EXHIBIT 3.2
CERTIFICATE OF DETERMINATION OF PREFERENCES
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Pursuant to Section 401 of the
California General Corporation Law
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ROBERT D. GLYNN, JR. and LESLIE H. EVERETT certify that:
1. They are the Chairman of the Board, Chief Executive Officer, and
President, and the Vice President and Corporate Secretary, respectively, of PG&E
Corporation, a California corporation.
2. Pursuant to authority conferred upon the Board of Directors of the
Corporation by its Restated Articles of Incorporation (the "Articles"), and,
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pursuant to the provisions of Section 401 of the California General Corporation
Law, said Board of Directors, at a duly called meeting held on December 20,
2000, at which a quorum was present and acted throughout, adopted the following
resolutions, which resolutions remain in full force and effect on the date
hereof creating a series of 5,000,000 shares of Preferred Stock having a par
value of $100 per share, designated as Series A Preferred Stock (the "Series A
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Preferred Stock") out of the class of 85,000,000 shares of preferred stock (the
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"Preferred Stock"):
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RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Articles, the Board of
Directors does hereby create, authorize and provide for the issuance of the
Series A Preferred Stock having the voting powers, designation, relative,
participating, optional and other special rights, preferences and
qualifications, limitations and restrictions thereof that are set forth as
follows:
Section 1. Designation and Amount. The shares of such series shall
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be designated as "Series A Preferred Stock" and the number of shares
constituting such series shall be 5,000,000.
Section 2. Dividends and Distributions. (A) Subject to the prior
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and superior rights of the holders of any shares of any other series of
Preferred Stock or any other shares of preferred stock of the Corporation
ranking prior and superior to the shares of Series A Preferred Stock with
respect to dividends, each holder of one one-hundredth (1/100) of a share (a
"Unit") of Series A Preferred Stock shall be entitled to receive, when, as and
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if declared by the Board of Directors out of funds legally available for that
purpose, (i) quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being a "Quarterly Dividend
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Payment Date"), commencing on the first Quarterly Dividend Payment Date after
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the first issuance of such Unit of Series A Preferred Stock, in an amount per
Unit (rounded to the nearest cent) equal to the greater of (a) $.01 or (b)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the Common Stock since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Preferred Stock, and (ii) subject to the provision for adjustment
hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per
share amount of all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock, by reclassification or otherwise) declared on shares of
Common Stock since the immediately preceding Quarterly Dividend Payment Date, or
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of a Unit of Series A Preferred Stock. In the event that the
Corporation shall at any time after December 20, 2000 (the "Rights Declaration
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Date") (i) declare any dividend on outstanding shares of Common Stock payable in
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shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of
Series A Preferred Stock was entitled immediately prior to such event pursuant
to the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on Units
of Series A Preferred Stock as provided in paragraph (A) above immediately after
it declares a dividend or distribution on the shares of Common Stock (other than
a dividend payable in shares of Common Stock); provided, however, that, in the
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event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $.01 per Unit on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding Unit of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issuance of such Unit of Series A Preferred
Stock, unless the date of issuance of such Unit is prior to the record date for
the first Quarterly Dividend Payment Date, in which case, dividends on such Unit
shall begin to accrue from the date of issuance of such Unit, or unless the date
of issuance is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of Units of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on Units of Series A Preferred
Stock in an amount less than the aggregate amount of all such dividends at the
time accrued and payable on such Units shall be allocated pro rata on a Unit-by-
Unit basis among all Units of Series A Preferred Stock at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of
Units of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Units of Series A Preferred
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Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each Unit of Series A Preferred Stock shall entitle the holder thereof to one
vote on all ma tters submitted for a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, then in each such case the number of votes per Unit to which
holders of Units of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such event and the denominator of which shall be the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
Units of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) (i) If, at any time, dividends on any Units of Series A Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends thereon,
then during the period (a "default period") from the occurrence of such event
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until such time as all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all Units of
Series A Preferred Stock then outstanding shall have been declared and paid or
set apart for payment, all holders of Units of Series A Preferred Stock, voting
separately as a class, shall have the right to elect two Directors.
(ii) During any default period, such voting rights of the holders
of Units of Series A Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of shareholders, and thereafter at annual meetings of
shareholders, provided that such voting rights may not be exercised at any
meeting unless one-third of the outstanding Units of Preferred Stock shall be
present at such meeting in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the holders of Units of
Series A Preferred Stock of such rights. At any meeting at which the holders of
Units of Series A Preferred Stock shall exercise such voting rights initially
during an existing default period, they
shall have the right, voting separately as a class, to elect Directors to fill
up to two vacancies in the Board of Directors, if any such vacancies may then
exist, or, if such right is exercised at an annual meeting, to elect two
Directors. After the holders of Units of Series A Preferred Stock shall have
exercised their right to elect Directors during any default period, the number
of Directors shall not be increased or decreased except as approved by a vote of
the holders of Units of Series A Preferred Stock as herein provided or pursuant
to the rights of any equity securities ranking senior to the Series A Preferred
Stock.
(iii) Unless the holders of Series A Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or shareholders
owning in the aggregate not less than 10% of the total number of the Units of
Series A Preferred Stock outstanding may request, the calling of a special
meeting of the holders of Units of Series A Preferred Stock, which meeting shall
thereupon be called by the Secretary of the Corporation. Notice of such meeting
and of any annual meeting at which holders of Units of Series A Preferred Stock
are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Units of Series A Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later then 60 days after such order or request, or, in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any shareholder or shareholders owning in the
aggregate not less than 10% of the total number of outstanding Units of Series A
Preferred Stock. Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the 60 days immediately preceding
the date fixed for the next annual meeting of the shareholders.
(iv) During any default period, the holders of shares of Common
Stock and Units of Series A Preferred Stock, and other classes or series of
stock of the Corporation, if applicable, shall continue to be entitled to elect
all the Directors until holders of the Units of Series A Preferred Stock shall
have exercised their right to elect, voting as a separate class, two Directors,
after the exercise of which right (x) the Directors so elected by the holders of
Units of Series A Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the class of
capital stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of capital stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Units of Series A Preferred Stock as a separate class to
elect Directors shall cease, (y) the term of any Directors elected by the
holders of Units of Series A Preferred Stock as a separate class shall
terminate, and (z) the number of Directors shall be such number as may be
provided for in the Articles or Bylaws of the Company (the "Bylaws"). Any
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vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.
(vi) The provisions of this paragraph (C) shall govern the election
of Directors by holders of Units of Preferred Stock during any default period
notwithstanding any provisions of the Articles or the Bylaws to the contrary.
(D) Except as set forth herein, holders of Units of Series A
Preferred Stock shall have no special voting rights and their consents shall not
be required (except to the extent they are entitled to vote with holders of
shares of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions. (A) Whenever quarterly dividends
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or other dividends or distributions payable on Units of Series A Preferred Stock
as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on outstanding
Units of Series A Preferred Stock shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of parity stock, except dividends paid ratably on Units of
Series A Preferred Stock and shares of all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any parity stock, provided, however, that the Corporation may at
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any time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any junior stock;
(iv) purchase or otherwise acquire for consideration any Units of
Series A Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors) to
all holders of such Units.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any Units of Series A Preferred Stock
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purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
Units shall, upon their cancellation, become authorized but unissued Units of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
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voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $1.00 per Unit plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, up until
the date of such payment, or (b) the amount equal to the aggregate per share
amount to be distributed to holders of shares of Common Stock, or (ii) to the
holders of shares of parity stock, unless simultaneously therewith distributions
are made ratably on Units of Series A Preferred Stock and all other shares of
such parity stock in proportion to the total amounts to which the holders of
Units of Series A Preferred Stock are entitled under clause (i)(a) of this
sentence and to which the holders of shares of such parity stock are entitled,
in each case upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall, at any time after the
Rights Declaration Date, (i) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock, or (iii) combine outstanding shares of Common Stock into
a smaller number of shares, then in each such case the aggregate amount to which
holders of Units of Series A Preferred Stock were entitled immediately prior to
such event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
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enter into any consolidation, merger, combination or other transaction in which
the shares of common stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event
the Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately preceding
sentence with respect to the exchange or conversion of Units of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. Redemption. The Units of Series A Preferred Stock shall
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not be redeemable.
Section 9. Ranking. The Units of Series A Preferred Stock shall
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rank junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Corporation as to the
payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.
Section 10. Amendment. The Articles, including, without limitation,
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this resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with any other corporation or corporations in
any manner that would alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding Units
of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. The Series A Preferred Stock may be
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issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
Section 12. Certain Definitions. As used herein with respect to the
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Series A Preferred Stock, the following terms shall have the following meanings:
(A) The term "Common Stock" shall mean the class of stock designated
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as the common stock, no par value per share, of the Corporation at the date
hereof or any other class of stock resulting from successive changes or
reclassification of such common stock.
(B) The term "junior stock" (i) as used in Section 4 shall mean the
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Common Stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends and (ii) as used in
Section 6 shall mean the Common Stock and any other class or series of capital
stock of the Corporation over which the Series A Preferred Stock has preference
or priority in the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, shall mean any
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class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the Series A Preferred Stock as to the payment of
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dividends and (ii) as used in Section 6, shall mean any class or series of
capital stock ranking pari passu with the Series A Preferred Stock in the
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distribution of assets upon any liquidation, dissolution or winding up of the
Corporation.
3. The number of shares constituting the Series A Preferred Stock is
5,000,000.
4. None of the Series A Preferred Stock has been issued.
We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this Certificate are true and
correct of our own knowledge.
Date: December 22, 2000
ROBERT D. GLYNN, JR.
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Robert D. Glynn, Jr.
Chairman of the Board,
Chief Executive Officer, and President
LESLIE H. EVERETT
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Leslie H. Everett
Vice President and
Corporate Secretary