Exhibit 99.4
FORM OF
WESTERN RESOURCES, INC.
Certificate of Designations
for a Series of Preference Stock
designated as "7.5% Convertible Preference Stock"
(this "Certificate")
Pursuant to Section 17-6401(g) of the General
Corporation Code of the State of Kansas
Western Resources, Inc., a corporation of the State of Kansas (formerly
named "The Kansas Power and Light Company") (hereinafter called the
"Corporation"), by the President and Chief Executive Officer, an officer
authorized to exercise the duties ordinarily exercised by a Vice President, and
an Assistant Secretary, DOES HEREBY CERTIFY that the Board of Directors of the
Corporation, at a meeting duly convened and held on November 8, 2000, at which a
quorum was present and acting throughout, duly and unanimously adopted the
following resolutions authorizing the issuance of a series of the Corporation's
Preference Stock, and fixing the designations, preferences and relative,
participating, optional and other rights and the qualifications, limitations and
restrictions thereof other than those which would apply to all series of
Preference Stock of the Corporation as follows:
BE IT RESOLVED, that a new series of the Preference Stock, without par
value, of the Corporation be, and it hereby is, established;
FURTHER RESOLVED, that the following be, and it hereby is, a statement
of the designation and the powers, preferences and rights, and the
qualifications, limitations and restrictions, of such series, subject to
the provisions set forth in the Restated Articles of Incorporation of the
Corporation, as heretofore amended (the "Articles") (capitalized terms used
herein and not otherwise defined herein shall have the meanings given
thereto in the Articles; certain other terms used herein are defined in
Section 9 of this Certificate):
1. Designation. The Preference Stock created and authorized hereby
shall be designated as the "7.5% Convertible Preference Stock" (the "7.5%
Series"). The number of shares constituting the 7.5% Series shall be
4,000,000 and no more. The 7.5% Series comprises all of the 4,000,000
shares of Preference Stock that the Corporation is authorized to issue
pursuant to the Articles.
2. Dividends. The rate per annum of dividends on the 7.5% Series shall
be $7.50 per share and dividends thereon shall be cumulative from and
including the date of issuance. January 1, 2001 shall be the first dividend
payment date for shares issued before that date, and dividends shall be
payable thereafter on the first day of January, April, July and October of
each year. For any period during which any share of such series is
outstanding less or more than a full quarterly dividend period, the
dividends payable shall be computed on the basis of twelve 30-day months
and the actual number of days elapsed in the period for which the dividends
are payable.
3. Optional Redemption(a). (a) The shares of the 7.5% Series shall not
be redeemable prior to the earlier to occur of (i) the fourth anniversary
of the Lobos Merger Effective Time and (ii) the fourth anniversary of
termination of the Lobos Merger Agreement, and on or after such date such
shares shall be redeemable in whole or in part at the option of the
Corporation, subject to the terms, provisions and effect as generally
provided for redemption of shares of the Corporation's Preference Stock in
the Articles, at the Liquidation Preference, plus, in each case, an amount
equal to the accrued but unpaid dividends on said shares to the date of
redemption; provided, however, that no redemption shall be made if any
dividends payable on the 7.5% Series are in arrears, unless all shares of
the 7.5% Series are redeemed. In the case of an optional redemption of less
than all of the shares of the 7.5% Series at the time outstanding, the
Corporation shall select by lot the shares so to be redeemed.
(b) No sinking fund or redemption, purchase or similar account or fund
will be provided for shares of the 7.5% Series.
4. Liquidation, Dissolution or Winding Up. In the event of the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of the 7.5% Series shall be entitled to receive
from any assets and funds of the Corporation remaining after payment of the
debts and other liabilities of the Corporation and after payment to the
holders of Preferred Stock of the preferential amount or amounts to which
such holders are entitled thereon) for each share an amount equal to the
Liquidation Preference, plus as to each share, an amount equal to the
accrued but unpaid dividends thereon to the dates of distribution.
5. Voting Rights. Subject to the special voting rights provided to
holders of the Corporation's Preferred Stock and the special rights stated
below as provided to holders of the Corporation's Preference Stock, as
stated in replacement Paragraph 1 of Section D of Article IV of the
Articles (set forth in the Certificate of Amendment to the Restated
Articles dated and filed May 12, 1998) each holder of shares of the 7.5%
Series shall have one vote for each share held by such holder for the
election of directors and upon all other matters requiring stockholder
action; provided, however, that whenever, as provided in or pursuant to the
Articles, the Preference Stockholders are entitled to vote separately as a
class for the election of certain directors, each holder of shares of the
7.5% Series shall be entitled to vote such shares only for the directors to
be elected by the holders of the Preference Stock.
As stated in Subdivision (a) of Paragraph 5 of Section D of Article IV
of the Articles (said Article IV being the former Article VI which article
was renumbered as specified in the Certificate of Amendment to Restated
Articles dated May 26, 1994). The holders of all Preference Stock shall be
entitled to the following special voting rights:
(a) If at any time, dividends payable on the Corporation's Preference
Stock are in default in an amount equivalent to six or more full quarterly
dividends, whether or not consecutive, the holders of all outstanding
shares of the Corporation's Preference Stock, voting separately as a class
and without regard to series, and in the manner provided in Paragraph 1 of
Section D of Article IV of the Articles, shall be entitled until, but only
until, all dividends in default shall have been paid or deposited in trust
with a bank or trust company having the qualifications set forth in
Paragraph 3 of Section B of Article IV of the Articles for payment on or
before the next succeeding dividend payment date, to elect two directors to
the Board of Directors, and the holders of the Preferred Stock and the
Common Stock, voting together, or voting as provided in Section A of
Article IV of the Articles in the event that the holders of the Preferred
Stock are then entitled to special voting rights pursuant to Subdivision
(a) of Paragraph 6 of Section A of Article IV of the Articles, and in
either case in the manner provided in Paragraph 1 of Section D of Article
IV of the Articles, shall be entitled to elect the remaining directors. If
and when all dividends then in default on the Preference Stock shall
thereafter be paid (and such dividends shall be declared and paid out of
surplus or net profits legally available therefore as soon as reasonably
practicable) the Preference Stock shall thereupon be divested of any
special rights to elect such two directors to the Board of Directors, but
subject always to the same provisions for vesting of special rights in the
Preference Stock in the case of any similar future default or defaults.
(i) The foregoing right of the Preference Stock to elect two
directors to the Board of Directors of the Corporation may be
exercised at any annual meeting of stockholders held for such purpose.
Upon the accrual of such special right of the holders of Preference
Stock, a meeting (which may be a special meeting of the stockholders
held pursuant to Subdivision (a) of Paragraph 6 of Section A of
Article IV of the Articles) of the holders of the Preference Stock
shall be held upon notice promptly given as provided in the By-laws
for a special meeting, by the Chairman of the Board, President or
Secretary of the Corporation. If, within fifteen (15) days after the
accrual of such special right of the Preference Stockholders, the
Chairman of the Board, President and Secretary of the Corporation
shall fail to call such meeting, then, upon request signed by any
holder of record of Preference Stock then outstanding delivered to the
Corporation at its principal office, the President of the Corporation
shall call a special meeting of the Preference Stockholders (which may
be a special meeting of the stockholders called pursuant to
Subdivision (a) of Paragraph 6 of Section A of Article IV of the
Articles) to be held within sixty (60) days after the receipt of such
request for the purpose of electing two directors to the Board of
Directors by a vote of the Preference Stock as above provided, to
serve until the next annual meeting or until their successors shall be
elected and qualified. The term of office of two of the persons who
are directors of the Corporation at the time (who shall not be
directors who have been elected by the holders of Preferred Stock
pursuant to Subdivision (a) of Paragraph 6 of Section A of Article IV
of the Articles) shall be designated by a majority of the directors
then in office as the directors whose terms shall terminate upon the
election of the two directors to the Board of Directors by the
Preference Stockholders, notwithstanding that the term for which such
two directors have been elected shall not then have expired.
(ii) At such time as the Preference Stock shall be divested of
the right to elect two directors to the Board of Directors, the term
of such directors so elected by the holders of the Preference Stock
shall terminate and the vacancies in the Board of Directors effected
thereby may be filled by a majority of the remaining directors.
(iii) At any annual or special meeting of stockholders held for
the purpose of electing directors at which the holders of the
Preference Stock would be entitled to elect two directors to the Board
of Directors, the presence in person or by proxy of the holders of a
majority of the outstanding Preference Stock shall be required to
constitute a quorum of Preference Stock for the election by such class
of two directors to the Board of Directors; provided, however, that a
majority of the holders of the Preference Stock who are present in
person or by proxy shall have the power to adjourn such meeting for
the purpose of the election of such two directors by such shares from
time-to-time without notice other than an announcement at the meeting.
No delay or failure by the holders of any class of shares to elect the
members of the Board of Directors which such holders are entitled to
elect shall invalidate the election of the remaining members of the
Board of Directors by the holders of such other class or classes of
shares, and a majority of the directors so elected shall, in such
case, constitute a quorum for the transaction of business by the Board
of Directors.
(iv) If, during any interval between the annual meeting of
stockholders for the election of directors and while the Preference
Stock shall be entitled to elect two directors, a director in office
who has been elected by the holders of the Preference Stock shall have
resigned, died or been removed, then (x) such vacancy shall be filled
by the remaining director then in office who was elected by the
Preference Stockholders or who succeeded to the director so elected,
and (y) if both directors so representing the Preference Stockholders
shall have resigned, died or been removed, or if any vacancy which
occurred more than six months prior to the date of the next ensuing
annual meeting is not so filled within forty (40) days after the
occurrence thereof, the President of the Corporation shall call a
special meeting of the holders of the Preference Stock and such
vacancy shall be filled at such special meeting.
(v) Any director elected by the holders of Preference Stock may
be removed from office only by vote of the holders of a majority of
the outstanding shares of Preference Stock voted for his election or
for his predecessor in cases where such director was elected by the
Board of Directors.
(b) As stated in Subdivision (b) of Paragraph 5 of Section B of
Article IV of the Articles (as corrected by the Certificate of Correction
to Restated Articles dated and filed January 24, 1992), so long as any
shares of Preference Stock are outstanding, the Corporation shall not,
without the consent (given by vote in person or by proxy at a meeting
called for that purpose) of the holders of at least two-thirds (2/3) of the
shares of Preference Stock then outstanding, voting separately as a class
and without regard to series,
(i) Amend, alter, change or repeal any of the express terms or
provisions of then outstanding Preference Stock in a manner
substantially prejudicial to the holders thereof; provided, however,
that, if any such amendment, alteration, change or repeal adversely
affects the holders of some but not all of the outstanding shares of
Preference Stock, only the consent of the holders of two-thirds (2/3)
of the total number of shares so affected shall be required; or
(ii) Create any class of stock ranking prior to the Preference
Stock as to dividends or upon liquidation, or securities convertible
into shares ranking prior to the Preference Stock in respects
aforesaid; provided that no such consent shall be required with
respect to the taking of any such action relating to the Corporation's
Preferred Stock, par value $100 per share, or Preferred Stock, without
par value.
6. Conversion Rights.
(a) Right to Convert. Each share of the 7.5% Series may be
converted at the option of the holder thereof at any time and from
time to time, and without the payment of any additional consideration
therefor, into that number of fully paid and nonassessable shares of
Common Stock, $5.00 par value per share, of the Corporation (the
"Common Stock") as provided herein.
(b) Conversion Procedures. Each holder of the 7.5% Series who
elects to convert the same into shares of Common Stock shall surrender
the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or any transfer agent for the 7.5% Series as may be
designated by the Board of Directors (the "Transfer Agent"), and shall
give written notice to the Corporation at such office that such holder
elects to convert the same and shall state therein the number of
shares of the 7.5% Series being converted; provided, however, such
number of shares shall not be fewer than 25,000. Thereupon, the
Corporation shall promptly issue and deliver at such office to such
holder a certificate or certificates for the number of shares of
Common Stock to which such holder is entitled upon such conversion.
Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the certificate
or certificates representing the shares of the 7.5% Series to be
converted, and the person entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes
as the record holder of such shares of Common Stock on such date.
(c) Conversion Price. Each share of the 7.5% Series shall be
convertible in accordance with this Section 6 into the number of
shares of Common Stock that results from dividing the Liquidation
Preference for the 7.5% Series by the conversion price that is in
effect at the time of conversion (the "Conversion Price"). The initial
Conversion Price for the 7.5% Series shall be $32.40 per share. The
Conversion Price shall be subject to adjustment from time to time as
provided below.
(d) Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time as follows:
(i) If the Corporation shall hereafter pay a dividend in or
make a distribution of Common Stock to all holders of any
outstanding class or series of Common Stock, the Conversion Price
in effect at the opening of business on the date following the
date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date fixed for
such determination and the denominator shall be the sum of such
number of outstanding shares and the total number of shares
constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on
the day following the Record Date. If any dividend or
distribution of the type described in this Section 6(d)(i) is
declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.
(ii) If the Corporation shall offer to issue rights or
warrants to all holders of its outstanding Common Stock entitling
them to subscribe for or purchase Common Stock at a price per
share less than the Current Market Price on the Record Date fixed
for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date
after such Record Date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close
of business on the Record Date plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares of Common Stock subject to such rights or
warrants would purchase at such Current Market Price and of which
the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the
total number of additional shares of Common Stock subject to such
rights or warrants for subscription or purchase. Such adjustment
shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of
stockholders entitled to purchase or receive such rights or
warrants. For the purposes of this Section 6(d)(ii), the issuance
of rights or warrants to subscribe for or purchase securities
convertible into Common Stock shall be deemed to be the issuance
of rights or warrants to purchase the shares of Common Stock into
which such securities are convertible at an aggregate offering
price equal to the aggregate offering price of such securities
plus the minimum aggregate amount (if any) payable upon
conversion of such securities into shares of Common Stock. To the
extent that shares of Common Stock are not delivered pursuant to
such rights or warrants, upon the expiration or termination of
such rights or warrants the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect
had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. If such rights or
warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect
if such date fixed for the determination of stockholders entitled
to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase Common Stock at less than such Current
Market Price, and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken into account
any consideration received for such rights or warrants, with the
value of such consideration, if other than cash, to be determined
by the Board of Directors.
(iii) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective
shall be proportionately reduced, and, conversely, if the
outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day
upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.
(iv) If the Corporation shall, by dividend or otherwise,
distribute to all holders of its shares of Common Stock shares of
any class of capital stock of the Corporation (other than any
dividends or distributions to which Section 6(d)(i) applies) or
evidences of its indebtedness, cash or other assets (including
securities, but excluding any rights or warrants of a type
referred to in Section 6(d)(ii) and excluding dividends and
distributions paid exclusively in cash and excluding any capital
stock, evidences of indebtedness, cash or assets distributed upon
a merger or consolidation to which Section 7(a) applies) (the
foregoing hereinafter in this Section 6(d)(iv) called the
"Distributed Securities"), then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal
to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record
Date with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price of the Common Stock
on such date less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) on such date
of the portion of the Distributed Securities so distributed
applicable to one share of Common Stock and the denominator shall
be such Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day following
the Record Date; provided, however, that, in the event the then
fair market value (as so determined) of the portion of the
Distributed Securities so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price
on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of the 7.5% Series
shall have the right to receive upon conversion of a share of the
7.5% Series (or any portion thereof) the amount of Distributed
Securities such holder would have received had such holder
converted such share of the 7.5% Series (or portion thereof)
immediately prior to such Record Date. If such dividend or
distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be
in effect if such dividend or distribution had not been declared.
If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 6(d)(iv) by reference
to the actual or when issued trading market for any securities
comprising all or part of such distribution, it must in doing so
consider the prices in such market over the same period used in
computing the Current Market Price to the extent possible.
Notwithstanding the foregoing, this Section 6(d)(iv) shall not
apply in the event that the Record Date for the distribution to
holders of the Common Stock of shares of Weststar Industries,
Inc. is the same as the Record Date for the receipt of Lobos
Parent Common Stock by holders of the Common Stock pursuant to
the Lobos Merger.
Rights or warrants distributed by the Corporation to all holders
of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Corporation's Capital Stock (either
initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events
("Dilution Trigger Event"): (i) are deemed to be transferred with
such Common Stock; (ii) are not exercisable; and (iii) are also
issued in respect of future issuances of Common Stock, shall be
deemed not to have been distributed for purposes of this Section
6(d)(iv) (and no adjustment to the Conversion Price under this
Section 6(d)(iv) shall be required) until the occurrence of the
earliest Dilution Trigger Event, whereupon such rights and
warrants shall be deemed to have been distributed and an
appropriate adjustment to the Conversion Price under this Section
6(d)(iv) shall be made. If any such rights or warrants, including
any such existing rights or warrants distributed prior to the
date hereof, are subject to subsequent events, upon the
occurrence of each of which such rights or warrants shall become
exercisable to purchase different securities, evidences of
indebtedness or other assets, then the occurrence of each such
event shall be deemed to be such date of issuance and record date
with respect to new rights or warrants (and a termination or
expiration of the existing rights or warrants without exercise by
the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or
any Dilution Trigger Event with respect thereto, that was counted
for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 6(d)(iv)
was made, (1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Price shall be readjusted
upon such final redemption or repurchase to give effect to such
distribution or Dilution Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming
such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants which
shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if
such rights and warrants had not been issued.
Notwithstanding any other provision of this Section 6(d)(iv) to
the contrary, capital stock, rights, warrants, evidences of
indebtedness, other securities, cash or other assets (including
any rights distributed pursuant to any shareholder rights plan)
shall be deemed not to have been distributed for purposes of this
Section 6(d)(iv) if the Corporation makes proper provision so
that each holder of shares of the 7.5% Series who converts a
share of the 7.5% Series (or any portion thereof) after the date
fixed for determination of stockholders entitled to receive such
distribution shall be entitled to receive upon such conversion,
in addition to the Common Stock issuable upon such conversion,
the amount and kind of such distributions that such holder would
have been entitled to receive if such holder had, immediately
prior to such determination date, converted such share of the
7.5% Series into Common Stock.
For purposes of this Section 6(d)(iv) and Sections 6(d)(i) and
(ii), any dividend or distribution to which this Section 6(d)(iv)
is applicable that also includes Common Stock, or rights or
warrants to subscribe for or purchase Common Stock to which
Section 6(d)(ii) applies (or both), shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness,
cash, assets, shares of capital stock, rights or warrants other
than (A) such shares of Common Stock or (B) rights or warrants to
which Section 6(d)(2) applies (and any Conversion Price reduction
required by this Section 6(d)(iv) with respect to such dividend
or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such Common Stock or such rights or
warrants (and any further Conversion Price reduction required by
Section 6(d)(i) and (ii) with respect to such dividend or
distribution shall then be made), except that (x) the Record Date
of such dividend or distribution shall be substituted as "the
Record Date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "Record Date
fixed for such determination" and "Record Date" within the
meaning of Section 6(d)(i) and as "the Record Date fixed for the
determination of stockholders entitled to receive such rights or
warrants", "the date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and
"such Record Date" within the meaning of Section 6(d)(ii), and
(y) any share of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the
meaning of Section 6(d)(i).
(v) If the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any
cash that is distributed upon a merger or consolidation to which
Section 7(a) applies or as part of a distribution referred to in
paragraph 6(d)(iv)) in an aggregate amount that, combined
together with (1) the aggregate amount of any other such
distributions to all holders of its Common Stock made exclusively
in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant
to this Section 6(d)(v) has been made, and (2) the aggregate of
any cash plus the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of
consideration payable in respect of any tender offer by the
Company or a Subsidiary of the Company for all or any portion of
the Common Stock concluded within the 12 months preceding the
date of payment of such distribution, and in respect of which no
adjustment pursuant to Section 6(d)(vi) has been made, exceeds
15% of the product of the Current Market Price on the Record Date
with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date, the
Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Record
Date by a fraction (i) the numerator of which shall be equal to
the Current Market Price on the Record Date less an amount equal
to the quotient of (x) the excess of such combined amount over
such 15% amount divided by (y) the number of shares of Common
Stock outstanding on the Record Date and (ii) the denominator of
which shall be equal to the Current Market Price on such Record
Date; provided, however, that, if the portion of the cash so
distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on
the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of Convertible
Preferred Stock shall have the right to receive upon conversion
of a share of Convertible Preferred Stock (or any portion
thereof) the amount of cash such holder would have received had
such holder converted such share of Convertible Preferred Stock
(or portion thereof) immediately prior to such Record Date. If
such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or
distribution had not been declared.
(vi) If a tender or exchange offer made by the Company or
any of its Subsidiaries for all or any portion of the Common
Stock expires and such tender or exchange offer (as amended upon
the expiration thereof) requires the payment to stockholders
(based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) that,
combined together with (i) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution
of the Board of Directors), as of the expiration of such tender
offer, of consideration payable in respect of any other tender
offers by the Company or any of its Subsidiaries for all or any
portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to this Section 6(d)(vi) has been
made and (ii) the aggregate amount of any distributions to all
holders of the Common Stock made exclusively in cash within 12
months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to Section 6(d)(v) has
been made, exceeds 15% of the product of the Current Market Price
as of the last time (the "Expiration Time") tenders could have
been made pursuant to such tender offer (as it may be amended)
times the number of shares of Common Stock outstanding (including
any tendered shares) at the Expiration Time, then, and in each
such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, the Conversion Price
shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect
immediately prior to the close of business on the date of the
Expiration Time by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the
sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the
tender offer) of all shares validly tendered and not withdrawn as
of the Expiration Time (the shares deemed so accepted, up to any
such maximum, being referred to as the "Purchased Shares") and
(y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time
and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction (if any)
to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such tender offer,
but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded,
the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such tender offer had not
been made. If the application of this Section 6(d)(vi) to any
tender offer would result in an increase in the Conversion Price,
no adjustment shall be made for such tender offer under this
Section 6(d)(vi).
(vii) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this Section 6(d)(vi) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 6(d) shall be made by the Corporation and shall be made
to the nearest cent or to the nearest one-hundredth of a share,
as the case may be. No adjustment need be made for a change in
the par value or no par value of the Common Stock.
(viii) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer
Agent an Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the
Conversion Price to each holder of the 7.5% Series at such
holder's last address appearing on the register of holders
maintained for that purpose within 20 days of the effective date
of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
(ix) In any case in which this Section 6(d) provides that an
adjustment shall become effective immediately after a Record Date
for an event, the Corporation may defer until the occurrence of
such event issuing to the holder of any share of the 7.5% Series
converted after such Record Date and before the occurrence of
such event the additional Common Stock issuable upon such
conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment.
(x) For purposes of this Section 6(d), the number of shares
of Common Stock at any time outstanding shall not include shares
held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of
fractions of Common Stock. The Corporation shall not pay any
dividend or make any distribution on Common Stock held in the
treasury of the Corporation.
7. Corporate Events.
(a) Merger. In case of (i) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value or
from par value to no par value or from no par value to par value, or as a
result of a subdivision or combination) or (ii) any consolidation or merger
of the Corporation with one or more other corporations (other than the
Lobos Merger or any consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock
issuable upon conversion of the 7.5% Series), (iii) any sale or conveyance
to another corporation or other entity of all or substantially all of the
property of the Corporation, or (iv) any other transaction which would
constitute a Change of Control of the Corporation, then the Corporation, or
such successor corporation or other entity, as the case may be, shall make
appropriate provision so that the holder of each share of the 7.5% Series
then outstanding shall have the right thereafter, to convert such share of
the 7.5% Series into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale,
reclassification, change or conveyance by a holder of the number of shares
of Common Stock into which such share of the 7.5% Series might have been
converted immediately prior to such consolidation, merger, sale,
reclassification, change or conveyance, subject to such adjustment which
shall be as nearly equivalent as may be practicable to the adjustments
provided in Section 6(d). The above provisions of this Section 7(a) shall
similarly apply to successive consolidations, mergers, conveyances or
transfers.
(b) Offer to Repurchase. In addition to the foregoing, upon the
occurrence of a Change of Control (other than the Lobos Merger), the
Corporation shall make an offer (a "Change of Control Offer") to each
holder of shares of the 7.5% Series to repurchase all or any part of each
such holder's shares of the 7.5% Series at an offer price in cash equal to
100% of the Liquidation Preference as of the Change of Control Payment Date
(the "Change of Control Payment"); provided, however, such Change of
Control Offer shall be limited to that number of shares of the 7.5% Series
equal to the total number of outstanding shares of the 7.5% Series
multiplied by a quotient equal to the total cash consideration paid to
stockholders pursuant to such Change of Control transaction divided by the
total consideration paid to stockholders pursuant to such Change of Control
transaction. The Corporation shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of shares of the 7.5% Series as a result of
a Change of Control, and the Corporation shall not be in violation of this
Certificate of Designation by reason of any act required by such rule or
other applicable law.
Within 25 days following any Change of Control, the Corporation shall mail
a notice to each holder of shares of the 7.5% Series stating:
(i) that the Change of Control Offer is being made pursuant to
this Section 7.5 and that up to the stated number of shares of the
7.5% Series tendered will be accepted for payment;
(ii) the purchase price and the purchase date, which shall be at
least 30 but no more than 60 days from the date on which the
Corporation mails notice of the Change of Control (the "Change of
Control Payment Date");
(iii) that any shares of the 7.5% Series not tendered will
continue to accrue dividends as provided in this Certificate of
Designation;
(iv) that, unless the Corporation defaults in the payment of the
Change of Control Payment, all shares of the 7.5% Series accepted for
payment pursuant to the Change of Control Offer shall cease to accrue
dividends after the Change of Control Payment Date;
(v) that holders of shares of the 7.5% Series electing to have
any shares of the 7.5% Series purchased pursuant to a Change of
Control Offer shall be required to surrender the shares of the 7.5%
Series to the Corporation or its designated agent (the "Paying Agent")
for such purpose, at the address specified in the notice prior to the
close of business on the third Business Day preceding the Change of
Control Payment Date; and
(vi) that holders of shares of the 7.5% Series will be entitled
to withdraw their election if the Corporation or the Paying Agent
receives, not later than the close of business on the second Business
Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the holder
of shares of the 7.5% Series, the number of shares of the 7.5% Series
delivered for purchase, and a statement that such holder is
withdrawing his election to have such shares purchased.
On the Change of Control Payment Date, the Corporation shall, to the
extent lawful, (i) accept for payment all shares of the 7.5% Series
tendered pursuant to the Change of Control Offer; provided, however,
that if the number of such tendered shares exceeds the limits set
forth above, the Corporation shall accept such shares pro rata and
(ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all shares of the 7.5% Series so
accepted for payment. The Corporation shall promptly mail to each
holder of shares of the 7.5% Series so tendered the Change of Control
Payment for such shares. The Corporation shall publicly announce the
results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(c) Notice of Record Date. In case at any time or from time to
time (i) the Corporation shall pay any stock dividend or make any
other non-cash distribution to the holders of its Common Stock, or
offer for subscription pro rata to the holders of its Common Stock any
additional shares of stock of any class or any other right, or (ii)
there shall be any capital reorganization or reclassification of the
Common Stock of the Corporation or consolidation or merger of the
Corporation with or into another corporation, or any sale or
conveyance to another corporation of the property of the Corporation
as an entirety or substantially as an entirety, or (iii) there shall
be a voluntary or involuntary dissolution, liquidation or winding up
of the Corporation, then, in any one or more of said cases the
Corporation shall give at least 20 days' prior written notice (the
time of mailing of such notice shall be deemed to be the time of
giving thereof) to the registered holders of the 7.5% Series at the
addresses of each as shown on the books of the Corporation maintained
by the Transfer Agent thereof of the date on which (A) a record shall
be taken for such stock dividend, distribution or subscription rights
or (B) such reorganization, reclassification, consolidation, merger,
sale or conveyance, dissolution, liquidation or winding up shall take
place, as the case may be; provided that, in the case of any
transaction to which clause (a) applies the Corporation shall give at
least 30 days' prior written notice as aforesaid. Such notice shall
also specify the date as of which the holders of the Common Stock of
record shall participate in said dividend, distribution or
subscription rights or shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale or
conveyance or participate in such dissolution, liquidation or winding
up, as the case may be. Failure to give such notice shall not
invalidate any action so taken.
8. Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of the 7.5% Series, such number
of its shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all then outstanding shares of the 7.5%
Series; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the 7.5% Series, the
Corporation will take such corporate action as may be necessary to
increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.
9. Definitions. Certain capitalized terms are used in this
Certificate as defined below:
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with such
Person. For the purposes of this definition, "control," when used with
respect to any particular Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through ownership of voting securities, by contract or
otherwise.
"Beneficial Owner" (and with correlative meanings, "Beneficially
Own" and "Beneficial Ownership") of any interest means a Person who,
together with his, her or its Affiliates, is or may be deemed a
beneficial owner of such interest for purposes of Rule 13d-3 or 13d-5
under the Exchange Act, or who, together with his, her, or its
Affiliates, has the right to become such a beneficial owner of such
interest (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise, conversion or exchange of any
warrant, right or other instrument, or otherwise.
"Board of Directors" shall mean the board of directors of the
Corporation.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in The City of New York or at a
place of payment are authorized by law, regulation or executive order
to remain closed.
"Change of Control" means the occurrence of any of the following:
(i) any Person becoming the Beneficial Owner, directly or indirectly,
of Voting Securities, pursuant to the consummation of a merger,
consolidation, sale of all or substantially all of the Corporation's
assets, share exchange or similar form of transaction that requires
the approval of the Corporation's stockholders, whether for such
transaction or the issuance of securities in such transaction, so as
to cause such Person's Voting Ownership Percentage to exceed 50% of
the Total Voting Power; provided, however, that the event described in
this clause (i) shall not be deemed to be a Change of Control if it
occurs as a result of the following acquisitions: (A) by any employee
benefit plan sponsored or maintained by the Corporation or any
Affiliate, or (B) by any underwriter temporarily holding securities
pursuant to an offering of such securities; (ii) the consummation of a
merger, consolidation, sale of all or substantially all of the
Corporation's assets, share exchange or similar form of corporate
transaction involving the Corporation or any of its subsidiaries that
requires the approval of the Corporation's shareholders whether for
such transaction or the issuance of securities in such transaction,
unless immediately following such transaction more than 50 percent of
the total voting power of (x) the corporation resulting from such
transaction, or (y) if applicable, the ultimate parent corporation
that directly or indirectly has Beneficial Ownership of 100 percent of
the voting securities eligible to elect directors of such resulting
corporation, is represented by Voting Securities that were outstanding
immediately prior to such transaction in substantially the same
proportion as the voting power of such Voting Securities among the
holders thereof immediately prior to such transaction; or (iii) the
consummation of a plan of complete liquidation or dissolution of the
Corporation.
"closing price" with respect to any securities on any day means
the last sale price on such day or, if no such sale takes place on
such day, the average of the reported high bid and low ask prices on
such day, in each case on the Nasdaq National Market or the New York
Stock Exchange, as applicable, or, if such security is not listed or
admitted to trading on such national market or exchange, on the
principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading, or, if not
quoted or listed or admitted to trading on any national securities
exchange or quotation system, the average of the high bid and low ask
prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated or
a similar generally accepted reporting service, or, if not so
available, in such manner as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors for
that purpose, or a price determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors.
"Current Market Price" means the average of the daily closing
prices per share of Common Stock for the 20 consecutive Trading Days
immediately prior to the date in question; provided, however, that (A)
if the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires
an adjustment to the Conversion Price pursuant to Section 6(d)(i),
(ii), (iii) or (iv) occurs during such 20 consecutive trading days,
the closing price for each trading day prior to the "ex" date for such
other event shall be adjusted by multiplying such closing price by the
same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (B) if the "ex" date for any
event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 6(d)(i), (ii), (iii) or (iv) occurs on or after
the "ex" date for the issuance or distribution requiring such
computation and prior to the date in question, the closing price for
each trading day on and after the "ex" date for such other event shall
be adjusted by multiplying such closing price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted
as a result of such other event and (C) if the "ex" date for the
issuance or distribution requiring such computation is prior to the
day in question, after taking into account any adjustment required
pursuant to clause (A) or (B) of this proviso, the closing price for
each trading day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 6(d)(iv), whose
determination shall be conclusive and described in a resolution of the
Board of Directors) of the evidence of indebtedness, shares of Capital
Stock or assets being distributed applicable to one Common Stock as of
the close of business on the day before such "ex" date. For purposes
of this paragraph, the term "ex" date (I) when used with respect to
any issuance or distribution, means the first date on which the Common
Stock trades regular way on the relevant exchange or in the relevant
market from which the closing price was obtained without the right to
receive such issuance or distribution,(II) when used with respect to
any subdivision or combination of Common Stock, means the first date
on which the Common Stock trades regular way on such exchange or in
such market after the time at which such subdivision or combination
becomes effective and (III) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration
Time of such offer. Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Price are called for pursuant to this
Section 6(d), such adjustments shall be made to the Current Market
Price as may be necessary or appropriate to effectuate the intent of
this Section 6(d) and to avoid unjust or inequitable results, as
determined in good faith by the Board of Directors.
"fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's-length transaction.
"Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract
or otherwise).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect
at the time. Reference to a particular section of the Exchange Act
shall include reference to the comparable section, if any, of any such
successor federal statute.
"Liquidation Preference" with respect to a share of the 7.5%
Series shall mean, as at any date, $100.00 per share (as adjusted for
any stock dividends, combinations or splits with respect to such
share), plus an amount equal to all accrued but unpaid dividends
(whether or not declared) on such share as at such date.
"Lobos Parent Common Stock" means the common stock, $0.001 par
value, of Parent.
"Lobos Merger" means the merger of Merger Sub-1 into the
Corporation pursuant to the terms of the Lobos Merger Agreement.
"Lobos Merger Agreement" means the Agreement and Plan of
Restructuring and Merger dated as of November 8, 2000, among the
Corporation, Public Service Company of New Mexico, Parent, Merger
Sub-1 and HVNM, Inc., as amended and in effect from time to time.
"Lobos Merger Effective Time" means the "Effective Time" as
defined in the Lobos Merger Agreement.
"Merger Sub-1 means HVK, Inc., a Kansas corporation
"Person" means any individual, "group" (as such term is used in
sections 13(d) and 14(d) of the Exchange Act), corporation,
partnership, joint venture, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any
other entity.
"Parent" means HVOLT Enterprise Inc., a Delaware corporation.
"Total Voting Power" shall mean, calculated at a particular point
in time, the aggregate votes represented by then outstanding Voting
Securities.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Stock is listed or admitted to
trading is open for the transaction of business.
"Voting Ownership Percentage" shall mean, calculated at a
particular point in time, the Voting Power represented by the Voting
Securities Beneficially Owned by the Person whose Voting Ownership
Percentage is being determined.
"Voting Power" shall mean, calculated at a particular point in
time, the ratio, expressed as a percentage, of (a) the votes
represented by the Voting Securities with respect to which the Voting
Power is being determined to (b) Total Voting Power.
"Voting Securities" shall mean the Common Stock and shares of any
class of capital stock of the Corporation then entitled to vote
generally in the election of any member of the Board of Directors, as
elected in accordance with the provisions of the By-laws and Articles
of the Corporation and shall not include the shares of the 7.5% Series
prior to its conversion into Common Stock.
10. Conflicts. In the event of a conflict between any provision of this
Designation and the Articles, the Articles shall take precedence and shall
control the resolution of such conflict.
IN WITNESS WHEREOF, Western Resources, Inc. has made this Certificate of
Designations under its seal and the hand of the President and Chief Executive
Officer, an officer authorized to exercise the duties ordinarily exercised by a
Vice President, and an Assistant Secretary this ____ day of November, 2000.
WESTERN RESOURCES, INC.
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
ATTEST:
____________________________________________
Name:_______________________________________
Title:______________________________________
STATE OF KANSAS )
) ss:
COUNTY OF SHAWNEE )
BE IT REMEMBERED, that on this ___ day of November, 2000, before me, the
undersigned, a Notary Public in and for the County and State aforesaid,
personally came _____________, _________ president of Western Resources, Inc., a
corporation duly organized, incorporated and existing under the laws of the
State of Kansas, who is personally known to me to such officer, and who is
personally known to me to be the same person who executed as such officer the
above instrument in writing, and he duly acknowledged execution of the same as
_______________ of said corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal the day and year last above written.
-------------------------------
Notary Public
My commission expires:
- -------------------------------