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Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CITATION INSURANCE GROUP
ROBERT ERICKSON AND DOUGLAS GOULD certify
that:
1. They are the duly elected and acting President and
Secretary, respectively, of Citation Insurance Group.
2. The Articles of Incorporation of this corporation are
hereby amended and restated to read as follows:
"ARTICLE I
The name of this corporation is PICO Holdings, Inc.
ARTICLE II
The purpose of the corporation is to engage in any lawful act
or activity for which a corporation may be organized under the
General Corporation Law of California other than the banking
business, the trust company business or the practice of a
profession permitted to be incorporated by the California
Corporations Code.
ARTICLE III
This corporation is authorized to issue two (2) classes of
shares, designated respectively "Common Stock" and "Preferred
Stock."
A. The number of shares of
Common Stock is One Hundred Million
(100,000,000). The par value of each share is
one tenth of one cent ($0.001).
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B. The number of shares of Preferred Stock is Two
Million (2,000,000). The par value of each share of Preferred
Stock is one cent ($.01). The Preferred Stock herein
authorized may be issued from time to time in one or more
series, the number of shares, the designation and the rights,
preferences, privileges and restrictions, within any limits
and restrictions herein stated, shall be fixed and determined,
for any wholly unissued series of stock authorized herein, by
the Board of Directors. The Board of Directors, within the
limits and restrictions stated herein and in any resolution or
resolutions of the Board originally fixing the number of
shares constituting any series, may increase or decrease (but
not below the number of shares of such series then
outstanding) the number of shares of any such series
subsequent to the issue of shares of that series. In case the
number of shares of any series shall be so decreased, the
shares constituted the decrease shall resume the status they
had prior to the adoption of the resolution originally fixing
the number of shares of that series.
C. One Million (1,000,000) shares of
Preferred Stock are designated as Series A
Junior Participating Cumulative Preferred
Stock.
(1) Dividends and
Distributions.
(a) The holders of shares of Series
A Preferred Stock, in preference to the holders of Common
Stock of the Corporation and of any other junior stock of the
Corporation that may be outstanding, shall be entitled to
receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly
dividends payable in cash on the tenth day of January, April,
July and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend
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Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $.25
per share ($1.00 per annum), or (ii) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) 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 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 any share or fraction of a share of Series A
Preferred Stock. In the event that the Corporation shall at
any time declare or pay any dividend on common Stock payable
in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding stares of
Common Stock (by reclassification or otherwise) into a greater
or lesser number of shares of Common Stock, then and in each
such event, the amount to which the holder of each share of
Series A Preferred Stock was entitled immediately prior to
such event under clause (ii) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator
of which is 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 the Series A Preferred Stock as
provided in paragraph C(1)(a) of this Article III
contemporaneously with any declaration of a dividend or
distribution on the Common Stock (other than a dividend
payable in
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shares of Common Stock); provided, however, that in the 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 $.25 per share ($1.00 per annum)
on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue
and be cumulative on outstanding shares of Series A Preferred
Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series A Preferred Stock,
unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which
cash dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly dividend Payment Date, in either of
which cases such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall cumulate but shall not bear
interest. Dividends paid on the shares of Series A Preferred
Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
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(2) Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting
rights:
(a) Each share of Series A Preferred
Stock shall entitle the holder thereof to 100 votes (and each
one one-hundredth of a share of Series A Preferred Stock shall
entitled the holder thereof to one vote) on all matters
submitted to a vote of the stockholders of the Corporation. In
the event that the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then and in each such event, the number of votes per
share to T which holders of shares 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 is the number of shares of Common Stock
outstanding immediately after such event, and the denominator
of which is the number of shares of common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided in
the Amended and Restated Articles of Incorporation of the
Corporation or herein or by law, the holders of shares 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 the stockholders of the Corporation.
(c) In addition, the holders of
shares of Series A Preferred Stock shall have the following
special voting rights:
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(i) In the event that at
any time dividends on a Series A Preferred Stock, whenever
accrued and whether or not consecutive, shall not have been
paid or declared and a sum sufficient for the payment thereof
set aside, in an amount equivalent to six quarterly dividends
on all shares of Series A Preferred Stock at the time
outstanding, then and in each such event, the holders of
shares of Series A Preferred Stock and each other series of
preferred stock now or hereafter issued that shall be accorded
such class voting right by the Board of Directors and that
shall have the right to elect two directors as the result of a
prior or subsequent default in payment of dividends on such
series (each such other series being hereinafter called "Other
Series of Preferred Stock"), voting separately as a class
without regard to series, shall be entitled to elect two
directors at the next annual meeting or a special meeting
called for such purpose. The remainder of the board shall be
elected by the holders of all shares (including the Series A
Preferred Stock and each Other Series of Preferred Stock) of
the Corporation entitled to vote for the election of
directors; provided, however, that the Series A Preferred
Stock and each Other Series of Preferred Stock voting as a
class, shall not have the right to elect more than one-third
of the directors. Such special voting right of the holders of
shares of Series A Preferred Stock may be exercised until all
dividends in a default on the Series A Preferred Stock shall
have been paid in full or declared and funds sufficient
therefor set aside, and when so paid or provided for, such
special voting right of the holders of shares of Series A
Preferred Stock shall cease, but subject always to the same
provisions for the vesting of such special voting rights in
the event of any such future dividend default or defaults.
(ii) At any time
after such special voting rights shall have so
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vested in the holders of shares of Series A Preferred Stock,
the Secretary of the Corporation may, and upon the written
request of the holders of record of 10% or more in number of
the shares of Series A Preferred Stock and each Other Series
of Preferred Stock then outstanding addressed to the Secretary
at the principal executive office of the Corporation shall,
call a special meeting of the holders of all shares of the
Corporation entitled to vote, for the election of directors to
be elected as herein provided, to be held within 60 days after
such call and at the place and upon the notice provided by law
and in the Bylaws for the holding of meetings of stockholders;
provided, however, that the Secretary shall not be required to
call such special meeting in the case of any such request
received less than 90 days before the date fixed for any
annual meeting of stockholders, and if in such case such
special meeting is not called or held, the holders of shares
of Preferred Stock so entitled to vote shall be entitled to
exercise the special voting rights provided in this paragraph
at such annual meeting. No such special meeting and no
adjournment thereof shall be held on a date later than 60 days
before the annual meeting of stockholders. If, at any meeting
so called or at any annual meeting held which the holders of
shares of Series A Preferred Stock have the special voting
rights provided for in this paragraph, the holders of not less
than 40% of the aggregate voting power of Series A Preferred
Stock and each Other Series of Preferred Stock then
outstanding are present in person or by proxy, such percentage
shall be sufficient to constitute a quorum for the election of
the two directors as herein provided.
(iii) Upon the
election at such meeting by the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock,
voting as a class, of the directors they are entitled so to
elect, the
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persons so elected, together with such persons as may be
directors or as may have been elected as directors by the
holders of all shares (including Series A Preferred Stock and
each other Series of Preferred Stock) otherwise entitled to
vote for directors, shall constitute the duly elected
directors of the Corporation. The directors so elected by
holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting as a class, shall serve
until the next annual meeting or until their respective
successors shall be elected and qualified, or if any such
director is a member of a class of directors under provisions
dividing the directors into classes, each such director shall
serve until the annual meeting at which the term of office of
such director's class shall expire or until such director's
successor shall be elected and shall qualify, and at each
subsequent meeting of stockholders at which the directorship
of any director elected by the vote of holders of shares of
Series A Preferred Stock and each Other Series of Preferred
Stock under the special voting rights set forth in this
paragraph is up for election, said special class voting rights
shall apply in the reelection of such director or in the
election of such director's successor; provided, however, that
whenever the holders of shares of Series A Preferred Stock and
each Other Series of Preferred Stock shall be divested of the
special rights to elect two directors as above provided, the
terms of office of all persons elected as directors by the
holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting as a class, shall forthwith
terminate, and two directors shall be elected by the holders
of all shares (including the Series A Preferred Stock and each
other series of Preferred Stock) to fill their positions.
(iv) If, at any time
after a special meeting of stockholders or an annual meeting
of stockholders at which the
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holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting as a class, have elected
directors as provided above, and while the holders of shares
of Series A Preferred Stock and each Other Series of Preferred
Stock shall be entitled so to elect two directors, the number
of directors who have been elected by the holders of shares of
Series A Preferred Stock and each Other Series of Preferred
Stock (or who by reason of one or more resignations, deaths or
removals have succeeded any directors so elected) shall by
reason of resignation, death or removal by less than two but
at least one, the vacancy in the directors so elected by the
holders of shares of the Series A Preferred Stock and each
Other Series of Preferred Stock may be filled by the remaining
director elected by such holders. In the event that such
election shall not occur within 30 days after such vacancy
arises, or in the event that there shall not be incumbent one
director so elected by such holders, the Secretary of the
Corporation may, and upon the written request of the holders
of record of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock then
outstanding addressed to the Secretary at the principal office
of the Corporation shall, call a special meeting of the
holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock so entitled to vote, for an election
to fill such vacancy or vacancies, to be held within 60 days
after such call and at the place and upon the notice provided
by law and in the Bylaws for the holding of meetings of
stockholders; provided, however, that the Secretary shall not
be required to call such special meeting in the case of any
such request received less than 90 days before the date fixed
for any annual meeting of stockholders, and if in such case
such special meeting is not called, the holders of shares of
Preferred Stock so entitled to vote shall be
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entitled to fill such vacancy or vacancies at such annual
meeting. If any such special meeting required to be called as
above provided shall not be called by the Secretary within 30
days after receipt of any such request, then the holders of
record of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock then
outstanding may designate in writing one of their number to
call such meeting, and the person so designated may, at the
expense of the Corporation, call such meeting to be held at
the place and upon the notice above provided, and for that
purpose shall have access to the stock books of the
Corporation; no such special meeting and no adjournment
thereof shall be held on a date later than 60 days before the
annual meeting of stockholders.
(d) Nothing herein
shall prevent the directors or stockholders from taking any
action to increase the number of authorized shares of Series A
Preferred Stock, or increasing the number of authorized shares
of Preferred Stock of the same class as the Series A Preferred
Stock or the number of authorized shares of Common Stock, or
changing the par value of the Common Stock or Preferred Stock,
or issuing options, warrants or rights to any class of stock
of the Corporation as authorized by the Amended and Restated
Articles of Incorporation of the Corporation, as it may
hereafter be amended.
(e) Except as set forth
herein, holders of shares of Series A Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote as
set forth in the Amended and Restated Articles of
Incorporation of the Corporation or herein or by law) for
taking any corporate action.
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(3) Restrictions.
(a) Whenever any
dividends or other distributions payable on the Series A
Preferred Stock as provided in Section C(1) hereof are in
arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not, directly or indirectly:
(i) declare or pay
dividends on, or made any other distributions with respect to,
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay
dividends on, or make any other distributions with respect to,
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on
shares of the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase
or otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
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(iv) purchase or
otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity
with the 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
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or
classes.
(b) The Corporation
shall not permit any subsidiary of the Corporation to purchase
or otherwise acquire for consideration, directly or
indirectly, any shares of stock of the Corporation unless the
Corporation could, under paragraph (a) of this Section 3,
purchase or otherwise acquire such shares at such time and in
such manner.
(4) Reacquired Shares. Any shares of Series
A Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of preferred stock, without designation as to
series, and may be reissued as part of any series of preferred
stock created by resolution or resolutions of the Board of
Directors (including Series A Preferred Stock), subject to the
conditions and restrictions on issuance set forth herein.
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(5) Liquidation, Dissolution or Winding
Up. Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to:
(a) the holders of shares of
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received the greater of
(i) $1.00 per share ($.01 per one one-hundredth of a share),
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, or (ii) an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share
to holders of shares of Common Stock; or
(b) the holders of shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or
winding up.
In the event that the corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of
Common Stock, then and in each such event, the aggregate
amount to which the holder of each share of Series A Preferred
Stock was entitled immediately prior to such event under
clause 5(a) of the preceding sentence shall be adjusted
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by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(6) Consolidation, Merger, etc. In the event
that the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, or otherwise
changed, then and in each such event, the shares of Series A
Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times 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 changed or exchanged.
In the event that the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of
Common Stock, then and in each such event, the amount set
forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(7) No Redemption. The shares of Series A
Preferred Stock shall not be
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redeemable. Notwithstanding the foregoing, the Corporation may
acquire shares of Series A Preferred Stock in any other manner
permitted by law, the Amended and Restated Articles of
Incorporation of the Corporation or herein.
(8) Rank. Unless otherwise provided in the
amended and Restated Articles of Incorporation of the
Corporation or a Certificate of Determination relating to a
subsequent series of preferred stock of the Corporation, the
Series A Preferred Stock shall rank junior to all other series
of the Corporation's preferred stock as to the payment of
dividends and the distribution of assets on liquidation,
dissolution or winding up, and senior to the Common Stock of
the Corporation.
(9) Amendment. The Amended and Restated
Articles of Incorporation of the Corporation shall not be
amended in any manner that would materially and adversely
alter or change the powers, preferences or special rights of
the Series A Preferred Stock without the affirmative vote of
the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single
series.
(10) Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share (in one
one-hundredths (1/100) of a share and integral multiples
thereof) that shall entitle the holder thereof, in proportion
to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the
benefit of all other rights of holders of shares of Series A
Preferred Stock.
ARTICLE IV
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The corporation reserves the right to amend, alter, or repeal
any provision contained in these Articles of Incorporation, in
the manner now or hereafter prescribed by law, and all rights
and powers conferred by these Articles of Incorporation on
shareholders, directors and officers are granted subject to
this reservation.
ARTICLE V
A. The liability of the directors of
the corporation for monetary damages shall
be eliminated to the fullest extent permissible
under California law.
B. The corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the
Corporations Code) through by-law provisions, agreements with
agents, vote of shareholders, or otherwise, in excess of the
indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the limits set
forth in Section 204 of the Corporations Code with respect to
actions for breach of duty to the corporation and its
shareholders.
ARTICLE VI
A. The authorized number of Directors of the
Corporation shall not be less than five (5) nor more than nine
(9) and the exact number of directors initially authorized
shall be nine (9). The exact number of Directors may be fixed
within the limits specified in this Article VI.A by a
resolution adopted by the Board of Directors, or by a vote of
the holders of a majority of the voting power of the
outstanding shares of capital stock entitled to vote. The
minimum or maximum number of directors provided in this
Article VI.A may be changed only by amendment
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to these Articles of Incorporation duly adopted by the
affirmative vote of the holders of a majority of the voting
power of outstanding shares of capital stock entitled to vote
and by a resolution duly adopted by the Board of Directors.
Subject to the rights of any outstanding series of Preferred
Stock, all directors shall be elected by the holders of all
outstanding shares of capital stock, voting together as a
single class.
B. So long as the Corporation remains a "Listed
Corporation" within the meaning of Section 301.5 of the
California Corporations Code and so long as the authorized
number of directors of the Corporation is nine or more, the
composition of the Board of Directors of the Corporation shall
be determined as set forth in this subsection. The Directors
shall be divided into three classes, as nearly equal in number
as reasonably possible, with the term of office of the first
class to expire at the annual meeting of shareholders in 1997,
the term of office of the second class to expire at the annual
meeting of shareholders in 1988 and the term of office of the
third class to expire at the annual meeting of shareholders in
1999. At each annual meeting of shareholders hereafter,
directors shall be elected for a term of office to expire at
the third succeeding annual meeting of shareholders after
their election. All directors shall hold office until the
expiration of the term for which elected, and until their
respective successors are elected, except in the case of the
death, resignation, or removal of any director."
3. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the Board of Directors.
4. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the required vote of the
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shareholders in accordance with Section 902 of the California Corporations Code.
The total number of outstanding shares Common Stock of the corporation entitled
to vote on this amendment is 6,094,203. The number of shares voting in favor of
the amendment equalled or exceeded the vote required. The percentage vote
required was more than 50%. There are no shares of Preferred Stock outstanding.
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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.
Dated: November ___, 1996
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ROBERT ERICKSON
President
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DOUGLAS GOULD
Secretary