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EXHIBIT (3)(a)
STATE OF MICHIGAN
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
LANSING, MICHIGAN
RESTATED ARTICLES OF INCORPORATION
(Profit Corporation)
Corporation Identification Number 485-283
These Restated Articles of Incorporation of CMS Energy Corporation (the
"Corporation") are executed pursuant to the provisions of Sections 641 through
651, Act 284, Public Acts of 1972, as amended, (the "Act"). An amendment to
these Restated Articles of Incorporation was authorized by the Board of
Directors at its meeting held on September 24, 1999 and by a Special Committee
of the Board of Directors held on November 2, 1999, pursuant to the provisions
of Section 642 of the Act in order to restate and integrate and do not further
amend the Articles.
The present name of the Corporation is CMS Energy Corporation. There are
no former names.
The date of filing the original Articles of Incorporation in Michigan
was February 26, 1987.
RESTATED ARTICLES OF INCORPORATION
The following Restated Articles of Incorporation supersede the original
Articles as amended and shall be the Articles of Incorporation of CMS Energy
Corporation.
ARTICLE I
The name of the corporation is CMS Energy Corporation (hereinafter
called the "Corporation").
ARTICLE II
The purpose or purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Business Corporation Act of Michigan.
ARTICLE III
The total number of shares of all classes of stock which the Corporation
shall have authority to issue is 320,000,000, of which 10,000,000 shares, par
value $.01 per share, are of a class designated Preferred Stock ("Preferred
Stock"), 250,000,000 shares, par value $.01 per share, are of a class designated
Common Stock ("CMS Energy Common Stock"), and 60,000,000 shares, no par value,
are of a class designated Class G Common Stock ("Class G Common Stock"). The CMS
Energy Common Stock and the Class G Common Stock are hereinafter collectively
referred to as the "Common Stock".
The statement of the designations and the voting and other powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the Common Stock and of the Preferred Stock is as follows:
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PREEMPTIVE RIGHTS
The holders of shares of Preferred Stock or of Common Stock shall have
no preemptive rights to subscribe for or purchase any additional issues of
shares of the capital stock of the Corporation of any class now or hereafter
authorized or any Preferred Stock, bonds, debentures, or other obligations or
rights or options convertible into or exchangeable for or entitling the holder
or owner to subscribe for or purchase any shares of capital stock, or any rights
to exchange shares issued for shares to be issued.
PREFERRED STOCK
The shares of Preferred Stock may be issued from time to time in one or
more series with such relative rights and preferences of the shares of any such
series as may be determined by the Board of Directors. The Board of Directors is
authorized to fix by resolution or resolutions adopted prior to the issuance of
any shares of each particular series of Preferred Stock, the designation,
powers, preferences and relative, participating, optional and other rights, and
the qualifications, limitations and restrictions thereof, if any, of such
series, including, but without limiting the generality of the foregoing, the
following:
(a) The rate of dividend, if any;
(b) The price at and the terms and conditions upon which shares
may be redeemed;
(c) The rights, if any, of the holders of shares of the series
upon voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding up of the
Corporation;
(d) Sinking fund or redemption or purchase provisions, if any, to
be provided for shares of the series;
(e) The terms and conditions upon which shares may be converted
into shares of other series or other capital stock, if issued with the
privilege of conversion; and
(f) The voting rights in the event of default in the payment of
dividends or under such other circumstances and upon such conditions as
the Board of Directors may determine.
No holder of any shares of any series of Preferred Stock shall be entitled to
vote in the election of directors or in respect of any other matter except as
may be required by the Michigan Business Corporation Act, as amended, or as is
permitted by the resolution or resolutions adopted by the Board of Directors
authorizing the issue of such series of Preferred Stock.
Series Established By Articles
There is hereby established one series of Preferred Stock designated as
Series A Mandatorily Convertible Preferred Stock.
Series A Mandatorily Convertible Preferred Stock
Section 1. Dividends.
(a) The holders of the Mandatorily Convertible Preferred Stock shall not be
entitled to receive any dividends prior to, or with respect to any period ending
prior to, the Rate Reset Date. The holders of the Mandatorily Convertible
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Preferred Stock, in preference to the rights of holders of any junior stock but
subject to the rights of holders of any senior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of any funds
legally available therefor, cumulative cash dividends from the Rate Reset Date
at the Reset Dividend Rate, and no more, payable on the dates as set forth in
this Section 3. Dividends shall accrue on any given share of Mandatorily
Convertible Preferred Stock from the Rate Reset Date. Dividends shall be payable
quarterly in arrears on each January 1, April 1, July 1, and October 1
commencing on the first such date following the Rate Reset Date (each such date
being hereinafter referred to as a "Dividend Payment Date"), or, if any Dividend
Payment Date is not a Business Day, then the Dividend Payment Date shall be the
next succeeding Business Day. Each such dividend shall be payable to holders of
record as they appear on the books of the Corporation or any transfer agent for
the Mandatorily Convertible Preferred Stock on such record dates as shall be
fixed by the Board of Directors subject to applicable law (which record date
shall be no more than 60 days prior to the date fixed for the payment thereof).
Dividends on the Mandatorily Convertible Preferred Stock shall accrue on a daily
basis commencing on and including the Rate Reset Date, and accrued dividends for
each dividend period or portion thereof shall cumulate, to the extent not paid,
as of the date on which they were to have been paid. A dividend period shall
commence on a Dividend Payment Date or the Rate Reset Date, as the case may be,
and continue to the day next preceding the next succeeding Dividend Payment
Date. Accumulated unpaid dividends shall not accrue interest. Dividends (or cash
amounts equal to accrued and unpaid dividends) payable on the Mandatorily
Convertible Preferred Stock for any period less than or more than a full
quarterly period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual number of days elapsed in any period less than one
month. Dividends on the Mandatorily Convertible Preferred Stock shall accrue
whether or not the Corporation has earnings, whether or not there are funds
legally available for the payment of such dividends and whether or not such
dividends are declared. Dividends in arrears for any past dividend periods or
portions thereof may be declared and paid at any time without reference to any
regular Dividend Payment Date to holders of record on such date as shall be
fixed by the Board of Directors subject to applicable law. Dividends on the
Mandatorily Convertible Preferred Stock shall cease to accrue on the earlier of
(i) the day immediately preceding the CMS Mandatory Conversion Date, or (ii) the
day immediately prior to their earlier conversion.
(b) As long as any shares of Mandatorily Convertible Preferred Stock are
outstanding, no dividends or other distributions for any dividend period (other
than dividends or other distributions payable in shares of, or warrants, rights
or options exercisable for or convertible into, junior stock, and cash in lieu
of fractional shares of such junior stock in connection with any such dividend
or distribution) will be paid on any junior stock unless: (i) full dividends, if
any, on all outstanding shares of senior stock, parity stock and Mandatorily
Convertible Preferred Stock have been paid, or declared and set aside for
payment, for all dividend periods terminating on or prior to the payment date of
such junior stock dividend or distribution, to the extent such dividends on
senior stock, parity stock or Mandatorily Convertible Preferred Stock are
cumulative; (ii) the Corporation has paid or set aside all amounts, if any, then
or theretofore required to be paid or set aside for all purchase, retirement,
and sinking funds, if any, for any outstanding shares of senior stock, parity
stock and Mandatorily Convertible Preferred Stock; and (iii) the Corporation is
not in default on any of its obligations to redeem any outstanding shares of
senior stock, parity stock or Mandatorily Convertible Preferred Stock.
In addition, as long as any Mandatorily Convertible Preferred Stock is
outstanding, no shares of any junior stock may be purchased, redeemed, or
otherwise acquired by the Corporation or any Subsidiary (except in connection
with a reclassification or exchange of any junior stock through the issuance of
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other junior stock (and cash in lieu of fractional shares of such junior stock
in connection therewith) and except for the acquisition of shares of any junior
stock pursuant to contractual obligations binding against the Corporation or any
Subsidiary that were entered into prior to the date of the first issuance of
shares of Mandatorily Convertible Preferred Stock or pursuant to contractual
obligations that are entered into at a time subsequent thereto when such
acquisitions of shares could be made pursuant to this Subsection 3(b)) nor may
any funds be set aside or made available for any sinking fund for the purchase
or redemption of any junior stock unless: (i) full dividends, if any, on all
outstanding shares of senior stock, parity stock and Mandatorily Convertible
Preferred Stock have been paid, or declared and set aside for payment, for all
dividend periods terminating on or prior to the date of such purchase,
redemption or acquisition, to the extent dividends on such senior stock, parity
stock or Mandatorily Convertible Preferred Stock dividends are cumulative; (ii)
the Corporation has paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase, retirement, and sinking
funds, if any, for any outstanding shares of senior stock, parity stock and
Mandatorily Convertible Preferred Stock; and (iii) the Corporation is not in
default on any of its obligations to redeem any outstanding shares of senior
stock, parity stock or Mandatorily Convertible Preferred Stock. Subject to the
provisions described above, such dividends or other distributions (payable in
cash, property, or junior stock) as may be determined from time to time by the
Board of Directors may be declared and paid on the shares of any junior stock
and from time to time junior stock may be purchased, redeemed or otherwise
acquired by the Corporation or any Subsidiary. In the event of the declaration
and payment of any such dividends or other distributions, the holders of such
junior stock will be entitled, to the exclusion of holders of any outstanding
senior stock or parity stock, to share therein according to their respective
interests.
(c) As long as any Mandatorily Convertible Preferred Stock is outstanding,
dividends or other distributions for any dividend period may not be paid on any
outstanding shares of parity stock (other than dividends or other distributions
payable in shares of, or warrants, rights or options exercisable for or
convertible into, parity stock or junior stock and cash in lieu of fractional
shares of such parity stock or junior stock in connection with any such
dividend), unless either: (a) (i) full dividends, if any, on all outstanding
shares of senior stock, parity stock and Mandatorily Convertible Preferred Stock
have been paid, or declared and set aside for payment, for all dividend periods
terminating on or prior to the payment date of such senior stock, parity stock
or Mandatorily Convertible Preferred Stock dividend or distribution, to the
extent dividends on such senior stock, parity stock or Mandatorily Convertible
Preferred Stock are cumulative; (ii) the Corporation has paid or set aside all
amounts, if any, then or theretofore required to be paid or set aside for all
purchase, retirement and sinking funds, if any, for any outstanding shares of
senior stock, parity stock and Mandatorily Convertible Preferred Stock; and
(iii) the Corporation is not in default on any of its obligations to redeem any
outstanding shares of senior stock, parity stock or Mandatorily Convertible
Preferred Stock; or (b) any such dividends are declared and paid pro rata so
that the amounts of any dividends declared and paid per share on outstanding
Mandatorily Convertible Preferred Stock and each share of such parity stock will
in all cases bear to each other the same ratio that accrued and unpaid dividends
(including any accumulation with respect to unpaid dividends for prior dividend
periods, if such dividends are cumulative) per share of outstanding Mandatorily
Convertible Preferred Stock and such outstanding shares of parity stock bear to
each other.
In addition, as long as any Mandatorily Convertible Preferred Stock is
outstanding, no shares of any parity stock may be purchased, redeemed or
otherwise acquired by the Corporation or any Subsidiary (except with any junior
stock and cash in lieu of fractional shares of such junior stock in connection
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therewith and except for the acquisition of shares of any parity stock pursuant
to contractual obligations binding against the Corporation or any Subsidiary
that were entered into prior to the date of the first issuance of shares of
Mandatorily Convertible Preferred Stock or pursuant to contractual obligations
that are entered into at a time subsequent thereto when such acquisitions of
shares could be made pursuant to this Subsection 3(c)) unless: (i) full
dividends, if any, on all outstanding shares of senior stock, parity stock and
Mandatorily Convertible Preferred Stock have been paid, or declared and set
aside for payment, for all dividend periods terminating on or prior to the date
of such purchase, redemption or other acquisition, to the extent dividends on
such senior stock, parity stock or Mandatorily Convertible Preferred Stock are
cumulative; (ii) the Corporation has paid or set aside all amounts, if any, then
or theretofore required to be paid or set aside for all purchase, retirement,
and sinking funds, if any, for any outstanding shares of senior stock, parity
stock and Mandatorily Convertible Preferred Stock; and (iii) the Corporation is
not in default of any of its obligations to redeem any outstanding shares of
senior stock, parity stock or Mandatorily Convertible Preferred Stock, unless
all parity stock and Mandatorily Convertible Preferred Stock as to which such a
default exists is purchased or redeemed on a pro rata basis.
(d) Any dividend payment made on the Mandatorily Convertible Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due
with respect to the Mandatorily Convertible Preferred Stock.
(e) All dividends paid with respect to the Mandatorily Convertible Preferred
Stock shall be paid pro rata to the holders entitled thereto.
(f) Holders of the Mandatorily Convertible Preferred Stock shall be entitled to
receive dividends in preference to and in priority over any dividends upon any
shares of the Corporation ranking junior to the Mandatorily Convertible
Preferred Stock as to dividends, but subject to the rights of holders of shares
of the Corporation having a preference and a priority over the payment of
dividends on the Mandatorily Convertible Preferred Stock.
Section 2. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, then,
before any distribution or payments shall be made to the holders of any junior
stock, but subject to the rights of any senior stock or parity stock, the
holders of the Mandatorily Convertible Preferred Stock shall be entitled to be
paid in full in cash the amount of $1,000 per share, together with accrued
dividends to the date of such distribution or payment, whether or not earned or
declared. If such payment shall have been made in full to the holders of the
Mandatorily Convertible Preferred Stock and all preferential payments or
distributions to be made with respect to senior stock and parity stock have been
made in full, the remaining assets and funds of the Corporation shall be
distributed among the holders of the junior stock, according to their respective
rights and preferences and in each case according to their respective shares.
If, upon any liquidation, dissolution or winding up of the affairs of the
Corporation, the amounts so payable are not paid in full to the holders of all
shares of the Mandatorily Convertible Preferred Stock and parity stock, the
holders of the Mandatorily Convertible Preferred Stock, together with holders of
parity stock, shall share ratably in any distribution of assets in proportion to
the full amounts to which they would otherwise be respectively entitled. Neither
the consolidation or merger of the Corporation or the statutory exchange of
securities with another entity, nor the sale, lease, transfer, exchange or
conveyance of all or a part of its assets, shall be deemed a liquidation,
dissolution or winding up of the affairs of the Corporation within the meaning
of the foregoing provisions of this Section 4.
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Section 3. Redemption. The Corporation shall have the right to redeem all, but
not part, of the outstanding Mandatorily Convertible Preferred Stock at any time
following a Redemption Event and prior to a Rate Reset Date at the redemption
price of $1,000 per share, together with accrued but unpaid dividends to the
date of payment, whether or not earned or declared (the "Redemption Price"). The
Corporation shall not have the right to redeem any or all of the Mandatorily
Convertible Preferred Stock at any other time. Notice of a redemption of the
Mandatorily Convertible Preferred Stock shall be mailed, addressed to the holder
or holders of record of such shares at their respective addresses as they shall
appear on the books of the Corporation, such mailing to be at least two Business
Days and not more than sixty days prior to the date fixed for redemption. Each
such notice of redemption shall specify the date fixed for redemption and the
Redemption Price. On or after the date fixed for redemption as stated in such
notice, each holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation and shall thereupon be
entitled to receive payment of the Redemption Price. If, on the date fixed for
redemption, funds necessary for the redemption shall be available therefor and
shall have been irrevocably deposited or set aside, then, notwithstanding that
the certificates evidencing any shares so called for redemption shall not have
been surrendered, the dividends with respect to the shares so called shall cease
to accrue after the date fixed for redemption, the shares shall no longer be
deemed outstanding, and all rights whatsoever with respect to the shares so
called for redemption (except the right of the holders to receive the Redemption
Price without interest upon surrender of their certificates therefor) shall
terminate.
Section 4. Conversion.
(a) Unless previously converted at the option of the holder in accordance with
the provisions hereof, on the CMS Mandatory Conversion Date each outstanding
share of Mandatorily Convertible Preferred Stock shall, without additional
notice to holders thereof, convert automatically (the "CMS Mandatory
Conversion") into (i) a number of fully paid and non-assessable shares of CMS
Common Stock at the CMS Mandatory Conversion Rate (as defined herein) in effect
on the CMS Mandatory Conversion Date; and (ii) the right to receive an amount in
cash equal to all accrued and unpaid dividends on such share of Mandatorily
Convertible Preferred Stock (other than previously declared dividends payable to
a holder of record as of a prior date) to and including the day immediately
prior to the CMS Mandatory Conversion Date, whether or not earned or declared,
out of funds legally available therefor (and if sufficient funds are not then
legally available therefor, the Corporation shall pay such amount, if any, pro
rata (based on the amounts so owing) to the holders of the Mandatorily
Convertible Preferred Stock and any parity stock then entitled to similar
payment as is then legally available therefor and shall pay any deficiency
thereafter as soon as funds are legally available therefor). The "CMS Mandatory
Conversion Rate" is equal to the following number of shares of CMS Common Stock
per share of Mandatorily Convertible Preferred Stock: (a) if the CMS Mandatory
Conversion Date Market Price is greater than or equal to the CMS Threshold
Appreciation Price, the quotient of (i) $1,000 divided by (ii) the CMS Threshold
Appreciation Price; (b) if the CMS Mandatory Conversion Date Market Price is
less than the CMS Threshold Appreciation Price but is greater than the Reset
Price, the quotient of $1,000 divided by the CMS Mandatory Conversion Date
Market Price; and (c) if the CMS Mandatory Conversion Date Market Price is less
than or equal to the Reset Price, the quotient of $1,000 divided by the Reset
Price, subject to adjustment as provided in this Section 6. "CMS Mandatory
Conversion Date Market Price" shall mean the Average Trading Price per share of
CMS Common Stock for the 20 consecutive Trading Days immediately prior to, but
not including, the CMS Mandatory Conversion Date; provided, however, that if an
event occurs during such 20 consecutive Trading Days that would require an
adjustment to the CMS Mandatory Conversion Rate pursuant to Section 6(c) or
6(e), the Board of Directors may make
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such adjustments to the Average Trading Price for shares of CMS Common Stock for
such 20 Trading Day period as it reasonably deems appropriate to effectuate the
intent of the adjustments in Sections 6(c) and 6(e), in which case any such
determination by the Board of Directors shall be set forth in a resolution of
the Board of Directors and shall be conclusive absent manifest error.
Dividends on the Mandatorily Convertible Preferred Stock shall cease to accrue,
and Mandatorily Convertible Preferred Stock shall cease to be outstanding, on
the CMS Mandatory Conversion Date. The Corporation shall make such arrangements
as it deems appropriate for the issuance of certificates representing CMS Common
Stock and for the payment of cash in respect of such accrued and unpaid
dividends, if any, or cash in lieu of fractional shares, if any, in exchange for
and contingent upon surrender of certificates representing the Mandatorily
Convertible Preferred Stock, and the Corporation may defer the payment of
dividends on such CMS Common Stock and the voting thereof until, and make such
payment and voting contingent upon, the surrender of such certificates
representing the Mandatorily Convertible Preferred Stock, provided that the
Corporation shall give the holders of the Mandatorily Convertible Preferred
Stock such notice of any such actions as the Corporation deems appropriate and
upon such surrender such holders shall be entitled to receive such dividends
declared and paid on such CMS Common Stock subsequent to the CMS Mandatory
Conversion Date. Amounts payable in cash in respect of the Mandatorily
Convertible Preferred Stock or in respect of such CMS Common Stock shall not
bear interest.
(b) Shares of Mandatorily Convertible Preferred Stock are convertible, at the
option of the holders thereof ("CMS Optional Conversion") at any time after the
date hereof and before the CMS Mandatory Conversion Date, into CMS Common Stock
at a rate equal to 24.779 shares of CMS Common Stock per share of Mandatorily
Convertible Preferred Stock (the "CMS Optional Conversion Rate"), subject to
adjustment as set forth in this Section 6; provided, however, that the CMS
Optional Conversion Rate shall adjust as of the Rate Reset Date (regardless of
the adjustments made to the CMS Optional Conversion Rate after the issuance of
the shares of Mandatorily Convertible Preferred Stock and prior to the Rate
Reset Date) to the following number of shares of CMS Common Stock per share of
Mandatorily Convertible Preferred Stock: the quotient of (i) $1,000 divided by
(ii) the CMS Threshold Appreciation Price, subject to further adjustment as set
forth in this Section 6. CMS Optional Conversion of shares of Mandatorily
Convertible Preferred Stock may be effected by delivering certificates
evidencing such shares of Mandatorily Convertible Preferred Stock, together with
written notice of conversion and, if required by the Corporation, a proper
assignment of such certificates to the Corporation or in blank (and, if
applicable as provided in the following paragraph, cash payment of an amount
equal to the dividends attributable to the current dividend period payable on
such shares), to the office of the transfer agent for the shares of Mandatorily
Convertible Preferred Stock or to any other office or agency maintained by the
Corporation for that purpose and otherwise in accordance with CMS Optional
Conversion procedures established by the Corporation. Each CMS Optional
Conversion shall be deemed to have been effected immediately before the close of
business on the date on which the foregoing requirements shall have been
satisfied. The CMS Optional Conversion shall be at the CMS Optional Conversion
Rate in effect at such time and on such date.
Holders of shares of Mandatorily Convertible Preferred Stock at the close of
business on a record date for any payment of declared dividends shall be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the CMS Optional Conversion of such shares
following such record date and on or prior to such Dividend Payment Date.
However, shares of Mandatorily Convertible Preferred Stock surrendered for CMS
Optional Conversion after the close of business on a record date for any payment
of declared dividends and before the opening of business on the next succeeding
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Dividend Payment Date must be accompanied by payment in cash of an amount equal
to the dividends attributable to the current dividend period payable on such
shares on such next succeeding Dividend Payment Date. Except as provided above,
upon any CMS Optional Conversion, the Corporation shall make no payment of or
allowance for unpaid dividends, whether or not in arrears, on such converted
shares of Mandatorily Convertible Preferred Stock as to which CMS Optional
Conversion has been effected or for previously declared dividends or
distributions on the shares of CMS Common Stock issued upon such CMS Optional
Conversion.
(c) The CMS Optional Conversion Rate shall be adjusted from time to time, and
the CMS Mandatory Conversion Rate shall be adjusted from time to time after the
Rate Reset Date, as follows:
(1) In case the Corporation shall (i) pay a dividend on its CMS Common Stock in
other CMS Common Stock, (ii) subdivide or split its outstanding CMS Common Stock
into a greater number of shares, (iii) combine its outstanding CMS Common Stock
into a smaller number of CMS Common Stock, or (iv) issue by reclassification of
its CMS Common Stock any other CMS Common Stock (including in connection with a
merger in which the Corporation is a surviving corporation), then, in any such
event, (1) the CMS Mandatory Conversion Rate in effect immediately prior to such
event shall be adjusted such that the Reset Price shall be adjusted by
multiplying it by a fraction (which fraction and all other fractions referred to
herein may be improper fractions), the numerator of which is one and the
denominator of which is the number of shares of CMS Common Stock that a holder
of one share of CMS Common Stock prior to any event described above would hold
after such event (assuming the issuance of fractional shares) (the
"Recapitalization Adjustment Ratio"), and (2) the CMS Optional Conversion Rate
in effect immediately prior to such event shall be adjusted by multiplying it by
a fraction, the numerator of which is one and the denominator of which is the
Recapitalization Adjustment Ratio. Such adjustment shall become effective
immediately after the effective date of any such event (or the earlier record
date in the case of any such dividend) whenever any of the events listed above
shall occur.
(2) In case the Corporation shall issue rights or warrants to all holders of its
CMS Common Stock entitling them (for a period, except in the case of Rights,
expiring within 45 days after the record date for determination of the
shareholders entitled to receive such rights or warrants) to subscribe for or
purchase CMS Common Stock at a price per share of CMS Common Stock less than the
current market price per share of CMS Common Stock (as defined in Section 6(d)
below) on such record date, then in each such case the CMS Mandatory Conversion
Rate on the date of such issuance shall be adjusted such that the Reset Price
shall be adjusted by multiplying it by a fraction the numerator of which shall
be the sum of (x) the number of shares of CMS Common Stock outstanding
immediately prior to such issuance, plus (y) the number of additional shares of
CMS Common Stock which the aggregate offering price of the total number of
shares of CMS Common Stock so offered for subscription or purchase would
purchase at the Average Trading Price for a share of CMS Common Stock for the
record date for such issuance, and the denominator of which shall be the sum of
(x) the number of shares of CMS Common Stock outstanding immediately prior to
such issuance, plus (y) the number of additional shares of CMS Common Stock
offered for subscription or purchase pursuant to such rights or warrants (the
"Anti Dilution Adjustment Ratio") and (B) the CMS Optional Conversion Rate in
effect on the record date described below shall be adjusted by multiplying it by
a fraction, the numerator of which is one and the denominator of which is the
Anti Dilution Adjustment Ratio. For the purposes of this Subsection (2): the
issuance of rights or warrants to subscribe for or purchase securities
exercisable for, convertible into, or exchangeable for, shares of CMS Common
Stock shall be deemed to be the issuance of rights or warrants to purchase the
shares of CMS Common
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Stock into which such securities are exercisable, convertible or exchangeable at
an aggregate offering price equal to the aggregate offering price of such
securities plus the minimum aggregate amount (if any) payable upon the exercise,
conversion or exchange of such securities. Such adjustment shall become
effective at the opening of business on the Business Day next following the
record date for such rights or warrants. To the extent that any shares of CMS
Common Stock, or securities exercisable for, convertible into, or exchangeable
for, shares of CMS Common Stock so offered for subscription or purchase are not
so subscribed or purchased by the expiration of such rights or warrants, the CMS
Mandatory Conversion Rate, the CMS Threshold Appreciation Price, the Reset Price
and the CMS Optional Conversion Rate shall each be readjusted to the rates or
amounts, respectively, which would then be in effect, had the adjustment made
upon the issuance of such rights or warrants been made upon the basis of the
issuance of rights or warrants in respect of only the number of shares of CMS
Common Stock and securities exercisable for, convertible into, or exchangeable
for, shares of CMS Common Stock actually issued upon exercise of such rights or
warrants.
(3) If the Corporation shall pay a dividend or make a distribution to all
holders of its CMS Common Stock consisting of evidences of its indebtedness or
other assets (including capital shares of the Corporation other than CMS Common
Stock but excluding any Ordinary Cash Dividends (as defined below)), or shall
issue to all holders of its CMS Common Stock rights or warrants to subscribe for
or purchase any of its securities (other than those referred to in Subsection
(2) above), then in each such case the CMS Mandatory Conversion Rate in effect
immediately prior to such event shall be adjusted such that the Reset Price
shall be adjusted by multiplying it by a fraction, the numerator of which shall
be the Average Trading Price for a share of CMS Common Stock on such record
date, minus the fair market value as of such record date of the portion of
evidences of indebtedness or other assets so distributed, or of such
subscription rights or warrants, applicable to one share of CMS Common Stock
(provided that such numerator shall never be less than $1.00) and the
denominator of which shall be the Average Trading Price for a share of CMS
Common Stock on such record date, (the "Distribution Adjustment Ratio") and (B)
the Optional Conversation Rate in effect immediately prior to such event shall
be adjusted by multiplying it by a fraction, the numerator of which is one and
the denominator of which is the Distribution Adjustment Ratio. Such adjustment
shall become effective on the opening of business on the Business Day next
following the record date for such dividend or distribution or the determination
of shareholders entitled to receive such dividend or distribution or rights or
warrants, as the case may be. "Ordinary Cash Dividends" shall mean (i) any
regular cash dividend on the CMS Common Stock that does not exceed the per share
amount of the immediately preceding regular cash dividend on the CMS Common
Stock (as adjusted to appropriately reflect any of the events referred to in
Section 6(c)(1)) and (ii) any other cash dividend or distribution which, when
combined on a per share basis with the per share amount of all other cash
dividends and distributions paid on the CMS Common Stock during the 365 day
period ending on the date of declaration of such dividend or distribution (as
adjusted to appropriately reflect any of the events referred to in Section
6(c)(1) and excluding cash dividends or distributions that resulted in an
adjustment to the CMS Mandatory Conversion Rate or the CMS Optional Conversion
Rate), does not exceed 10% of the current market price per CMS Common Stock
(determined pursuant to Section 6(d)) on the Trading Day immediately preceding
the date of declaration of such dividend or distribution.
(d) For the purpose of any computation under Section 6(c) above, the "current
market price per share of CMS Common Stock" on any date in question shall mean
the Average Trading Price for shares of CMS Common Stock for the 15 consecutive
Trading Days ending on the earlier of the day in question and, if applicable,
the day before the "ex" date with respect to the issuance or distribution
requiring
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such computation; provided, however, that if another event occurs that would
require an adjustment pursuant to Section 6(c), the Board of Directors of the
Corporation may make such adjustments to the Average Trading Price for shares of
CMS Common Stock during such 15 Trading Day period as it reasonably deems
appropriate to effectuate the intent of the adjustments in Section 6(c), in
which case any such determination by the Board of Directors of the Corporation
shall be set forth in a Board resolution and shall be conclusive absent manifest
error. For purposes of this paragraph, the term "'ex' date", when used with
respect to any issuance or distribution, means the first date on which the
shares of CMS Common Stock trade regular way on the relevant exchange or in the
relevant market from which the Average Trading Price was obtained without the
right to receive such issuance or distribution. For the purpose of any
computation under Section 6(c) above, the "fair market value" of any assets,
evidences of indebtedness, subscription rights or warrants on any date in
question: (i) in the event any such item is a publicly traded security
("Publicly Traded Security"), shall be determined for such date pursuant to the
provisions of this Section 6(d) for determination of the "current market price
per share of CMS Common Stock", except that (x) each reference therein to "CMS
Common Stock" shall be deemed to mean such Publicly Traded Security, and (y) if
such Publicly Traded Security does not trade on a "when issued" basis for the 15
consecutive Trading Days preceding the "ex" date, such determination shall be
made for the period of 15 consecutive Trading Days commencing on the "ex" date;
and (ii) in the event any such item is not a Publicly Traded Security, shall be
reasonably determined in good faith for such date by the Board of Directors of
the Corporation, as evidenced by a resolution of the Board, whose determination
shall be conclusive absent manifest error.
(e) In any case of any reclassification of CMS Common Stock (other than a
reclassification of the CMS Common Stock referred to in Section 6(c)(1)); any
consolidation or merger of the Corporation with or into another corporation or
other entity (other than a merger resulting in a reclassification of the CMS
Common Stock referred to in Section 6(c)(1); any sale or conveyance to another
entity (other than a Subsidiary) of all or substantially all of the assets of
the Corporation; or the statutory exchange of securities with another
corporation or entity (other than in connection with a merger or acquisition)
(any such event referred to herein as a "Transaction"), then the CMS Optional
Conversion Rate and CMS Mandatory Conversion Rate shall be adjusted so that
after consummation of such a Transaction the holders of shares of Mandatory
Convertible Preferred Stock will receive, in lieu of the number of shares of CMS
Common Stock which such holder would have received upon conversion but for such
Transaction, the kind and amount of securities, cash or other property
receivable upon consummation of such Transaction by a holder of such number of
shares of CMS Common Stock, subject to further adjustment as provided in this
Section 6, including without limitation, an adjustment to the CMS Optional
Conversion Rate on the Rate Reset Date if such Transaction occurs prior to the
Rate Reset Date. On and after the consummation of any such Transaction, the CMS
Mandatory Conversion Date Market Price, which shall be used for purposes of the
determination as to which of clauses (a), (b) or (c) of the definition of CMS
Mandatory Conversion Rate applies, shall mean the sum of (i) the product of the
Average Trading Price of any Publicly Traded Security received upon consummation
of such Transaction for the 20 consecutive Trading Days immediately prior to,
but not including, the CMS Mandatory Conversion Date multiplied by the fraction
of such security received in such Transaction per share of CMS Common Stock
(assuming the issuance of fractional shares) plus (ii) the fair market value of
the cash and other property received upon consummation of such Transaction per
share of CMS Common Stock as of the day preceding the CMS Mandatory Conversion
Date as determined in accordance with Subsection 6(d). In determining the kind
and amount of securities, cash or other property receivable upon consummation of
such Transaction by a holder of shares of CMS Common Stock, it shall be assumed
that such holder is not a person or entity with which the Corporation
consolidated or into which the Corporation was
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merged or which merged into the Corporation or with which such statutory
exchange occurred, as the case may be, or an affiliate of any such Person and
that such holder of CMS Common Stock failed to exercise rights of election, if
any, as to the kind or amount of securities, cash, or other property receivable
upon consummation of such transaction (provided that, if the kind or amount of
securities, cash, or other property receivable upon consummation of such
Transaction is not the same for each non electing share, then the kind and
amount of securities, cash or other property receivable upon consummation of
such transaction for each non electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non electing shares). In
the event of such a reclassification, consolidation, merger, sale, conveyance or
exchange, effective provision shall be made in the Restated Articles of
Incorporation, as amended and restated, or similar document of the resulting or
surviving corporation or entity so that the conversion rate applicable to any
securities or property into which the shares of the Mandatorily Convertible
Preferred Stock shall then be convertible shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the CMS Common Stock contained in Subsections (1) to
(3) of Section 6(c) inclusive, above, and the other provisions of this Section 6
with respect to the CMS Common Stock shall apply on terms as nearly equivalent
as practicable to any such other securities and property deliverable upon
conversion of shares of Mandatorily Convertible Preferred Stock.
(f) Whenever any adjustments are required in the shares of CMS Common Stock into
which each share of Mandatorily Convertible Preferred Stock is convertible, the
Corporation shall forthwith (a) compute the adjusted Mandatory Conversation Rate
and CMS Optional Conversion Rate in accordance herewith and prepare a
certificate signed by an officer of the Corporation setting forth the adjusted
CMS Mandatory Conversion Rate and the CMS Optional Conversion Rate, describing
in reasonable detail the method of calculation used and the facts requiring such
adjustment and upon which such adjustment is based, which certificate shall be
conclusive, final and binding evidence of the correctness of the adjustment and
file with the transfer agent of the Mandatorily Convertible Preferred Stock such
certificate and (b) cause a copy of such certificate to be mailed to each holder
of record of the Mandatorily Convertible Preferred Stock as of or promptly after
the effective date of such adjustment and, with respect to adjustments
applicable after the Rate Reset Date, make a prompt public announcement of such
adjustment.
(g) The Corporation shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued shares of CMS Common Stock
for the purpose of issuance upon conversion of the Mandatorily Convertible
Preferred Stock a number of shares of CMS Common Stock equal to the product of
(i) the number of shares of CMS Common Stock then deliverable at such time upon
an CMS Optional Conversion of all shares of the Mandatorily Convertible
Preferred Stock multiplied by (ii) 2.0.
(h) The Corporation will pay any and all documentary stamp or similar issue or
transfer taxes that may be payable in respect of the issuance or delivery of
shares of CMS Common Stock on conversion of shares of the Mandatorily
Convertible Preferred Stock pursuant to Section 6. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involving the issue and delivery of shares of CMS Common Stock in the
name other than in that which the shares of Mandatorily Convertible Preferred
Stock so converted were registered and no such issue and delivery shall be made
unless and until the person requesting such issue has paid to the Corporation
the amount of any such tax, or has established, to the satisfaction of the
Corporation, that such tax has been paid.
(i) For the purpose of this Section 6, the term "CMS Common Stock" shall include
any shares of the Corporation of any class or series which has no preference or
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priority in the payment of dividends or in the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and which is not subject to redemption by the Corporation. However,
CMS Common Stock issuable upon conversion of the Mandatorily Convertible
Preferred Stock shall include only shares of the class designated as CMS Common
Stock as of the original date of issuance of the Mandatorily Convertible
Preferred Stock, or shares of the Corporation of any classes or series resulting
from any reclassification or reclassifications thereof (including
reclassifications referred to in clause (iv) of Subsection 6(c)(1)) and which
have no preference or priority in the payment of dividends or in the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and which are not subject to
redemption by the Corporation, provided that, if at any time, there shall be
more than one such resulting class or series, the shares of such class and
series then so issuable shall be in the same proportion, if possible, or if not
possible, in substantially the same proportion which the total number of shares
of such class and series resulting from all such reclassifications bears to the
total number of shares of all classes and series resulting from all such
reclassifications.
(j) No fractional shares or scrip representing fractional shares shall be issued
upon the conversion of the Mandatorily Convertible Preferred Stock. If any such
conversion would otherwise require the issuance of a fractional share, an amount
equal to such fraction multiplied by the current market price per share of CMS
Common Stock (determined as provided in Section 6(d)) of the CMS Common Stock on
the date of conversion shall be paid to the holder in cash by the Corporation.
If on such date there is no current market price per share of CMS Common Stock,
the fair market value of a share of CMS Common Stock (determined as provided in
Section 6(d)) on such date, shall be used. If more than one share of Mandatorily
Convertible Preferred Stock shall be surrendered for conversion at one time by
or for the same holder, the number of full shares of CMS Common Stock issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of shares of Mandatorily Convertible Preferred Stock so surrendered.
(k) All shares of the Mandatorily Convertible Preferred Stock purchased or
otherwise acquired by the Corporation (including shares surrendered for
conversion) shall be canceled and thereupon restored to the status of authorized
but unissued shares of Preferred Stock undesignated as to series.
(l) No adjustment in the CMS Mandatory Conversion Rate and the CMS Optional
Conversion Rate shall be required unless such adjustment (plus any adjustments
not previously made by reason of this Section 6(l)) would require an increase or
decrease of at least 1% in the number of shares of CMS Common Stock into which
each share of the Mandatorily Convertible Preferred Stock is then convertible;
provided, however, that any adjustments which by reason of this Section 6(l) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment and provided further that any adjustment shall be required
and made in accordance with the provisions of Section 6(c) not later than such
time as may be required in order to preserve the tax free nature of a
distribution to the holders of shares of CMS Common Stock. If any action or
transaction would require adjustment to the CMS Mandatory Conversion Rate or the
CMS Optional Conversion Rate pursuant to this Section 6, only one adjustment
shall be made and such adjustment shall be the amount of the adjustment that has
the highest absolute value. All calculations under this Section 6 shall be made
to the nearest one thousandth of a share of CMS Common Stock.
(m) The Board of Directors may make such upward adjustments in the CMS Mandatory
Conversion Rate and the CMS Optional Conversion Rate, in addition to those
required by this Section 6, as shall be determined by the Board of Directors, as
evidenced by a resolution of the Board of Directors, to be advisable in order
that any stock dividends, subdivisions of shares, distribution of rights to
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purchase stock or securities, or distribution of securities convertible into or
exchangeable for stock (or any transaction that could be treated as any of the
foregoing transactions pursuant to Section 305 of the Internal Revenue Code of
1986, as amended) made by the Corporation to its stockholders after the Rate
Reset Date shall not be taxable. The determination of the Board of Directors as
to whether an adjustment should be made pursuant to the provisions of this
Subsection (m), and if so, as to what adjustment should be made and when, shall
be conclusive, final and binding on the Corporation and all stockholders of the
Corporation.
(n) In any case in which Section 6 shall require that an adjustment as a result
of any event become effective at the opening of business on the Business Day
next following a record date and the date fixed for conversion occurs after such
record date, but before the occurrence of such event, the Corporation may, in
its sole discretion, elect to defer the following until after the occurrence of
such event: (A) issuing to the holder of any converted Mandatorily Convertible
Preferred Stock the additional shares of CMS Common Stock issuable upon such
conversion over the shares of CMS Common Stock issuable before giving effect to
such adjustments and (B) paying to such holder any amount in cash in lieu of a
fractional share of CMS Common Stock pursuant to Section 6(j).
(o) Notwithstanding the foregoing provisions of this Section 6, no adjustment of
the CMS Optional Conversion Rate or the CMS Mandatory Conversion Rate shall be
required to be made upon the issuance of any shares of CMS Common Stock pursuant
to any present or future plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of CMS Common Stock under any such plan.
(p) Notwithstanding any other provision of this Section 6, the issuance or
distribution of Rights shall not be deemed to constitute an issuance or a
distribution or dividend of rights, warrants, or other securities to which any
of the adjustment provisions described above applies until the occurrence of the
earliest Rights Event.
(q) For purposes of this Section 6, shares of CMS Common Stock owned by, or held
for the account of, the Corporation, a Subsidiary or another entity of which a
majority of the common stock or common equity interests are owned, directly or
indirectly, by the Corporation shall be deemed to be not outstanding.
Section 5. Voting Rights. The holders of Mandatorily Convertible Preferred Stock
shall have no right to vote except as otherwise specifically provided herein, in
the Restated Articles of Incorporation, as amended and restated, or as required
by statute.
(a) So long as any shares of Mandatorily Convertible Preferred Stock are
outstanding, in addition to any other vote or consent of shareholders required
in the Restated Articles of Incorporation, as amended and restated, or by law,
the consent of the holders of at least a majority of the Mandatorily Convertible
Preferred Stock, given in person or by proxy, either in writing without a
meeting (if permitted by law) or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(1) any amendment, alteration or repeal of any of the provisions of the Restated
Articles of Incorporation, as amended and restated,, which affects adversely the
powers, rights or preferences of the holders of the Mandatorily Convertible
Preferred Stock or reduces the minimum time required for any notice to which
holders of Mandatorily Convertible Preferred Stock then outstanding may be
entitled; provided, that the amendment of the provisions of the Restated
Articles of Incorporation, as amended and restated, so as to authorize or
create, or to increase the authorized amount of, any junior stock or parity
stock shall not be
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deemed to affect adversely the powers, rights or preferences of the holders of
the Mandatorily Convertible Preferred Stock and shall not be subject to approval
by the holders of the Mandatorily Convertible Preferred Stock and such holders
shall not be entitled to vote thereon to the fullest extent permitted by law;
(2) the authorization, creation or issuance of, or the increase in the
authorized amount of, any stock of any class or series, or any security
convertible into stock of any class or series, ranking senior to the Mandatorily
Convertible Preferred Stock; or
(3) the merger or consolidation of the Corporation with or into any other
corporation or other entity or a statutory share exchange with another
corporation or entity, unless in connection with such merger, consolidation or
statutory share exchange each holder of shares of Mandatorily Convertible
Preferred Stock immediately preceding such merger, consolidation or share
exchange shall either (I) with respect to a merger, consolidation or statutory
share exchange consummated prior to, on or after the Rate Reset Date, receive or
continue to hold in the surviving or resulting corporation or other corporation
or entity the same number of shares, with substantially the same rights and
preferences (except as contemplated by Subsection 6(e) and except for those
rights and preferences that could be affected without the vote of the holders of
the Mandatorily Convertible Preferred Stock, such as the authorization and
issuance of junior stock), as correspond to the shares of Mandatorily
Convertible Preferred Stock held immediately prior to such merger or
consolidation or (II) with respect to a merger, consolidation or statutory share
exchange consummated after the Rate Reset Date, receive the kind and amount of
securities, cash and other property that would have been receivable upon
consummation of such merger, consolidation or share exchange by such holder
(subject to the assumptions set forth in Section 6(e)) if the CMS Mandatory
Conversion had occurred immediately prior to the consummation of such merger,
consolidation or share exchange and the CMS Mandatory Conversion Rate was
determined as of such time (and if clause (I) or (II) are applicable, then such
merger, consolidation or statutory share exchange shall not be subject to
approval by the holders of the Mandatorily Convertible Preferred Stock and such
holders shall not be entitled to vote thereon).
(b) Holders of Mandatorily Convertible Preferred Stock shall not be entitled to
receive notice of any meeting of shareholders at which they are not entitled to
vote or consent except as otherwise provided by applicable law.
Section 6. Other Rights. Shares of Mandatorily Convertible Preferred Stock shall
not have any relative, participating, optional or other special rights or powers
other than as set forth herein, in the Restated Articles of Incorporation, as
amended and restated, or as required by law.
Section 7. Notices. In case, at any time while any shares of Mandatorily
Convertible Preferred Stock are outstanding, (i) the Corporation shall declare a
dividend (or any other distribution) on its CMS Common Stock, excluding any cash
dividends, (ii) the Corporation shall authorize the issuance to all holders of
its CMS Common Stock of rights or warrants to subscribe for or purchase shares
of CMS Common Stock or of securities exercisable for, convertible into, or
exchangeable for, shares of CMS Common Stock, (iii) the Corporation shall
authorize any reclassification of its CMS Common Stock (other than a subdivision
or combination thereof) or any consolidation or merger or statutory share
exchange to which the Corporation is a party and for which approval of any
stockholders of the Corporation is required (except for a merger of the
Corporation into one of its Subsidiaries solely for the purpose of changing the
corporate name or corporate domicile of the Corporation to another state of the
United States and in connection with which there is no substantive change in the
rights or privileges of any securities of the Corporation other than changes
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resulting from differences in the corporate statutes of the then existing and
the new state of domicile), or the sale or transfer to another corporation of
the property of the Corporation as an entirety or substantially as an entirety,
(iv) the Corporation shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, or (v) there shall occur any Pro
Rata Repurchase, then the Corporation shall cause to be filed at each office or
agency maintained for the purpose of conversion of the Mandatorily Convertible
Preferred Stock, and shall cause to be mailed to the holders of Mandatorily
Convertible Preferred Stock at their last addresses as they shall appear on the
stock register, at least 10 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified), a notice stating (A) the date on which a record is to be taken
for the purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of CMS Common Stock
of record to be entitled to such dividend, distribution, rights or warrants are
to be determined, or (B) the date on which any such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or
Pro Rata Repurchase is expected to become effective, and the date as of which it
is expected that holders of CMS Common Stock of record shall be entitled to
exchange their CMS Common Stock for securities or other property (including
cash), if any, deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up or Pro Rata Repurchase;
provided, however, that if any such action requiring such notice is to occur
prior to the Rate Reset Date, then such notice need only be given on or before
the date of such action. The failure to give or receive the notice required
hereby or any defect therein shall not affect the legality or validity of such
dividend, distribution, right or warrant or other action.
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SERIES A MANDATORILY CONVERTIBLE PREFERRED STOCK
Section 8. Definitions. Capitalized terms used but not defined herein shall have
the meaning ascribed thereto in the Restated Articles of Incorporation, as
amended and restated. In addition, the following terms shall have the following
meanings when used herein:
"Average Trading Price" for any given period, including a single day, means, for
a security, an amount equal to (i) the sum of the Closing Price for such
security on each Trading Day in such period divided by (ii) the total number of
Trading Days in such period.
"Board of Directors" shall mean the Board of Directors of the Corporation.
"Business Day" shall mean any day other than a Saturday, Sunday, or a day on
which commercial banking institutions in New York, New York, Wilmington,
Delaware or the State of Michigan are authorized or obligated by law or
executive order to close.
"Closing Price" means, for a security, the closing price for such security on
the Trading Day in question (or if such day is not a Trading Day then as of the
Trading Day next preceding such day) as reported by Bloomberg L.P., or if not so
reported by Bloomberg L.P., as reported by another recognized source selected by
the Board of Directors of the Corporation.
"CMS Common Stock" shall have the meaning specified in Section 6(i) hereof.
"CMS Mandatory Conversion" shall have the meaning specified in Section 6(a)
hereof.
"CMS Mandatory Conversion Date" means the date on which the Mandatorily
Convertible Preferred Stock will be converted automatically into CMS Common
Stock on the third anniversary of the Rate Reset Date in accordance with and as
defined in the CMS Remarketing Agreement.
"CMS Mandatory Conversion Date Market Price" shall have the meaning specified in
Section 6(a).
"CMS Mandatory Conversion Rate" shall have the meaning specified in
Section 6(a) hereof.
"CMS Optional Conversion" shall have the meaning specified in Section 6(b).
"CMS Optional Conversion Rate" shall have the meaning specified in Section 6(b).
"CMS Remarketing Agent" shall have the meaning ascribed to such term in the CMS
Remarketing Agreement.
"CMS Remarketing Agreement" shall mean the CMS Preferred Stock Remarketing and
Registration Rights Agreement dated as of November 10, 1999 among the
Corporation, the CMS Share Trust, Bank One Trust Company, N.A. as Series A-1
Indenture Trustee, and Donaldson, Lufkin & Jenrette Securities Corporation, as
CMS Remarketing Agent. The Corporation will furnish any shareholder of the
Corporation with a copy of the CMS Remarketing Agreement without charge upon
request in writing to the Secretary of the Corporation.
"CMS Threshold Appreciation Price" means the product of (i) the Reset Price and
(ii) 1.10.
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"Dividend Payment Date" shall have the meaning specified in Section 3(a) hereof.
"Failed Remarketing" shall have the meaning ascribed to such term in the CMS
Remarketing Agreement.
"Final Sale Date" shall have the meaning ascribed to such term in the CMS
Remarketing Agreement.
"junior stock" shall mean (and references to shares ranking "junior to" the
Mandatorily Convertible Preferred Stock shall refer to), with respect to
Sections 3 and 7, CMS Common Stock and any other class or series of stock of the
Corporation which by its terms is not entitled to receive any dividends unless
all dividends required to have been paid or declared and set apart for payment
on the Mandatorily Convertible Preferred Stock shall have been so paid or
declared and, with respect to Sections 4 and 7, CMS Common Stock and any other
class or series of stock of the Corporation which by its terms is not entitled
to receive any assets upon the liquidation, dissolution or winding up of the
affairs of the Corporation until the Mandatorily Convertible Preferred Stock
shall have received the entire amount to which such stock is entitled upon
liquidation, dissolution or winding up.
"parity stock" shall mean (and references to shares ranking "on a parity with"
the Mandatorily Convertible Preferred Stock shall refer to), with respect to
Sections 3 and 7, any class or series of stock of the Corporation which by its
terms is entitled to receive payment of dividends on a parity with the
Mandatorily Convertible Preferred Stock and, with respect to Sections 4 and 7,
any class or series of stock of the Corporation which by its terms is entitled
to receive assets upon the liquidation, dissolution or winding up of the affairs
of the Corporation on a parity with the Mandatorily Convertible Preferred Stock.
"Principal Market" means the principal exchange on which the security in
question is traded or the principal market on which such security is quoted, as
determined by the Board of Directors of the Corporation.
"Pro Rata Repurchase" means any purchase of shares of CMS Common Stock by the
Corporation or any affiliate thereof (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934 (the "Exchange Act")) pursuant to any tender
offer or exchange offer subject to Section 13(e) of the Exchange Act, or
pursuant to any other offer available to substantially all holders of CMS Common
Stock, whether for cash, shares of capital stock of the Corporation, other
securities of the Corporation, evidences of indebtedness of the Corporation or
any other person or any other property (including, without limitation, shares of
capital stock, other securities or evidences of indebtedness of a Subsidiary),
or any combination thereof, effected while any of the shares of Mandatorily
Convertible Preferred Stock are outstanding; provided, however, that "Pro Rata
Repurchase" shall not include any purchase of shares by the Corporation or any
affiliate thereof made in open market transactions substantially in accordance
with the requirements of Rule 10b-18 as in effect under the Exchange Act or on
such other terms and conditions as the Board of Directors shall have determined
are reasonably designed to prevent such purchases from having a material effect
on the trading market for the CMS Common Stock. A Pro Rata Repurchase shall be
deemed to be effective on the date of acceptance of shares for purchase or
exchange under any tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rate Repurchase that is not a
tender or exchange offer.
"Rate Reset Date" shall have the meaning ascribed to such term in the CMS
Remarketing Agreement.
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"Redemption Event" means the occurrence of any of the following: (i) any
consolidation or merger of the Corporation with or into another corporation or
entity or the statutory exchange of securities with another corporation or
entity, unless in connection with such consolidation, merger or exchange the
outstanding shares of CMS Common Stock immediately preceding the consummation of
such consolidation, merger or exchange are converted into, exchanged for or
otherwise represent at least a majority of the outstanding shares of common
stock of the surviving or resulting corporation or entity immediately succeeding
the consummation of such consolidation, merger or exchange; or (ii) the
Corporation sells or conveys to another entity (other than a Subsidiary) all or
substantially all of the assets of the Corporation.
"Reset Common Yield" shall mean the quotient of (i) the product of (x) 4 and (y)
the highest amount of the ordinary quarterly cash dividend on one share of CMS
Common Stock most recently declared prior to the Series A-1 Note Trigger Date
(as appropriately adjusted for the events referred to in Section 6(c)(1)),
unless subsequent to such declaration and prior to the Series A-1 Note Trigger
Date, the Corporation has publicly announced a change to, or elimination of, its
ordinary quarterly cash dividend and filed with the Securities and Exchange
Commission a document including such change or elimination, in which case the
amount of such proposed ordinary quarterly cash dividend or $0.00 if such
dividend is to be eliminated, divided by (ii) the Reset Price (provided,
however, that if as of the Series A-1 Note Trigger Date there is more than one
class of CMS Common Stock, then the Reset Common Yield shall be calculated with
respect to each then outstanding class of CMS Common Stock, and the Reset Common
Yield as used herein shall be the amount calculated with respect to the class of
CMS Common Stock resulting in the greatest Reset Common Yield).
"Reset Dividend Rate" shall mean an amount per share per annum equal to the
product of (i) the sum of (x) the Reset Common Yield (expressed as a
percentage), plus (y) 7.0% and (ii) $1,000 (rounded to the nearest cent).
"Reset Price" shall mean the higher of (i) the Closing Price of a share of CMS
Common Stock on the Series A-1 Note Trigger Date or (ii) the quotient (rounded
up to the nearest cent) of $125,000,000 divided by the number, as of the Series
A-1 Note Trigger Date, of the authorized but unissued shares of CMS Common Stock
that have not been reserved as of the Series A-1 Note Trigger Date by the Board
of Directors for other purposes subject to adjustment as provided in Section 6.
"Rights" means rights or warrants distributed by the Corporation under a
shareholder rights plan or agreement to all holders of CMS Common Stock
entitling the holders thereof to subscribe for or purchase shares of the
Corporation's capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
("Rights Events"):
(i) are deemed to be transferred with such shares of CMS Common Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of CMS Common Stock.
"Rights Events" shall have the meaning ascribed to such term in the definition
of Rights.
"senior stock" shall mean (and references to shares ranking "senior to" or
"prior to" the Mandatorily Convertible Preferred Stock shall refer to), with
respect to Sections 3 and 7, any class or series of stock of the Corporation
ranking senior to the Mandatorily Convertible Preferred Stock in respect of the
right to receive dividends and, with respect to Sections 4 and 7, any class or
series of stock of the Corporation ranking senior to the Mandatorily Convertible
Preferred Stock
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with respect to the right to receive assets upon the liquidation, dissolution or
winding up of the affairs of the Corporation. All classes or series of stock of
the Corporation other than junior stock or parity stock shall be senior stock
with respect to the Mandatorily Convertible Preferred Stock, except to the
extent expressly provided otherwise in the Restated Articles of Incorporation,
as amended and restated.
"Series A-1 Notes" shall have the meaning ascribed to such term in the CMS
Remarketing Agreement.
"Series A-1 Note Trigger Date" shall mean the earlier of (A) the Successful
Repricing Date or (B) the date of a Failed Remarketing.
"Subsidiary" means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other individuals performing similar functions, are at the
time directly or indirectly owned by the Corporation.
"Successful Repricing Date" shall have the meaning ascribed to such term in the
CMS Remarketing Agreement.
"Trading Day" means a day on which the Principal Market with respect to the
security in question is regularly scheduled to be open for trading. For purposes
of this definition, a day on which any such exchange is scheduled to close (as
opposed to unexpectedly closing) prior to its regular closing time shall not
constitute a Trading Day.
Section 2. Designation and Amount. The distinctive designation of the series of
Preferred Stock created by this amendment to the Restated Articles of
Incorporation shall be the "Series A Mandatorily Convertible Preferred Stock."
The number of shares that shall constitute such series shall be 125,000 shares.
COMMON STOCK
The shares of Common Stock may be issued from time to time as the Board
of Directors shall determine for such consideration as shall be fixed by the
Board of Directors. Each share of Common Stock of the Corporation shall be equal
to every other share of said stock in every respect, except as otherwise
provided in this Common Stock Division of Article III. Capitalized terms in this
Common Stock Division of Article III have the respective meanings set forth in
Section 6 of this Common Stock Division of Article III. The relative voting,
distribution, dividend, liquidation and other rights and limitations of the CMS
Energy Common Stock and Class G Common Stock are as follows:
(1) Dividend Rights. Subject to the express terms of any outstanding
series of Preferred Stock, dividends or distributions may be paid in cash or
otherwise upon the CMS Energy Common Stock and the Class G Common Stock out of
the assets of the Corporation in the relationship and upon the terms provided
for below with respect to each such class:
(a) Dividends on CMS Energy Common Stock. Dividends and
distributions on the CMS Energy Common Stock may be declared and paid
only out of the assets of the Corporation legally available therefor.
(b) Dividends on Class G Common Stock. Dividends and
distributions on the Class G Common Stock may be declared and paid only
out of the lesser of (i) the assets of the Corporation legally available
therefor and (ii) the Available Class G Dividend Amount.
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(c) Discrimination between CMS Energy Common Stock and Class G
Common Stock. The Board of Directors, subject to Sections l(a) and l(b),
may, in its sole discretion, declare dividends or distributions payable
exclusively to the holders of CMS Energy Common Stock, exclusively to
the holders of Class G Common Stock or to the holders of both of such
classes in equal or unequal amounts, notwithstanding the amounts of
assets available for dividends or distributions on each class, the
respective voting rights of each class, the amounts of prior dividends
declared on each class or any other factor.
(2) Exchange or Redemption. Shares of Class G Common Stock are subject
to exchange or redemption upon the terms provided below:
(a) Exchange or Redemption of Class G Common Stock.
(i) In the event of the Disposition, in one transaction or
a series of related transactions, by the Corporation of all or
substantially all of the properties and assets attributed to the
Consumers Gas Group (other than in connection with the
Disposition by the Corporation of all of its properties and
assets in one transaction or a series of related transactions
which results in the dissolution, liquidation or winding up of
the Corporation referred to in Section 4) to any person, entity
or group (other than (A) the holders of all outstanding shares of
Class G Common Stock on a pro rata basis or (B) any person,
entity or group in which the Corporation, directly or indirectly,
owns a majority equity interest), the Corporation shall, on or
prior to the first Business Day following the 90th day following
the consummation of such Disposition, exchange each outstanding
share of Class G Common Stock for a number of fully paid and
nonassessable shares of CMS Energy Common Stock having a Fair
Market Value equal to 110% of the Fair Market Value of one share
of Class G Common Stock as of the date of the first public
announcement by the Corporation of such Disposition.
For purposes of this Section 2(a)(i):
(x) as of any date, "substantially all of the properties
and assets attributed to the Consumers Gas Group" shall mean a
portion of such properties and assets (A) that represents at
least 80% of the then-current market value (as determined by the
Board of Directors) of the properties and assets attributed to
the Consumers Gas Group as of such date or (B) from which were
derived at least 80% of the aggregate revenues for the
immediately preceding twelve fiscal quarterly periods of the
Corporation (calculated on a pro forma basis to include revenues
derived from any of such properties and assets acquired during
such period) derived from properties and assets attributed to the
Consumers Gas Group during such periods;
(y) if immediately after any event, the Corporation,
directly or indirectly, owns less than a majority equity interest
in any person, entity or group in which the Corporation, directly
or indirectly, owned a majority equity interest immediately prior
to the occurrence of such event, a Disposition of all of the
properties and assets attributed to the Consumers Gas Group owned
by such person, entity or group shall be deemed to have occurred;
and
(z) in the case of a Disposition of properties and assets
in a series of related transactions, such Disposition shall not
be deemed to have been consummated until the consummation of the
last of such transactions.
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(ii) The Board of Directors may, by a majority vote of the
directors then in office, at any time declare that each of the
outstanding shares of Class G Common Stock shall be exchanged, on
an Exchange Date set forth in a notice to holders of Class G
Common Stock pursuant to Section 2(b)(i), for a number of fully
paid and nonassessable shares of CMS Energy Common Stock having a
Fair Market Value equal to 115% of the Fair Market Value of one
share of Class G Common Stock as of the date of the first public
announcement by the Corporation of such exchange.
(iii) At any time on or after the date on which all of the
consolidated assets and liabilities attributed to the Consumers
Gas Group (and no other assets or liabilities) become the
consolidated assets and liabilities of a single corporation, all
of the common stock of which is owned by the Corporation ("Gas
Group Subsidiary"), the Board of Directors may, in its sole
discretion and by a majority vote of the directors then in
office, provided that there are assets of the Corporation legally
available therefor, declare that all of the outstanding shares of
Class G Common Stock shall be exchanged on an Exchange Date set
forth in a notice to holders of Class G Common Stock pursuant to
Section 2(b)(i), for a number of the outstanding shares of common
stock of the Gas Group Subsidiary equal to the product of the Gas
Group Fraction and the number of all outstanding shares of common
stock of the Gas Group Subsidiary, on a pro rata basis, each of
which shall, upon such issuance, be fully paid and nonassessable.
(iv) After any Exchange Date on which all outstanding
shares of Class G Common Stock were exchanged, any share of Class
G Common Stock that is issued on conversion or exercise of any
Convertible Securities shall, immediately upon issuance pursuant
to such conversion or exercise and without any notice or any
other action on the part of the Corporation or its Board of
Directors or the holder of such share of Class G Common Stock:
(A) in the event the then-outstanding shares of
Class G Common Stock were exchanged for CMS Energy Common
Stock on such Exchange Date pursuant to Section 2(a)(i) or
2(a)(ii), be exchanged for the kind and amount of shares
of capital stock and other securities and property that a
holder of such Convertible Security would have been
entitled to receive pursuant to the terms of such
Convertible Security had such terms provided that the
conversion or exercise privilege in effect immediately
prior to any exchange by the Corporation of any of its
capital stock for shares of any other capital stock of the
Corporation would be adjusted so that the holder of any
such Convertible Security thereafter surrendered for
conversion or exercise would be entitled to receive the
number of shares of capital stock of the Corporation and
other securities and property such holder would have owned
immediately following such action had such Convertible
Security been converted or exercised immediately prior
thereto; or
(B) in the event the then-outstanding shares of
Class G Common Stock were exchanged for common stock of
the Gas Group Subsidiary pursuant to Section 2(a)(iii), be
redeemed, to the extent of the assets of the Corporation
legally available therefor, for $.01 in cash.
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The provisions of clause (A) of this Section 2(a)(iv) shall not apply to
the extent that equivalent adjustments are otherwise made pursuant to the
provisions of such Convertible Securities.
(b) General Exchange Provisions.
(i) In the event of any exchange pursuant to this Section
2, the Corporation shall cause to be given to each holder of
Class G Common Stock to be so exchanged a notice stating (A) that
shares of such class of Common Stock shall be exchanged, (B) the
Exchange Date, (C) the kind and amount of shares of capital stock
or cash and/or securities or other property to be received by
such holder with respect to each share of such class of Common
Stock held by such holder, including details as to the
calculation thereof, (D) the place or places where certificates
for shares of such class of Common Stock, properly endorsed or
assigned for transfer (unless the Corporation shall waive such
requirement), are to be surrendered for delivery of certificates
for shares of such capital stock or cash and/or securities or
other property and (E) that, subject to Section 2(b)(iii) hereof,
dividends or other distributions on such shares of Common Stock
will cease to be paid as of such Exchange Date. Such notice shall
be sent by first class mail, postage prepaid, not less than 30
nor more than 60 days prior to the Exchange Date, and in any case
to each holder of shares of such class of Common Stock to be
exchanged at such holder's address as the same appears on the
stock transfer books of the Corporation. Neither the failure to
mail such notice to any particular holder of such class of Common
Stock nor any defect therein shall affect the sufficiency thereof
with respect to any other holder of such class of Common Stock.
(ii) The Corporation shall not be required to issue or
deliver fractional shares of any class of capital stock or any
fractional securities to any holder of Class G Common Stock upon
any exchange, dividend or other distribution pursuant to this
Section 2. If more than one share of Class G Common Stock shall
be held at the same time by the same holder, the Corporation may
aggregate the number of shares of any class of capital stock that
shall be issuable or the amount of securities that shall be
deliverable to such holder upon any exchange, dividend or other
distribution (including any fractions of shares or securities).
If the number of shares of any class of capital stock or the
amount of securities remaining to be issued or delivered to any
holder of Class G Common Stock is a fraction, the Corporation
shall, if such fraction is not issued or delivered to such
holder, pay a cash adjustment in respect of such fraction in an
amount equal to the fair market value of such fraction on the
fifth Business Day prior to the date such payment is to be made.
For purposes of the preceding sentence, "fair market value" of
any fraction shall be (A) in the case of any fraction of a share
of any class of Common Stock, the product of such fraction and
the Fair Market Value of such share and (B) in the case of any
other fractional security, such value as is determined by the
Board of Directors.
(iii) No adjustments in respect of dividends or other
distributions shall be made upon the exchange of any shares of
Class G Common Stock; provided, however, that if the Exchange
Date with respect to such class of Common Stock shall be
subsequent to the record date for the payment of a dividend or
other distribution thereon or with respect thereto, the holders
of shares of such class of Common Stock at the close of business
on such record date shall be entitled to receive the dividend or
other distribution payable on or
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with respect to such shares on the date set for payment of such
dividend or other distribution, notwithstanding the exchange of
such shares or the Corporation's default in payment of the
dividend or distribution due on such date.
(iv) Before any holder of shares of Class G Common Stock
shall be entitled to receive certificates representing shares of
any capital stock or cash and/or securities or other property to
be received by such holder with respect to such shares of such
class of Common Stock pursuant to this Section 2, such holder
shall surrender at such office as the Corporation shall specify
certificates for such shares of Common Stock, properly endorsed
or assigned for transfer (unless the Corporation shall waive such
requirement). The Corporation will as soon as practicable after
such surrender of certificates representing such shares of such
class of Common Stock deliver to the person for whose account
such shares of such class of Common Stock were so surrendered, or
to the nominee or nominees of such person, certificates
representing the number of whole shares of the kind of capital
stock or cash and/or securities or other property to which such
person shall be entitled as aforesaid, together with any
fractional payment contemplated by Section 2(b)(ii).
(v) From and after any applicable Exchange Date, all
rights of a holder of shares of Class G Common Stock that were
exchanged shall cease except for the right, upon surrender of the
certificates representing such shares, to receive certificates
representing shares of the kind and amount of capital stock or
cash and/or securities or other property for which such shares
were exchanged, together with any fractional payment contemplated
by Section 2(b)(ii) and rights to dividends or other
distributions as provided in Section 2(b)(iii). No holder of a
certificate that immediately prior to the applicable Exchange
Date for Class G Common Stock represented shares of such class of
Common Stock shall be entitled to receive any dividend or other
distribution with respect to shares of any kind of capital stock
into which such shares were exchanged until surrender of such
holder's certificate for a certificate or certificates
representing shares of such kind of capital stock. Upon such
surrender, there shall be paid to the holder the amount of any
dividends or other distributions (without interest) which
theretofore became payable with respect to a record date after
the Exchange Date, but that were not paid by reason of the
foregoing, with respect to the number of whole shares of the kind
of capital stock represented by the certificate or certificates
issued upon such surrender. From and after an Exchange Date for
Class G Common Stock, the Corporation shall, however, be entitled
to treat the certificates for shares of Class G Common Stock that
have not yet been surrendered for exchange as evidencing the
ownership of the number of whole shares of the kind or kinds of
capital stock for which the shares of Class G Common Stock
represented by such certificates shall have been exchanged,
notwithstanding the failure to surrender such certificates.
(vi) The Corporation will pay any and all documentary,
stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of any shares of capital stock
on exchange of shares of Class G Common Stock pursuant hereto.
The Corporation shall not, however, be required to pay any tax
that may be payable in respect of any transfer involved in the
issue and delivery of any shares of capital stock in a name other
than that in which the shares of Class G Common Stock so
exchanged were registered, and no such issue or delivery shall be
made unless and until the person requesting such
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issue has paid to the Corporation the amount of any such tax, or
has established to the satisfaction of the Corporation that such
tax has been paid.
(c) Increase in Authorized Shares in Connection with Exchange. In
order to give effect to any exchange of Class G Common Stock for CMS
Energy Common Stock as contemplated by Sections 2(a)(i) and 2(a)(ii),
the Board of Directors shall have the authority pursuant to Section
303(3) of the Michigan Business Corporation Act, or any successor
provision, to amend these Articles of Incorporation to increase the
number of authorized shares of CMS Energy Common Stock to the number
that will be sufficient, when added to the previously authorized but
unissued shares of CMS Energy Common Stock, to give effect to the
exchange of Class G Common Stock. The foregoing exchange provisions
shall be deemed to be a "conversion privilege" of the shares of Class G
Common Stock within the meaning of Section 303(3) of the Michigan
Business Corporation Act, or any successor provision.
(3) Voting Rights. (a) Except as provided in Section 3(b) and except as
otherwise provided by law, the holders of CMS Energy Common Stock and Class G
Common Stock shall vote together as a single class on all matters as to which
holders of Common Stock are entitled to vote. Subject to Section 5, on all
matters to be voted on by the holders of CMS Energy Common Stock and Class G
Common Stock together as a single class, (i) each share of outstanding CMS
Energy Common Stock shall have one vote and (ii) each share of outstanding Class
G Common Stock shall have one vote. If shares of only one class of Common Stock
are outstanding, each share of that class shall have one vote. If any class of
Common Stock of the Corporation is entitled to vote separately as a class, with
respect to any matter, each share of that class shall be entitled to one vote in
the separate vote on such matter.
(b) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the vote or consent of the holders of a
majority of all of the shares of either class of Common Stock then outstanding,
voting as a separate class, shall be necessary for authorizing, effecting or
validating the merger or consolidation of the Corporation into or with any other
entity if such merger or consolidation would adversely affect the powers or
special rights of such class of Common Stock either directly by amendment of
these Articles of Incorporation or indirectly by requiring the holders of such
class to accept or retain, in such merger or consolidation, anything other than
(i) shares of such class or (ii) shares of the surviving or resulting
corporation having, in either case, powers and special rights identical to those
of such class prior to such merger or consolidation.
(4) Liquidation Rights. Subject to Section 5, in the event of the
dissolution, liquidation or winding up of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation and after there shall have been paid or set apart
for the holders of Preferred Stock the full preferential amounts (including any
accumulated and unpaid dividends) to which they are entitled, the holders of
Class G Common Stock and CMS Energy Common Stock shall be entitled to receive,
on a per share basis, the same portion of all of the assets of the Corporation
remaining for distribution to the holders of Common Stock, regardless of whether
or not any of such assets were attributed to the Consumers Gas Group. Neither
the merger or consolidation of the Corporation into or with any other
corporation, nor the merger or consolidation of any other corporation into or
with the Corporation nor any sale, transfer or lease of all or any part of the
assets of the Corporation, shall be deemed to be a dissolution, liquidation or
winding up for purposes of this Section 4.
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(5) Subdivision or Combination. If the Corporation shall in any manner
subdivide (by stock split, stock dividend or otherwise) or combine (by reverse
stock split or otherwise) the outstanding shares of either Class G Common Stock
or CMS Energy Common Stock, the voting and liquidation rights of CMS Energy
Common Stock relative to Class G Common Stock shall be appropriately adjusted so
as to avoid any dilution in the aggregate voting or liquidation rights of either
class of Common Stock.
(6) Definitions. As used in this Common Stock Division of Article III,
the following terms shall have the following meanings (with terms defined in the
singular having comparable meaning when used in the plural and vice versa),
unless another definition is provided or the context otherwise requires.
See Attached
ARTICLE IV
The address of the registered office is Fairlane Plaza South, Suite
1100, 330 Town Center Drive, Dearborn, Michigan 48126. The name of the resident
agent at the registered office is Thomas A. McNish. The mailing address of the
registered office is: 212 W. Michigan Ave., M440, Jackson, MI 49201-2277.
ARTICLE V
Special meetings of the shareholders may be called only by the Board of
Directors or by the Chairman of the Board.
ARTICLE VI
The number of directors of the Corporation shall be as specified in, or
determined in the manner provided in, the bylaws of the Corporation.
Any vacancies occurring on the Corporation's Board of Directors (whether
by reason of the death, resignation or removal of a director) may be filled by a
majority vote of the directors then in office although less than a quorum. An
increase in the number of members of the Board of Directors shall be construed
as creating a vacancy.
ARTICLE VII
A director may be removed by the affirmative vote of a majority of the
members of the Board of Directors then in office. A director also may be removed
by shareholders, but only for cause, at an annual meeting of shareholders and by
the affirmative vote of a majority of the shares then entitled to vote for the
election of directors. For purposes of this section, cause for removal shall be
construed to exist only if a director whose removal is proposed has been
convicted of a felony by a court of competent jurisdiction and such conviction
is no longer subject to appeal or has been adjudged by a court of competent
jurisdiction to be liable for willful misconduct in the performance of his or
her duty to the Corporation in a matter of substantial importance to the
Corporation and such adjudication is no longer subject to appeal.
ARTICLE VIII
A director shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of duty as a director except (i)
for a breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation of
Section 551(1) of the Michigan Business Corporation Act, and (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article VIII, and no modification to its
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provisions by law, shall apply to, or have any effect upon, the liability or
alleged liability of any director of the Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment, repeal or
modification.
ARTICLE IX
Each director and each officer of the Corporation shall be indemnified
by the Corporation to the fullest extent permitted by law against expenses
(including attorneys' fees), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with the
defense of any proceeding in which he or she was or is a party or is threatened
to be made a party by reason of being or having been a director or an officer of
the Corporation. Such right of indemnification is not exclusive of any other
rights to which such director or officer may be entitled under any now or
hereafter existing statute, any other provision of these Articles, bylaw,
agreement, vote of shareholders or otherwise. If the Business Corporation Act of
the State of Michigan is amended after approval by the shareholders of this
Article IX to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Business Corporation Act of the State of Michigan, as so amended. Any repeal
or modification of this Article IX by the shareholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
ARTICLE X
Each director shall be a shareholder of the Corporation and any director
ceasing to be a shareholder shall thereupon immediately cease to be a director.
ARTICLE XI
The Corporation reserves the right to amend, alter, change or repeal any
provision in these Articles of Incorporation as permitted by law, and all rights
conferred on shareholders herein are granted subject to this reservation.
Notwithstanding the foregoing, the provisions of Articles V, VI, VII, VIII, IX
and this Article XI may not be amended, altered, changed or repealed unless such
amendment, alteration, change or repeal is approved by the affirmative vote of
the holders of not less than 75% of the outstanding shares entitled to vote
thereon.
Signed on November 8, 1999
CMS ENERGY CORPORATION
(S E A L)
By: /s/ Thomas A. McNish
-------------------------------
Thomas A. McNish
Vice President and Secretary
STATE OF MICHIGAN)
) ss.
COUNTY OF JACKSON)
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On this 8th day of November, 1999, before me appeared Thomas A. McNish,
to me personally known, who, being by me duly sworn, did say that he is Vice
President and Secretary of CMS Energy Corporation, which executed the foregoing
instrument, and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its Board of Directors and shareholders, and
said officer acknowledged said instrument to be the free act and deed of said
corporation.
/s/ Renne E. Stephens
-----------------------------------
(S E A L) Renne E. Stephens
Notary Public for Jackson County
State of Michigan
My Commission Expires March 5, 2003
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ATTACHMENT TO PAGE 25
"Available Class G Dividend Amount" on any date ("calculation date") shall
mean the excess of:
(i) the product of (a) the Gas Group Fraction as of such calculation date and
(b) an amount equal to the total assets attributed to the Consumers Gas Group
less the total liabilities attributed to the Consumers Gas Group as of such
calculation date determined in accordance with generally accepted accounting
principles as in effect at such time applied on a basis consistent with that
applied in determining Consumers Gas Group Income; over
(ii) the product of (a) the Gas Group Fraction as of such calculation date and
(b) the amount that would be needed to satisfy any preferential rights to which
holders of any preferred stock attributed to the Consumers Gas Group are
entitled as of such calculation date;
provided that such excess shall be reduced by an amount, if any, sufficient to
ensure that the businesses attributed to the Consumers Gas Group shall be able
to pay their debts as they become due in the usual course of business.
"Business Day" shall mean each weekday other than any day on which any relevant
class of Common Stock is not traded on any national securities exchange or the
National Association of Securities Dealers Automated Quotations National Market
or in the over-the-counter market.
"Consumers Gas Group" shall mean, at any time, (i) all of the gas storage
business of Michigan Gas Storage Company, (ii) all of the gas utility business
of Consumers Power Company, (iii) all assets and liabilities of the Corporation
to the extent attributed to either of such businesses, whether or not such
assets or liabilities are or were assets and liabilities of such companies,
(iv) all assets and properties of the Corporation which when attributed to the
Consumers Gas Group increase the Retained Interest Shares, and (v) such
businesses, assets, and liabilities acquired directly or indirectly by the
Corporation after the Effective Date and determined by the Board of Directors
to be attributed to the Consumers Gas Group; provided that, from and after any
dividend or distribution with respect to any shares of Class G Common Stock
(other than a dividend or distribution payable in shares of Class G Common
Stock or Convertible Securities convertible into Class G Common Stock or
exercisable for Class G Common Stock), or any repurchase of shares of Class G
Common Stock from holders of Class G Common Stock generally, there shall no
longer be attributed to the Consumers Gas Group an amount of assets or
properties of the Consumers Gas Group equal to the aggregate amount of such
kind of assets or properties so paid in respect of shares of Class G Common
Stock multiplied by a fraction, the numerator of which is equal to the Retained
Interest Shares and the denominator of which is equal to the number of
outstanding shares of Class G Common Stock at such time.
"Consumers Gas Group Income" shall mean the consolidated net income or loss
attributed to the Consumers Gas Group determined in accordance with generally
accepted accounting principles, including consolidated income and expenses of
Consumers Power Company attributed to the operations of the Consumers Gas Group
on a substantially consistent basis, including, without limitation, corporate
administrative costs, net interest and other financial costs and income taxes.
"Convertible Securities" shall mean any securities of the Corporation that are
convertible into or exercisable for or evidence the right to acquire any shares
of CMS Energy Common Stock or Class G Common Stock, whether at such time or
upon the occurrence of certain events, pursuant to antidilution provisions of
such securities or otherwise.
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"Disposition" shall mean a sale, transfer, assignment or other disposition
(whether by merger, consolidation, sale or contribution of assets, properties or
stock or otherwise), but shall not include (1) an attribution of assets or
properties of the Corporation to the Consumers Gas Group if such attribution
increases the Retained Interest Shares, or (2) assets or properties of the
Corporation ceasing to be attributed to the Consumers Gas Group if the result
is a decrease in the Retained Interest Shares.
"Effective Date" shall mean May 22, 1995.
"Exchange Date" shall mean any date fixed for an exchange of shares of CMS
Energy Common Stock for Class G Common Stock, as set forth in a notice to
holders of Class G Common Stock pursuant to Section 2(b)(i) or of Convertible
Securities convertible into or exercisable for shares of Class G Common Stock.
"Fair Market Value" of shares of either class of Common Stock on any date means
the average of the daily closing prices thereof for the period of 20
consecutive Business Days commencing on the 30th Business Day prior to such
date. The closing price of shares of a class of Common Stock for each Business
Day shall be (i) if such shares are listed or admitted to trading on a national
securities exchange, the closing price on the New York Stock Exchange Composite
Tape (or any successor composite tape reporting transactions on national
securities exchanges) or, if such New York Stock Exchange Composite Tape shall
not be in use or shall not report transactions in such shares, the last
reported sales price regular way on the principal national securities exchange
on which such shares are listed or admitted to trading (which shall be the
national securities exchange on which the greatest number of such shares of
stock has been traded during such 20 consecutive Business Days), or, if there
is no transaction on any such Business Day in any such situation, the mean of
the bid and asked prices on such Business Day, or (ii) if such shares are not
listed or admitted to trading on any such exchange, the closing price, if
reported, or, if the closing price is not reported, the average of the closing
bid and asked prices as reported by the National Association of Securities
Dealers Automated Quotations or a similar source selected from time to time by
the Corporation for this purpose, and (iii) reduced, if such Business Day is
prior to any "ex" date or any similar date occurring during such period for any
dividend or distribution paid or to be (other than as contemplated in (iv)
below) paid with respect to such shares, by the fair market value (as
determined by the Board of Directors) of the per share amount of such dividend
or distribution, and (iv) appropriately adjusted, if such Business Day is prior
to (A) the effective date of any subdivision (by stock split, stock dividend,
or otherwise) or combination (by reverse stock split or otherwise) of such
shares, or (B) the "ex" date or any similar date for any dividend or
distribution of shares of such class of Common Stock on the outstanding shares
of such class of Common Stock, occurring during such period, to reflect such
subdivision, combination, dividend or distribution. In the event such closing
or bid and asked prices are unavailable, the Fair Market Value of such shares
shall be determined by the Board of Directors.
"Gas Group Fraction" as of any date is a fraction the numerator of which shall
be the number of shares of Class G Common Stock outstanding on such date and
the denominator of which shall be the sum of the number of shares of Class G
Common Stock outstanding on such date plus the Retained Interest Shares on such
date, provided that such fraction shall in no event be greater than one.
"Gas Group Subsidiary" shall have the meaning set forth in Section 2(a)(iii).
"Retained Interest Shares" shall initially be 32,000,000 shares; provided,
however, that such number from time to time shall be:
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(i) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of Class G
Common Stock and dividends or distributions of shares of Class G Common Stock
to holders thereof and other reclassifications of Class G Common Stock;
(ii) decreased by (A) the number of Retained Interest Shares issued or sold by
the Corporation, (B) the number of Retained Interest Shares issued upon
conversion or exercise of Convertible Securities which are not attributed to
the Consumers Gas Group, (C) the number of Retained Interest Shares issued by
the Corporation as a dividend or distribution or by reclassification or
exchange to holders of CMS Energy Common Stock and (D) the number (rounded, if
necessary, to the nearest whole number) equal to the aggregate fair value (as
determined by the Board of Directors) of assets or properties of the
Corporation which cease to be attributable to the Consumers Gas Group in
consideration for a decrease in the Retained Interest Shares divided by the
Fair Market Value of one share of Class G Common Stock as of the date such
assets or properties cease to be attributable to the Consumers Gas Group; and
(iii) increased by (A) the number of outstanding shares of Class G Common Stock
repurchased by the Corporation with assets which are not attributed to the
Consumers Gas Group, and (B) the number (rounded, if necessary, to the nearest
whole number) equal to the fair value (as determined by the Board of Directors)
of assets or properties of the Corporation that are attributed to the Consumers
Gas Group in consideration for an increase in the Retained Interest Shares
divided by the Fair Market Value of one share of Class G Common Stock as of the
date of such attribution.
(7) Determinations by the Board of Directors. Any determinations made in
compliance with applicable law by the Board of Directors of the Corporation
under any provision in this Article III shall be final and binding on all
shareholders of the Corporation.
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