Exhibit (3)(i)
CHARTER
of
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
Hartford, Connecticut
as
RESTATED EFFECTIVE
APRIL, 1990
CHARTER
of
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
Section 1. The Hartford Steam Boiler Inspection and Insurance
Company shall continue under that name, a body corporate, with
power to purchase or otherwise acquire, have, hold and enjoy
lands, rents, tenements, hereditaments, goods, monies, chattels,
choses in action and property and effects of every kind, and also
any or all of the shares or other securities or any interest in,
or obligation of, any insurance corporation or any other
corporation or governmental unit and the same to sell, grant and
convey and to loan, invest, reinvest, alienate and dispose of any
of such assets in any manner permitted on or after the effective
date of this act in the case of any other corporation chartered
on or after said date by Connecticut and empowered to do a class
of business referred to in Section 2 hereof, and to have and
enjoy all the rights, privileges, powers and immunities granted
on or after to said date to corporations under the general
statutes, including the power to amend this charter from time to
time.
Section 2. The Corporation shall have the power to write boiler
and machinery, fire, marine, casualty, liability, indemnity,
accident and health and fidelity insurance and any and all other
forms of insurance against hazards or risks of every kind and
description which on or after the effective date of this act may
lawfully be the subject of insurance except life and endowment
insurance and contracts for the payment of annuities; and the
Corporation is specifically empowered to accept and to cede
reinsurance of any such risks or hazards. The Corporation shall
have the power to make inspections and render inspection and
engineering services in connection with the design, construction,
maintenance or operation of boilers, machinery or any equipment
regardless of whether policies of insurance are issued in
connection therewith. The Corporation may exercise such powers
outside of Connecticut to the extent permitted by the laws of the
particular jurisdiction. Policies or other contracts may be
issued, stipulated to be with or without participation in
profits; and they may be with or without seal.
Section 3. The capital stock of the Corporation shall not be less
than one million dollars. The authorized number of shares, which
may be increased from time to time when and if authorized by the
stockholders shall consist of 50,000,000 shares of common stock
without par value and 500,000 shares of preferred stock without
par value. The Board of Directors is authorized to fix and
determine the terms, limitations and relative rights and
preferences of the preferred stock including, without limitation,
any voting rights thereof, to divide and issue the preferred
stock in series, to fix and determine the variations among series
to the extent permitted by law and to provide that shares of the
preferred stock, or any series thereof, may be convertible into
the same or a different number of shares of common stock. No
stockholder shall have any preemptive right to purchase or
subscribe to any shares of any class of stock of the Corporation,
whether authorized on or after the effective date of this act, or
to any securities convertible into shares of any class of stock
of the Corporation. The capital stock of the Corporation shall be
transferable in accordance with the bylaws, and one or more
transfer agents may be employed.
Section 4. The corporate office shall be in Hartford or in such
other town in Connecticut as the Board of Directors may deter-
mine. The annual meeting of the stockholders shall be held at
such time and place within the state and upon such notice as may
be determined from time to time either by or in accordance with
the bylaws. At all meetings of the stockholders and subject, in
the case of preferred stockholders, to such provisions concerning
voting rights as the Board of Directors may determine pursuant to
the authority granted in Section 3 hereof, each stockholder shall
be entitled to vote in person or by an attorney duly authorized
by a written proxy and each share of stock represented at the
meeting shall be entitled to one vote.
Section 5. The business property and affairs of the Corporation
shall be managed by or under the direction of a Board of
Directors consisting of not less than nine nor more than fourteen
directors, the exact number of directorships to be determined
from time to time by resolution adopted by the affirmative vote
of a majority of the entire Board of Directors. 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. The class of
directors that was elected by the stockholders at the 1984 annual
meeting of stockholders shall be assigned to Class I for a term
expiring in 1987; the current directors in the class expiring in
1986 shall be assigned to Class II for a term expiring in 1986;
the current directors in the class expiring in 1985 shall be
assigned to Class III for a term expiring in 1985. At each annual
meeting of stockholders, successors to the class of directors
whose term expires at the annual meeting shall be elected for a
three-year term. If the number of directors is changed, 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 reduction of the number
of directors remove any director in office or 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, removal from office or
order of court that, by reason of incompetency or any other
lawful cause, he is no longer a director in office.
Any vacancy on the Board of Directors that results from an
increase in the number of directors may be filled by the
concurring vote of directors holding a majority of the
directorships, which number of directorships shall be the number
prior to the vote on the increase, and any other vacancy
occurring in the Board of Directors may be filled by concurring
vote of a majority of the remaining directors then in office,
although less than a quorum, or by a sole remaining director. Any
director elected to fill a vacancy not resulting from an increase
in the number of directors shall have the same remaining term as
that of his predecessor.
Any director or the entire Board of Directors may be removed
only for cause by the affirmative vote of eighty percent (80%) of
the votes entitled to be cast by the holders of all then
outstanding shares of voting stock of the Corporation, voting
together as a single class. For the purposes of this Section 5,
"cause" shall be defined as (a) a final non-appealable order of
conviction of a felony involving moral turpitude by a court of
competent jurisdiction in the United States or (b) a final
non-appealable order of a court of competent jurisdiction in the
United States finding gross negligence in the performance of
duties as a director or officer of the Corporation.
Notwithstanding the foregoing, whenever the holders of any
one or more classes or series of preferred stock issued by the
Corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies
and other features of such directorships shall be governed by the
terms of this Charter applicable thereto, and such directors so
elected shall not be divided into classes pursuant to this
Section 5 unless expressly provided by such term.
Notwithstanding any other provisions of this Charter or the
bylaws of the Corporation (and notwithstanding the fact that a
lesser percentage or separate class vote may be specified by law,
this Charter or the bylaws of the Corporation) the affirmative
vote of the holders of not less than eighty percent (80%) of the
votes entitled to be cast by the holders of all then outstanding
shares of voting stock of the Corporation, voting together as a
single class, shall be required to amend or repeal, or adopt any
provisions inconsistent with this Section 5; provided, however,
that this paragraph shall not apply to, and such eighty percent
(80%) vote shall not be required for any amendment, repeal or
adoption recommended by three-quarters of the entire Board if all
of such directors are persons who were members of the Board at
the annual meeting of stockholders of the Corporation held prior
to the proposal of any such amendment, repeal or adoption or
persons nominated by such members.
Section 6. The directors of the Corporation shall choose from
among their number a president and shall elect one or more vice
presidents, a treasurer, a secretary and such other officers as
they may deem desirable. The officers shall be elected to hold
office until the next annual meeting and until their successors
have been chosen; they may be removed at any time at the pleasure
of the directors.
Section 7.
A. In addition to any affirmative vote required by law or this
Charter or the bylaws of the Corporation, and except as otherwise
expressly provided in Section B of this Section 7, a Business
Combination (as hereinafter defined) shall require the
affirmative vote of not less than eighty percent (80%) of the
votes entitled to be cast by the holders of all then outstanding
shares of Voting Stock (as hereinafter defined), voting together
as a single class. 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 Section A of this Section 7 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 this
Charter or the bylaws of the Corporation, 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:
1. The Business Combination shall have been approved by
two-thirds (whether such approval is made prior to or subsequent
to the acquisition of beneficial ownership of the Voting Stock
that caused the Interested Stockholder, as hereinafter defined to
become an Interested Stockholder) of the Continuing Directors, as
hereinafter defined.
2. All of the following conditions shall have been met:
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 Stockholder for any share of Common
Stock in connection with the acquisition by the
Interested Stockholder of beneficial ownership of
shares of Common Stock within the two-year period
immediately prior to the first public announcement of
the proposed Business Combination (the "Announcement
Date");
(ii) the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the
Interested Stockholder became an Interested Stockholder
(the "Determination Date"), whichever is higher;
(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 Stockholder for any share of
Common Stock in connection with the acquisition by the
Interested Stockholder of beneficial ownership of
shares of Common Stock within the two-year period
immediately prior to the Announcement Date to (y) the
Fair Market Value per share of Common Stock on the
first day in such two-year period on which the
Interested Stockholder acquired beneficial ownership of
any share of Common Stock; and
(iv) The Corporation'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) with respect to common stock of such Interested
Stockholder or the highest price/earnings multiple with
respect to Common Stock within the two-year period
immediately preceding the Announcement Date (such
price/earnings multiples being determined as
customarily computed and reported in the financial
community);
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 (as hereinafter defined), other than Common
Stock, shall be at least equal to the highest amount deter-
mined 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 Stockholder for any share of such class
or series of Capital Stock in connection with the
acquisition by the Interested Stockholder within the
two-year period immediately prior to the Announcement
Date;
(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;
(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
Stockholder for any share of such class or series of
the Capital Stock in connection with the acquisition by
the Interested Stockholder of beneficial ownership of
shares of such class or series of Capital Stock within
the two-year period immediately prior to the
Announcement Date 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 Stockholder acquired beneficial ownership of
any share of 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
Corporation, regardless of whether the Business
Combination to be consummated constitutes such an
event.
The provision of this Paragraph 2.b shall be required to be
met with respect to every class or series of outstanding
Capital Stock, whether or not the Interested Stockholder has
previously acquired beneficial ownership of any shares of a
particular class or series of Capital Stock.
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 Stockholder in
connection with its direct or indirect acquisition of
beneficial ownership of shares of such class or series of
Capital Stock. If the consideration so paid for shares of
any class or series of Capital Stock varied as to form, the
form of consideration for such class or series of Capital
Stock 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 Stockholder.
d. After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (i) except as approved by two-thirds
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
two-thirds 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 fully 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 two-thirds of the Continuing
Directors; and (iv) such Interested Stockholder 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 Stockholder becoming an Interested
Stockholder and except in a transaction that, after giving
effect thereto, would not result in any increase in the
Interested Stockholder's percentage beneficial ownership of
any class or series of Capital Stock.
e. After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall
not have received the benefit, directly or indirectly
(except proportionately as a stockholder of this
Corporation), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by this Corporation, 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 and the rules and
regulations thereunder (the "Act") (or any subsequent provi-
sions replacing such Act, rules and regulations) or the
insurance laws and regulations of the State of Connecticut,
if applicable, shall be mailed to all stockholders of the
Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or
information statement is required by law to be mailed). 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 Stockholder and its Affiliates or Associates (as
hereinafter defined), such investment banking firm to be
paid a reasonable fee for its services by the Corporation.
C. For the purposes of this Section 7:
1. The term "Business Combination" shall mean:
a. any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (i) any
Interested Stockholder or (ii) any other corporation
(whether or not itself an Interested Stockholder) which
is or after such merger or consolidation would be an
Affiliate or Associate of an Interested Stockholder; or
b. any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of transactions) with any Interested Stockholder
or any Affiliate or Associate of any Interested
Stockholder involving any assets or securities of this
Corporation, any subsidiary or any Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder having an aggregate Fair Market
Value of $10,000,000 or more; or
c. the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed
by or on behalf of an Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder;
or
d. any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other
transaction (whether or not with or otherwise involving
an Interested Stockholder) 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 Stockholder or any
Affiliate or Associate of any Interested Stockholder:
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 stock of the
Corporation authorized to be issued from time to time under
Section 3 of this Charter, and the term "Voting Stock" shall
mean all Capital Stock which by its terms may be voted on
all matters submitted to stockholders of the Corporation
generally.
3. The term "person" shall mean any individual, firm,
corporation 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 Stockholder" shall mean any person
(other than the Corporation or any Subsidiary and other than
any profit-sharing, employee stock ownership or other
employee benefit plan of the Corporation 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 Corporation and at any time within the
two-year period immediately prior to the date in question
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, convertible securities, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, convertible
securities, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding; or (c) which are
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 the purposes of
determining whether a person is an Interested Stockholder
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 Paragraph 5 of this 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 March 1, 1984 (the term
"registrant" in said Rule 12b-2 meaning in this case the
Corporation).
7. The term "Subsidiary" means any corporation of which a
majority of any class of equity security is beneficially
owned by the Corporation; provided, however, that for the
purposes of the definition of Interested Stockholder set
forth in Paragraph 4 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is beneficially
owned by the Corporation.
8. The term "Continuing Director" means any member of the
board of directors of the Corporation (the "Board") while
such person is a member of the Board, who is not an
Affiliate or Associate or representative of the Interested
Stockholder and was a Member of the Board prior to the time
that the Interested Stockholder became an Interested
Stockholder, and any successor of a Continuing Director,
while such successor is a member of the Board, who is not an
Affiliate or Associate or representative of the Interested
Stockholder 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 sales 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 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 this
Corporation survives, the phrase "consideration other than
cash to be received" as used in Paragraphs 2.a and 2.b of
Section B of this Section 7 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. The Board of Directors shall have the power and duty to
determine for the purposes of this Section 7 on the basis of
information known to them after reasonable inquiry, (a) whether a
person is an Interested Stockholder, (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, and (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 this Corporation
have, or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $10,000,000 or more. Any such
determination made in good faith shall be binding and conclusive
on all parties.
E. Nothing contained in this Section 7 shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
F. The fact that any Business Combination complies with the
provisions of Section B of this Section 7 shall not be construed
to impose any fiduciary duty, obligation or responsibility on the
Board, or any member thereof, to approve such Business
Combination or recommend its adoption or approval to the
stockholders of this Corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board, 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 this Charter or the
Bylaws of the Corporation (and notwithstanding the fact that a
lesser percentage or separate class vote may be specified by law,
this Charter or the bylaws of the Corporation), the affirmative
vote of the holders of not less than eighty percent (80%) of the
votes entitled to be cast by the holders of all 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 Section 7; provided, however, that this
Section G shall not apply to, and such eighty percent (80%) vote
shall not be required for, any amendment, repeal or adoption
unanimously recommended by the Board 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 Section 7.
Section 8. To the fullest extent permitted by the Connecticut
General Statutes as the same exists or may hereafter be amended,
the personal liability of a director to the Corporation or its
stockholders for monetary damages for breach of duty as a
director shall be limited to an amount that is not less than the
compensation received by such director for serving the
Corporation during the year of the violation. If the Connecticut
General Statutes are amended after approval by the stockholders
of this Section 8 to authorize corporate action further
eliminating or limiting the personal liability of directors, then
the liability of each director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the
Connecticut General Statutes, as so amended. Any repeal or
modification of this Section 8 by the stockholders of the
Corporation shall not adversely affect any right or protection of
a director of the Corporation existing at the time of such repeal
or modification.