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
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
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 12, 1994, and prior to the close
of business on December 14, 1995, 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
12, 1994, and prior to the close of business on December 14, 1995
of 31,555 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 219,959,434 itemized as follows:
CLASS SERIES NUMBER OF SHARES
Common Stock - 200,000,000
Preference 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
THIRD: The number of shares of the corporation so cancelled is
33,212 itemized as follows:
CLASS SERIES NUMBER OF SHARES
Serial Preferred
Stock $2.44 Convertible Series of 1966 1,657
$3.37 Series of 1987 31,555
FOURTH: The number of shares which the corporation has
authority to issue after giving effect to such cancellation is
219,926,222, 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 6,526
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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 of such cancellation is 123,870,682
itemized as follows:
CLASS SERIES NUMBER OF SHARES
Common Stock - 118,494,460
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 6,526
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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 $387,305,560 and
$1,010,531,171.08, respectively.
DATED: December 20, 1995
POTOMAC ELECTRIC POWER COMPANY
By /s/ H. L. DAVIS
H. Lowell Davis
Vice Chairman and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ ELLEN SHERIFF ROGERS
Ellen Sheriff Rogers
Assistant Secretary
DISTRICT OF COLUMBIA, ss.:
I, Michelle T. Brown, a Notary Public, do hereby certify that on this 20th
day of December, 1995, personally appeared before me
H. Lowell Davis, who, being by 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/ MICHELLE T. BROWN
Notary Public, D. C.
[Notarial Seal] My commission expires: 11-14-97
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 33,212, itemized as follows:
CLASS SERIES NUMBER OF SHARES
Serial Preferred
Stock $2.44 Convertible
Series of 1966 1,657
$3.37 Series of 1987 31,555
THIRD: The total number of authorized shares of the
corporation remaining after giving effect to such reduction is
219,926,222, 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 6,526
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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 18, 1995.
DATED: December 20, 1995
POTOMAC ELECTRIC POWER COMPANY
By /s/ H. LOWELL DAVIS
H. Lowell Davis
Vice Chairman and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ ELLEN SHERIFF ROGERS
Ellen Sheriff Rogers
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 14, 1995, and prior to the close
of business on December 12, 1996, through their conversion, in
accordance with their terms, into shares of its common stock:
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 219,926,222 itemized as
follows:
CLASS SERIES NUMBER OF SHARES
Common Stock - 200,000,000
Preference 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 6,526
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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
573 itemized as follows:
CLASS SERIES NUMBER OF SHARES
Serial Preferred
Stock $2.44 Convertible
Series of 1966 573
FOURTH: The number of shares which the corporation has
authority to issue after giving effect to such cancellation is
219,925,649, 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 5,953
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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 of such cancellation is 123,875,670
itemized as follows:
CLASS SERIES NUMBER OF SHARES
Common Stock - 118,500,021
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 5,953
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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 $387,282,471
and $1,010,424,927.80, respectively.
DATED: December 17, 1996
POTOMAC ELECTRIC POWER COMPANY
By /s/ D. R. WRAASE
Dennis R. Wraase
Senior Vice President and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ ELLEN SHERIFF ROGERS
Ellen Sheriff Rogers
Secretary
DISTRICT OF COLUMBIA, ss.:
I, Lisa A. Poole, a Notary Public, do hereby certify that on
this 17th day of December, 1996, personally appeared before me
Dennis R. Wraase, who, being by me first duly sworn, declared that
he is Senior Vice President and Chief Financial Officer of Potomac
Electric Power Company, that he signed the foregoing document as
Senior Vice President 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] My commission expires: 7-31-97
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 573, itemized as follows:
CLASS SERIES NUMBER OF SHARES
Serial Preferred
Stock $2.44 Convertible
Series of 1966 573
THIRD: The total number of authorized shares of the
corporation remaining after giving effect to such reduction
is 219,925,649, 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 5,953
$3.82 Series of 1969 500,000
$3.37 Series of 1987 869,696
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 16, 1996.
DATED: December 17, 1996
POTOMAC ELECTRIC POWER COMPANY
By /s/ D. R. WRAASE
Dennis R. Wraase
Senior Vice President and
Chief Financial Officer
[Corporate Seal]
Attest:
/s/ ELLEN SHERIFF ROGERS
Ellen Sheriff Rogers
Secretary