Exhibit 3(b)(i)
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
TEXAS-NEW MEXICO POWER COMPANY
ARTICLE I
Pursuant to the provisions of Article 4.07 of the Texas Business
Corporation Act, Texas-New Mexico Power Company adopts the following Amended and
Restated Articles of Incorporation which accurately copy the Articles of
Incorporation and all amendments thereto that are in effect to date and as
further amended by such Restated Articles of Incorporation as hereinafter set
forth and which contain no other change in any provision hereof.
ARTICLE II
The Articles of Incorporation of the corporation are hereby amended by
these Amended and Restated Articles of Incorporation as follows: (a) current
ARTICLE ONE, TWO, THREE, FOUR, FIVE, SIX, SEVEN, EIGHT and NINE are redesignated
as ARTICLE ONE, TWO, THREE, FOUR, FIVE, SIX, SEVEN, EIGHT and NINE, respectively
of ARTICLE V below and (b) ARTICLE TEN and ARTICLE ELEVEN of ARTICLE V is hereby
added to the Articles of Incorporation.
ARTICLE III
Each amendment made by the Amended and Restated Articles of Incorporation
has been effected in conformity with the provisions of the Texas Business
Corporation Act and each such amendment made was duly adopted on April 6, 2000,
by the shareholders of the corporation.
ARTICLE IV
The number of shares of the corporation outstanding was 10,705 shares of
common stock, 8,390 shares of Series B Preferred Stock and 6,950 shares of
Series C Preferred Stock and the number of shares entitled to vote on the
restated articles of incorporation as so amended was 10,705 shares of common
stock. All of the shareholders of the common stock of the corporation have
signed a written consent to the adoption of such restated articles of
incorporation as so amended pursuant to Article 9.10 of the Texas Business
Corporation Act.
ARTICLE V
The articles of incorporation and all amendments and supplements thereto
are hereby superseded by the following restated articles of incorporation which
accurately copy the entire text thereof and as amended as above set forth:
ARTICLE ONE
The name of the corporation is TEXAS-NEW MEXICO POWER COMPANY.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
SECTION 1 - PURPOSE; OPERATION AS A STAND-ALONE ENTITY
The purpose for which the corporation is organized is the transaction of
any or all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act, provided that, to ensure the separateness of the
corporation, the corporation will:
1.01. maintain accurate and appropriate detailed books, financial records
and accounts, including checking and other bank accounts and custodian and other
securities safekeeping accounts, that are separate and distinct from those of
any other Person;
1.02. maintain its books, financial records and accounts (including
inter-entity transaction accounts) in a manner so that it will not be difficult
or costly to segregate, ascertain or otherwise identify its assets and
liabilities;
1.03. not commingle any of its assets, funds, liabilities or business
functions with the assets, funds, liabilities or business functions of any other
Person;
1.04. observe all appropriate corporate procedures and formalities;
1.05. not merge or consolidate with any other Person (other than for
financial reporting purposes);
1.06. cause all material transactions and agreements between it and any one
or more of its Affiliates (including transactions and agreements pursuant to
which the assets or property of one is used or to be used by the other) to be
entered into in the names of the Persons that are parties to the transaction or
agreement and to be formally documented in writing;
1.07. conduct transactions with third parties in its name and as a Person
that is separate and distinct from its Affiliates;
1.08. pay its own liabilities, expenses and losses only from its own
assets;
1.09. compensate all consultants, independent contractors and agents from
its own funds for services provided to it by such consultants, independent
contractors and agents;
1.10. to the extent that it and its Affiliates jointly contract or do
business with vendors or service providers or share overhead expenses, allocate
fairly, appropriately non-arbitrarily the
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costs and expenses incurred in so doing between or among such Persons, with the
result that each such Person bears its fair share of all such costs and
expenses;
1.11. to the extent that it contracts or does business with vendors or
service providers where the goods or services are wholly or partially for the
benefit of its Affiliates, allocate fairly, appropriately and non-arbitrarily
the costs incurred in so doing to the Person for whose benefit the goods or
services are provided, with the result that each such Person bears its fair
share of all such costs;
1.12. not enter into any guaranty, or otherwise become liable for, or
pledge its assets to secure, the liabilities, debts or obligations of any other
Person;
1.13. hold itself out as separate and distinct from any other Person and
shall not identify itself as a division or department of any other Person;
1.14. ensure that decisions with respect to its business and daily
operations shall be independently made (although the individual making any
particular decision may also be an employee, officer or director of any one or
more of its Affiliates) and shall not be dictated by its Affiliates;
1.15. to the extent that it occupies any premises in the same location or
shares the use of equipment with its Affiliates, allocate fairly, appropriately
and non-arbitrarily any rent and overhead expenses among and between such
Persons with the result that each bears its fair share of all such rent and
expenses;
1.16. cause its representatives and agents to hold themselves out to third
parties as being its representatives or agents, as the case may be, and conduct
its business using separate business cards, letterhead, purchase orders,
invoices, checks and the like bearing its own name, it being understood that it
need not have its own dedicated employees;
1.17. to the extent that it share the same officers or other employees with
its Affiliates, allocate fairly, appropriately and non-arbitrarily the salaries
of and expenses related to providing other benefits to such officers and other
employees between or among such Persons, with the result that each such Person
will bear its fair share of the salary and benefit costs associated with all
such common or shared officers or other employees;
1.18. maintain separate annual financial statements prepared in accordance
with generally accepted accounting principles, consistently applied], showing
its assets and liabilities separate and distinct from those of any other Person;
1.19. pay or bear the cost of the preparation of its financial statements,
and have such financial statements audited by an independent certified public
accounting firm;
1.20. to the extent its financial statements are to be consolidated with
the financial statements of any other Person, cause to be included in such
consolidated financial statements a narrative description of its separate
assets, liabilities, business functions, operations and existence to ensure that
such separate assets, liabilities, business functions, operations and existence
are readily distinguishable by any Person receiving or relying upon a copy of
such consolidated financial statements;
1.21. not hold out its credit as being available to satisfy the debts or
obligations of any other Person;
1.22. correct any known misunderstanding regarding its separate identity;
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1.23. not make any loans to any Person or buy or hold any indebtedness or
other obligations issued by any other Person (except for cash and cash
equivalents);
1.24. hold all of its assets in its own name; and
1.25. maintain an arm's-length relationship with its Affiliates and enter
into transactions with Affiliates only on a commercially reasonably basis.
SECTION 2 - DEFINITIONS
2.01. The term "Affiliate" shall mean any other person directly or
indirectly controlling, controlled by, or under common control with, that
person; for purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that person, whether through the ownership of voting securities, by contract or
otherwise.
2.02. The term "Person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act).
ARTICLE FOUR
The total number of shares of Capital Stock which the corporation is
authorized to issue is thirteen million (13,000,000), of which Capital Stock
twelve million (12,000,000) shares of the par value of Ten Dollars ($10.00) per
share shall be Common Stock and of which one million (1,000,000) shares of the
par value of One Hundred Dollars ($100.00) per share shall be Preferred Stock.
The designations, preferences, limitations and relative rights in respect
of the shares of each class of Capital Stock of the corporation, and the
authority granted to the Board of Directors to fix by resolution or resolutions
any thereof which shall not be fixed herein, are as follows:
SECTION 1 - DEFINITIONS
1.01.The term "Preferred Stock" shall mean all or any shares of any series
of Preferred Stock described in Section (2) of this Article Four.
1.02.The term "Parity Stock" shall mean stock of any class other than the
Preferred Stock with respect to which dividends and amounts payable upon any
liquidation, dissolution or winding up of the corporation shall be payable on a
parity with and in proportion to the respective amounts payable in respect of
the Preferred Stock, notwithstanding that such Parity Stock may have other terms
and provisions varying from those of the Preferred Stock.
1.03. The term "Junior Stock" shall mean the Common Stock and stock of any
other class ranking junior to the Preferred Stock and Parity Stock in respect of
dividends and amounts payable upon any liquidation, dissolution or winding up of
the corporation.
1.04. The term "accrued dividends" shall mean, in respect of each share of
stock, that amount which shall be equal to simple interest upon the par value at
the annual dividend rate fixed for such share and no more, from and including
the date upon which dividends on such share became cumulative and (i) up to but
not including the date fixed for payment in liquidation, dissolution or winding
up or for redemption, or (ii) up to and including the last day of any period
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for which such accrued dividends are to be determined, less the aggregate amount
of all dividends theretofore paid or declared and set apart for payment thereon.
Computation of accrued dividends in respect of any portion of a quarterly
dividend period shall be by the 360-day method of computing interest.
1.05. The term "gross income available for payment of interest charges"
shall mean the total operating revenues and other income net of the corporation,
less all proper deductions for operating expenses, taxes (including income,
excess profits and other taxes based on or measured by income or undistributed
earnings or income), and other appropriate items, including provision for
maintenance, and provision for retirements, depreciation and obsolescence (but
in no event less than the minimum provisions required by the terms of any
indenture or agreement securing any outstanding indebtedness of the
corporation), but excluding any charges on account of interest on indebtedness
outstanding and any credits or charges for amortization of debt premium,
discount and expense, all to be determined in accordance with sound accounting
practice. In determining such "gross income available for payment of interest
charges," no deduction, credit or adjustment shall be made on account of (1)
profits or losses from sales of property carried in plant or investment accounts
of the corporation, or from the reacquisition of any securities of the
corporation, or (2) charges for the elimination or amortization of utility plant
adjustment or acquisition accounts or other intangibles; and income, excess
profits and other taxes based on or measured by income or undistributed earnings
or income shall be appropriately adjusted to reflect the effect of the exclusion
of such items.
1.06. The term "net income of the corporation available for dividends"
shall mean the "gross income available for payment of interest charges," as
defined and determined above under Section 1.05, less the sum of charges for
interest on indebtedness and less charges or plus credits for amortization of
debt premium, discount and expense, and other appropriate items, determined in
accordance with sound accounting practice.
In determining "net income of the corporation available for dividends" no
deduction, credit or adjustment shall be made on account of (1) expenses in
connection with the issuance (except charges or credits for amortization of debt
premium, discount and expense), redemption or retirement of any securities
issued by the corporation, including any amount paid in excess of the principal
amount or par or stated value of securities redeemed or retired, or, in the
event such redemption or retirement is effected with the proceeds of the sale of
other securities of the corporation, interest or dividends on the securities
redeemed or retired from the date on which the funds required for such
redemption or retirement are deposited in trust for such purpose to date of
redemption or retirement, (2) profits or losses from the sales of property
carried in plant or investment accounts of the corporation, or from the
reacquisition of any securities of the corporation, (3) charges for the
elimination or amortization of utility plant adjustment or acquisition accounts
or other intangibles, or (4) any earned surplus adjustment (including tax
adjustments) applicable to any period of this corporation's predecessor
corporation, Community Public Service Company, a Delaware corporation, prior to
January 1, 1963; and income, excess profits and other taxes based on or measured
by income or undistributed earnings or income shall be appropriately adjusted to
reflect the effect of the exclusion of such items.
1.07. The term "net income of the corporation available for dividends on
Junior Stock" shall mean "net income of the corporation available for
dividends," as defined above, less all accrued dividends and all dividends paid
on outstanding Preferred Stock and Parity Stock and on any class of stock
ranking as to dividends prior to such Preferred Stock or Parity Stock.
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1.08 The term "sound accounting practice" shall mean recognized principles
of accounting practice followed by electric utility companies or required by any
applicable rules, regulations or orders of any public regulatory authority
having Jurisdiction over the accounts of the corporation, provided that the
corporation may, at the time, contest or controvert in good faith the validity
or applicability to the corporation of any such rule, regulation or order and
thereby suspend the effect thereof until such contest or controversy has been
terminated.
SECTION 2 - PREFERRED STOCK
2.01. Issue in Series. The shares of Preferred Stock may be divided and
issued from time to time in one or more series, with such distinguishing
characteristics, including designations, preferences, limitations and relative
rights, as are hereinafter provided in this Article Four and otherwise as
permitted by law. All shares of Preferred Stock of any particular series shall
be identical except as to the date or dates from which dividends thereon shall
become cumulative as provided in Section 2.02. The authorized but unissued
shares of Preferred Stock may be divided by number from time to time into and
issued in designated series, and the shares of each series of Preferred Stock so
designated shall provide for dividends at such rates, and shall be subject to
redemption at such price or prices and at such time or times, as shall be
provided in the resolution or resolutions of the Board of Directors providing
for the issuance of such stock, full authority for such purpose being granted to
and vested in the Board of Directors. The resolution or resolutions of the Board
of Directors of the corporation dividing the number of shares of authorized but
unissued Preferred Stock, and designating the series and fixing the relative
rights and preferences thereof shall (a) designate the series to which Preferred
Stock shall belong and fix the number of shares thereof, (b) fix the dividend
rate therefor and fix the date from which dividends on the shares of such series
initially issued shall be cumulative, (c) state at what times the Preferred
Stock of such series shall be redeemable and the redemption price or prices
payable thereon in the event of redemption; and may, in a manner not
inconsistent with the provisions of this Article Four and insofar as permitted
by applicable provisions of law, (i) provide for a sinking fund for the purchase
or redemption or a purchase fund for the purchase of shares of such series and
the terms and provisions governing the operation of any such fund, (ii) impose
conditions or restrictions upon the creation of indebtedness of the corporation
or upon the issue of additional Preferred Stock or other stock ranking equally
therewith or prior thereto as to dividends or assets, (iii) impose conditions or
restrictions upon the payment of dividends upon, or the making of other
distributions to, or the acquisition of, Junior Stock, (iv) grant to the holders
of the Preferred Stock of such series the right to convert such stock into
shares of Junior Stock, and (v) grant such other special rights to, or impose
other conditions or restrictions upon, the holders of shares of such series as
the Board of Directors may determine; the term "fixed for such series" and
similar terms shall mean stated and expressed in this Article Four, or in any
amendment to these Restated Articles of Incorporation, or in a resolution or
resolutions adopted by the Board of Directors providing for the issue of
Preferred Stock of the series referred to.
2.02. Dividends. Out of the assets of the corporation legally available for
dividends the holders of the Preferred Stock shall be entitled to receive, but
only when and as declared by the Board of Directors, dividends at the rate per
annum fixed for each series and no more. Dividends declared shall be payable
quarterly on March 15, June 15, September 15 and December 15 in each year, to
Preferred stockholders of record on such date, not more than fifty (50) days and
not less than ten (10) days prior to each such payment date, as may be
determined by the Board of Directors. Dividends on the shares of Preferred Stock
of any series initially issued shall be
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cumulative from and including a date fixed for such series at the time of the
initial establishment or designation of a series and on any additional shares of
the same series from and including the first day of the quarterly dividend
period in which such additional shares shall be issued.
Each share of Preferred Stock shall rank on a parity with each other share
of Preferred Stock, irrespective of series, with respect to dividends at the
respective rates fixed for such series, and no dividends shall be paid or
declared on the Preferred Stock of any series or Parity Stock unless at the same
time a dividend in like proportion, ratably, to the accrued dividends on the
Preferred Stock of each series outstanding shall be paid or declared and set
apart for payment on each series of Preferred Stock then outstanding. The amount
of any deficiency for past dividend periods may be paid or declared, and set
apart at any time without reference to any quarterly dividend payment date.
Accrued dividends on Preferred Stock shall not bear interest.
2.03. Liquidation Rights. In the event of any involuntary liquidation,
dissolution or winding up of the corporation, the holders of each series of
Preferred Stock shall be entitled to receive, for each share thereof, the par
value thereof, together with accrued dividends, or, in case such liquidation,
dissolution or winding up shall have been voluntary, an amount per share equal
to the then applicable current redemption price fixed for such series, before
any distribution of the assets shall be made to the holders of shares of any
class of Junior Stock; but the holders of Preferred Stock of such series shall
be entitled to no further participation in such distribution. In the event that
the assets of the corporation available for distribution to holders of Preferred
Stock shall not be sufficient to make the full payment herein required, such
assets shall be distributed to the holders of the shares of respective series of
Preferred Stock ratably in proportion to the amounts payable on each share
thereof, including accrued dividends. A consolidation or merger of the
corporation or sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the corporation shall not be deemed a dissolution,
liquidation or winding up of the corporation within the meaning of this Section
2.03.
2.04. Redemption and Repurchase Provisions.
(A) Preferred Stock of each series shall be subject to redemption, in
whole or in part, at the redemption prices fixed for such series in such
amount, at such place and by such method, which, if in part, shall be by
lot, as shall from time to time be determined by resolution of the Board of
Directors. Notice of the proposed redemption of any shares of any series of
Preferred Stock shall be given the corporation by mailing a copy of such
notice, at least twenty (20) days but not more than fifty (50) days prior
to the date fixed for such redemption, to the holders of record of such
shares to be redeemed, at their respective addresses then appearing on the
books of the corporation. On or after the date specified in such notice,
each holder of shares of Preferred Stock called for redemption as
aforesaid, shall be entitled to receive therefor the redemption price
thereof, upon presentation and surrender at any place designated in such
notice of the certificates for such shares of Preferred Stock held by him.
On and after the date fixed for redemption, if notice is given as
aforesaid, and unless default is made by the corporation in providing
moneys for payment of the redemption price, all dividends on the shares
called for redemption shall cease to accrue, and on and after such
redemption date, unless default be made as aforesaid, or on and after the
date of earlier deposit by the corporation with a bank or trust company
doing business in the City of Fort Worth, Texas, or any bank or trust
company in the City of New York, New York, duly appointed and acting as
transfer agent for this corporation in
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either case having a capital and surplus of at least $3,000,000.00 in trust
for the benefit of the holders of the shares of the Preferred Stock of such
series so called for redemption, of all funds necessary for redemption as
aforesaid (provided in the latter case that there shall have been mailed as
aforesaid to holders of record of shares to be redeemed, a notice of the
redemption thereof or that the corporation shall have executed and
delivered to the Transfer Agent for the Preferred Stock or to the bank or
trust company with which such deposit is made an instrument irrevocably
authorizing it to mail such notice at the corporation's expense) all rights
of the holders of the shares called for redemption as stockholders of the
corporation, except only the right to receive the redemption price, shall
cease and determine. Any funds so deposited which shall remain unclaimed by
the holders of such Preferred Stock at the end of six (6) years after the
redemption date, together with any interest thereon which shall have been
allowed by the bank or trust company with which such deposit shall have
been made, shall be paid by it to the corporation, free of any trust, and
thereafter such holders shall look only to the corporation therefor. Shares
of Preferred Stock redeemed as aforesaid shall be restored to the status of
authorized but unissued shares.
(B) Except as otherwise herein provided or prohibited by law, the
corporation may also from time to time purchase shares of Preferred Stock
of any series for any sinking or purchase fund and otherwise at not
exceeding the then current redemption prices applicable to redemptions for
the sinking fund for such series or otherwise, as the case may be,
including accrued dividends thereon to the date of purchase, plus customary
brokerage commissions. Shares of Preferred Stock of any series so purchased
not used to satisfy sinking or purchase fund obligations may in the
discretion of the Board of Directors be reissued or otherwise disposed of
from time to time to the extent permitted by law.
C) If and so long as there are dividends in arrears on any shares of
Preferred Stock of any series or Parity Stock or a default exists in any
sinking or purchase fund obligation provided for the benefit of any series
of Preferred Stock, the corporation shall not redeem any shares of any
series of Preferred Stock or Parity Stock, unless in connection therewith
all the outstanding Preferred Stock of all series is redeemed, or purchase
any shares of any series of Preferred Stock or Parity Stock unless an offer
to purchase on a comparable basis is made to the holders of all the
Preferred Stock then outstanding.
(D) The corporation will not permit any subsidiary corporation to
purchase any shares of stock of any class of the corporation.
2.05. Restrictions on Corporate Action.
(A) So long as any Preferred Stock is outstanding, the corporation
shall not, (1) without the consent (given by vote in person or by proxy at
a meeting called for the purpose) of the holders of at least two-thirds, or
(2) without the consent (given in writing without a meeting) of all the
holders, of the aggregate number of shares of all series of Preferred Stock
(treated as one class) then outstanding -
(I) Create, authorize or increase the authorized amount of any
shares of any class of stock other than Preferred Stock, Parity Stock
or Junior Stock or any obligation or security convertible into stock
other than Preferred Stock, Parity Stock or Junior Stock, or
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(ii) Amend, change or repeal any of the express terms of the
Preferred Stock outstanding in any manner prejudicial to the holders
thereof, except that, if such amendment, change or repeal is
prejudicial to the holders of less than all series of Preferred Stock,
the consent of only the holders of two-thirds of the aggregate number
of shares of the series thereof so affected shall be required, or
(iii) Issue any shares of Preferred Stock in addition to the
shares issued or presently to be issued or issue any Parity Stock
unless, after giving effect to the issue of such additional shares,
(a) the net income of the corporation available for
dividends for the period of twelve (12) consecutive calendar
months within the fifteen (15) calendar months immediately
preceding the calendar month within which such additional shares
of stock are to be issued shall have been at least two and
one-half (2 1/2) times the aggregate annual dividend requirements
upon the entire amount to be outstanding (upon the issuance of
such additional shares of Preferred Stock or such Parity Stock)
of Preferred Stock and Parity Stock and of any stocks of the
corporation of any class ranking as to dividends prior to the
Preferred Stock or Parity Stock;
(b) the gross income available for payment of interest
charges for a period of twelve (12) consecutive calendar months
within the fifteen (15) calendar months immediately preceding the
calendar month within which such additional shares of stock are
to be issued, shall have been at least one and one-half (1 1/2)
times the sum of (1) the aggregate annual interest charges on all
the indebtedness of the corporation then outstanding, and (2) the
aggregate annual dividend requirements upon the entire amount to
be outstanding of Preferred Stock and Parity Stock and of any
stocks of the corporation of any class ranking as to dividends
prior to the Preferred Stock or Parity Stock; and
(c) the aggregate of the capital of the corporation
applicable to all Junior Stock, plus the capital surplus and the
earned surplus of the corporation, determined in accordance with
sound accounting practice, shall be not less than the aggregate
payable upon involuntary liquidation, dissolution or winding up
of the corporation to the holders of the entire amount to be
outstanding of Preferred Stock and Parity Stock and of any stocks
of the corporation of any class ranking as to assets prior to the
Preferred Stock.
In the foregoing computations, there shall be excluded (a) all
indebtedness and all shares of stock to be retired in connection with the
issue of such additional shares, and (b) all interest charges on all
indebtedness and dividend requirements on all shares of stock to be retired
in connection with the issue of such additional shares. The net earnings of
any property acquired by the corporation during or after the period for
which income is computed, or of any property which is to be acquired in
connection with the issuance of any such additional shares, if capable of
being separately determined or estimated, may be included on a pro forma
basis (including a pro forma increase in income, excess profits and other
taxes based on or measured by income or undistributed earnings or income)
in the foregoing computations; and if within or after the period for which
income is computed any substantial portion of the properties of the
corporation shall have been disposed of, the net
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earnings of such property, if capable of being separately determined or
estimated, shall be excluded on a pro forma basis (including a pro forma
decrease in income, excess profits and other taxes based on or measured by
income, or undistributed earnings or income) in the foregoing computations
for a period prior to the date of such disposition.
(B) So long as any Preferred Stock is outstanding, the corporation
shall not, (1) without the consent (given by vote in person or proxy at a
meeting called for the purpose) of the holders of a majority or (2) without
the consent (given in writing without a meeting) of all the holders, of the
aggregate number of shares of all series of Preferred Stock (treated as one
class) then outstanding, issue, assume or create unsecured securities (the
words "unsecured securities," as used in this paragraph being deemed to
mean notes, debentures or other securities representing unsecured
indebtedness other than indebtedness maturing by its terms in one year or
less from the date of its creation and not renewable or extendible at the
option of the corporation for a period of more than one year from the date
of its creation) for any purpose, except to refund outstanding unsecured
securities of such character, theretofore issued or assumed, if thereby the
aggregate principal amount of such unsecured securities would exceed twenty
percent (20%) of the sum of (1) the total principal amount of all bonds or
other securities representing secured indebtedness of the corporation then
to be outstanding, and (2) the capital represented by stocks of the
corporation and the earned and capital surplus of the corporation,
determined in accordance with sound accounting practice; provided, however,
that any unsecured securities theretofore issued under any authorization of
holders of Preferred Stock given pursuant hereto (and any securities to
refund the same) shall not be considered in determining the amount of other
unsecured securities which may be issued, assumed or created within the
aforesaid twenty percent (20%) limitation.
(C) So long as any Preferred Stock is outstanding, the corporation
shall not, (1) without the consent (given by vote in person or by proxy at
a meeting called for the purpose) of the holders of at least four-fifths,
or (2) without the consent (given in writing without a meeting) of all the
holders of the aggregate number of shares of all series of Preferred Stock
(treated as one class) then outstanding -
(I) merge or consolidate with or into any other corporation or
corporations, provided that the provisions of this clause (i) shall
not apply to a purchase or other acquisition by the corporation of
franchises or assets of another corporation in any manner which does
not involve a merger or consolidation; or
(ii) sell, lease or otherwise dispose of all or substantially all
of its property.
No consent of the holders of the shares of any series of Preferred
Stock in respect of action hereinabove set forth in subparagraphs (A), (B)
or (C) shall be required if irrevocable provision is contemporaneously made
for the redemption of all shares of such series of Preferred Stock at the
time outstanding, or provision is made that the proposed action shall not
be effective unless irrevocable provision is made for the prompt purchase,
redemption or retirement of all shares of such series of Preferred Stock at
the time outstanding.
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2.06. Voting Rights. The holders of Preferred Stock shall not be entitled
to vote except:
(a) as provided above under Section 2.05;
(b) as may from time to time be required by the laws of Texas; and
(c) voting separately as a class for the election of the smallest
number of directors necessary to constitute a majority of the Board of
Directors whenever and as often as dividends payable on any series of
Preferred Stock outstanding shall be in arrears in an amount equivalent to
or exceeding six (6) quarterly dividends, which right may be exercised at
any annual meeting and at any special meeting of stockholders called for
the purpose of electing directors, until such time as arrears in dividends
on the Preferred Stock and the current dividend thereon shall have been
paid or declared and a sum sufficient for the payment thereof set apart,
whereupon all voting rights given by this clause (c) shall be divested from
the Preferred Stock (subject, however, to being at any time or from time to
time similarly revived and divested).
So long as holders of the Preferred Stock shall have the right to elect
directors under the terms of the foregoing clause (c), the holders of the Common
Stock, voting separately as a class, shall, subject to the voting rights of any
other class of stock, be entitled to elect the remaining directors.
Whenever, under the provisions of the foregoing clause (c) the right of
holders of the Preferred Stock, if any, to elect directors shall accrue or shall
terminate, the Board of Directors shall, within ten (10) days after delivery to
the corporation at its principal office of a request or requests to such effect
signed by the holders of at least five percent (5%) of the outstanding shares of
any class of stock entitled to vote, call a special meeting, in accordance with
the Bylaws of the corporation, of the holders of the class or classes of stock
of the corporation entitled to vote, to be held within sixty (60) days from the
delivery of such request, for the purpose of electing a full Board of Directors
to serve until the next annual meeting and until their respective successors
shall be elected and shall qualify; provided, however, that if the annual
meeting of stockholders for the election of directors is to be held within
eighty (80) days after the delivery of such request, the Board of Directors need
not act thereon. If, at any special meeting called as aforesaid or at any annual
meeting of stockholders after accrual or termination of the right of holders of
the Preferred Stock to elect directors as in the foregoing clause (c) provided,
any director shall not be re-elected, his term of office shall end upon the
election and qualification of his successor, notwithstanding that the term for
which such director was originally elected shall not at the time have expired.
If, during any interval between annual meetings of stockholders for the
election of directors while holders of the Preferred Stock shall be entitled to
elect any director pursuant to the foregoing clause (c), the number of directors
in office who have been elected by the holders of the Preferred Stock (voting as
a class) or by the holders of the Common Stock (voting as a class), as the case
may be, shall become less than the total number of directors subject to election
by holders of shares of such class, whether by reason of the resignation, death
or removal of any director or directors, or an increase in the total number of
directors, the vacancy or vacancies shall be filled (1) by the remaining
directors or director, if any, then in office who either were or was elected by
the votes of shares of such class or succeeded to a vacancy originally filled by
the votes of shares of such class or (2) if there is no such director remaining
in office, at a special meeting of holders of shares of such class called by the
President of the corporation to be held within sixty (60) days after there shall
have been delivered to the corporation at its principal office a request or
requests
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signed by the holders of at least five percent (5%) of the outstanding shares of
such class; provided, however, that such request need not be so acted upon if
delivered less than eighty (80) days before the date fixed for the annual
meeting of stockholders for the election of directors.
Any director may be removed from office for cause by vote of the holders of
a majority of the shares of the class of stock which voted for his election (or
for his predecessor in case such director was elected by directors). A special
meeting of holders of shares of any class may be called by a majority vote of
the Board of Directors or by the President for the purpose of removing a
director in accordance with the provisions of the preceding sentence, and shall
be called to be held within sixty (60) days after there shall have been
delivered to the corporation at its principal office a request or requests to
such effect signed by holders of at least five percent (5%) of the outstanding
shares of the class entitled to vote with respect to the removal of any such
director; provided, however, that such request need not be so acted upon if
delivered less than eighty (80) days before the date fixed for the annual
meeting of stockholders for the election of directors.
The holders of a majority of the shares of a class of stock entitled under
this Section 2.06 to vote for the election or removal of directors or the
filling of any vacancy however created in the Board of Directors, present in
person or represented by proxy at a meeting called for the purpose of voting on
any such action, shall constitute a quorum for such purpose without regard to
the presence or absence at the meeting of the holders of any other class of
stock not entitled under this Section 2.06 to vote in respect thereto. A lesser
interest of the class entitled to vote from time to time may adjourn any meeting
for such purpose, and the same shall be held as adjourned without further
notice. When a quorum is present, the vote of the holders of a majority of the
shares of such quorum shall govern each such election, removal or filling of a
vacancy in respect of which such class is entitled to vote.
Preferred Stockholders shall not be entitled to receive notice of any
meeting of holders of any class of stock at which they are not entitled to vote.
Each holder of Preferred Stock, as to all matters in respect of which such
stock has voting power, is entitled to one vote for each share of stock standing
in his name. Cumulative voting shall not be allowed, but each holder of
Preferred Stock, at any election of directors at which such Preferred Stock has
voting power, shall be entitled to cast that number of votes equal to the number
of shares of Preferred Stock owned by him for as many directors as there are to
be elected.
2.07. Restriction on Dividends. So long as any shares of Preferred Stock
shall be outstanding, the corporation shall not declare or pay or set apart any
dividends on any shares of Junior Stock (other than dividends payable in shares
of Junior Stock), or make any other distribution on shares of Junior Stock, or
make any expenditures for the purchase, redemption or other retirement for a
consideration of shares of Junior Stock (other than in exchange for other shares
of Junior Stock),.unless accrued dividends on all shares of all series of
Preferred Stock outstanding for all past quarterly dividend periods shall have
been paid or declared and set apart and the full dividend for the then current
quarterly dividend period shall have been or concurrently shall be paid or
declared and set apart, or if the corporation shall be in default of the sinking
or purchase fund obligation provided for any series of Preferred Stock.
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2.08. Relative Rights and Preferences of Outstanding Series of Preferred
Stock. The relative rights and preferences of each of the outstanding series of
Preferred Stock which are not set forth elsewhere in this Article Four are as
follows:
(A) 4.65% Cumulative Preferred Stock, Series B (8,290 shares), and 4.75%
Cumulative Preferred Stock, Series C (6,950 shares).
1. The Preferred Stock of each of said series shall be designated,
respectively, "4.65% Cumulative Preferred Stock, Series B" (herein called
"Series B Preferred Stock"), and "4.75% Cumulative Preferred Stock, Series
C" (herein called "Series C Preferred Stock").
2(a). Series B Preferred Stock. The fixed dividend rate of the shares
of Series B Preferred Stock is 4.65% per share per annum and such dividends
are cumulative from the date of issue of the shares of such series
initially issued and on any additional shares of the same series from and
including the first day of the quarterly dividend period in which such
additional shares shall be issued, with the first quarterly dividend
payable September 15, 1963; the fixed redemption prices on the shares of
such series are $106.50 per share if redeemed prior to September 15, 1966;
$105.00 per share if redeemed on September 15, 1966 or thereafter and prior
to September 15, 1969; $103.50 per share if redeemed on September 15, 1969
or thereafter and prior to September 15, 1972 ; $102.00 per share if
redeemed on September 15, 1972 or thereafter and prior to September 15,
1972 or thereafter and prior to September 15, 1975; $101.00 per share if
redeemed on September 15, 1975 or thereafter and prior to September 15,
1978; and $100.00 per share if redeemed on September 15, 1978 or
thereafter; together with all accrued dividends thereon (as such phrase is
defined for the purposes of Article Four of the Restated Articles of
Incorporation of the corporation). The fixed liquidation price for the
shares of such series is One Hundred Dollars ($100) per share, together
with all accrued dividends thereon (as such phrase is so defined), in the
event of involuntary liquidation and the applicable current redemption
price in the event of voluntary liquidation, all as more fully prescribed
by the provisions of Paragraph 2.03 of Article Four of the Restated
Articles of Incorporation of the corporation.
2(b). Series C Preferred Stock. The fixed dividend rate on the shares
of Series C Preferred Stock is 4.75% per share per annum and such dividends
are cumulative from the date of issue of the shares of such series
initially issued and on any additional shares of the same series from and
including the first day of the quarterly dividend period in which such
additional shares shall be issued, with the first quarterly dividend
payable September 15, 1965; the fixed redemption prices on the shares of
such series are $105.75 per share if redeemed prior to September 15, 1968;
$104.60 per share if redeemed on September 15, 1968 or thereafter and prior
to September 15, 1971; $103.45 per share if redeemed on September 15, 1971
or thereafter and prior to September 15, 1974; $102.30 per share if
redeemed on September 15, 1974 or thereafter and prior to September 15,
1977; $101.15 per share if redeemed on September 15, 1977 or thereafter and
prior to September 15, 1980; and $100.00 per share if redeemed on September
15, 1980 or thereafter; together with all accrued dividends thereon (as
such phrase is defined for the purposes of Article Four of the Restated
Articles of Incorporation of the corporation). The fixed
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liquidation price for the shares of such series is One Hundred Dollars
($100) per share, together with all accrued dividends thereon (as such
phrase is so defined), in the event of involuntary liquidation and the
applicable current redemption price in the event of voluntary liquidation,
all as more fully prescribed by the provisions of Section 2.03 of Article
Four of the Restated Articles of Incorporation of the corporation.
3. The corporation (unless prevented from so doing by any applicable
restriction of law) will in each year, so long as any shares of the Series
B or Series C Preferred Stock are outstanding, make offers (hereinafter in
this Paragraph 3 called a Purchase Offer) to the holders of shares of the
Series B and/or Series C Preferred Stock to purchase on October 1 in each
such year, at the prices at which the same may be offered to the
corporation up to but not exceeding a price of $100 per share and accrued
dividends, a number of shares of said series equal to 2% of the maximum
number of shares of each of the Series B and Series C Preferred Stock
outstanding at any one time prior to August 15 of such year, all as
hereinafter provided in this Paragraph 3.
The Transfer Agent for the Series B and Series C Preferred Stock
shall, at least 30 days prior to October 1 of each such year, mail to the
holders of record of shares of each of the said Series as at the day prior
to the mailing date, a notice, in the name of the corporation, that the
corporation will on October I of that year, accept offers to sell the
number of shares required to be covered by the Purchase Offers at the
prices at which shares are offered to the corporation up to but not
exceeding a price of $100 per share and accrued dividends thereon.
The Transfer Agent shall on October 1, on behalf of the corporation,
accept offers to sell shares of the Series B and Series C Preferred Stock
received by it up to the full number of shares covered by the Purchase
Offer upon such basis as will result in the lowest aggregate cost to the
corporation. To that end, the Transfer Agent shall accept offers at the
same prices on a pro rata basis with respect to each series, as nearly as
may be. In case any person whose offer is accepted shall thereafter fail to
make good such offer, said Transfer Agent shall, to the extent practicable,
within 30 days after October 1, accept in lieu thereof, the best offer or
offers, if any, theretofore made and not theretofore accepted.
On or prior to October 1 in each year, the corporation shall deposit
with said Transfer Agent cash sufficient to purchase the shares of each of
said Series, if any, which have been accepted for purchase pursuant to the
Purchase Offer made in such year and thereafter shall deposit any
additional funds required to carry out the Purchase Offer for such year.
The Transfer Agent shall return to the corporation any funds deposited with
it and not applied to the purchase of shares of the Series B or Series C
Preferred Stock pursuant to the Purchase Offer for such year.
If in any year the full purchase obligation of the corporation shall
not have been satisfied by the making and carrying out of the Purchase
Offer, any deficiency in the satisfaction of such purchase obligation shall
be made good, in the manner hereinafter in this paragraph set forth, before
any dividends shall be declared or paid upon or set apart for any shares of
Common Stock or any shares of any class of stock ranking junior to the
Preferred Stock or any sums applied to the purchase, redemption or other
retirement of the Common Stock or any shares of any class of stock ranking
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junior to the Preferred Stock or any sums applied to the purchase,
redemption or other retirement of the Common Stock or any shares of any
class of stock ranking junior to the Preferred Stock. Any such deficiency
may be made good at any time by the making and carrying out of a Special
Purchase Offer covering the number of shares of the Series B or Series C
Preferred Stock as to which such deficiency exists and, to that end, the
corporation shall file with the Transfer Agent a certificate, signed by the
President or a Vice President, specifying a date, not less than 45 days
after the date of filing thereof, on which offers to sell shares of the
Series B or Series C Preferred Stock will be accepted. Such Special
Purchase Offer shall otherwise be made and carried out on thirty days'
notice and in the same manner as hereinabove provided for Purchase Offers
to be carried out on October 1.
The Purchase Offer in any year shall be deemed to have been completed
and satisfied if the corporation shall have complied with the provisions of
this Paragraph 3 notwithstanding that the total number of shares purchased
by it shall have been less than the total number of shares covered by the
corporation's Purchase Offer for that year because too few offers to sell
were received by it.
Shares of the Series B and Series C Preferred Stock purchased pursuant
to any Purchase Offer or Special Purchase Offer shall be canceled and shall
not be reissued as shares of the same Series.
The provisions of this Paragraph 3 in so far as the same relate to
purchases of outstanding shares of each of said Series, are subject to the
applicable provisions of Section (2) of Article Four of the Restated
Articles of Incorporation of the corporation.
4. The shares of the Series B Preferred Stock and Series C Preferred
Stock are not convertible.
5. So long as any shares of the Series B or Series C Preferred Stock
shall be outstanding, the corporation shall not declare or pay or set apart
any dividends on any shares of Junior Stock (other than dividends payable
in shares of Junior Stock) or make any other distribution on any shares of
Junior Stock, or make any expenditures for the purchase, redemption or
other retirement for a consideration of shares of Junior Stock (other than
in exchange for other shares of Junior Stock or from the proceeds of any
sale of such stock received not more than six (6) months prior to such
retirement), if the aggregate amount of all such dividends, distributions
and expenditures of the corporation after December 31, 1962, would exceed
the aggregate amount of the net income of such corporation available for
dividends on Junior Stock accumulated after December 31, 1962, plus
$1,500,000, and then only within the limits set forth in Section 3.01 of
Article Four of the Restated Articles of Incorporation of the corporation.
For the purposes of this paragraph, references to the "corporation" shall
mean both the corporation and its predecessor, Community Public Service
Company, a Delaware corporation.
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SECTION 3 THE COMMON STOCK
3.01. Dividends. Out of any assets of the corporation legally available for
dividends remaining after full cumulative dividends upon any shares of Preferred
Stock or of any other class of stock ranking as to dividends ahead of the Common
Stock of the corporation then outstanding shall have been paid or declared and
set apart for all past quarterly dividend periods and for the current quarterly
dividend period, then and not otherwise, dividends may be paid upon the Common
Stock to the exclusion of the Preferred Stock and of any such other class of
stock.
3.02. Distribution of Assets. In the event of any liquidation, dissolution
or winding up of the corporation, after there shall have been paid to or set
aside for the holders of all series of Preferred Stock and of any other class of
stock ranking as to assets ahead of the Common Stock the full preferential
amounts, including accrued dividends, to which they are respectively entitled,
the holders of the Common Stock shall be entitled to receive, pro rata, all the
remaining assets of the corporation available for distribution to its
stockholders. The Board of Directors, by vote of a majority of the members
thereof, may distribute in kind to the holders of the Common Stock such
remaining assets of the corporation or may sell, transfer or otherwise dispose
of all or any of the remaining property and assets of the corporation to any
other corporation and receive payment therefor wholly or partly in cash and/or
in stock and/or in obligations of such corporation, and may sell all or any part
of the consideration received therefor or distribute the same and/or the balance
thereof in kind to the holders of the Common Stock.
3.03. Voting Rights. Subject to the voting rights expressly conferred upon
the Preferred Stock by Section (2) of this Article Four and by law and the
voting rights of any other class of stock, the holders of the Common Stock shall
exclusively possess full voting power for the election of directors and for all
other purposes and shall be entitled to one vote for each share of Common Stock
held of record. Cumulative voting shall not be allowed, but each holder of
Common Stock, at any election of directors at which such Common Stock has voting
power, shall be entitled to cast that number of votes equal to the number of
shares of Common Stock owned by him for as many directors as there are to be
elected.
SECTION 4 - MISCELLANEOUS
4.01. Preemptive Rights. No holder of stock of any class of the corporation
shall have any right, as such holder, to purchase or subscribe for any stock of
any class of the corporation now or hereafter authorized or any securities
convertible into, or carrying or evidencing any right or option to purchase,
stock of any class now or hereafter authorized which the corporation may at any
time issue, but any and all such stock, securities, rights and/or options may be
issued and disposed of by the Board of Directors to such persons and for such
lawful consideration and on such terms as the Board of Directors in its
discretion may determine, without first offering the same or any thereof to the
stockholders of the corporation.
4.02. Stock Fully Paid. All shares of capital stock, whether heretofore
issued or hereafter issued for a lawful consideration fixed by the Board of
Directors, including, without limitation, issuance of stock dividends, shall,
when the full lawfuI consideration fixed by the Board of Directors has been
paid, or when so issued as a stock dividend, be deemed fully paid stock and not
liable to any further call or assessment thereon, and the holders of such shares
shall not be liable for any further payment thereon.
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4.03. Unissued Shares. Any of the unissued shares of capital stock of the
corporation may be issued from time to time in such amount and manner,
including, without limitation, in distribution as stock dividends, and for such
lawful consideration as the Board of Directors may determine.
ARTICLE FIVE
The Bylaws of the corporation may be altered, amended or repealed at any
regular or special meeting of the directors at which a quorum is present by the
affirmative vote of a majority of those present at such meeting, provided notice
of the proposed alteration, amendment or repeal is contained in the notice of
such meeting.
ARTICLE SIX
The corporation has heretofore complied with the requirements of law as to
the initial minimum capital requirements without which it could not commence
business under the Texas Business Corporation Act.
ARTICLE SEVEN
The post office address of its registered office is 4100 International
Plaza, P.O. Box 2943, Fort Worth, Texas 76113, and the name of its registered
agent at such address is M. D. Blanchard.
ARTICLE EIGHT
The number of directors presently constituting the Board of Directors of
the corporation is nine, and the names and addresses of the persons now serving
as directors are as follows:
R. Denny Alexander Fort Worth, Texas
John A. Fanning Fort Worth, Texas
Sidney M. Gutierrez Albuquerque, New Mexico
J. R. Holland, Jr. Dallas, Texas
Harris L. Kempner, Jr. Galveston, Texas
Kevern R. Joyce Fort Worth, Texas
Dr. Carol D. Surles Charleston, Illinois
Larry G. Wheeler Oakland, California
Dennis H. Withers Mansfield, Texas
ARTICLE NINE
To the full extent allowed pursuant to the Texas Miscellaneous Corporation
Laws Act as it now exists or as it may be amended or recodified from time to
time, directors shall not be personally liable to the Corporation or its
shareholders for monetary damages for any act or omission in the director's
capacity as a director except for liability for:
1. a breach of the director's duty of loyalty to the corporation or its
shareholders or members;
2. an act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law;
17
3. a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the
scope of the director's office;
4. an act or omission for which the liability of a director is expressly
provided for by statute;
5. an act related to an unlawful stock repurchase or payment of a
dividend.
ARTICLE TEN
The corporation shall at all times have at least one Independent Director,
who will be appointed by the shareholders. To the fullest extent permitted by
the Texas Business Corporation Act, the Independent Director shall consider only
the interests of the corporation and its creditors in acting or otherwise voting
on any Material Action. For purposes of this provision: "Independent Director"
means a natural person who, for the five-year period prior to his or her
appointment as Independent Director has not been, and during the continuation of
his or her service as Independent Director is not: (i) an employee, director,
stockholder, partner or officer of the corporation or any of its Affiliates
(other than his or her service as an Independent Director of the corporation);
(ii) a customer or supplier that derives more than ten percent of its revenues
from the corporation or any of its Affiliates; or (iii) any member of the
immediate family of a person described in (i) or (ii); and "Material Action"
shall mean to amend the Article of Incorporation, consolidate or merge the
corporation with or into any Person, or sell all or substantially all of the
assets of the corporation or to institute proceedings to have the corporation be
adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the corporation or file a petition seeking, or
consent to, reorganization or relief with respect to the corporation under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the corporation or a substantial part of its property, or
make any assignment for the benefit of creditors of the corporation, or admit in
writing the corporation's inability to pay its debts generally as they become
due, or, to the fullest extent permitted by law, take action in furtherance of
any such action, or dissolve or liquidate the corporation.
ARTICLE ELEVEN
The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of not less than One Thousand
Dollars ($1,000.00).
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IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated
Articles of Incorporation as of this ____ day of April, 2000.
TEXAS-NEW MEXICO POWER COMPANY
By:
----------------------------
Name: Paul W. Talbot
Title: Secretary
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