RESTATED ARTICLES OF INCORPORATION
AND ARTICLES OF RESTATEMENT
OF
POTOMAC ELECTRIC POWER COMPANY
These Restated Articles of Incorporation and Articles of
Restatement were duly adopted on December 21, 1992 by the Board
of Directors of Potomac Electric Power Company (hereinafter
sometimes called the "Company"), a District of Columbia
corporation and a domestic corporation of the Commonwealth of
Virginia, in accordance with the provisions of Section 58a of the
District of Columbia Business Corporation Act, D.C. Code Section
29-358.1, and Chapter 522 of the Virginia State Corporation Act,
Va. Code Section 13.1-711 (1989 Replacement Volume). The
Company's Articles of Incorporation were originally filed in the
District of Columbia on April 28, 1896, and Articles of
Reincorporation of an Existing Domestic Corporation were filed in
the District of Columbia on January 20, 1957.
The Restated Articles of Incorporation and Articles of
Restatement only restate and integrate and do not further amend
the provisions of the Company's articles of incorporation as
previously amended or supplemented, and there is no discrepancy
between those provisions and the provisions of these restated
articles.
The Restated Articles of Incorporation and Articles of
Restatement of the Company are as follows:
I. The name of the Company is
POTOMAC ELECTRIC POWER COMPANY.
II. The duration of the Company shall be perpetual.
III. The purposes for which the Company is organized are:
(A) To manufacture, produce, generate, buy, sell,
lease, deal in, transmit and distribute (i) power, light, energy
and heat in the form of electricity or otherwise, (ii)
by-products thereof and (iii) appliances, facilities and
equipment for use in connection therewith;
(B) To acquire (by construction, purchase,
condemnation, lease or otherwise), use, maintain, operate, deal
in and dispose of, power plants, dams, substations, office
buildings, service buildings, transmission lines, distribution
lines, and all other buildings, machinery, property (real,
personal or mixed) and facilities (including water power and
other sites), and all fixtures, equipments and appliances,
necessary, appropriate, incidental or convenient for its
corporate purposes; and
(C) To conduct business as a public service company,
which business is briefly described as the purchase, manufacture,
generation, transmission, distribution and sale, both at
wholesale and at retail, of electricity or other power or energy
for light, heat and power purposes in the District of Columbia,
the Commonwealth of Virginia, the State of Maryland and
elsewhere.
IV. The aggregate number of shares which the Company shall have
authority to issue is 215,042,227 divided into three classes:
the first consisting of 6,242,227 shares of the par value of $50
each; the second consisting of 8,800,000 shares of the par value
of $25 each; and the third consisting of 200,000,000 shares of
the par value of $1 each.
V. Said 6,242,227 shares of the par value of $50 each are
designated as Serial Preferred Stock; said 8,800,000 shares of
the par value of $25 each are designated as Preference Stock; and
said 200,000,000 shares of the par value of $1 each are
designated as Common Stock. Such of said authorized shares of
Serial Preferred Stock, Preference Stock and Common Stock as are
unissued at any time may be issued, in whole or in part, at any
time or from time to time by action of the Board of Directors of
the Company, subject to the laws in force in the District of
Columbia and the Commonwealth of Virginia and the terms and
conditions set forth in the Articles of Incorporation, as
amended, of the Company.
The preferences, qualifications, limitations, and
restrictions, the special or relative rights, and the voting
power in respect of the shares of each said class are as follows:
(A) SERIAL PREFERRED STOCK
(a) Subject to the provisions hereafter in this subdivision
(A) set forth, the Serial Preferred Stock may be divided into and
issued, from time to time, in one or more series as the Board of
Directors may determine, and the Board of Directors is hereby
expressly authorized to adopt from time to time resolutions, in
respect of any unissued shares of Serial Preferred Stock, to fix
and determine:
(1) The division of such shares into series and the
designation and authorized number of the shares of the particular
series;
(2) The rate of dividend for the particular series;
(3) The price or prices at and the terms and
conditions on which shares of the particular series may be
redeemed;
(4) The amount payable upon shares of the particular
series in the event of voluntary liquidation;
(5) Sinking fund provisions (if any) for the
redemption or purchase of shares of the particular series; and
(6) The terms and conditions (if any) on which the
shares of the particular series may be converted into other
classes of stock of the Company;
All shares of Serial Preferred Stock shall be of equal rank with
each other, regardless of series, and all shares thereof shall be
identical except as to the above listed relative rights and
preferences, in respect of any or all of which there may be
variations between different series as fixed and determined by
the Board of Directors in said resolutions. All shares of the
Serial Preferred Stock of any one series shall be identical with
each other in all respects.
(b) The following terms, as used in this subdivision (A),
shall have the following meanings:
(1) The term senior stock shall mean any class of
stock ranking in its claim to assets or dividends prior to the
1,600,000 shares of Serial Preferred Stock created hereby;
(2) The term parity stock shall mean any class of
stock ranking in its claim to assets or dividends on a parity
with the Serial Preferred Stock, but shall not include any of the
1,600,000 shares of Serial Preferred Stock created hereby, nor
shall it include any increase in the authorized amount of the
Serial Preferred Stock; and
(3) The term junior stock shall mean the Common Stock
and any other class of stock ranking in its claim to assets or
dividends junior to the Serial Preferred Stock.
(c) The holders of the Serial Preferred Stock shall be
entitled to receive, but only when and as declared by the Board
of Directors, cumulative cash dividends in the case of each
series at the annual rate for such series theretofore fixed by
the Board of Directors as hereinbefore provided, payable
quarter-yearly on the first days of March, June, September and
December in each year to stockholders of record on the respective
dates fixed for the purpose by the Board of Directors as
dividends are declared.
No dividend shall be declared on any shares of the
Serial Preferred Stock unless there shall likewise be declared on
all shares of the Serial Preferred Stock at the time outstanding
like dividends, ratably in proportion to the respective annual
dividend rates fixed therefor.
The dividends on shares of the Serial Preferred Stock
shall be cumulative from the quarter-yearly dividend payment date
next preceding the date of issue of such shares, unless such
shares shall have been issued after the record date and before
the payment date for a particular dividend, in which case the
dividends shall be cumulative from the quarter-yearly dividend
payment date next ensuing after the date of issue of such shares.
Unless dividends on all outstanding shares of the Serial
Preferred Stock, at the annual dividend rate or rates fixed
therefor, shall have been paid for all past quarter-yearly
dividend periods to which they are entitled, and the full
dividend thereon at said rate or rates for the quarter-yearly
dividend period current at the time shall have been paid or
declared and set apart for payment, but without interest on
accumulated dividends, and unless all sinking fund payments, if
any, theretofore required to have been made shall have been made
or provided for, no dividends shall be declared and no other
distribution shall be made on any junior stock, and no junior
stock shall be purchased, retired or otherwise acquired for value
by the Company. No dividend shall be declared on any junior
stock payable more than 120 days after the date of declaration.
The holders of the Serial Preferred Stock shall not be
entitled to receive any dividends thereon other than the
dividends referred to in this subdivision (c).
(d) The Company, at the option of the Board of Directors or
by the operation of the sinking fund, if any, provided for the
Serial Preferred Stock of any series, may, from time to time,
subject to such terms and conditions, if any, as may be fixed by
the Board of Directors with respect to any series as hereinbefore
provided, redeem the whole or any part of such series at any time
outstanding, by paying in cash the applicable redemption price
therefor theretofore fixed by the Board of Directors as
hereinbefore provided.
Notice of every such redemption shall be given by
publication at least once in each of two calendar weeks in each
of two daily newspapers printed in the English language, one
published and of general circulation in the City of Washington,
District of Columbia, and the other in the Borough of Manhattan,
The City of New York, the first publication to be at least thirty
days and not more than sixty days prior to the date fixed for
such redemption. At least thirty days' and not more than sixty
days' previous notice of every such redemption shall also be
mailed to the holders of record of the shares so to be redeemed,
at their respective addresses as the same shall appear on the
books of the Company; but failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the
validity of the proceedings for the redemption of any shares so
to be redeemed.
In case of the redemption of a part only of any series
of the Serial Preferred Stock at the time outstanding, the
Company or its duly authorized agent shall select by lot the
shares so to be redeemed. The Board of Directors shall have full
power and authority, subject to the limitations and provisions
herein contained, to prescribe the manner in which the drawings
by lot shall be conducted and the terms and conditions upon which
the Serial Preferred Stock shall be redeemed from time to time.
If such notice of redemption shall have been duly given
by publication, and if on or before the redemption date specified
therein the funds necessary for such redemption shall have been
set aside by the Company, separate and apart from its other
funds, in trust for the account of the holders of the shares so
called for redemption, so as to be and continue to be available
therefor, then, notwithstanding that any certificate for shares
so called for redemption shall not have been surrendered for
cancellation, the shares represented thereby shall no longer be
deemed to be outstanding on and after such redemption date, and
all rights with respect to such shares shall forthwith on such
redemption date cease and terminate, except only the right of the
holders thereof to receive the amount payable upon redemption
thereof, without interest.
Provided, however, in the alternative, that, after
giving notice by publication of any such redemption as
hereinbefore provided or after giving to the bank or trust
company referred to below irrevocable authorization to give or
complete such notice by publication, and prior to the redemption
date specified in such notice, the Company may deposit in trust,
for the account of the holders of the shares of Serial Preferred
Stock so to be redeemed, the funds necessary for such redemption
with a bank or trust company in good standing, organized and
doing business under the laws of the United States or of any
state or territory or of the District of Columbia and having its
principal office in the City of Washington, District of Columbia,
or in the Borough of Manhattan, The City of New York, having
capital, surplus and undivided profits aggregating at least Ten
Million Dollars, designated in such notice of redemption, and
thereupon all shares of the Serial 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 Serial Preferred Stock shall forthwith upon such
deposit in trust cease and terminate, except only the right of
the holders thereof to receive from such bank or trust company at
any time after the time of such deposit the funds so deposited,
without interest and the right to exercise, on or before such
redemption date privileges of conversion or exchange, if any, not
theretofore expiring.
Shares of Serial Preferred Stock purchased or redeemed
pursuant to any obligation of the Company to purchase or redeem
shares for a sinking fund, shares redeemed pursuant to the
provisions hereof or purchased and for which credit shall have
been taken against any sinking fund obligation, and shares
surrendered pursuant to any conversion right, shall not be
reissued or otherwise disposed of and shall be canceled. Any
other shares of Serial Preferred Stock redeemed or otherwise
acquired by the Company shall continue to be part of the
authorized capital stock of the Company and may thereafter, in
the discretion of the Board of Directors and to the extent
permitted by law, be sold or reissued from time to time, as part
of the same or another series, subject to the terms and
conditions herein set forth.
If and so long as the Company shall be in default in
the payment of any quarter-yearly dividend on shares of any
series of the Serial Preferred Stock, or shall be in default in
the payment of funds into or the setting aside of funds for any
sinking fund created for any series of the Serial Preferred
Stock, the Company may not (other than by the use of unapplied
funds, if any, paid into or set aside for a sinking fund or funds
prior to such default) (i) redeem any shares of the Serial
Preferred Stock unless all shares thereof are redeemed, or (ii)
purchase or otherwise acquire for a consideration any shares of
the Serial Preferred Stock, except pursuant to offers of sale
made by holders of the Serial Preferred Stock in response to an
invitation for tenders given simultaneously by the Company by
mail to the holders of record of all shares of the Serial
Preferred Stock then outstanding.
(e) In the event of any voluntary liquidation, dissolution
or winding up of the Company, then, before any distribution or
payment shall be made to the holders of any junior stock, the
holder of each share of the Serial Preferred Stock shall be
entitled to be paid in full in cash the amount fixed with respect
to such share by the Board of Directors as hereinbefore provided,
together with an amount computed at the annual dividend rate
therefor from the date upon which dividends thereon became
cumulative to the date fixed for the payment thereof, less the
aggregate of the dividends theretofore paid thereon. If such
payments shall have been made in full to the holders of the
Serial Preferred Stock, the remaining assets and funds of the
Company shall be distributed among the holders of the Common
Stock and any other junior stock according to their respective
rights, preferences, restrictions, qualifications and shares.
In the event of any involuntary liquidation,
dissolution or winding up of the Company, then, before any
distribution or payment shall be made to the holders of any
junior stock, the holder of each share of the Serial Preferred
Stock shall be entitled to be paid in full the par value thereof
in cash, together with an amount computed at the annual dividend
rate therefor from the date upon which dividends thereon became
cumulative to the date fixed for the payment thereof, less the
aggregate of the dividends theretofore paid thereon. If such
payments shall have been made in full to the holders of the
Serial Preferred Stock, the remaining assets and funds of the
Company shall be distributed among the holders of the Common
Stock and any other junior stock according to their respective
rights, preferences, restrictions, qualifications and shares.
With respect to the payments to be made in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the Company, all series of the Serial Preferred Stock shall
rank ratably according to their respective interests without
preference of any series thereof over any other series.
(f) Subject to the limitations hereinafter specified,
whenever the full dividends on the Serial Preferred Stock at the
time outstanding for all past quarter-yearly dividend periods
shall have been paid and the full dividend thereon for the
quarter-yearly dividend period then current shall have been paid
or declared and a sum sufficient for the payment thereof set
apart, then such dividends (payable in cash, stock or otherwise)
as may be determined by the Board of Directors may be declared on
the Common Stock and any other junior stock, and the Serial
Preferred Stock shall not be entitled to participate in any such
dividends.
(g) So long as any shares of the Serial Preferred Stock are
outstanding, no amendment to the Articles of Incorporation of the
Company which would (i) create, change any junior stock into, or
increase the rights and preferences of, any senior or parity
stock, (ii) increase the authorized amount of the Serial
Preferred Stock in excess of the 1,600,000 shares created hereby
or the authorized amount of any senior or parity stock, or (iii)
change the express terms of the outstanding shares of Serial
Preferred Stock in any manner substantially prejudicial to the
holders thereof, shall be made without the affirmative consent
(given in writing without a meeting or by a vote at a meeting
duly called for the purpose) of the holders of more than two
thirds of the aggregate number of shares of the Serial Preferred
Stock then outstanding; but any such amendment may be made with
such affirmative consent, together with such additional vote or
consent of stockholders as from time to time may be required by
law; provided, however, that if any such amendment would change
the express terms of the outstanding shares of Serial Preferred
Stock of any particular series in any manner substantially
prejudicial to the holders thereof without correspondingly
affecting the holders of the outstanding shares of Serial
Preferred Stock of all series, then, in lieu of such consent of
the holders of Serial Preferred Stock (or, if such consent of the
holders of the outstanding shares of Serial Preferred Stock is
required by law, in addition thereto), a like affirmative consent
of the holders of more than two thirds of the Serial Preferred
Stock of the affected series at the time outstanding shall be
necessary for making such amendment.
(h) So long as any shares of the Serial Preferred Stock are
outstanding, the Company shall not, without the affirmative
consent (given in writing without a meeting or by a vote at a
meeting duly called for the purpose) of the holders of at least a
majority of the aggregate number of shares of the Serial
Preferred Stock then outstanding:
(1) issue any shares of the Serial Preferred Stock, in
excess of 300,000 shares thereof at any one time outstanding, or
issue any shares of senior or parity stock (either directly or by
reclassification), unless for a period of twelve consecutive
calendar months within the fifteen calendar months next preceding
the date on which such shares are to be issued net earnings
(after depreciation and taxes but before deducting interest) have
been at least one and one-half times the annual interest charges
and dividend requirements on all indebtedness of the Company and
on all shares of Serial Preferred Stock and senior and parity
stock which shall then be outstanding; for the purpose of such
computation, the shares and any indebtedness proposed to be
issued in connection with such issue shall be included, but any
indebtedness or shares proposed to be retired in connection with
such issue shall be excluded, and in determining such net
earnings, the Board of Directors of the Company shall make such
adjustments, by way of increase or decrease in such net earnings,
as shall in their opinion be necessary to give effect, for the
entire twelve months for which such net earnings are determined,
to any acquisition or disposition of property the earnings of
which can be separately ascertained, and to any issue, sale,
assumption or retirement of securities, which shall have occurred
after the commencement of such twelve months' period and prior to
or in connection with the issue of the shares of the Serial
Preferred Stock or senior or parity stock; or
(2) issue any shares of the Serial Preferred Stock, in
excess of 300,000 shares thereof at any one time outstanding, or
issue any shares of senior or parity stock (either directly or by
reclassification), unless immediately after such proposed issue
the aggregate of (i) the capital of the Company applicable to its
stock ranking junior as to assets and dividends and (ii) the
surplus of the Company shall be not less than the aggregate
amount payable upon involuntary liquidation to the holders of the
Serial Preferred Stock and of senior and parity stock then to be
outstanding, excluding from such computation all stock to be
retired through such proposed issue; or
(3) issue any unsecured notes, debentures or other
securities representing unsecured indebtedness, or assume or
guarantee any such unsecured securities, other than for the
extension, renewal or refunding of outstanding debt securities
theretofore issued or assumed, or for the redemption or
retirement of shares of the Serial Preferred Stock or of any
senior or parity stock, if immediately after such issue or
assumption the total principal amount of such unsecured
securities then outstanding would exceed twenty-five per cent of
the aggregate of (i) the total principal amount of all bonds or
other securities representing secured indebtedness issued,
assumed or guaranteed by the Company and then to be outstanding
and (ii) the capital and surplus of the Company as then stated on
its books less any known excess of book value of the Company's
physical property which is devoted to public use over (I) the
actual cost thereof to the Company and (II) as to such property
as was not acquired as the result of arm's length negotiations,
the actual cost thereof to the one first devoting the same to
public use; or
(4) merge or consolidate with or into any other
corporation or corporations or sell or lease all or substantially
all of its assets, unless such merger, consolidation, sale or
lease, or the issue and assumption of all securities to be issued
or assumed in connection with any such merger, consolidation,
sale or lease shall have been ordered, approved or permitted by
the regulatory authority or authorities having jurisdiction in
the premises; provided that the provisions of this clause (4)
shall not apply to a purchase, lease or other acquisition by the
Company of the franchises or assets of another corporation, or
otherwise apply in any manner which does not involve a merger or
consolidation or sale or lease by the Company of all or
substantially all of its assets.
(i) So long as any shares of the Serial Preferred Stock are
outstanding, the Company shall not pay any dividends on its
Common Stock (other than dividends payable in Common Stock) or
make any distribution on, or purchase or otherwise acquire for
value, any of its Common Stock (each such payment, distribution,
purchase and/or acquisition being herein referred to as a "Common
Stock dividend"), except to the extent permitted by the following
provisions:
(1) No Common Stock dividend shall be declared or paid
in an amount which, together with all other Common Stock
dividends declared in the year ending on (and including) the date
of the declaration of such Common Stock dividend, would in the
aggregate exceed 50% of the net earnings of the Company for the
period consisting of the twelve consecutive calendar months
ending on the last day of the calendar month next preceding the
declaration of such Common Stock dividend, after deducting from
such net earnings dividends accruing on any stock other than
Common Stock of the Company during such period, if at the end of
such period, the ratio (herein referred to as the "capitalization
ratio") of the sum of (i) the capital represented by the Common
Stock (including premiums on Common Stock) and (ii) the surplus
accounts of the Company, to the sum of (I) the total capital and
(II) the surplus accounts of the Company (after adjustment in
each case of the surplus accounts to reflect payment of such
Common Stock dividend) would be less than 20%.
(2) If such capitalization ratio, determined as
aforesaid, shall be 20% or more, but less than 25%, no Common
Stock dividend shall be declared or paid in an amount which,
together with all other Common Stock dividends declared in the
year ending on (and including) the date of the declaration of
such Common Stock dividend, would in the aggregate exceed 75% of
the net earnings of the Company for the period consisting of the
twelve consecutive calendar months ending on the last day of the
calendar month next preceding the declaration of such Common
Stock dividend after deducting from such net earnings dividends
accruing on any stock other than the Common Stock of the Company
during such period; and
(3) If such capitalization ratio, determined as
aforesaid, shall be in excess of 25%, no Common Stock dividend
shall be declared or paid which would reduce such capitalization
ratio to less than 25% except to the extent permitted by the next
preceding subparagraphs (1) and (2).
For the purposes of this subdivision (i) the total capital
of the Company shall be deemed to consist of the aggregate of (x)
the principal amount of all outstanding indebtedness of the
Company represented by bonds, notes or other evidences of
indebtedness maturing by their terms one year or more after the
date of the issue thereof and (y) the par or stated value of all
outstanding capital stock (including premiums on capital stock)
of all classes of the Company. All indebtedness and shares of
stock of the Company acquired by the Company and held in its
treasury shall be excluded in determining total capital.
Purchases or other acquisitions of Common Stock shall be
deemed, for the purposes of the foregoing provisions of this
subdivision (i), to have been declared as dividends as of the
date on which such purchases or acquisitions are consummated.
(j) No holder of Serial 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 securities
convertible into, or carrying or evidencing any right to
purchase, stock, of any class whatever, whether now or hereafter
authorized, and whether issued for cash, property, services or
otherwise.
(k) Except as otherwise in subdivisions (g) and (h) of this
subdivision (A) or by statute specifically provided, the Serial
Preferred Stock shall have no voting power unless and until
dividends payable thereon are in default in an amount equivalent
to four full quarter-yearly dividends on the Serial Preferred
Stock at the time outstanding. In such event and until such
default shall have been remedied as hereinafter provided, the
holders of Serial Preferred Stock, voting separately, shall
become entitled to elect twenty-five percent of the Board of
Directors, or the smallest number of directors that exceeds
twenty-five percent of the Board, but in no event less than two
directors, and the other stockholders then entitled to vote for
the election of directors, voting separately by classes if so
required by the provisions applicable to such classes, shall be
entitled to elect the remaining directors of the Company. Upon
the accrual of such special right to the holders of Serial
Preferred Stock a meeting of the stockholders then entitled to
vote for the election of directors shall be held upon notice
promptly given, as provided in the By-Laws for a special meeting,
by the President or the Chairman of the Board of the Company. If
within fifteen days after the accrual of such special right to
the holders of Serial Preferred Stock, the President and the
Chairman of the Board of the Company shall fail to call such
meeting, then such meeting shall be held upon notice, as provided
in the By-Laws for a special meeting, given by the holders of not
less than five hundred shares of Serial Preferred Stock after
filing with the Company notice of their intention so to do. The
terms of office of all persons who may be directors of the
Company at the time shall terminate upon the election of
directors by the holders of Serial Preferred Stock, whether or
not at the time of such termination the remaining directors of
the Company shall have been elected; and thereafter and during
the continuance of such special right of the holders of Serial
Preferred Stock, the Board of Directors shall be divided into two
or more classes, one class consisting of the directors to be
elected by the holders of Serial Preferred Stock and the other
class or classes consisting of the directors to be elected by the
other stockholders entitled to vote for the election of
directors, and the directors of each such class elected at such
meeting, or at any adjournment thereof, and the directors of each
such class elected at any subsequent annual meeting for the
election of directors, held during the continuance of such
special right, shall hold office until the next succeeding annual
election and until their respective successors by classes are
elected and qualified.
However, if and when all dividends then in default on the
Serial Preferred Stock shall be paid (and such dividends shall be
declared and paid as soon as reasonably practicable out of
surplus or net profits, but without diminishing the amount of
capital of the Company), the holders of Serial Preferred Stock
shall be divested of such special right, but subject always to
the same provisions for the revesting of such special right in
the holders of Serial Preferred Stock in the case of any similar
future default or defaults. Whenever the holders of Serial
Preferred Stock shall be so divested of such special right, the
method of election of the Board of Directors by the vote of the
other stockholders entitled to vote for the election of directors
exclusively shall be restored, and the election of directors
shall take place at the next succeeding annual meeting for the
election of directors, or at any adjournment thereof.
(l) Except as hereinafter provided, during the continuance
of the special right of the holders of Serial Preferred Stock to
elect directors as provided in subdivision (k) of this
subdivision (A), at all meetings for the election of directors
the presence in person or by proxy of the holders of record of a
majority of the outstanding shares of Serial Preferred Stock
shall be necessary to constitute a quorum for the election of
directors whom the holders of Serial Preferred Stock are entitled
to elect, and the presence in person or by proxy of the holders
of record of a majority of the outstanding shares of each other
class of stock then entitled to vote for the election of
directors shall be necessary to constitute a quorum for the
election of the directors whom the holders of such class of stock
are entitled to elect. In the absence of such a quorum of the
holders of stock of any particular class then entitled to vote
for the election of directors, the holders of a majority of the
shares of the stock of such class so present in person or
represented by proxy may adjourn from time to time the meeting
for the election of directors to be elected by such stock,
without notice other than announcement at the meeting, until the
requisite quorum of holders of such stock shall be obtained.
However, at the first meeting for the election of directors after
any accrual of the special right of the holders of Serial
Preferred Stock, and at any subsequent annual meeting for the
election of directors held during the continuance of such special
right, if there shall not be such a quorum of the holders of
Serial Preferred Stock the meeting shall be adjourned from time
to time as above provided until such quorum shall have been
obtained; provided that, if such quorum shall not have been
obtained within ninety days from the date of such meeting as
originally called (or, in the case of any annual meeting held
during the continuance of such special right, from the date fixed
for such annual meeting), the presence in person or by proxy of
the holders of record of one third of the outstanding shares of
Serial Preferred Stock shall then be sufficient to constitute a
quorum for the election of the directors whom the holders of
Serial Preferred Stock are then entitled to elect. The absence
of a quorum of the holders of any class of stock then entitled to
vote for the election of directors shall not, except as
hereinafter provided, prevent or invalidate the election by the
other class or classes of stockholders of the directors which
they are entitled to elect, if the necessary quorum of
stockholders of such other class or classes is present in person
or represented by proxy at any such meeting or any adjournment
thereof. However, at the first meeting for the election of
directors after any accrual of the special right of the holders
of Serial Preferred Stock to elect directors as provided in
subdivision (k) of this subdivision (A), the absence of a quorum
of the holders of Serial Preferred Stock shall prevent the
election of directors by the holders of Common Stock until the
election of directors by the holders of Serial Preferred Stock
after a quorum of the holders of Serial Preferred Stock shall
have been obtained.
(B) PREFERENCE STOCK
(a) Subject to the provisions hereafter in this subdivision
(B) set forth, the Preference Stock may be divided into and
issued, from time to time, in one or more series as the Board of
Directors may determine, and the Board of Directors is hereby
expressly authorized to adopt from time to time resolutions, in
respect of any unissued shares of Preference Stock, to fix and
determine:
(1) The division of such shares into series and the
designation and authorized number of shares of the particular
series;
(2) The rate of dividend and the time of payment for
the particular series and the dates from which dividends on all
shares of such series issued prior to the record date for the
first dividend on shares of such series shall be cumulative;
(3) The price or prices at and the terms and
conditions on which shares of the particular series may be
redeemed;
(4) The amount payable upon shares of the particular
series in the event of voluntary liquidation;
(5) Sinking fund provisions (if any) for the
redemption or purchase of shares of the particular series; and
(6) The terms and conditions (if any) on which the
shares of the particular series may be converted into other
classes of stock of the Company.
All shares of Preference Stock shall be of equal rank with each
other, regardless of series, and all shares thereof shall be
identical except as to the above listed relative rights and
preferences, in respect of any or all of which there may be
variations between different series as fixed and determined by
the Board of Directors in said resolutions. All shares of the
Preference Stock of any one series shall be identical with each
other in all respects. All shares of the Preference Stock shall
be subject to the prior rights and preferences of the Serial
Preferred Stock as defined in subdivision (A) above and any other
senior stock as defined in subdivision (b) (1) below hereafter
authorized.
(b) The following terms, as used in this subdivision (B),
shall have the following meanings:
(1) The term senior stock as used in this subdivision
(B) shall mean the Serial Preferred Stock and any other class of
stock ranking in its claim to assets or dividends prior to the
5,000,000 shares of Preference Stock created hereby;
(2) The term parity stock as used in this subdivision
(B) shall mean any class of stock ranking in its claim to assets
or dividends on a parity with the Preference Stock, but shall not
include any of the 8,800,000 shares of Preference Stock provided
for hereby, nor shall it include any increase in the authorized
amount of the Preference Stock; and
(3) The term junior stock as used in this subdivision
(B) shall mean the Common Stock and any other class of stock
ranking in its claim to assets or dividends junior to the
Preference Stock.
(c) The holders of the Preference Stock shall be entitled,
subject to the prior rights and preferences of senior stock, to
receive, but only when and as declared by the Board of Directors,
cumulative cash dividends in the case of each series at the
annual rate for such series theretofore fixed by the Board of
Directors as hereinbefore provided, payable quarter-yearly on the
first days of March, June, September and December (or such other
quarter-yearly dates for a particular series as the Board of
Directors may determine prior to the issue thereof as
hereinbefore provided) in each year to stockholders of record on
the respective dates fixed for the purpose by the Board of
Directors as dividends are declared.
No dividend shall be declared on any shares of
Preference Stock of any series for any particular dividend period
unless dividends in full have been paid or declared and set apart
for payment or are contemporaneously declared and set apart for
payment on the Preference Stock of all series then outstanding
for all dividend periods terminating at or before the end of the
particular dividend period. When dividends at the respective
annual dividend rates are not paid in full on any shares of
Preference Stock, the shares of all series of Preference Stock
shall share ratably in the payment of dividends including
accumulations, if any, in accordance with the sums which would be
payable on such shares if all dividends were declared and paid in
full.
The dividends on shares of Preference Stock shall be
cumulative in the case of all shares of each particular series
(a) if issued prior to the record date for the first dividend on
shares of such series, then from the date theretofore fixed for
the purpose by the Board of Directors as hereinbefore provided,
or, if no such date is so fixed, then from the date on which the
shares of such series shall have been originally issued, (b) if
issued after the record date for a dividend on shares of such
series and before the payment date for such dividend then from
such dividend payment date; and (c) otherwise from the quarterly
dividend payment date next preceding the date of issue of such
shares. Unless dividends on all outstanding shares of the
Preference Stock, at the annual dividend rate or rates fixed
therefor, shall have been paid for all past quarter-yearly
dividend periods to which they are entitled, and the full
dividend thereon at said rate or rates for the quarter-yearly
dividend periods current at the time shall have been paid or
declared and set apart for payment, but without interest on
accumulated dividends, and unless all sinking fund payments, if
any, theretofore required to have been made shall have been made
or provided for, no dividends shall be declared and no other
distribution shall be made on any junior stock, and no junior
stock shall be purchased, retired or otherwise acquired for value
by the Company. No dividend shall be declared on any junior
stock payable more than 120 days after the date of declaration.
The holders of the Preference Stock shall not be
entitled to receive any dividends thereon other than the
dividends referred to in this subdivision (c).
(d) The Company, at the option of the Board of Directors or
by the operation of the sinking fund, if any, provided for the
Preference Stock of any series, may, from time to time, subject
to such terms and conditions, if any, as may be fixed by the
Board of Directors with respect to any series as hereinbefore
provided, and subject to the prior rights and preferences of
senior stock, redeem the whole or any part of such series at any
time outstanding, by paying in cash the applicable redemption
price theretofore fixed by the Board of Directors as hereinbefore
provided.
Notice of every such redemption shall be given by
publication at least once in each of two calendar weeks in each
of two daily newspapers printed in the English language, one
published and of general circulation in the City of Washington,
District of Columbia, and the other in the Borough of Manhattan,
The City of New York, the first publication to be at least thirty
days and not more than sixty days prior to the date fixed for
such redemption. At least thirty days' and not more than sixty
days' previous notice of every such redemption shall also be
mailed to the holders of record of the shares so to be redeemed,
at their respective addresses as the same shall appear on the
books of the Company; but failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the
validity of the proceedings for the redemption of any shares so
to be redeemed.
In case of the redemption of a part only of any series
of the Preference Stock at the time outstanding, the Company or
its duly authorized agent shall select by lot the shares so to be
redeemed. The Board of Directors shall have full power and
authority, subject to the limitations and provisions herein
contained, to prescribe the manner in which the drawings by lot
shall be conducted and the terms and conditions upon which the
Preference Stock shall be redeemed from time to time.
If such notice of redemption shall have been duly given
by publication, and if on or before the redemption date specified
therein the funds necessary for such redemption shall have been
set aside by the Company, separate and apart from its other
funds, in trust for the account of the holders of the shares so
called for redemption so as to be and continue to be available
therefor, then, notwithstanding that any certificate for shares
so called for redemption shall not have been surrendered for
cancellation, the shares represented thereby shall no longer be
deemed to be outstanding on and after such redemption date, and
all rights with respect to such shares shall forthwith on such
redemption date cease and terminate, except only the right of the
holders thereof to receive the amount payable upon redemption
thereof, without interest.
Provided, however, in the alternative, that after
giving notice by publication of any such redemption as
hereinbefore provided or after giving to the bank or trust
company referred to below irrevocable authorization to give or
complete such notice by publication, and prior to the redemption
date specified in such notice, the Company may deposit in trust,
for the account of the holders of the shares of Preference Stock
so to be redeemed, the funds necessary for such redemption with a
bank or trust company in good standing, organized and doing
business under the laws of the United States or of any state or
territory or of the District of Columbia and having its principal
office in the City of Washington, District of Columbia, or in the
Borough of Manhattan, The City of New York, having capital,
surplus and undivided profits aggregating at least Ten Million
Dollars, designated in such notice of redemption, and thereupon
all shares of the Preference 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
Preference Stock shall forthwith upon such deposit in trust cease
and terminate, except only the right of the holders thereof to
receive from such bank or trust company at any time after the
time of such deposit the funds so deposited, without interest and
the right to exercise, on or before such redemption date
privileges of conversion or exchange, if any, not theretofore
expiring.
Shares of Preference Stock purchased or redeemed
pursuant to any obligation of the Company to purchase or redeem
shares for a sinking fund, shares redeemed pursuant to the
provisions hereof or purchased and for which credit shall have
been taken against any sinking fund obligation, and shares
surrendered pursuant to any conversion right, shall not be
reissued or otherwise disposed of and shall be cancelled. Any
other shares of Preference Stock redeemed or otherwise acquired
by the Company shall continue to be part of the authorized
capital stock of the Company and may thereafter, in the
discretion of the Board of Directors and to the extent permitted
by law, be sold or reissued from time to time, as part of the
same or another series, subject to the terms and conditions
herein set forth.
If and so long as the Company shall be in default in
the payment of any quarter-yearly dividend on shares of any
series of the Preference Stock, or shall be in default in the
payment of funds into or the setting aside of funds for any
sinking fund created for any series of the Preference Stock, the
Company may not (other than by the use of unapplied funds, if
any, paid into or set aside for a sinking fund or funds prior to
such default) (i) redeem any shares of the Preference Stock
unless all shares thereof are redeemed, or (ii) purchase or
otherwise acquire for a consideration any shares of the
Preference Stock, except pursuant to offers of sale made by
holders of the Preference Stock in response to an invitation for
tenders given simultaneously by the Company by mail to the
holders of record of all shares of the Preference Stock then
outstanding.
(e) In the event of any voluntary liquidation, dissolution
or winding up of the Company, then, before any distribution or
payment shall be made to the holders of any junior stock, the
holder of each share of the Preference Stock shall be entitled,
subject to the prior rights and preferences of senior stock, to
be paid in full in cash the amount fixed with respect to such
share by the Board of Directors as hereinbefore provided,
together with an amount computed at the annual dividend rate
therefor from the date upon which dividends thereon became
cumulative to the date fixed for the payment thereof, less the
aggregate of the dividends theretofore paid thereon. If such
payments shall have been made in full to the holders of the
Preference Stock, the remaining assets and funds of the Company
shall be distributed among the holders of the Common Stock and
any other junior stock according to their respective rights,
preferences, restrictions, qualifications and shares.
In the event of any involuntary liquidation,
dissolution or winding up of the Company, then, before any
distribution or payment shall be made to the holders of any
junior stock, the holder of each share of the Preference Stock
shall be entitled, subject to the prior rights and preferences of
senior stock, to be paid in full the par value thereof in cash,
together with an amount computed at the annual dividend rate
therefor from the date upon which dividends thereon became
cumulative to the date fixed for the payment thereof, less the
aggregate of the dividends theretofore paid thereon. If such
payments shall have been made in full to the holders of the
Preference Stock, the remaining assets and funds of the Company
shall be distributed among the holders of the Common Stock and
any other junior stock according to their respective rights,
preferences, restrictions, qualifications and shares.
With respect to the payments to be made in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the Company, all series of the Preference Stock shall rank
ratably according to their respective interests without
preference of any series thereof over any other series.
(f) Whenever the full dividends on the Preference Stock at
the time outstanding for all past quarter-yearly dividend periods
shall have been paid and the full dividend thereon for the
quarter-yearly dividend period then current shall have been paid
or declared and a sum sufficient for the payment thereof set
apart, then such dividends (payable in cash, stock or otherwise)
as may be determined by the Board of Directors may be declared on
the Common Stock and any other junior stock, and the Preference
Stock shall not be entitled to participate in any such dividends.
(g) So long as any shares of the Preference Stock are
outstanding, no amendment to the Articles of Incorporation of the
Company which would (i) create, change any junior stock into, or
increase the rights and preferences of, any senior or parity
stock, (ii) increase the authorized amount of the Preference
Stock in excess of the 5,000,000 shares created hereby or the
authorized amount of any senior or parity stock, or (iii) change
the express terms of the outstanding shares of Preference Stock
in any manner substantially prejudicial to the holders thereof,
shall be made without the affirmative consent (given in writing
without a meeting or by a vote at a meeting duly called for the
purpose) of the holders of more than two thirds of the aggregate
number of shares of the Preference Stock then outstanding; but
any such amendment may be made with such affirmative consent,
together with such additional vote or consent of stockholders as
from time to time may be required by law; provided, however, that
if any such amendment would change the express terms of the
outstanding shares of Preference Stock of any particular series
in any manner substantially prejudicial to the holders thereof
without correspondingly affecting the holders of the outstanding
shares of Preference Stock of all series, then, in lieu of such
consent of the holders of Preference Stock (or, if such consent
of the holders of the outstanding shares of Preference Stock is
required by law, in addition thereto), a like affirmative consent
of the holders of more than two thirds of the Preference Stock of
the affected series at the time outstanding shall be necessary
for making such amendment.
(h) So long as any shares of the Preference Stock are
outstanding, the Company shall not, without the affirmative
consent (given in writing without a meeting or by a vote at a
meeting duly called for the purpose) of the holders of at least a
majority of the aggregate number of shares of the Preference
Stock then outstanding, merge or consolidate with or into any
other corporation or corporations or sell or lease all or
substantially all of its assets, unless such merger,
consolidation, sale or lease, or the issue and assumption of all
securities to be issued or assumed in connection with any such
merger, consolidation, sale or lease shall have been ordered,
approved or permitted by the regulatory authority or authorities
having jurisdiction in the premises; provided that the provisions
of this subdivision (h) shall not apply to a purchase, lease or
other acquisition by the Company of the franchises or assets of
another corporation, or otherwise apply in any manner which does
not involve a merger or consolidation or sale or lease by the
Company of all or substantially all of its assets.
(i) No holder of Preference Stock shall be entitled as such
as a matter of right to subscribe for or purchase any part of any
new or additional issue of stock, or securities convertible into,
or carrying or evidencing any right to purchase, stock, of any
class whatever, whether now or hereafter authorized, and whether
issued for cash, property, services or otherwise.
(j) Except as otherwise in subdivisions (g) and (h) of this
subdivision (B) or by statute specifically provided, the
Preference Stock shall have no voting power unless and until
dividends payable thereon are in default in an amount equivalent
to six full quarter-yearly dividends on the Preference Stock at
the time outstanding. In such event and until such default shall
have been remedied as hereinafter provided, the holders of
Preference Stock, voting separately, shall become entitled to
elect two directors of the Company at the next meeting of
stockholders for the election of directors (unless all dividends
then in default on the Preference Stock shall have been paid),
and the other stockholders then entitled to vote for the election
of directors, voting separately by classes if so required by the
provisions applicable to such classes, shall be entitled to elect
the remaining directors of the Company. During the continuance
of such special right of the holders of Preference Stock, the
Board of Directors shall be divided into two or more classes, one
consisting of the directors to be elected by the holders of
Preference Stock and the other class or classes consisting of the
directors to be elected by the other stockholders entitled to
vote for the election of directors, and the directors of each
such class elected at any meeting for the election of directors,
held during the continuance of such special right, shall hold
office, subject to the rights of any senior stock, until the next
succeeding annual election and until their respective successors
by classes are elected and qualified.
However, if and when all dividends then in default on
the Preference Stock shall be paid (and such dividends shall be
declared and paid as soon as reasonably practicable out of
surplus or net profits, but without diminishing the amount of
capital of the Company), the holders of Preference Stock shall be
divested of such special right, but subject always to the same
provisions for the revesting of such special right in the holders
of Preference Stock in the case of any similar future default or
defaults. Whenever the holders of Preference Stock shall be so
divested of such special right, the method of election of the
Board of Directors by the vote of the other stockholders entitled
to vote for the election of directors exclusively shall be
restored and the election of directors shall take place at the
next succeeding annual meeting for the election of directors, or
at any adjournment thereof.
(k) Except as hereinafter provided, during the continuance
of the special right of the holders of Preference Stock to elect
directors as provided in subdivision (j) of this subdivision (B),
at all meetings for the election of directors the presence in
person or by proxy of the holders of record of a majority of the
outstanding shares of Preference Stock shall be necessary to
constitute a quorum for the election of directors whom the
holders of Preference Stock are entitled to elect, and the
presence in person or by proxy of the holders of record of a
majority of the outstanding shares of each other class of stock
then entitled to vote for the election of directors shall, except
as otherwise provided in subdivision (1) of subdivision (A), be
necessary to constitute a quorum for the election of the
directors whom the holders of such class of stock are entitled to
elect. In the absence of such a quorum of the holders of stock
of any particular class then entitled to vote for the election of
directors, the holders of a majority of the shares of the stock
of such class so present in person or represented by proxy may
adjourn from time to time the meeting for the election of
directors to be elected by such stock, without notice other than
announcement at the meeting, until the requisite quorum of
holders of such stock shall be obtained. The absence of a quorum
of the holders of any class of stock then entitled to vote for
the election of directors shall not, except as hereinbefore
provided, prevent or invalidate the election by the other class
or classes of stockholders of the directors which they are
entitled to elect, if the necessary quorum of stockholders of
such other class or classes is present in person or represented
by proxy at any such meeting or any adjournment thereof.
(C) COMMON STOCK
(a) No holder of Common Stock shall be entitled as such as
a matter of right to subscribe for or purchase any part of any
new or additional issue of stock, or securities convertible into,
or carrying or evidencing any right to purchase, stock, of any
class whatever, whether now or hereafter authorized, and whether
issued for cash, property, services or otherwise.
(b) Except as otherwise provided by statute or by this
Article V, voting rights for all purposes shall be vested
exclusively in the holders of the Common Stock, who shall have
one vote for each share held by them.
VI. The following provisions are set forth herein for the
regulation of the internal affairs of the Company:
At the date hereof, the Company has issued and
outstanding $120,000,000 aggregate principal amount of First
Mortgage Bonds issued under and secured by the lien of the
Company's Mortgage and Deed of Trust dated July 1, 1936, as
amended and supplemented, heretofore made by the Company to The
Riggs National Bank of Washington, D.C., as Trustee, which
Mortgage and Deed of Trust, as amended and supplemented,
constitutes a lien on substantially all the properties and
franchises of the Company, other than cash, accounts receivable
and other liquid assets, securities, leases by the Company as
lessor, equipment and materials not installed as part of the
fixed property, and electric energy and other materials,
merchandise or supplies produced or purchased by the Company for
sale, distribution or use. The Board of Directors of the Company
may from time to time cause to be issued additional First
Mortgage Bonds to be secured by said Mortgage and Deed of Trust,
as heretofore or hereafter amended and supplemented, without
limitation as to principal amount and without action by or
approval of the Company's shareholders, and in connection
therewith may cause to be executed and delivered by the Company
such supplemental indentures, containing such additional
covenants, as the Board may approve.
Without the assent of the shareholders of any class the
stated capital of the Company may, from time to time, be reduced
in respect of shares of its Serial Preferred Stock reacquired in
conversion and cancelled.
VII. The address of the Company's registered office in the
District of Columbia is 1900 Pennsylvania Avenue, N. W.; and the
name of its registered agent at such address is Jack E.
Strausman.
The address of the Company's registered office in Virginia
is 8280 Greensboro Drive, #900, P.O. Box 9346, Tyson's Corner,
McLean, Virginia 22102; and the name of its registered agent at
such address is John S. Stump, who is a resident of Virginia and
a member of the Virginia State Bar.
VIII. Unless otherwise provided in the By-Laws, the number of
directors of the Company shall be twelve (12).
IX. The business and affairs of the Company shall be managed by
or under the direction of the Board of Directors. The number of
directors shall be determined in accordance with the provisions
of Article VIII. The directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class
shall consist, as nearly as may be possible, of one-third of the
total number of directors constituting the entire Board of
Directors. At the 1987 annual meeting of shareholders, Class I
directors shall be elected for a one-year term, Class II
directors for a two-year term, and Class III directors for a
three-year term. At each succeeding annual meeting of
shareholders beginning in 1988, successors to the class of
directors whose term expires at that annual meeting shall be
elected for a three-year term. If the number of directors is
changed in accordance with the provisions of Article VIII, any
increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal
as possible, and any additional director of any class elected to
fill a vacancy resulting from an increase in such class shall
hold office for a term that shall coincide with the remaining
term of that class, but in no case will a decrease in the number
of directors shorten the term of any incumbent director. A
director shall hold office until the annual meeting for the year
in which his term expires and until his successor shall be
elected and shall qualify, subject, however, to prior death,
resignation, retirement, age and service limitations as may be
set forth in the By-Laws, disqualification or removal from
office. Any vacancy on the Board of Directors that results from
other than an increase in the number of directors may be filled
by a majority of the Board of Directors then in office even if
less than a quorum, or by a sole remaining director. The term of
any director elected by the Board of Directors to fill a vacancy
not resulting from an increase in the number of directors shall
expire at the next shareholders' meeting at which directors are
elected, and the remainder of such term, if any, shall be filled
by a director elected at such meeting.
Notwithstanding the foregoing, whenever the holders of any
class of stock issued by the Company shall have the right, voting
separately by class or series, to elect directors at an annual or
special meeting of shareholders, the election, term of office,
filling of vacancies and other features of such directorships
shall be governed by the terms of the Articles of Incorporation
applicable thereto, and such directors so elected shall not be
divided into classes pursuant to this Article IX unless expressly
provided by such terms.
Subject to the provisions of the preceding paragraphs,
directors elected pursuant to this Article IX may be removed only
for cause.
X. In addition to any other vote that may be required by law or
these Articles of Incorporation or the By-Laws of the Company,
the affirmative vote of the holders of four-fifths of all the
capital stock entitled to vote shall be required to amend, alter,
or repeal Articles IX and X of these Articles of Incorporation,
and Article I, Section 1, the second through the fourth
paragraphs, Article I, Section 2, and Article II, Section 1 of
the By-Laws of the Company; provided, however, that the power of
the Board of Directors to amend, alter, or repeal the By-Laws
shall not be affected by this Article X.
XI. (A) In addition to any affirmative vote required by law or
these Articles of Incorporation or the By-Laws of the Company,
and except as otherwise expressly provided in Paragraph (B) of
this Article XI, a Business Combination (as hereinafter defined)
shall require the affirmative vote of not less than sixty-six and
two-thirds percent (66-2/3%) of the votes entitled to be cast by
the holders of all the then outstanding shares of Voting Stock
(as hereinafter defined), voting together as a single class,
excluding Voting Stock beneficially owned by any Interested
Shareholder (as hereinafter defined). Such affirmative vote
shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage or separate class vote may
be specified, by law or in any agreement with any national
securities exchange or otherwise.
(B) The provisions of the preceding Paragraph (A) shall not
be applicable to any particular Business Combination, and such
Business Combination shall require only such affirmative vote, if
any, as is required by law or by any other provision of these
Articles of Incorporation or the By-Laws of the Company, or any
agreement with any national securities exchange, if all of the
conditions specified in either of the following Paragraphs (1) or
(2) are met or, in the case of a Business Combination not
involving the payment of consideration to the holders of the
Company's outstanding Capital Stock (as hereinafter defined), if
the condition specified in the following Paragraph (1) is met:
(1) The Business Combination shall have been approved
by a majority (whether such approval is made prior to or
subsequent to the acquisition of beneficial ownership of the
Voting Stock that caused the Interested Shareholder to become an
Interested Shareholder) of the Continuing Directors (as
hereinafter defined).
(2) All of the following conditions shall have been
met with respect to every class or series of outstanding Capital
Stock, whether or not the Interested Shareholder has previously
acquired beneficial ownership of any shares of a particular class
or series of Capital Stock:
(a) The aggregate amount of cash and the Fair
Market Value (as hereinafter defined), as of the date of the
consummation of the Business Combination, of consideration other
than cash to be received per share by holders of Common Stock in
such Business Combination shall be at least equal to the highest
amount determined under clauses (i), (ii), (iii), and (iv) below:
(i) (if applicable) the highest per share
price (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the Interested
Shareholder for any share of Common Stock in connection with the
acquisition by the Interested Shareholder of beneficial ownership
of shares of Common Stock (x) within the two-year period
immediately prior to the first public announcement of the
proposed Business Combination (the "Announcement Date") or (y) in
the transaction in which it became an Interested Shareholder,
whichever is higher, in either case as adjusted for any
subsequent stock split, stock dividend, subdivision or
reclassification with respect to Common Stock;
(ii) the Fair Market Value per share of
Common Stock on the Announcement Date or on the date on which the
Interested Shareholder became an Interested Shareholder (the
"Determination Date"), whichever is higher, as adjusted for any
subsequent stock split, stock dividend, subdivision or
reclassification with respect to Common Stock;
(iii) (if applicable) the price per share
equal to the Fair Market Value per share of Common Stock
determined pursuant to the immediately preceding clause (ii),
multiplied by the ratio of (x) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the Interested
Shareholder for any share of Common Stock in connection with the
acquisition by the Interested Shareholder of beneficial ownership
of shares of Common Stock within the two-year period immediately
prior to the Announcement Date, as adjusted for any subsequent
stock split, stock dividend, subdivision or reclassification with
respect to Common Stock to (y) the Fair Market Value per share of
Common Stock on the first day in such two-year period on which
the Interested Shareholder acquired beneficial ownership of any
share of Common Stock, as adjusted for any subsequent stock
split, stock dividend, subdivision or reclassification with
respect to Common Stock; and
(iv) the Company's net income per share of
Common Stock for the four full consecutive fiscal quarters
immediately preceding the Announcement Date, multiplied by the
higher of the then price/earnings multiple (if any) of such
Interested Shareholder or the highest price/earnings multiple of
the Company within the two-year period immediately preceding the
Announcement Date (such price/earnings multiples being determined
by dividing the highest price per share during a day as reported
in the Wall Street Journal from the Composite Tape for the New
York Stock Exchange by the immediately preceding publicly
reported twelve-months earnings per share).
(b) The aggregate amount of cash and the Fair Market
Value, as of the date of the consummation of the Business
Combination, of consideration other than cash to be received per
share by holders of shares of any class or series of outstanding
Capital Stock, other than Common Stock, shall be at least equal
to the highest amount determined under clauses (i), (ii), (iii),
and (iv) below:
(i) (if applicable) the highest per share
price (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the Interested
Shareholder for any share of such class or series of Capital
Stock in connection with the acquisition by the Interested
Shareholder of beneficial ownership of shares of such class or
series of Capital Stock (x) within the two-year period
immediately prior to the Announcement Date or (y) in the
transaction in which it became an Interested Shareholder,
whichever is higher, in either case as adjusted for any
subsequent stock split, stock dividend, subdivision or
reclassification with respect to such class or series of Capital
Stock;
(ii) the Fair Market Value per share of such
class or series of Capital Stock on the Announcement Date or on
the Determination Date, whichever is higher, as adjusted for any
subsequent stock split, stock dividend, subdivision or
reclassification with respect to such class or series of Capital
Stock;
(iii) (if applicable) the price per share
equal to the Fair Market Value per share of such class or series
of Capital Stock determined pursuant to the immediately preceding
clause (ii), multiplied by the ratio of (x) the highest per share
price (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the Interested
Shareholder for any share of such class or series of Capital
Stock in connection with the acquisition by the Interested
Shareholder of beneficial ownership of shares of such class or
series of Capital Stock within the two-year period immediately
prior to the Announcement Date, as adjusted for any subsequent
stock split, stock dividend, subdivision or reclassification with
respect to such class or series of Capital Stock to (y) the Fair
Market Value per share of such class or series of Capital Stock
on the first day in such two-year period on which the Interested
Shareholder acquired beneficial ownership of any share of such
class or series of Capital Stock, as adjusted for any subsequent
stock split, stock dividend, subdivision or reclassification with
respect to such class or series of Capital Stock; and
(iv) (if applicable) the highest preferential
amount per share to which the holders of shares of such class or
series of Capital Stock would be entitled in the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Company regardless of whether the Business
Combination to be consummated constitutes such an event.
(c) The consideration to be received by holders
of a particular class or series of outstanding Capital Stock
shall be in cash or in the same form as previously has been paid
by or on behalf of the Interested Shareholder in connection with
its direct or indirect acquisition of beneficial ownership of
shares of such class or series of Capital Stock. If the
consideration previously paid by the Interested Shareholder to
acquire shares of any class or series of Capital Stock varied
among the recipients thereof as to form, the form of
consideration to be paid for such class or series of Capital
Stock in connection with the Business Combination shall be either
cash or the form used to acquire beneficial ownership of the
largest number of shares of such class or series of Capital Stock
previously acquired by the Interested Shareholder.
(d) After the Determination Date and prior to the
consummation of such Business Combination: (i) except as
approved by a majority of the Continuing Directors, there shall
have been no failure to declare and pay at the regular date
therefor any full quarterly dividends (whether or not cumulative)
payable in accordance with the terms of any outstanding Capital
Stock; (ii) there shall have been no reduction in the annual rate
of dividends paid on the Common Stock (except as necessary to
reflect any stock split, stock dividend or subdivision of the
Common Stock), except as approved by a majority of the Continuing
Directors; (iii) there shall have been an increase in the annual
rate of dividends paid on the Common Stock as necessary to
reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction that
has the effect of reducing the number of outstanding shares of
Common Stock, unless the failure so to increase such annual rate
is approved by a majority of the Continuing Directors; and (iv)
such Interested Shareholder shall not have become the beneficial
owner of any additional shares of Capital Stock except as part of
the transaction that results in such Interested Shareholder
becoming an Interested Shareholder and except in a transaction
that, after giving effect thereto, would not result in any
increase in the Interested Shareholder's percentage of beneficial
ownership of any class or series of Capital Stock.
(e) After the Determination Date, such Interested
Shareholder shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder of the
Company), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided by the Company, whether in anticipation of or in
connection with such Business Combination or otherwise.
(f) A proxy or information statement describing
the proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder (the "Act") (or any
subsequent provisions replacing such Act, rules or regulations)
shall be mailed to all shareholders of the Company at least 30
days prior to the consummation of such Business Combination
(whether or not such proxy or information statement is required
to be mailed pursuant to such Act or subsequent provisions). The
proxy or information statement shall contain on the first page
thereof, in a prominent place, any statement as to the
advisability (or inadvisability) of the Business Combination that
the Continuing Directors, or any of them, may choose to make and,
if deemed advisable by a majority of the Continuing Directors,
the opinion of an investment banking firm selected by a majority
of the Continuing Directors as to the fairness (or not) of the
terms of the Business Combination from a financial point of view
to the holders of the outstanding shares of Capital Stock other
than the Interested Shareholder and its Affiliates or Associates
(as hereinafter defined), such investment banking firm to be paid
a reasonable fee for its services by the Company.
(g) Such Interested Shareholder shall not have
made any major change in the Company's business or equity capital
structure without the approval of a majority of the Continuing
Directors.
(C) The following definitions shall apply with respect to
this Article XI:
(1) The term "Business Combination" shall mean:
(a) any merger or consolidation of the Company or
any Subsidiary (as hereinafter defined) with (i) any Interested
Shareholder or (ii) any other company (whether or not itself an
Interested Shareholder) which is or after such merger or
consolidation would be an Affiliate or Associate of an Interested
Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition or security arrangement,
investment, loan, advance, guarantee, agreement to purchase,
agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a
series of transactions) with or for the benefit of any Interested
Shareholder or any Affiliate or Associate of any Interested
Shareholder involving any assets, securities or commitments of
the Company or any Subsidiary having an aggregate Fair Market
Value and/or involving aggregate commitments of $10,000,000 or
more or constituting more than 5 percent of the book value of the
total assets (in the case of transactions involving assets or
commitments other than Capital Stock) or 5 percent of the
shareholders' equity (in the case of transactions in Capital
Stock) of the entity in question (the "Substantial Part"), as
reflected in the most recent fiscal year-end consolidated balance
sheet of such entity existing at the time the shareholders of the
Company would be required, pursuant to Paragraph A of this
Article XI, to approve or authorize the Business Combination
involving the assets, securities and/or commitments constituting
any Substantial Part; or
(c) the adoption of any plan or proposal for the
liquidation or dissolution of the Company which is voted for or
consented to by any Interested Shareholder or any Affiliate or
Associate thereof; or
(d) any reclassification of securities (including
any reverse stock split), or recapitalization of the Company, or
any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction (whether or not with or
otherwise involving an Interested Shareholder) that has the
effect, directly or indirectly, of increasing the proportionate
share of any class or series of Capital Stock, or any securities
convertible into Capital Stock or into equity securities of any
Subsidiary, that is beneficially owned by any Interested
Shareholder or any Affiliate or Associate of any Interested
Shareholder; or
(e) any agreement, contract or other arrangement
providing for any one or more of the actions specified in the
foregoing clauses (a) to (d).
(2) The term "Capital Stock" shall mean all capital
stock of the Company authorized to be issued from time to time
under Article IV of these Articles of Incorporation, and the term
"Voting Stock" shall mean all Capital Stock that by its terms may
be voted on all matters submitted to shareholders of the Company
generally.
(3) The term "person" shall mean any individual, firm,
company or other entity and shall include any group comprised of
any person and any other person with whom such person or any
Affiliate or Associate of such person has any agreement,
arrangement or understanding, directly or indirectly, for the
purpose of acquiring, holding, voting or disposing of Capital
Stock.
(4) The term "Interested Shareholder" shall mean any
person (other than the Company or any Subsidiary and other than
any profit-sharing, employee stock ownership or other employee
benefit plan of the Company or any Subsidiary or any trustee of
or fiduciary with respect to any such plan when acting in such
capacity) who (a) is the beneficial owner of Voting Stock
representing ten percent (10%) or more of the votes entitled to
be cast by the holders of all then outstanding shares of Voting
Stock; or (b) is an Affiliate or Associate of the Company and at
any time within the two-year period immediately prior to the
Announcement Date was the beneficial owner of Voting Stock
representing ten percent (10%) or more of the votes entitled to
be cast by the holders of all then outstanding shares of Voting
Stock.
(5) A person shall be a "beneficial owner" of any
Capital Stock (a) which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly; (b) which
such person or any of its Affiliates or Associates has, directly
or indirectly, (i) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding; or (c) which is
beneficially owned, directly or indirectly, by any other person
with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Capital
Stock. For purposes of determining whether a person is an
Interested Shareholder pursuant to Paragraph (4) of this Section
(C), the number of shares of Capital Stock deemed to be
outstanding shall include shares deemed beneficially owned by
such person through application of this Paragraph (5) of Section
(C), but shall not include any other shares of Capital Stock that
may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
(6) The terms "Affiliate" and "Associate" shall have
the respective meanings ascribed to such terms in Rule 12b-2
under the Act as in effect on the date that Article XI is
approved by the Board (the term "registrant" in said Rule 12b-2
meaning in this case the Company).
(7) The term "Subsidiary" means any company of which a
majority of any class of equity security is beneficially owned by
the Company; provided, however, that for the purposes of the
definition of Interested Shareholder set forth in Paragraph (4)
of this Section (C), the term "Subsidiary" shall mean only a
company of which a majority of each class of equity security is
beneficially owned by the Company.
(8) The term "Continuing Director" means any member of
the Board of Directors of the Company (the "Board of Directors"),
while such person is a member of the Board of Directors, who is
not an Affiliate or Associate or representative of the Interested
Shareholder and was a member of the Board of Directors prior to
the time that the Interested Shareholder became an Interested
Shareholder, and any successor of a Continuing Director while
such successor is a member of the Board of Directors, who is not
an Affiliate or Associate or representative of the Interested
Shareholder and is recommended or elected to succeed the
Continuing Director by a majority of Continuing Directors.
(9) The term "Fair Market Value" means (a) in the case
of cash, the amount of such cash; (b) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if
such stock is not quoted on the Composite Tape, on the New York
Stock Exchange, or, if such stock is not listed on such Exchange,
on the principal United States securities exchange registered
under the Act on which such stock is listed, or, if such stock is
not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day
period preceding the date in question on the National Association
of Securities Dealers, Inc. Automated Quotations System or any
similar system then in use, or if no such quotations are
available, the fair market value on the date in question of a
share of such stock as determined by a majority of the Continuing
Directors in good faith; and (c) in the case of property other
than cash or stock, the fair market value of such property on the
date in question as determined in good faith by a majority of the
Continuing Directors.
(10) In the event of any Business Combination in which
the Company survives, the phrase "consideration other than cash
to be received" as used in Paragraphs (2)(a) and (2)(b) of
Section (B) of this Article XI shall include the shares of Common
Stock and/or the shares of any other class or series of Capital
Stock retained by the holders of such shares.
(D) A majority of the Continuing Directors shall have the
power and duty to determine for the purposes of this Article XI,
on the basis of information known to them after reasonable
inquiry, (a) whether a person is an Interested Shareholder, (b)
the number of shares of Capital Stock or other securities
beneficially owned by any person, (c) whether a person is an
Affiliate or Associate of another, (d) whether the assets that
are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of
securities by the Company or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $10,000,000 or
more, and (e) whether the assets or securities that are the
subject of any Business Combination constitute a Substantial
Part. Any such determination made in good faith shall be binding
and conclusive on all parties.
(E) Nothing contained in this Article XI shall be construed
to relieve any Interested Shareholder from any fiduciary
obligation imposed by law.
(F) The fact that any Business Combination complies with
the provisions of Section (B) of this Article XI shall not be
construed to impose any fiduciary duty, obligation or
responsibility on the Board of Directors, or any member thereof,
to approve such Business Combination or recommend its adoption or
approval to the shareholders of the Company, nor shall such
compliance limit, prohibit or otherwise restrict in any manner
the Board of Directors, or any member thereof, with respect to
evaluations of or actions and responses taken with respect to
such Business Combination.
(G) Notwithstanding any other provisions of these Articles
of Incorporation or the By-Laws of the Company (and
notwithstanding the fact that a lesser percentage or separate
class vote may be specified by law, these Articles of
Incorporation or the By-Laws of the Company), the affirmative
vote of the holders of not less than four-fifths of the votes
entitled to be cast by the holders of all the then outstanding
shares of Voting Stock, voting together as a single class, shall
be required to amend or repeal, or adopt any provisions
inconsistent with, this Article XI; provided, however, that this
Section (G) shall not apply to, and such four-fifths vote shall
not be required for, any amendment, repeal or adoption
unanimously recommended by the Board of Directors if all of such
directors are persons who would be eligible to serve as
Continuing Directors within the meaning of Section (C), Paragraph
(8) of this Article XI.
IN WITNESS WHEREOF, Potomac Electric Power Company has duly
caused these Restated Articles of Incorporation to be duly
executed (in duplicate) in its name by Dennis R. Wraase, one of
its Senior Vice Presidents, and by Betty K. Cauley, its
Secretary, and its corporate seal to be hereunto affixed and duly
attested by Betty K. Cauley, its Secretary, all as of the 22nd
day of December, 1992.
POTOMAC ELECTRIC POWER COMPANY
[Corporate Seal]
Attest: By /s/ D. R. WRAASE
Dennis R. Wraase
Senior Vice President
/s/ BETTY K. CAULEY By /s/ BETTY K. CAULEY
Betty K. Cauley Betty K. Cauley
Secretary Secretary
DISTRICT OF COLUMBIA, ss.:
I, Indiana C. Shepp, a notary public, do hereby certify that
on this 22nd day of December, 1992, personally appeared before me
Dennis R. Wraase, who, being by me first duly sworn, declared
that he is a Senior Vice President of Potomac Electric Power
Company, that he signed the foregoing document as Senior Vice
President of the corporation, and that the statements therein
contained are true.
/s/ INDIANA C. SHEPP
[NOTARIAL SEAL] Notary Public, D. C.
My commission expires: June 14, 1992.
CERTIFICATE OF
POTOMAC ELECTRIC POWER COMPANY
Pursuant to Virginia Code Section 13.1-711 D., Potomac
Electric Power Company, through Betty K. Cauley, it Secretary and
Associate General Counsel, hereby certifies that the accompanying
Restated Articles of Incorporation and Articles of Restatement do
not contain an amendment to the Articles of Incorporation
requiring shareholder approval and were duly adopted by the Board
of Directors of the Company on December 21, 1992.
WHEREFORE, this Certificate has been duly executed this 22nd
day of December, 1992.
POTOMAC ELECTRIC POWER COMPANY
By: /s/ BETTY K. CAULEY
Betty K. Cauley
Secretary and Associate General Counsel
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
POTOMAC ELECTRIC POWER COMPANY
Pursuant to the provisions of Section 29-356 of Title 29 of
the District of Columbia Code (Section 56 of the District of
Columbia Business Corporation Act, as amended) and Section
13.1-710 of the Code of Virginia (chapter 522 of the Virginia
Stock Corporation Act), the undersigned corporation adopts these
Articles of Amendment to its Articles of Incorporation.
FIRST:
The name of the Company is Potomac Electric Power Company.
SECOND:
The following amendment to the Articles of Incorporation was
adopted by the shareholders of the corporation in the manner
prescribed by the District of Columbia Business Corporation Act
and the Virginia State Corporation Act:
Article IV of the Articles of Incorporation is hereby
amended to read as follows:
IV. The aggregate number of shares which the Company
shall have authority to issue is 220,042,227 divided into three
classes: the first consisting of 11,242,227 shares of the par
value of $50 each; the second consisting of 8,800,000 shares of
the par value of $25 each; and the third consisting of
200,000,000 shares of the par value of $1 each.
The first paragraph of Article V of the Articles of
Incorporation is hereby amended to read as follows:
V. Said 11,242,227 shares of the par value of $50 each
are designated as Serial Preferred Stock; said 8,800,000 shares
of the par value of $25 each are designated as Preference Stock;
and said 200,000,000 shares of the par value of $1 each are
designated as Common Stock. Such of said authorized shares of
Serial Preferred Stock, Preference Stock and Common Stock as are
unissued at any time may be issued, in whole or in part, at such
time, or from time to time, by action of the Board of Directors
of the Company, subject to the laws in force in the District of
Columbia and the Commonwealth of Virginia and the terms and
conditions set forth in the Articles of Incorporation, as amended
of the Company.
The number of shares of Serial Preferred Stock appearing in
Article V, Section (A), subparagraphs (b)(1) and (2) and (g) is
hereby amended to read 11,242,227.
THIRD:
The amendment to increase by 5,000,000 shares the authorized
number of shares of Serial Preferred Stock was proposed and
recommended by the Board of Directors of the corporation and
submitted to and approved by its shareholders in accordance with
the corporation's Articles of Incorporation and applicable law.
FOURTH:
The amendment was adopted by the shareholders on May 20,
1993. The number of shares of the corporation outstanding at the
time of such adoption was 120,430,936. The number of shares
entitled to vote at such time on the amendment was 119,962,841,
the designation and number of which shares of each class were as
follows:
Class Number of Shares
Common Stock 114,471,011
Serial Preferred Stock 5,491,830
The number of shares of each class entitled to vote on the
amendment that were voted for and against the amendment were:
Number of Shares Voted
Class For Against
Common Stock 78,854,276 7,415,274
Serial Preferred Stock 4,263,996 234,178
FIFTH:
The amendment does not provide for an exchange,
reclassification, or cancellation of issued shares.
SIXTH:
The amendment does not effect a change in the amount of
stated capital, or paid-in surplus, or both, of the corporation.
IN WITNESS WHEREOF, the Potomac Electric Power Company has
caused these Articles of Amendment to be duly executed (in
duplicate) in its name by William T. Torgerson, one of its Vice
Presidents, and by Mary T. Howard, one of its Assistant
Secretaries, and its corporate seal to be hereunto affixed and
duly attested by Mary T. Howard, one of its Assistant
Secretaries, all as of the 20th day of May, 1993.
POTOMAC ELECTRIC POWER COMPANY
(Corporate Seal)
By: /s/ WILLIAM T. TORGERSON
Vice President
ATTEST:
/s/ M. T. HOWARD By: /s/ M. T. HOWARD
Assistant Secretary Assistant Secretary
DISTRICT OF COLUMBIA, ss.:
I, Indiana C. Shepp, a notary public, do hereby certify that
on this 20th day of May, 1993, personally appeared before me
William T. Torgerson, who, being by me first duly sworn, declared
that he is a Vice President of Potomac Electric Power Company,
that he signed the foregoing document as Vice President of the
corporation, and that the statements therein are true.
/s/ INDIANA C. SHEPP
Notary Public, D. C.
[NOTARIAL SEAL]
My commission expires: June 14, 1995
DISTRICT OF COLUMBIA
STATEMENT OF
CANCELLATION OF REDEEMABLE SHARES
OF
POTOMAC ELECTRIC POWER COMPANY
Under the provisions of Section 29-359 of Chapter 3 of Title
29 of the District of Columbia Code, 1981 Edition (Section 59 of
the District of Columbia Business Corporation Act, as amended),
the undersigned corporation submits this statement of
cancellation, pursuant to the provisions of its articles of
incorporation, of redeemable shares of the corporation reacquired
by it subsequent to the close of business on December 17, 1992,
and prior to the close of business on December 16, 1993, through
their conversion, in accordance with their terms, into shares of
its common stock, and through redemption subsequent to the close
of business on December 17, 1992, and prior to the close of
business on December 16, 1993 of 30,000 shares of Serial
Preferred Stock, $3.37 Series of 1987:
FIRST: The name of the corporation is Potomac Electric Power
Company.
SECOND: The aggregate number of shares which the corporation
had authority to issue is 220,042,227, itemized as follows:
CLASS SERIES NUMBER OF SHARES
Common Stock - 200,000,000
Preference Stock Undesignated as to series 8,800,000
Serial Preferred
Stock $2.44 Series of 1957 300,000
$2.46 Series of 1958 300,000
$2.28 Series of 1965 400,000
$2.44 Convertible
Series of 1966 10,027
$3.82 Series of 1969 500,000
$3.37 Series of 1987 982,200
Auction Series A 1,000,000
$3.89 Series of 1991 1,000,000
$3.40 Series of 1992 1,000,000
Undesignated as to series
5,750,000
THIRD: The number of shares of the corporation so cancelled is
31,183 itemized as follows:
CLASS SERIES NUMBER OF SHARES
Serial Preferred
Stock $2.44 Convertible Series of 1966 1,183
$3.37 Series of 1987 30,000
FOURTH: The number of shares which the corporation has
authority to issue after giving effect to such cancellation is
220,011,044, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Common Stock -
200,000,000
Preference Stock Undesignated as to series 8,800,000
Serial Preferred
Stock $2.44 Series of 1957 300,000
$2.46 Series of 1958 300,000
$2.28 Series of 1965 400,000
$2.44 Convertible
Series of 1966
8,844
$3.82 Series of 1969
500,000
$3.37 Series of 1987
952,200
Auction Series A
1,000,000
$3.89 Series of 1991
1,000,000
$3.40 Series of 1992
1,000,000
Undesignated as to series
5,750,000
FIFTH: The aggregate number of issued shares of the
corporation after giving effect to such cancellation is
122,926,152 itemized as follows:
CLASS SERIES NUMBER OF SHARES
Common Stock - 117,465,108
Preference Stock -
NONE
Serial Preferred
Stock $2.44 Series of 1957 300,000
$2.46 Series of 1958
300,000
$2.28 Series of 1965
400,000
$2.44 Convertible Series of 1966
8,844 $3.82 Series of 1969
500,000
$3.37 Series of 1987
952,200
Auction Series A
1,000,000
$3.89 Series of 1991
1,000,000
$3.40 Series of 1992
1,000,000
SIXTH: After giving effect to such cancellation, the amounts
of the stated capital and paid-in surplus of the corporation,
computed in accordance with the provisions of the District of
Columbia Business Corporation Act, as amended, are $390,517,308
and $989,419,430.89, respectively.
DATED: December 21, 1993
POTOMAC ELECTRIC POWER
COMPANY
By /s/ H. L. DAVIS
H. Lowell Davis
Vice Chairman and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ M. T. HOWARD
M. T. Howard
Assistant Secretary
DISTRICT OF COLUMBIA, ss.:
I, Lisa A. Poole, a Notary Public, do hereby certify that on
this 21st day of December, 1993, personally appeared before me H.
Lowell Davis, who, being by me first duly sworn, declared that he
is Vice Chairman and Chief Financial Officer of Potomac Electric
Power Company, that he signed the foregoing document as Vice
Chairman and Chief Financial Officer of the corporation, and that
the statements therein contained are true.
/s/ LISA A. POOLE
Notary Public, D. C.
[Notarial Seal]
ARTICLES OF AMENDMENT
OF
POTOMAC ELECTRIC POWER COMPANY
Under the provisions of Section 13.1-652 of the Code of
Virginia, as amended, the undersigned corporation submits these
Articles of Amendment.
FIRST: The name of the corporation is Potomac Electric Power
Company.
SECOND: The reduction in the number of authorized shares of the
corporation is 31,183, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Serial Preferred
Stock $2.44 Convertible Series of 1966 1,183
$3.37 Series of 1987 30,000
THIRD: The total number of authorized shares of the
corporation remaining after giving effect to such reduction is
220,011,044, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Common Stock - 200,000,000
Preference Stock Undesignated as to series 8,800,000
Serial Preferred
Stock $2.44 Series of 1957 300,000
$2.46 Series of 1958 300,000
$2.28 Series of 1965 400,000
$2.44 Convertible Series of 1966 8,844
$3.82 Series of 1969 500,000
$3.37 Series of 1987 952,200
Auction Series A 1,000,000
$3.89 Series of 1991 1,000,000
$3.40 Series of 1992 1,000,000
Undesignated as to series 5,750,000
The Articles of Incorporation prohibit the reissuance of
acquired shares.
FOURTH: The reduction in the number of authorized shares was
duly authorized by the Board of Directors on December 20, 1993.
DATED: December 21, 1993
POTOMAC ELECTRIC POWER
COMPANY
By /s/ H. L. DAVIS
H. Lowell Davis
Vice Chairman and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ M. T. HOWARD
M. T. Howard
Assistant Secretary
DISTRICT OF COLUMBIA
STATEMENT OF
CANCELLATION OF REDEEMABLE SHARES
OF
POTOMAC ELECTRIC POWER COMPANY
Under the provisions of Section 29-359 of Chapter 3 of Title
29 of the District of Columbia Code, 1981 Edition (Section 59 of
the District of Columbia Business Corporation Act, as amended),
the undersigned corporation submits this statement of
cancellation, pursuant to the provisions of its articles of
incorporation, of redeemable shares of the corporation reacquired
by it subsequent to the close of business on December 16, 1993,
and prior to the close of business on December 12, 1994, through
their conversion, in accordance with their terms, into shares of
its common stock, and through redemption subsequent to the close
of business on December 16, 1993, and prior to the close of
business on December 12, 1994 of 50,949 shares of Serial
Preferred Stock, $3.37 Series of 1987:
FIRST: The name of the corporation is Potomac Electric Power
Company.
SECOND: The aggregate number of shares which the corporation
had authority to issue is 220,011,044, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Common Stock -
200,000,000
Preference Stock Undesignated as to series 8,800,000
Serial Preferred
Stock $2.44 Series of 1957 300,000
$2.46 Series of 1958 300,000
$2.28 Series of 1965 400,000
$2.44 Convertible Series of 1966 8,844
$3.82 Series of 1969 500,000
$3.37 Series of 1987 952,200
Auction Series A
1,000,000
$3.89 Series of 1991 1,000,000
$3.40 Series of 1992 1,000,000
Undesignated as to series 5,750,000
THIRD: The number of shares of the corporation so cancelled is
51,610 itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Serial Preferred
Stock $2.44 Convertible Series of 1966 661
$3.37 Series of 1987 50,949
FOURTH: The number of shares which the corporation has
authority to issue after giving effect to such cancellation is
219,959,434, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Common Stock -
200,000,000
Preference Stock Undesignated as to series 8,800,000
Serial Preferred
Stock $2.44 Series of 1957
300,000
$2.46 Series of 1958
300,000
$2.28 Series of 1965
400,000
$2.44 Convertible Series of 1966 8,183
$3.82 Series of 1969
500,000
$3.37 Series of 1987
901,251
Auction Series A
1,000,000
$3.89 Series of 1991
1,000,000
$3.40 Series of 1992
1,000,000
Undesignated as to series
5,750,000
FIFTH: The aggregate number of issued shares of the
corporation after giving effect to such cancellation is
123,557,532 itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Common Stock -
118,148,098
Preference Stock -
NONE
Serial Preferred
Stock $2.44 Series of 1957
300,000
$2.46 Series of 1958
300,000
$2.28 Series of 1965
400,000
$2.44 Convertible Series of 1966 8,183
$3.82 Series of 1969 500,000
$3.37 Series of 1987
901,251
Auction Series A
1,000,000
$3.89 Series of 1991
1,000,000
$3.40 Series of 1992
1,000,000
SIXTH: After giving effect to such cancellation, the amounts
of the stated capital and paid-in surplus of the corporation,
computed in accordance with the provisions of the District of
Columbia Business Corporation Act, as amended, are $388,619,798
and $1,004,683,941.72, respectively.
DATED: December 16, 1994
POTOMAC ELECTRIC POWER COMPANY
By /s/ H. L. DAVIS
H. Lowell Davis
Vice Chairman and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ M. T. HOWARD
M. T. Howard
Assistant Secretary
DISTRICT OF COLUMBIA, ss.:
I, Indiana C. Shepp, a Notary Public, do hereby certify that
on this 16th day of December, 1994, personally appeared before me
H. Lowell Davis, who, being by me first duly sworn, declared that
he is Vice Chairman and Chief Financial Officer of Potomac
Electric Power Company, that he signed the foregoing document as
Vice Chairman and Chief Financial Officer of the corporation, and
that the statements therein contained are true.
/s/ INDIANA C. SHEPP
Notary Public, D. C.
[Notarial Seal] My commission expires: June 14, 1995
ARTICLES OF AMENDMENT
OF
POTOMAC ELECTRIC POWER COMPANY
Under the provisions of Section 13.1-652 of the Code of
Virginia, as amended, the undersigned corporation submits these
Articles of Amendment.
FIRST: The name of the corporation is Potomac Electric Power
Company.
SECOND: The reduction in the number of authorized shares of the
corporation is 51,610, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Serial Preferred
Stock $2.44 Convertible Series of 1966 661
$3.37 Series of 1987 50,949
THIRD: The total number of authorized shares of the
corporation remaining after giving effect to such reduction is
219,959,434, itemized as follows:
CLASS SERIES NUMBER OF
SHARES
Common Stock -
200,000,000
Preference Stock Undesignated as to series 8,800,000
Serial Preferred
Stock $2.44 Series of 1957 300,000
$2.46 Series of 1958 300,000
$2.28 Series of 1965 400,000
$2.44 Convertible Series of 1966 8,183
$3.82 Series of 1969 500,000
$3.37 Series of 1987 901,251
Auction Series A
1,000,000
$3.89 Series of 1991 1,000,000
$3.40 Series of 1992 1,000,000
Undesignated as to series 5,750,000
The Articles of Incorporation prohibit the reissuance of
acquired shares.
FOURTH: The reduction in the number of authorized shares was
duly authorized by the Board of Directors on December 15, 1994.
DATED: December 16, 1994
POTOMAC ELECTRIC POWER
COMPANY
By /s/ H. L. DAVIS
H. Lowell Davis
Vice Chairman and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ M. T. HOWARD
M. T. Howard
Assistant Secretary