanding Equal Preference Stock shall at
any time and from time to time equal or exceed an amount equivalent to
four (4) full quarterly dividends on any shares of any series of the
Equal Preference Stock at the time outstanding, then until all dividends
in default on the Equal Preference Stock shall have been paid, the
holders of Equal Preference Stock, voting separately as one class, shall
have the right to elect the smallest number of directors necessary to
constitute a majority of the full board of directors, and the holders of
the stock generally entitled to vote, voting separately as one class,
shall have the right to elect the remaining members of the board of
directors. If and when all dividends in default on the Equal Preference
Stock shall be paid (and, except when prevented from so doing by any
applicable restriction of law or contained in any agreement relating to
indebtedness of the corporation, such dividends shall be declared and
paid out of any funds legally available therefor as soon as reasonably
practicable unless, by a majority vote of the directors elected by the
holders of stock generally entitled to vote, such directors determine
such payment not to be in the best interests of the corporation), the
Equal Preference Stock shall thereupon be divested of such special right
to elect any member of the board of directors, but subject always to the
same provisions for the vesting of such special right in the Equal
Preference Stock in case of further like default or defaults.
(2) Upon accrual of the right of the holders of the Equal
Preference Stock to elect a majority of the board of directors as above
provided in this subsection A, the president, a vice president or the
clerk of the corporation shall call a special meeting of the
stockholders of the corporation for the purpose of electing a new board
of directors to be held not less than forty-five (45) nor more than
sixty (60) days after the accrual of such right; provided, however, that
no such special meeting shall be called if the date of such accrual of
such right shall be less than one hundred twenty (120) days but not less
than forty-five (45) days prior to the date otherwise fixed by the by-
laws of the corporation for the next annual meeting of the stockholders,
in which event said annual meeting shall be held on the date specified
in the by-laws or a special meeting in lieu thereof called to be held
within three (3) days thereafter. If said officers fail to call such
meeting, or fail to hold such annual meeting or special meeting in lieu
thereof within three (3) days of the date provided therefor in the by-
laws, any holder or holders of Equal Preference Stock holding in the
aggregate one thousand (1,000) shares may call a special meeting for
such purpose.
(3) The notice of any such special meeting, any annual meeting
of the corporation or any special meeting in lieu thereof, at which the
holders of the Equal Preference Stock shall have the right to elect
directors, shall be mailed by the corporation not less than thirty (30)
days prior to the meeting and state (x) that by reason of the fact that
dividends payable on the Equal Preference Stock are or have been in
default in an amount equal to or in excess of four (4) full quarterly
dividends, the holders of the Equal Preference Stock, voting together as
a class, are entitled to elect the smallest number of directors
necessary to constitute a majority of the full board of directors, (y)
that any holder of the Equal Preference Stock has the right at any
reasonable time to inspect and make copies of the list or lists of the
holders of Equal Preference Stock maintained at the principal office of
the corporation or at the office of any transfer agent for the Equal
Preference Stock, and (z) the substance of the next succeeding paragraph
with respect to the number of shares of Equal Preference Stock required
to be represented at any meeting or adjournment thereof for the election
of directors of the corporation at which such holders have the right to
elect directors.
(4) At any such special or annual meeting at which the holders
of the Equal Preference Stock shall have the right to elect directors,
the presence in person or by proxy of the holders of a majority of the
outstanding stock generally entitled to vote 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 a majority of the
outstanding Equal Preference Stock shall be required to constitute a
quorum of such class for the election of directors; provided, however,
that in the absence of such a quorum of the holders of the Equal
Preference Stock, no election of directors shall be held but a majority
of the holders of the Equal Preference Stock who are present in person
or by proxy shall have the power to adjourn the meeting for election of
directors to a date not less than twenty-five (25) nor more than sixty
(60) days for the date of such original meeting. At such adjourned
meeting the presence in person or by proxy of the holders of thirty-five
per cent (35%) of the outstanding Equal Preference Stock shall
constitute a quorum of such class for the election of directors.
In the calculation of any quorum, majority, or percentage, of the
Equal Preference Stock, each share of stock bearing $100 par value shall
be counted as one and each share of stock bearing $25 par value shall be
counted as one-quarter. The Equal Preference Stock, when voting as
such, shall vote as a single class.
(5) In the event any such special or annual meeting of
stockholders shall be adjourned as aforesaid, the president, any vice
president or the clerk of the corporation shall, within ten (10) days
after the date of the original meeting, cause notice of the adjourned
meeting to be given to all stockholders of the corporation entitled to
vote thereat. Such notice shall contain substantially the statements
hereinabove required with respect to the original meeting, and shall
further state that the required quorum of the holders of the Equal
Preference Stock was not present at such original meeting and that the
holders of thirty-five per cent (35%) of the outstanding Equal
Preference Stock will constitute a quorum of such class for the election
of directors at such adjourned meeting.
(6) If the requisite quorum of holders of the Equal Preference
Stock shall not be present at such adjourned meeting, then, in case the
original meeting was a special meeting called as aforesaid, the
directors of the corporation then in office shall remain in office until
the next annual meeting of the stockholders of the corporation and until
their successors have been elected and shall qualify; or if such
original meeting was an annual meeting of the stockholders or special
meeting in lieu thereof, all members of the board of directors to be
elected at such meeting shall be elected by a vote of the holders of a
majority of the shares of the stock generally entitled to vote present
in person or represented by proxy at such adjourned meeting.
(7) Upon reversion, pursuant to subsection A(1), of the voting
powers to their status prior to default, a special or annual meeting of
stockholders generally entitled to vote shall be held for the purpose of
electing directors. Notice thereof shall be given promptly by the
corporation and in any case within fifteen (15) days after such
reversion, such notice to be mailed by the corporation not less than
seven (7) nor more than ten (10) days prior to such meeting to all
stockholders generally entitled to vote at their respective addresses
appearing upon the books of the corporation, unless such notice shall
have been waived either before or after the holding of such meeting by
all such stockholders. If the corporation fails to call such meeting or
fails to hold such annual meeting within three (3) days of the date
provided therefor in the by-laws, any holder or holders of stock
generally entitled to vote holding in the aggregate one thousand (1,000)
shares may call a special meeting for such purpose.
(8) Forthwith upon the election of a majority of the board of
directors of the corporation by the holders of Equal Preference Stock
pursuant to subsection A(1) hereof, the terms of office of all persons
who may be directors of the corporation at the time shall terminate,
whether or not the holders of stock generally entitled to vote shall
then have elected the remaining members of the board of directors, and,
if the holders of stock generally entitled to vote shall not have
elected the remaining members of the board of directors, then the
directors of the corporation in office just prior to the election of the
majority of the board of directors by the holders of Equal Preference
Stock shall appoint the remaining directors of the corporation pending
such election by the holders of stock generally entitled to vote. Any
director elected by holders of Equal Preference Stock shall hold office
until the next annual meeting of the holders of Equal Preference Stock
and until his successor is chosen and qualified, except that upon the
reversion, pursuant to subsection A(1), of the voting powers to their
status prior to default, then forthwith upon the election of new
directors by the holders of stock generally entitled to vote, the terms
of office of the directors elected by the holders of Equal Preference
Stock shall terminate.
(9) During any period in which the holders of Equal Preference
Stock have the right to elect a majority of the board of directors,
pursuant to subsection A(1), the number of directors constituting the
full board of directors shall be the number constituting the full board
of directors immediately prior to said period unless it be changed at an
annual meeting of stockholders by a two-thirds vote of the holders of
Equal Preference Stock and by a two-thirds vote of the holders of stock
generally entitled to vote to such number as shall have been stated in
the notice of said annual meeting.
(10) In case of any vacancy in the office of a director elected
by the holders of Equal Preference Stock pursuant to the foregoing
provisions of this subsection A, the remaining directors elected by the
holders of Equal Preference Stock by affirmative vote of a majority
thereof, or the remaining director so elected if there be but one, may
elect a successor or successors to hold office for the unexpired term of
the director or directors whose place or places shall be vacant. The
holders of the Equal Preference Stock, at a special meeting called for
the purpose by the holders of an aggregate of not less than one thousand
(1,000) shares of the Equal Preference Stock, upon notice mailed not
less than thirty (30) days prior to such meeting to all stockholders
entitled to vote thereat, by a vote of a majority of the Equal
Preference Stock issued and outstanding, may remove from office a
director elected by the holders of Equal Preference Stock and may elect
a successor for the remainder of his term.
(11) Under all circumstances, however, the directors elected by
the holders of stock generally entitled to vote shall have the right,
and neither the holders of Equal Preference Stock nor any directors
elected under these provisions by the holders of Equal Preference Stock
shall have any right, to vote upon the question of calling for
redemption, or of purchasing, all of the Equal Preference Stock at the
time outstanding.
(12) Except when some mandatory provision of law shall be
controlling or as otherwise provided in this Section 4 and, with respect
to any special rights of (i) the Preferred Stock as a class, or (ii) the
Preferred Stock - Cumulative as a class, or (iii) any series of either
such class as a series, in the provisions of the by-laws or articles of
organization controlling said class or in the votes creating said
series, neither the Preferred Stock nor the Preferred Stock - Cumulative
shall be entitled to vote as a separate class, and no outstanding series
of either such class shall be entitled to vote as a separate series, on
any matter and all shares of the Preferred Stock of all series and all
shares of the Preferred Stock - Cumulative of all series shall be deemed
to constitute but one class for any purpose for which a vote of the
stockholders of the corporation by classes may now or hereafter be
required.
B. So long as any shares of the Preferred Stock of any series are
outstanding, the corporation shall not, without the vote at a meeting called
for that purpose of the holders of at least two-thirds of the total number of
shares of the Preferred Stock of all series then outstanding make any change
in the provisions relative to the Preferred Stock, or of any series thereof,
which would change the express terms and provisions of such stock (other than
the express terms and provisions thereof set forth in subsections A, D, and E
of this Section 4) in any manner prejudicial to the holders thereof except
that if such change is prejudicial to the holders of one or more, but not all
of such series, only to the vote of the holders of two-thirds of the total
number of shares of all series so affected and then outstanding shall be
required.
C. So long as any shares of the Preferred Stock - Cumulative of any
series are outstanding, the corporation shall not, without the vote at a
meeting called for that purpose of the holders of at least two-thirds of the
total number of shares of the Preferred Stock - Cumulative of all series then
outstanding make any change in the provisions relative to the Preferred Stock
- - Cumulative, or of any series thereof, which would change the express terms
and provisions of such stock (other than the express terms and provisions
thereof set forth in subsections A, D, and E of this Section 4) in any manner
prejudicial to the holders thereof except that if such change is prejudicial
to the holders of one or more, but not all, of such series, only the vote of
the holders of two-third of the total number of shares of all series so
affected and then outstanding shall be required.
D. So long as any shares of the Preferred Stock or the Preferred
Stock - Cumulative of any series are outstanding, the corporation shall not,
without the vote at a meeting called for that purpose of the holders of at
least two-thirds of the total number of shares of the Preferred Stock and the
Preferred Stock - Cumulative of all series then outstanding:
(1) Make any change in the provisions of this Section 4, which
would change the express terms and provisions of subsections A, D, or E,
or such stock in any manner prejudicial to the holders of the Preferred
Stock and the Preferred Stock - Cumulative, except that if such change
is prejudicial to the holders of one class, but not both, only the vote
of the holders of two-thirds of the total number of shares of the class
so affected and then outstanding shall be required; or
(2) Create or authorize any class of stock which shall be
preferred as to dividends or assets over the Preferred Stock, the
Preferred Stock - Cumulative or any security convertible into either
class.
No preferred stock so preferred as to dividends or assets over the Preferred
Stock or the Preferred Stock - Cumulative (other than either of such preferred
stocks issued upon conversion of another security) shall be issued more than
six months after the above referred to vote creating or authorizing such class
of stock unless within six months prior to such issue approval thereof has
been obtained, at a meeting called for the purpose, by vote of at least two-
thirds of the total number of shares of Preferred Stock and Preferred Stock -
Cumulative of all series outstanding.
E. So long as any shares of the Preferred Stock or the Preferred
Stock - Cumulative of any series are outstanding, the corporation shall not,
without the vote at a meeting called for that purpose of the holders of at
least a majority of the total number of shares of the Preferred Stock and
Preferred Stock - Cumulative of all series then outstanding:
(1) Issue shares of Preferred Stock or the Preferred Stock -
Cumulative of any series if after such issue the aggregate combined
outstanding par value of all series thereof would exceed $120 million.
(2) Issue additional shares of any series of Preferred Stock or
the Preferred Stock - Cumulative or of any other stock ranking prior
thereto or on a parity therewith as to dividends or assets, except for
refunding an equal par or stated value of Preferred Stock or Preferred
Stock - Cumulative, or other such prior or parity preferred stock, of
the corporation theretofore outstanding:
(i) Unless the junior stock equity to be outstanding
immediately after such issue shall be at least equal to the
aggregate amount payable on involuntary liquidation, dissolution
or winding up of the affairs of the corporation upon all Preferred
Stock and Preferred Stock - Cumulative of all series and of any
other such prior or parity stock to be outstanding immediately
after such issue; provided, however, that if for the purpose of
meeting this requirement it shall have been necessary to take into
consideration any portion of the earned surplus of the
corporation, the corporation shall not (until such junior stock
equity exclusive of such portion of earned surplus shall equal
such aggregate) pay any dividends or make any distribution on
shares of its stock ranking junior to the Preferred Stock and
Preferred Stock - Cumulative as to dividends or assets which would
result in reducing such junior stock equity to an amount less than
such aggregate amount payable on involuntary liquidation,
dissolution or winding up of the affairs of the corporation; and
(ii) Unless the gross income of the corporation after taxes
available for interest on its indebtedness and for dividends on
the Preferred Stock, the Preferred Stock - Cumulative and any
other such prior or parity stock, determined in accordance with
generally accepted accounting principles, for a period of twelve
(12) consecutive calendar months within the fifteen (15) calendar
months immediately preceding the calendar month in which such
additional stock is issued, or in which a contract for the
issuance and sale thereof is made, is at least one and one-half (1
1/2) times the aggregate of the annual interest charges and
dividend requirements on all interest bearing indebtedness and all
series of Preferred Stock, Preferred Stock - Cumulative and such
prior or parity stock to be outstanding immediately after the
proposed issue. In said computations under this subsection (ii):
(a) Interest on indebtedness and dividends on stock
in each case to be retired with the proceeds of the proposed
issue and similar charges on indebtedness and stock retired
or to be retired prior to the proposed issue from the
proceeds of any junior stock issued by the corporation are
to be excluded;
(b) Such gross income, similarly determined for said
twelve (12) months period, from any property acquired by
purchase, merger or otherwise during or after said period or
to be acquired in connection with the proposed issue, may be
included; and
(c) The amount deducted for depreciation shall be
the amount charged by the corporation on its books for
depreciation during such period but not less than the
greater of (x) two and one-tenth per cent (2.1%) of the
arithmetical average of the gross plant investment in
depreciable property on the books of the corporation on the
first and last days of such period or (y) the largest
minimum depreciation requirement for such period of any
mortgage indenture to which the corporation is a party
during such period.
"Junior stock equity" as used in this subsection E and in subsections H of
Sections 2 and 3 of this Article XVIII means the aggregate of the par value
of, or stated capital represented by, the outstanding shares of stock ranking
junior to the Preferred Stock as to dividends and assets, of the premium on
capital stock and of the surplus (including earned surplus, capital surplus
and surplus invested in plant) of the corporation less the excess, if any, of
the aggregate amount payable on involuntary liquidation, dissolution or
winding up of the affairs of the corporation upon all outstanding preferred
stock of the corporation over the aggregate par or stated value thereof and
less, unless the amounts or items are being amortized or are being provided
for by reserves, (a) any amounts recorded on the books of the corporation in
adjustment accounts for utility plant and other plant in excess of the
original cost thereof, (b) unamortized debt discount and expense and capital
stock discount and expense, and (c) the excess, if any, during the period from
January 1, 1954 to the end of a month within ninety (90) days preceding the
date as of which junior stock equity is determined, over the amount charged by
the corporation on its books during such period for depreciation of an amount
determined as follows:
(x) For the calendar year 1954 and for each full calendar year
thereafter, an amount equal to two and one-tenth per cent
(2.1%) of the arithmetical average of the gross plant
investment in depreciable property on the books of the
corporation on January 1 and December 31 of such calendar
year; and
(y) For any other period, an amount equal to one-twelfth (1/12)
of two and one-tenth per cent (2.1%) of the gross plant
investment in depreciable property on the books of the
corporation on the first day of the calendar year in such
period multiplied by the number of full calendar months in
such period.
(3) Merge or consolidate with or into any other corporation or
corporations or sell, lease or dispose of all or substantially all its
assets, unless such merger, consolidation, sale, lease or disposition,
or the issuance and assumption of all securities to be issued or assumed
in connection therewith, shall have been ordered, approved or permitted
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 under said Act or
by any court of the United States having such jurisdiction.
F. No stockholder, directors, officer or agent of the corporation
shall be held individually responsible for any action taken in good faith
though subsequently adjudged to be in violation of this Section 4.
The voting rights set forth in subsections B, C, and D shall not be
effective if, in connection with any matter specified therein, provision is
made for the purchase, redemption or retirement of all the Preferred Stock and
Preferred Stock - Cumulative at the time outstanding, or it is provided that
the proposed action shall not be effective unless such provision is made.
In the calculations in subsections D and E of "at least two-thirds of
the total number of shares of Preferred Stock and the Preferred Stock -
Cumulative" or of "at least a majority of the total number" of such shares,
each share of Preferred Stock bearing $100 par value shall be counted as one
and each share of Preferred Stock - Cumulative bearing $25 par value shall be
counted as one- quarter.
SECTION 5. Maximum Issues of Preferred Stock and Preferred Stock
- Cumulative.
The corporation shall not, without the vote at a meeting called for the
purpose of at least a majority of the shares of stock generally entitled to
vote, issue shares of any series of Preferred Stock or Preferred Stock -
Cumulative if after such issue the aggregate outstanding par value of all such
series would exceed $120 million.
SECTION 6. Terms Applicable to Specific Series of the Preferred
Stock.
A. The first series of the Preferred Stock of the corporation shall
be designated "Cumulative Preferred Stock, 4.44% Series"; the annual dividend
rate per share shall be four and forty-four hundredths per cent (4.44%) of the
par value thereof (such dividends on shares of the initial issue of said first
series to be cumulative from November 18, 1953, and the first dividend date to
be February 1, 1954); the redemption prices therefor shall be as follows:
If the redemption date is: Redemption
Price
On or prior to December 31, 1958............................... $106.568
January 1, 1959 through December 31, 1961...................... 106.068
January 1, 1962 through December 31, 1964...................... 105.568
January 1, 1965 through December 31, 1967...................... 105.068
January 1, 1968 through December 31, 1970...................... 104.568
After December 31, 1970........................................ 104.068
together in each case with accrued dividends; and the amounts payable upon any
liquidation, dissolution or winding up, if voluntary, shall be equal to said
redemption prices plus accrued dividends and, if involuntary, shall be $100.00
per share plus accrued dividends.
B. The second series of the Preferred Stock of the corporation shall
be designated "Cumulative Preferred Stock, 4.76% Series"; the annual dividend
rate per share shall be four and seventy-six hundredths per cent (4.76%) of
the par value thereof (such dividends on shares of the initial issue of said
second series to be cumulative from August 27, 1962, and the first dividend
date to be November 1, 1962); the redemption prices therefor shall be as
follows:
If the redemption date is: Redemption
Price
On or prior to October 31, 1967..................................$106.58
November 1, 1967 through October 31, 1972........................ 105.63
November 1, 1972 through October 31, 1977........................ 104.68
After October 31, 1977........................................... 103.73
together in each case with accrued dividends; and the amounts payable upon any
liquidation, dissolution or winding up, if voluntary, shall be equal to said
redemption prices plus accrued dividends and, if involuntary, shall be $100.00
per share plus accrued dividends.
C. The third series of the Preferred Stock of the corporation shall
be designated "Cumulative Preferred Stock, 9.44% Series"; the annual dividend
rate per share shall be nine and forty-four hundredths per cent (9.44%) of the
par value thereof (such dividends on shares of the initial issue of said third
series to be cumulative from October 19, 1970, and the first dividend date to
be February 1, 1971); the redemption prices therefor shall be as follows:
If the redemption date is: Redemption
Price
On or prior to January 31, 1976................................. $110.95
February 1, 1976 through January 31, 1981....................... 108.59
February 1, 1981 through January 31, 1986....................... 106.23
After January 31, 1986.......................................... 103.87
together in each case with accrued dividends, provided, however, that none of
the Cumulative Preferred Stock, 9.44% Series, shall be so redeemed prior to
October 1, 1975, if such redemption is for the purpose or in anticipation of
refunding such Preferred Stock through the use directly or indirectly of funds
obtained by the issuance of debt securities at an effective interest cost to
the corporation or other preferred stocks at an effective dividend cost to the
corporation (both as computed in accordance with generally accepted financial
practice) of less than 9.44% per annum; and the amounts payable upon any
liquidation, dissolution or winding up, if voluntary, shall be equal to said
redemption prices plus accrued dividends and, if involuntary, shall be $100.00
per share plus accrued dividends.
D. The fourth series of the Preferred Stock of the corporation shall
be designated "Cumulative Preferred Stock, 7.80% Series"; the annual dividend
rate per share shall be seven and eighty hundredths per cent (7.80%) of the
par value thereof (such dividends on shares of the initial issue of said
fourth series to be cumulative from December 14, 1971, and the first dividend
date to be February 1, 1972); the redemption prices therefor shall be as
follows:
If the redemption date is: Redemption
Price
On or prior to January 31, 1977................................. $109.10
February 1, 1977 through January 31, 1982....................... 107.15
February 1, 1982 through January 31, 1987....................... 105.20
After January 31, 1987.......................................... 103.25
together in each case with accrued dividends, provided, however, that none of
the Cumulative Preferred Stock, 7.80% Series, shall be so redeemed prior to
December 1, 1976, if such redemption is for the purpose or in anticipation of
refunding such Preferred Stock through the use directly or indirectly of funds
obtained by the issuance of debt securities at an effective interest cost to
the corporation or other preferred stocks at an effective dividend cost to the
corporation (both as computed in accordance with generally accepted financial
practice) of less than 7.80% per annum; and the amounts payable upon any
liquidation, dissolution or winding up, if voluntary, shall be equal to said
redemption prices plus accrued dividends and, if involuntary, shall be $100.00
per share plus accrued dividends.
E. The fifth series of the Preferred Stock of the corporation shall
be designated "Cumulative Preferred Stock, 7.84% Series"; the annual dividend
rate per share shall be seven and eighty-four hundredths per cent (7.84%) of
the par value thereof (such dividends on shares of the initial issue of said
fifth series to be cumulative from October 31, 1973, and the first dividend
date to be February 1, 1974); the redemption prices therefor shall be as
follows:
If the redemption date is: Redemption
Price
On or prior to October 31, 1978................................. $109.00
November 1, 1978 through October 31, 1983....................... 107.04
November 1, 1983 through October 31, 1988....................... 105.08
November 1, 1988 through October 31, 1993....................... 103.12
After October 31, 1993.......................................... 101.95
together in each case with accrued dividends, provided, however, that none of
the Cumulative Preferred Stock, 7.84% Series, shall be so redeemed prior to
October 1, 1978, if such redemption is for the purpose or in anticipation of
refunding such Preferred Stock through the use, directly or indirectly, of
funds obtained by the issuance of debt securities at an effective interest
cost to the corporation or other preferred stocks at an effective dividend
cost to the corporation (both as computed in accordance with generally
accepted financial practice) of less than 7.83% per annum; and the amounts
payable upon any liquidation, dissolution, or winding up, if voluntary, shall
be equal to said redemption prices plus accrued dividends and, if involuntary,
shall be $100.00 per share plus accrued dividends.
F. The sixth series of Preferred Stock of the Company be designated
"Cumulative Preferred Stock, 6.99% Series"; the annual dividend rate per share
be six and ninety-nine hundredths percent (6.99%) of the par value thereof
(such dividends on shares of the initial issue of said sixth series to be
cumulative from August 12, 1993, and the first dividend date to be November 1,
1993); that none of said sixth series will be redeemable until after August 1,
2003; that redemption prices per share if redeemed during the twelve-month
periods beginning August 1 in each of the years indicated in the table below
be as follows:
Year Redemption Price
---- ----------------
2003 103.50
2004 103.15
2005 102.80
2006 102.45
2007 102.10
2008 101.75
2009 101.40
2010 101.05
2011 100.70
2012 100.35
2013 and thereafter $100.00
together in each case with accrued dividends; and that the amounts payable
upon liquidation, dissolution or winding up, if voluntary, shall be equal to
said redemption prices plus accrued dividends, and, if involuntary, shall be
$100.00 per share plus accrued dividends.
SECTION 7. Terms Applicable to Specific Series of the Preferred
Stock-Cumulative
The first series of Preferred Stock-Cumulative of the Company be
designated "Preferred Stock-Cumulative, 6.84% Series"; the annual dividend
rate per share be six and eighty-four hundredths percent (6.84%) of the par
value thereof (such dividends on shares of the initial issue of said first
series to be cumulative from the date of such initial issue, and the first
dividend date to be November 1, 1993); that none of said first series will be
redeemable until after October 1, 1998; that the redemption price per share be
$25.80 plus accrued dividends; and that the amount payable upon liquidation,
dissolution or winding up, if voluntary, shall be equal to said redemption
price plus accrued dividends, and, if involuntary, shall be $25.00 per share
plus accrued dividends.
ARTICLE XIX.
CERTIFICATES OF STOCK.
Each stockholder shall be entitled to a certificate of capital stock of
the corporation owned by him in such form as shall, in conformity to law, be
prescribed from time to time by the board of directors. Such certificate
shall be signed by the president or a vice president and by the treasurer or
an assistant treasurer, and shall bear the seal of the corporation; provided,
however, that the signature of the president or a vice president or of the
treasurer or an assistant treasurer of the corporation, or both such
signatures, or the seal of the corporation, or either or both of such
signatures and such seal, upon such certificate may be facsimile, and such
certificate shall be as valid and effectual for all purposes as if signed by
such officer or officers, or sealed with the seal of the corporation, as the
case may be. The fact that a person signing has ceased to be an officer shall
not invalidate any such certificate.
ARTICLE XX.
TRANSFER OF SHARES OF STOCK.
Subject to the restrictions, if any, imposed by the agreement of
association, title to a certificate of stock and to the shares represented
thereby shall be transferred only by delivery of the certificate properly
endorsed, or by delivery of the certificate accompanied by a written
assignment of the same, or a written power of attorney to sell, assign, or
transfer the same or the shares represented thereby, properly executed; but
the person registered on the books of the corporation as the owner of shares
shall have the exclusive right to receive dividends thereon and to vote
thereon as such owner, and except only as may be required by law, may in all
respects be treated by the corporation as the exclusive owner thereof.
It shall be the duty of each stockholder to notify the corporation of
his post office address.
ARTICLE XXI.
TRANSFER BOOKS.
The treasurer or such agent or agents as may be employed by the
treasurer with the approval of the board of directors shall keep the stock and
transfer books of the corporation and a record of all certificates of stock
issued and of all transfers of stock and a register of all the stockholders,
their addresses and the number of shares held by each. For the purpose of
determining stockholders who are entitled to receive payment of any dividend,
to vote or act at a meeting and any adjournment thereof or to receive any
offering of additional stock, or for any other purpose permitted by law, the
board of directors may from time to time close the transfer books for such
period, not exceeding thirty days, as the board may determine or, without
closing said books, may fix a record date, not more than thirty days in
advance of such payment, meeting, offering or other action, as of which
stockholders entitled to such dividend, vote, offering or other right shall be
determined.
ARTICLE XXII.
LOSS OF CERTIFICATES.
In case of the alleged loss or destruction, or the mutilation of a
certificate of stock, a duplicate certificate may be issued in place thereof,
upon such reasonable terms as the board of directors may prescribe.
ARTICLE XXIII.
SEAL.
The seal of the corporation shall, subject to alteration by the board of
directors, consist of a flat-faced circular die with the words "MASSACHUSETTS
ELECTRIC COMPANY -- CORPORATE SEAL" cut or engraved thereon.
ARTICLE XXIV.
EXECUTION OF PAPERS.
Except as the board of directors may generally or in particular cases
authorize the execution thereof in some other manner, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts and other obligations made,
accepted or endorsed by the corporation, shall be signed by the president, any
vice president, the treasurer or any assistant treasurer.
ARTICLE XXV.
FISCAL YEAR.
Except as from time to time otherwise provided by the board of
directors, the fiscal year of the corporation shall be the calendar year.
ARTICLE XXVI.
AMENDMENTS.
Subject to the provisions of law and of the Preferred Stock and the
Preferred Stock-Cumulative, these by-laws may be amended, altered or repealed
by a vote of a majority of the outstanding capital stock generally entitled to
vote at any meeting of such stockholders, provided notice of the proposed
amendment, alteration or repeal is given in the notice of said meeting.
ARTICLE XXVII.
LIABILITY AND INDEMNIFICATION.
No director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such
liability, except with respect to any matter as to which such liability shall
have been imposed (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under section sixty-one or sixty-two of chapter one hundred and fifty-six B of
the General Laws of Massachusetts, or (iv) for any transaction from which the
director derived an improper personal benefit.
The corporation shall indemnify each of its directors and officers
against any loss, liability or expense, including amounts paid in satisfaction
of judgments, in compromise or as fines and penalties, and counsel fees,
imposed upon or reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, including but not limited to derivative suits (to the extent
permitted by law), in which he may be involved or with which he may be
threatened, while in office or thereafter, by reason of his being or having
been a director or officer, except with respect to any matter as to which he
shall have been adjudicated in such action, suit or proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interests of the corporation, or, to the extent that such matter relates to
service with respect to any employee benefit plan, as in the best interests of
the participants or beneficiaries of such plan. As to any matter disposed of
by a compromise payment by a director or officer, pursuant to a consent decree
or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless such compromise shall be approved as in the
best interests of the corporation, after notice that it involves such
indemnification, if no change in control has occurred (a) by a disinterested
majority of the directors then in office, (b) by a majority of the
disinterested directors then in office, provided that there has been obtained
an opinion in writing of independent legal counsel to the effect that such
director or officer appears to have acted in good faith in the reasonable
belief that his action was in the best interests of the corporation, or (c) by
the vote, at a meeting duly called and held, of the holders of a majority of
the shares outstanding and entitled to vote thereon, exclusive of any shares
owned by any interested director or officer or, if a change in control shall
have occurred, by an opinion in writing of independent legal counsel to the
effect that such director or officer appears to have acted in good faith in
the reasonable belief that his action was in the best interests of the
corporation.
Expenses incurred with respect to the defense or disposition of any
action, suit or proceeding heretofore referred to in this Article shall be
advanced by the corporation prior to the final disposition of such action,
suit or proceeding, upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification, which undertaking shall be accepted without
reference to the financial ability of the recipient to make such repayment.
If in an action, suit or proceeding brought by or in right of the corporation,
a director is held not liable, whether because relieved of liability under the
first paragraph of this Article or otherwise, he shall be deemed to have been
entitled to indemnification for expenses incurred in defense of said action,
suit or proceeding.
As used in this Article:
(i) The term "officer" includes (a) persons who serve at the
request of the corporation as directors, officers, or trustees of
another organization and (b) employees of the corporation and its
affiliates who serve in any capacity with respect to benefit plans for
the corporation's employees.
(ii) An "interested" director or officer is one against whom in
such capacity the proceeding in question or another proceeding on the
same or similar grounds is then pending.
(iii) A "change in control" occurs when: (a) any individual,
corporation, association, partnership, joint venture, trust or other
entity or association thereof acting in concert (excluding any employee
benefit plan, dividend reinvestment plan or similar plan of the
corporation, or any trustee thereof acting in such capacity) acquires
more than 20% of the corporation's outstanding stock having general
voting rights or more than 20% of the common shares of any entity owning
more than 50% of the corporation's outstanding stock having general
voting rights, whether in whole or in part, by means of an offer made
publicly to the holders of all or substantially all of such outstanding
stock or shares to acquire stock or shares for cash, other property, or
a combination thereof or by any other means, unless the transaction is
consented to by vote of a majority of the continuing directors; or (b)
continuing directors cease to constitute a majority of the board.
(iv) The term "continuing director" shall mean any director of the
corporation who (a) was a member of the board of directors of the
corporation on the later of January 1, 1987, or the date the director or
officer seeking indemnification first became such, or (b) was
recommended for his initial term of office by a majority of continuing
directors in office at the time of such recommendation.
Nothing contained in this Article shall (i) limit the power of the
corporation to indemnify employees and agents of the corporation or its
subsidiaries other than directors and officers on any terms it deems
appropriate not prohibited by law, (ii) limit the power of the corporation to
indemnify directors and officers for expenses incurred in suits, actions, or
other proceedings initiated by such director or officer or (iii) affect any
rights to indemnification to which corporation personnel other than directors
and officers may be entitled by contract or otherwise. The rights provided in
this Article shall not be exclusive of or affect any other right to which any
director or officer may be entitled and such rights shall inure to the benefit
of its or his successors, heirs, executors, administrators and other legal
representatives. Such other rights shall include all powers, immunities and
rights of reimbursement allowable under the laws of The Commonwealth of
Massachusetts.
The provisions of this Article shall not apply with respect to any act
or omission occurring prior to June 25, 1987. No amendment to or repeal of
this Article shall apply to or have any effect upon the liability, exoneration
or indemnification of any director or officer for or with respect to any acts
or omissions of the director or officer occurring prior to such amendment or
repeal.