Exhibit 3.4
STATEMENT OF DESIGNATION
SERIES B PREFERRED STOCK
OF
PHILADELPHIA SUBURBAN CORPORATION
Philadelphia Suburban Corporation, a Pennsylvania corporation (the
"Corporation"), DOES HEREBY CERTIFY:
A. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation and in accordance with the provisions of Section
1522 of the Pennsylvania Business Corporation Law of 1988, as amended, the Board
of Directors of the Corporation adopted the following resolution at a duly
called and noticed meeting held on the 5th day of March, 1996:
BE IT RESOLVED, that pursuant to the authority expressly vested in the
Board of Directors by the Corporation's Articles of Incorporation, the Board of
Directors deems it advisable to, and hereby does, designate a new series of
preferred stock of the Corporation, par value one dollar ($1.00) per share, to
be known as the "Series B Preferred Stock." The voting rights, preferences,
limitations and special rights of the Series B Preferred Stock are as follows:
1. Designation. The shares of such series of Preferred
Stock shall be designated as "Series B Preferred Stock."
2. Authorized Number. The number of shares constituting
the Series B Preferred Stock shall be 32,200 shares.
3. Dividends. Beginning on March 1, 1997, and on each
June 1, September 1, December 1 and March 1 thereafter, the holders of shares of
Series B Preferred Stock shall be entitled to receive a quarterly dividend in
arrears equal to $1.5125 per share of Series B Preferred Stock (as adjusted for
any stock dividends, combinations or splits with respect to such shares) out of
funds legally available for such purchase. Such dividends shall be payable only
when, as and if declared by the Board of Directors, provided that quarterly
dividends that are not so paid shall be cumulative, and accumulations of
dividends shall bear interest at the rate of 6.05% per annum. No dividend or
other distribution shall be declared or paid (other than dividends payable in
shares of common stock of the Corporation, par value $.50 per share (the "Common
Stock") or options to purchase or rights to subscribe for Common Stock, or
securities by their terms convertible into or exchangeable for Common Stock, or
options to purchase or rights to subscribe for such convertible or exchangeable
securities, provided that such securities rank junior to the Series B Preferred
Stock with respect to the payment of dividends and liquidation proceeds) on any
shares of the Corporation's capital stock ranking junior to the Series B
Preferred Stock as to payment of dividends unless all dividends on the Series B
Preferred Stock accrued for all past quarterly dividend periods shall have been
paid and the full dividend thereon for the current dividend period shall be paid
or declared and set apart for payment. The Corporation's Series B Preferred
Stock shall rank senior to its Series A Preferred Stock and its Common Stock
with respect to the right to receive dividends and other distributions.
4. Rights on Liquidation, Dissolution, Winding-Up.
(a) In the event of any liquidation, dissolution or
winding-up of the affairs of the Corporation (collectively, a "Liquidation"),
whether voluntary or involuntary, before any payment of cash or distribution of
other property is made to the holders of the Common Stock or any other class or
series of shares ranking on Liquidation junior to the Series B Preferred Stock,
the holders of Series B Preferred Stock shall be entitled to receive out of the
assets of the Corporation legally available for distribution to its
shareholders, an amount per share (rounded to the nearest $0.01 equal to the
Liquidation Preference (as defined below), plus an amount equal to any accrued
but unpaid cumulative dividends and any interest accrued thereon. The
Liquidation Preference shall be equal to $100.00 per share (as adjusted for any
stock dividends, combinations or splits with respect to such shares).
(b) If upon the occurrence of any Liquidation, whether
voluntary or involuntary, the assets and funds to be distributed among holders
of Series B Preferred Stock and any other class or series of stock ranking equal
to the Series B Preferred Stock as to distribution of assets upon Liquidation
shall be insufficient to permit the payment to the holders of the preferential
amounts described in Section 4(a), then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among holders of Series B Preferred Stock and any other class or series of stock
ranking equal to the Series B Preferred Stock as to distribution of assets upon
Liquidation in accordance with the sums that would be payable on such
distribution if all sums payable thereon to holders of all shares of such
classes or series were paid in full.
(c) If upon the occurrence of any liquidation, the assets
and funds thus distributed among holders of Series B Preferred Stock shall be
sufficient to permit the payment to such holders of the preferential amounts
described in Section 4(a), then the holders of shares of Series B Preferred
Stock shall be entitled to no further participation in the distribution of the
assets of the Corporation and any remaining net assets of the Corporation may be
distributed to the holders of Common Stock and any other class or series of
stock ranking junior to the Series B Preferred Stock as to the distribution of
assets upon Liquidation in accordance with their relative liquidation
preferences. Written notice of such liquidation, dissolution or winding up,
stating a payment date, the amount of the Liquidation payments and the place
where said Liquidation payments shall be payable, shall be given by mail,
postage prepaid, not less than 30 days prior to the payment date stated therein,
to the holders of record of Series B Preferred Stock, such notice to be
addressed to each such holder at his post office address as shown by the records
of the Corporation.
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Except as provided in Section 5, a consolidation or
merger of the Corporation into or with any other corporation or corporations
shall not be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meanings of the provisions of this section 4.
The Company's Series B Preferred Stock shall rank senior to
its Series A Preferred Stock with respect to the right to the distribution of
the Company's assets upon liquidation.
5. Merger, Consolidation, etc. The Corporation shall
give notice to each holder of Series B Preferred Stock at least 20 days prior to
the effective date of (i) any consolidation or merger of the Corporation with or
into any other corporation or corporations (other than a merger or consolidation
in which the holders of Series B Preferred Stock receive securities of the
surviving corporation having substantially similar rights to the Series B
Preferred Stock and in which the shareholders of the Corporation immediately
prior to the transaction will be the holders of at least a majority of the
voting securities of the surviving corporation immediately after the
transaction); (ii) a sale, conveyance or disposition of all or substantially all
of the assets of the Corporation; or (iii) the effectuation by the Corporation
of a transaction or series of related transactions in which more than 50% of the
voting power of the Corporation is disposed of. The holders of a majority of the
Series B Preferred Stock shall be entitled, by electing prior to the effective
date of any of the foregoing types of transactions, to require the Corporation
to treat any such transaction as if it were a Liquidation and to cause the
proceeds of such transaction, or any property deliverable from such transaction
to be distributed among the shareholders as if such transaction were a
Liquidation.
6. Protective Provisions. So long as any shares of
Series B Preferred Stock shall remain outstanding, the Corporation shall not,
without the affirmative vote of the holders of at least a majority of the shares
of Series B Preferred Stock at the time outstanding adopt any amendment to its
Articles of Incorporation which would adversely affect in any material respect
the rights or preferences of shares of the Series B Preferred Stock as set forth
in this Statement of Designation.
7. Conversion. The Series B Preferred Stock shall not
be convertible into any other class or series of capital stock of the
Corporation.
8. Redemption.
(a) The Series B Preferred Stock shall not be redeemable
by the Corporation prior to November 30, 2001. Thereafter, up to 20% of the
number of the number of shares of Series B Preferred Stock originally issued may
be called for redemption by the Corporation, in whole or in part, each year
starting on December 1, 2001 (the "Redemption Date"), upon 30 days' prior
written notice, by the payment therefor of an amount per share (rounded to the
nearest $0.01) equal to the sum of (i) the Liquidation Preference and (ii) all
accumulations of accrued and unpaid dividends on such outstanding shares of
Series B Preferred Stock (together with any accrued interest thereon) through
the date of redemption (such amount, the "Redemption Price"). The Corporation's
right to redeem shall be cumulative, such that any shares the Corporation has a
right to redeem in one year that are not so redeemed, may be
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redeemed by the Corporation in a subsequent year. At the election of the holders
of the Series B Preferred Stock called for redemption by the Corporation, the
Redemption Price may be paid in cash or by the delivery of a promissory note of
the Corporation in substantially the form attached hereto as Exhibit "A" (the
"Note"). The election by the holders of the shares being redeemed shall be made
by written notice to the Corporation no less than 15 days prior to the
Redemption Date, otherwise the Corporation may elect to pay the Redemption Price
in cash.
(b) The Series B Preferred Stock shall not be called for
redemption by the holders prior to December 1, 1998. Thereafter, the Series B
Preferred Stock may be called for redemption, in whole or in part, by such
holders, and thereupon shall be redeemed for cash by the Corporation, upon 30
days' prior written notice, from such holders at a per share price equal to the
Redemption Price.
(c) Shares of Series B Preferred Stock are not subject to
or entitled to the benefit of a sinking fund.
(d) Shares of Series B Preferred Stock that are redeemed
shall be canceled and shall not be reissuable by the Corporation and the
Articles of Incorporation of the Corporation shall be appropriately amended to
effect a corresponding reduction in the Corporation's authorized capital stock.
(e) If notice of redemption as provided in Section
(a) above shall have been duly given or if the Corporation shall have given to
the bank or trust company hereinafter referred to irrevocable authorization
promptly to give such notice, and if on or before the Redemption Date specified
therein the Corporation shall have either deposited the funds necessary for such
redemption with, or delivered a Note in the amount of the applicable Redemption
to, such bank or trust company in trust for the benefit of the holders of the
shares called for redemption, then, notwithstanding that any certificates for
shares so called for redemption shall not have been surrendered for
cancellation, from and after the Redemption Date, all shares so called for
redemption shall no longer be deemed to be outstanding and all rights with
respect to such shares shall forthwith cease and terminate, except only the
right of the holders thereof to receive from such bank or trust company at any
time after the time of such deposit the funds so deposited, without interest.
Any interest accrued on such funds shall be paid to the Corporation from time to
time. The aforesaid bank or trust company shall be organized and in good
standing under the laws of the United States of America, or the Commonwealth of
Pennsylvania, shall be doing business in Pennsylvania, and shall be identified
in the notice of redemption. Any funds so set aside or deposited, as the case
may be, and unclaimed at the end of two years from such Redemption Date shall,
to the extent permitted by law, be released or repaid to the Corporation, after
which repayment the holders of the shares so called for redemption shall look
only to the Corporation for payment thereof.
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B. The aggregate number of shares of Series B Preferred Stock
established by the foregoing resolutions, all prior statements, if any, filed
under Section 1522 of the Pennsylvania Business Law of 1988, as amended, or
corresponding provisions of prior law with respect thereto, and any other
provisions of the Corporation's Articles of Incorporation shall be 32,200
shares.
IN WITNESS WHEREOF, the undersigned has executed this
Statement this 22nd day of November, 1996.
PHILADELPHIA SUBURBAN CORPORATION
By: /s/ Nicholas DeBenedictis
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EXHIBIT A
PROMISSORY NOTE
$______________________ _______________________
FOR VALUE RECEIVED, the undersigned, PHILADELPHIA SUBURBAN CORPORATION,
a Pennsylvania, corporation ("Borrower"), HEREBY IRREVOCABLY PROMISES TO PAY to
______________________________________________ ("Payee"), the principal sum of
______________ AND 00/100 DOLLARS ($______________), together with interest on
the principal balance hereof from time to time unpaid at the rates provided
below until payment in full thereof.
Interest shall accrue on the principal balance from time to time
outstanding hereunder at a rate per annum equal to 6.05% per annum. The
principal amount of this note shall be due within sixty (60) days of Borrower's
receipt of written demand from the Payee, but no later than [insert date 5 years
after the applicable date of redemption]. All accrued and unpaid interest shall
be due and payable quarterly, in arrears, on [insert interest payment dates].
If any payment of interest or principal hereunder becomes due and
payable on a day other than a business day, the maturity thereof shall be
extended to the next succeeding business day and, with respect to payments or
principal, interest thereon at the then applicable rate and for the period of
such extension shall be payable on such next succeeding business day. The term
"business day" means any day other than a Saturday, a Sunday or a day on which
banking institutions in Philadelphia, Pennsylvania are not required to be open.
Both principal and interest hereunder are payable in lawful money of
the United States of America via first class United States mail to [insert
payee's address].
Demand, presentment, protest and notice of nonpayment and protest,
notice of intention to accelerate maturity, notice of acceleration of maturity,
and notice of dishonor are hereby waived by Borrower.
If Borrower shall make a general assignment for the benefit of
creditors or any proceeding shall be instituted by or against Borrower seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for any
substantial part of its assets, or if Borrower shall take any corporate action
to authorize any of the actions set forth above in this paragraph, then all of
the obligations evidenced by this Promissory Note shall automatically, without
notice or demand by Payee, be immediately due and payable. If Borrower shall
fail to make payment of principal or interest when due hereunder and if Borrower
has not made such payment within ten business days of receipt of notice by
Payee, the obligations evidenced by this Promissory Note shall, at the option of
Payee, be due in payable in full.
Whenever possible each provision of this Promissory Note shall be
interpreted in such manner as to be effective and valued under applicable law,
but if any provision of this Promissory Note shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Promissory Note.
THIS PROMISSORY NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL
LAWS AND DECISIONS, AND NOT THE CONFLICTS OF LAW PROVISIONS, OF THE COMMONWEALTH
OF PENNSYLVANIA.
PHILADELPHIA SUBURBAN CORPORATION
By: __________________________________
Name: ________________________________
Title: _______________________________