03/12/04, 12:20 PM
EXHIBIT 4.2
CERTIFICATE OF DESIGNATIONS
SERIES D PARTICIPATING PREFERRED STOCK
OF
CALIFORNIA WATER SERVICE GROUP, INC.
(Pursuant to Section 151 of the General Corporation Law
of the State of Delaware)
California Water Service Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 151(g)
thereof,
HEREBY CERTIFIES:
1. On August 18, 1999, the Board of Directors of the Corporation
adopted a resolution designating 221,000 shares of Preferred Stock as
Series D Participating Preferred Stock.
2. No shares of Series D Participating Preferred Stock have been
issued.
3. Pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the
following resolution was duly adopted by the Board of Directors on August
18, 1999 creating the series of Preferred Stock designated as Series D
Participating Preferred Stock:
RESOLVED, that the Board of Directors, pursuant to the authority
vested in the Board of Directors of this Corporation in accordance with
the provisions of its Certificate of Incorporation, a series of Preferred
Stock of the Corporation be and hereby is created, and that the
determination and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the shares
of such series, and the qualifications, limitations or restrictions
thereof are as follows:
"Series D Participating Preferred Stock":
Paragraph 1. Designation and Amount. The shares of such series
shall be designated as "Series D. Participating Preferred Stock" (the
"Series D Preferred Stock") and the number of shares constituting the
Series D Preferred Stock shall be 221,000 and its part value is $0.01 per
share. Such number of shares may be increased or decreased by resolution
of the Board of Directors prior to the issuance of any Series D Preferred
Stock.
Paragraph 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series D Preferred Stock with respect to dividends, the
holders of shares of Series D Preferred Stock, in preference to the
holders of Common Stock, no par value (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive,
as and when declared by the Board of Directors out of the surplus or net
profits, dividends payable in cash on the same date as dividends upon the
Corporation's Series C (each such payment date referred to herein as a
"Dividend Payment Date") and in the same manner as dividends upon the
Corporation's Series C, commencing on the first Dividend Payment Date
after the first issuance of a share or fraction of a share of Series D
Preferred Stock, in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 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 the Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Dividend Payment Date or, with respect to the first
Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series D Preferred Stock. If the Corporation shall fail to
pay any such dividends upon all the issued and outstanding Series D
Preferred Stock, the deficiency in dividends shall be fully paid but
without interest before any dividends shall be set apart or paid on the
Common Stock. In the event the Corporation shall at any time declare or
pay any dividend on the 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 in each such case the
amount to which holders of shares of Series D Preferred Stock were
entitled immediately prior to such event under 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 D Preferred Stock as provided in paragraph (A) of this
Paragraph 2 immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock).
(C) The Board of Directors may fix a record date for the
determination of holders of shares of Series D Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which
record date shall be not less than 10 nor more than 60 days prior to the
date fixed for the payment thereof.
Paragraph 3. Voting Rights. The holders of shares of Series D
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series D Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the 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 in each such case the number of votes per share to which holders of
shares of Series D Preferred Stock were entitled immediately prior to
such an 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 herein, in any other Certificate
of Amendment to the Certificate of Incorporation or Certificate of
Designations creating a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Series D Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series D Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Paragraph 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series D Preferred Stock as provided in
Paragraph 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series
D Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series D Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series D Preferred Stock, except dividends paid ratably
on the Series D 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) to the
Series D 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 D Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series D Preferred Stock, or any
shares of stock ranking on a parity with the Series D 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 any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Paragraph 4, purchase or otherwise acquire such shares at
such time and in such manner.
Paragraph 5. Reacquired Shares. Any shares of Series D Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Amendment to
the Certificate of Incorporation or Certificate of Designations creating
a series of Preferred Stock or any similar stock or as otherwise required
by law.
Paragraph 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series D Preferred Stock unless, prior thereto, the
holders of shares of Series D Preferred Stock shall have received a
minimum of $100.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date
of such payment, provided that the holders of shares of Series D
Preferred Stock shall be entitled to receive 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 (2) to the holders of shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series D Preferred Stock, except
distributions made ratably on the Series D Preferred Stock and all 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 the Corporation shall at any time declare or pay
any dividend on the 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 in each such case the aggregate amount to
which holders of shares of Series D Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) 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.
Paragraph 7. Consolidation, Merger, etc. In case 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,
then in any such case each share of Series D Preferred Stock shall at the
same time be similarly exchanged or changed into 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
the Corporation shall at any time declare or pay any dividend on the
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 in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series D
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.
Paragraph 8. Redemption. The shares of Series D Preferred Stock
may be redeemed at the option of the Corporation in whole or in part upon
any Dividend Payment Date and in the manner prescribed in the
Corporation's Certificate of Incorporation, upon at least 30 days notice
to the holder of record thereof at a redemption price per share equal to
100 times the fair market value of one common share on such date,
together with all accrued dividends on the Series D Preferred Stock.
Paragraph 9. Rank. The Series D Preferred Stock shall rank, (i)
with respect to the payment of dividends in parity with the Series C
Preferred Stock and (ii) with respect to the distribution of assets,
junior to all other series of the Corporation's preferred shares.
Paragraph 10. Amendment. The Certificate of Incorporation shall
not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series D Preferred Stock so
as to affect them adversely without, in addition to any other vote of
stockholders required by law, the affirmative vote of the holders of at
least a majority of the outstanding shares of Series D Preferred Stock,
voting together as a single class.
Paragraph 11. Fractional Shares. The Series D Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit
of all other rights of holders of the Series D Preferred Stock."
IN WITNESS WHEREOF, California Water Service Group, Inc. has
caused this certificate to be duly executed this 14th day of September,
1999.
CALIFORNIA WATER SERVICE GROUP, INC.
By: /s/Peter C. Nelson
Peter C. Nelson
President and Chief Executive Officer
Attest:
/s/Paul Ekstrom
Paul Ekstrom
Secretary