Pre-Effective Amendment to Application or Declaration — Form U-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: U-1/A Pre-Effective Amendment to Application or 59± 262K
Declaration
2: EX-99.1 Ex A-1 Memorandum of Association of Emera 4± 19K
11: EX-99.10 Ex D-5 Ferc Order 9 28K
12: EX-99.11 Ex G-1 Emera's Annual Report 46 256K
13: EX-99.12 Ex K-1 Emera Inc. Group of Companies 2± 15K
3: EX-99.2 Ex A-2 Articles of Association of Emera 42± 170K
4: EX-99.3 Ex A-3 Articles of Organization of Bhe 144 382K
5: EX-99.4 Ex A-4 By-Laws of Bhe 42 83K
6: EX-99.5 Ex A-5 Articles of Bangor Var 9 44K
7: EX-99.6 Ex A-6 Bylaws of Bangor Var 8 21K
8: EX-99.7 Ex A-7 Partnership Agreement 23± 96K
9: EX-99.8 Ex D-2 Order of Maine Public Utilities Commission 17 58K
10: EX-99.9 Ex D-3 Mpuc Certification 1 8K
EX-99.4 — Ex A-4 By-Laws of Bhe
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Exhibit A-4
BY-LAWS
OF
BANGOR HYDRO-ELECTRIC COMPANY
As amended through June 16, 1994
BY-LAWS
OF
BANGOR HYDRO-ELECTRIC COMPANY
ARTICLE I. Location of Offices
The principal office of this corporation shall be at such place within the
State of Maine as the Board of Directors may from time to time designate, and
the Company shall have and maintain such other offices as the Board of Directors
may deem expedient.
ARTICLE II. Corporate Seal
The corporation shall have a seal with the name of the Company in a circle,
and the word "Seal" or such suitable device as the Board of Directors shall
determine, in the center of the space thus enclosed. The seal of the corporation
upon a certificate of stock, corporate bond or other corporate obligations for
the payment of money may be facsimile, engraved or printed, where such
certificate is signed by a Transfer Agent or Transfer Clerk and by a Registrar,
and where such bond or obligation is certified by a Trustee.
1
ARTICLE III. Meetings of Stockholders
Section 1. The Annual Meeting of the Stockholders shall be held on the
fourth Tuesday in April of each year, or within sixty days thereafter, upon such
date as the Board of Directors of the Company may designate, in the City of
Bangor, Maine, or at such other place within the State of Maine as may be
designated by the Board of Directors of the Company, for the election of a Board
of Directors and for the transaction of any other business that may be brought
before such meeting. In case of the failure for any cause to hold such meeting
and election on said fourth Tuesday in April or within sixty days thereafter as
above provided, said election may be held at any special meeting of the
Stockholders called for the purpose.
Section 2. Unless waived in the manner prescribed by the Maine Business
Corporation Act, written notice of the Annual Meeting or any special meeting of
Stockholders stating the place, day and hour thereof, shall be given in the
manner prescribed by the Maine Business Corporation Act.
Section 3. Special meetings of the Stockholders may be called at any time
by order of the Board of Directors or by written direction of a majority of the
Board of Directors, or of Stockholders representing not less than one-fifth of
the capital stock of the Company issued and outstanding. Such meetings shall be
in Bangor, Maine, or at such other place within the State of Maine as may be
designated by the Board of Directors of the Company.
2
Section 4. The holders of one third of the stock of the Company issued and
outstanding shall constitute a quorum for the transaction of business at any
meeting, but a less number may convene any meeting and may adjourn the same from
time to time until a quorum shall be present, and no notice of such adjournment
shall be necessary. If Stockholders are to consider the number of authorized
shares of common stock at any meeting, 50% of the stock of the Company issued
and outstanding shall constitute a quorum for the transaction of such business.
Section 5. Stockholders entitled to vote at any meeting of Stockholders may
vote either in person or by proxy granted not more than sixty days before the
meeting, the date of which shall be named therein, and said proxies shall not be
valid after a final adjournment thereof. Stockholders may also be represented by
a general power of attorney produced at the meeting and valid until it is
revoked. At any meeting of Stockholders, each holder of Common Stock entitled to
vote thereat shall be entitled to cast one-twelfth of a vote for each share of
Common Stock held, and each holder of Preferred Stock entitled to vote thereat
shall be entitled to cast one vote for each share of such Preferred Stock held.
Except as may otherwise be required by law or by the Articles of Incorporation
3
and except as the Board of Directors may otherwise fix and determine in the
By-Laws with respect to any class or series of Preferred Stock having special
voting powers, a majority of the total votes cast at any meeting of Stockholders
shall be sufficient for the adoption or rejection of any question presented.
Section 6. The stock transfer books of the Company may be closed by the
order of the Board of Directors for such period, not to exceed sixty days,
previous to any meeting of the Stockholders, or previous to the payment of any
dividend upon the stock of the Company, or for any other purpose, as the Board
may determine, during which time no transfer of stock on the books of the
Company shall be made; and said books shall be re-opened the day following the
date fixed for such meeting or for the payment of such dividend or for the
accomplishment of such purpose.
The Board of Directors may from time to time determine the date as of which
Stockholders shall be entitled to notice of and to vote at any regular or
special meeting of the Stockholders, but such date shall not be more than sixty
days nor less than ten days prior to the date upon which such meeting is to be
held. The date so determined shall be specified in the notice of the meeting.
4
ARTICLE IV. Election of Directors
Section 1. Directors shall be elected in the manner set forth in the
Articles of Incorporation. Directors must be and remain Stockholders.
ARTICLE V. Meetings of Directors
Section 1. Regular meetings of the Board of Directors shall be held at such
times and places as may from time to time be fixed by resolution of the Board.
No notice shall be required for regular meetings, the times and places of which
have been fixed by resolution. Special meetings of the Board of Directors may be
held at any time or place upon the call of the Clerk or Assistant Clerk under
the direction of the Chairman of the Board, the President, or any two Directors
then in office, of which meetings reasonable notice in writing or otherwise
shall be given to each director or sent to his or her residence or place of
business, the time and place for holding the meeting to be designated in the
notice.
Unless otherwise indicated in the notice calling the meeting, any and all
business may be transacted at any such special meeting.
Section 2. A meeting of the Board of Directors for organization may be held
without notice immediately after the meeting of the Stockholders at which such
5
Board of Directors is elected, at which meeting officers of the Company may be
chosen, but no other business shall be transacted, unless every director shall
be present.
Section 3. At the meetings of the Board of Directors, a majority shall
constitute a quorum, but a less number may convene and adjourn any such meeting
from time to time until a quorum is present, of which adjournment no notice need
be given. All questions coming before any meeting of a Board of Directors for
action shall be decided by a majority vote of the Directors present at such
meeting, unless otherwise provided in these By-Laws.
ARTICLE VI. Officers
Section 1. Directors shall elect from their own number a Chair of the
Board; shall appoint a President, a Treasurer and a Clerk; and may appoint one
or more Vice Presidents and such other officers as the Directors may deem
necessary or desirable in order to conduct the business of the Company. If the
offices of the Chair of the Board and the President are not vested in one
person, the Directors shall designate one of them as the chief executive officer
of the Company. In the absence of a valid designation of the foregoing
6
functions, the President shall be the chief executive officer. If the offices
and functions of the Chair of the Board, the President and the chief executive
officer are vested in one person, then in the event of accident or disability or
other circumstances that render such person incapable of performing his or her
duties, the Chair of the Executive Committee of the Board of Directors (or, if
there be no such Chair, the Director of the longest tenure of service on the
Board who is not an employee of the Company) shall assume the duties as
temporary, acting Chair of the Board, and he or she shall promptly appoint,
subject to ratification by the full Board at its earliest convenience, an
officer of the Company to be the temporary, acting chief executive officer. The
services of these temporary officers shall continue until the Chair of the
Board, President and chief executive officer has resumed his or her duties, or
until the Directors shall otherwise determine.
If the offices and functions of the Chair of the Board, the President and
the chief executive officer are not vested in one person, then in the event of
accident, disability or other circumstances that render the chief executive
officer incapable of performing his or her duties (1) if the chief executive
officer is the Chair of the Board, the President shall assume the duties as
temporary, acting chief executive officer and the Chair of the Executive
Committee of the Board (or, if there be no such Chair, the Director of the
longest tenure of service on the Board who in not an employee of the Company)
7
shall assume the duties of temporary, acting Chair of the Board, or (2) if the
chief executive officer is the President, the Chair of the Board shall assume
the duties as temporary, acting chief executive officer, and he or she shall
promptly appoint, subject to ratification by the full Board at its earliest
convenience, an officer of the Company to be the temporary, acting President.
The services of these temporary, acting officers shall continue until the chief
executive officer has resumed his or her duties, or until the Directors shall
otherwise determine.
In the event of accident, disability or other circumstances that render
the Chair of the Board incapable of performing his or her duties and the Chair
of the Board is not the chief executive officer, the Chair of the Executive
Committee of the Board of Directors (or, if there be no such Chair, the Director
of the longest tenure of service on the Board who in not an employee of the
Company) shall assume the duties as temporary, acting Chair of the Board, until
the Chair of the Board has resumed his or her duties or until the Directors
shall otherwise determine.
Notwithstanding the foregoing, the Directors may by resolution make a
different provision in any year for the assumption of responsibilities of the
Chair of the Board, the chief executive officer and the President in the event
of their inability to serve as aforesaid, which resolution shall be effective
until the next meeting at which officers are appointed.
A majority vote of the whole Board of Directors shall be necessary for the
election of officers. All such officers shall hold office for one year and until
their successors are chosen and duly qualified, provided however that the Board
8
of Directors shall have power at any time to remove from office any of such
officers as well as any other agent or employee of the Company, with or without
cause.
ARTICLE VII. Powers and Duties of Directors and Officers
Section 1. The Board of Directors shall have and exercise all the powers
and authority granted by law in order to carry out its responsibility to manage
and control the business, property and affairs of the Company. The Board of
Directors shall be vested with all the powers and authority of the corporation
itself, except in such matters as may be especially excepted by the Articles of
Incorporation or By-Laws of the Company or by the laws of the State of Maine.
Subject to any contrary provisions of law, the Articles of Incorporation or
these By-Laws, the Board of Directors shall have power to delegate from time to
time such authority as it may deem necessary to any one or more members of the
Board acting as a committee, in order that the business of the Company may be
transacted with promptness and dispatch.
Section 2. The Board of Directors by a resolution adopted by a majority of
the full Board of Directors then in office may designate from among its members
an Executive Committee consisting of two or more Directors, and may delegate to
such Executive Committee all the authority of the Board of Directors in the
management of the corporation's business and affairs, except as limited by law
9
(including without limitation the Maine Business Corporation Act), or the
resolution establishing the Executive Committee or any resolution thereafter
adopted by the Board of Directors. Vacancies in the membership of the Executive
Committee shall be filled by resolution adopted by a majority of the full Board
of Directors then in office. The Executive Committee shall keep regular minutes
of its proceedings and report the same to the Board of Directors. Members of the
Executive Committee may be removed from office, with or without cause, by
resolution adopted by a majority of the full Board of Directors then in office.
So far as practicable, the provisions of these By-Laws relating to the calling,
noticing and conduct of meetings of the Board of Directors shall govern the
calling, noticing and conduct of meetings of the Executive Committee.
The Board of Directors, by a resolution adopted by a majority of the
Directors who are not employees of the Company, shall establish an Audit
Committee and a Compensation Committee, the membership of each of which shall
consist of Directors who are not employees of the Company. The Audit Committee
shall review the adequacy of the Company's financial reporting processes and
internal controls and conduct such other business as may be delegated to it by
the Board of Directors. The Compensation Committee shall review and recommend to
the Board of Directors the compensation and benefits of the Directors and
officers of the Company and the Company's overall compensation and benefits
10
policies and conduct such other business as may be delegated to it by the Board
of Directors.
The Board of Directors, by resolution adopted by a majority of the
Directors, may establish such other committees as it deems necessary or
desirable in order to conduct the business and affairs of the Company with
dispatch, and, to the extent permitted by law, empower such committees with such
authority as the Board of Directors deems appropriate.
Except as otherwise provided by law, the Articles of Incorporation, these
By-Laws or a majority of the Board of Directors, the Chair of the Board may
appoint members and chairs of committees of the Board, and shall ex officio be a
member of all committees.
Section 3. The Chair of the Board of Directors shall be responsible for the
conduct of the business and functions of the Board of Directors, except to the
extent that specific functions may be otherwise governed by law, the Articles of
Incorporation, these By-Laws or resolution of the Board of Directors. He or she
shall establish the schedule and agendas for and shall preside at meetings of
the Stockholders and the Board of Directors, and shall attend to such other
business as the Board of Directors may from time to time direct.
Section 4. The President, in the capacity of chief executive officer of the
Company, shall implement the overall direction and policies of the Board of
11
Directors, and supervise and direct generally the business and affairs of the
Company. The President may sign any deeds, mortgages, bonds, contracts, or other
instruments that the Board of Directors has authorized for execution, except
when the signing and execution thereof has been expressly delegated by the Board
of Directors or these By-Laws to some other officer or agent of the Company or
is required by law to be otherwise signed or executed. The President shall also
make reports to the Board of Directors and the shareholders and generally
perform all duties incident to the office of President and such other duties as
may be prescribed by the Board of Directors.
In the event the President is not the chief executive officer of the
Company, unless the Board of Directors shall otherwise specify, the foregoing
powers and duties shall appertain to the chief executive officer, and the
President shall have such powers and duties as the Board of Directors shall
determine.
Section 5. Vice Presidents shall have such responsibilities and duties as
may be prescribed by the President, and in the absence of any specific
delegation of responsibilities shall have such powers, duties and
responsibilities as may reasonably be implied by their titles as necessary to
the routine operation of the functions for which they are responsible in the
normal course of the business of the Company.
12
Section 6. The Treasurer or his or her designate shall receive and be
responsible for all cash, notes and securities of the Company, and is authorized
to give receipts for all moneys due and payable to the Company from whatever
source, and to endorse checks, drafts and warrants in the name of the Company in
banks and other financial institutions. All funds of the Company shall be
deposited to the credit of the Company. They may be invested, and if so, must be
invested pursuant to guidelines issued from time to time by the Board of
Directors. He or she shall affix the seal of the Company to such instruments as
it is necessary and proper to execute under seal and attest the same, and he or
she shall discharge such other duties as pertain to this office, or as may be
assigned to him from time to time by the Board of Directors or by the President.
Section 7. The Clerk shall be a resident of the State of Maine, and shall
be sworn to a faithful discharge of his duties. He or she shall keep a record of
all votes of the Stockholders and Directors and record all the minutes of the
meetings of the Stockholders and Directors in a book to be kept for that
purpose. He or she shall keep a book containing a true and complete list of all
Stockholders, their residences, and the amount of stock held by each, and shall
keep such other books and perform such other duties as pertain to his or her
office or as may be assigned to him or her from time to time by the Board of
13
Directors or by the President. In the absence or disability of the Clerk and
Assistant Clerk, the President may appoint a Clerk pro tempore.
Section 8. The compensation and benefits of the officers shall be
established by the Board of Directors. The compensation and benefits of officers
who are Directors shall be established by a majority vote of Directors who are
not employees of the Company.
The compensation and benefits of the Board of Directors shall be
established by a majority vote of the full Board of Directors. Directors who are
employees of the Company shall receive no compensation for their service as
Directors.
Section 9. The Treasurer shall give, and other officers, agents and
employees of the Company may be required to give, at the expense of the Company,
bonds in such amount and form with such sureties as the Board of Directors may
require and approve, for the faithful discharge of the duties of their
respective offices and positions.
Section 10. Any current or former Director, officer or employee who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a Director,
officer or employee of the Company, or is or was serving at the request of the
Company as a Director, officer, trustee, partner, fiduciary, employee or agent
14
of another corporation, partnership, joint venture, trust, pension or other
employee benefit plan or other enterprise, shall be indemnified by the Company
against expenses, including attorney's fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding to the full extent permitted by Maine law.
Expenses incurred in defending a civil, criminal, administrative or
investigative action, suit or proceeding shall in all cases be authorized and
paid by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt by the Company of:
(1) A written undertaking by or on behalf of the officer, director or
employee to repay that amount if he or she is finally adjudicated:
(A) Not to have acted honestly or in the reasonable belief that
his or her action was in or not opposed to the best interests of
the Company or its shareholders or, in the case of a person
serving as a fiduciary of an employee benefit plan or trust, in
or not opposed to the best interests of such plan or trust or its
participants or beneficiaries;
15
(B) With respect to any criminal action or proceeding, to have
had reasonable cause to believe that his or her conduct was
unlawful; or
(C) With respect to any claim, issue or matter asserted in any
action, suit or proceeding brought by or in the right of the
Company, to be liable to the Company, unless the court in which
that action, suit or proceeding was brought permits
indemnification in accordance with subsection (2) of 13-A
M.R.S.A. ss.719; and
(2) A written affirmation by the officer, Director or employee that he
or she has met the standard of conduct necessary for indemnification by
the Company as authorized by this section.
The undertaking required by subparagraph (1) shall be an unlimited general
obligation of the person seeking the advance, but need not be secured and may be
accepted without reference to financial ability to make the repayment.
ARTICLE VIII. Checks, Drafts and Negotiable Instruments
All checks, drafts, or other orders for the payment of money, notes, or
other evidences of indebtedness issued in the name of the corporation shall be
16
signed by such officer or officers, agent or agents of the corporation and in
such manner as shall from time to time be determined by resolution of the Board
of Directors.
ARTICLE IX. Fiscal Year
The fiscal year of the Company shall commence on the first day of January
and end on the last day of December in each year.
ARTICLE X. Stock
Section 1. The authorized capital stock of the Company shall be
$110,000,000 represented by 600,000 shares of Preferred Stock of the par value
of $100 each, and 10,000,000 shares of Common Stock of the par value of $5 each.
Section 2. The 600,000 shares of Preferred Stock shall be available for
classification and reclassification in different classes or series from time to
time. Subject to reclassification upon retirement by redemption or otherwise,
25,000 shares shall be 7% Preferred Stock, 17,500 shares shall be 4% Preferred
Stock, Series A, 4,840 shares shall be 4 1/4% Preferred Stock, and 150,000
shares shall be 8.76% Preferred Stock.
The remaining shares, 402,660 in number, plus additional shares equal in
number to any shares now outstanding or hereafter issued which may be retired by
17
redemption or otherwise may be issued as additional shares of any class or
series heretofore or hereafter authorized, or may be issued in one or more new
classes or series which (subject to the provisions hereof) shall have such
designations, preferences and voting powers, or restrictions or qualifications
thereof as shall be fixed and determined by the Board of Directors in the
By-Laws, including provisions (among others) with respect to dividends;
redemption, conversion rights, if any; sinking fund, if any; restrictions or
limitations, if any, upon the payment of dividends, issuance of capital stock,
incurring of indebtedness and such other matters as the Board of Directors may
determine; and voting powers, if any, which voting powers, if any, may be either
general voting powers or special voting powers, or both.
In fixing and determining the special voting powers of any class or series
of Preferred Stock, the Board of Directors is specifically authorized to provide
that if at any time dividends or required sinking fund payments payable on the
Preferred Stock shall be in default in any amount to be specified in the
By-Laws, then, until all dividends or required sinking fund payments so in
default shall have been paid or declared and set apart for payment, the holders
of shares of Preferred Stock of each and every class or series, voting as a
single class, shall be entitled to elect in such manner as the Board of
Directors may provide, the smallest number of Directors necessary to constitute
18
a majority of the full Board of Directors, the balance of the Directors to be
elected by the holders of shares having general voting powers. The Board of
Directors is further specifically authorized so to provide with respect to any
class or series of Preferred Stock hereafter authorized that the holders of
shares of such class or series, either separately or together with the holders
of all other classes and series of Preferred Stock, shall have the right to vote
with respect to or to consent or object to such other matters as may be fixed
and determined by the Board of Directors in the By-Laws.
Except as hereinabove provided, each class or series of Preferred Stock
shall be identical with each other class or series of Preferred Stock. Each
share of Preferred Stock of any particular class or series shall be identical in
all respects with every other share of Preferred Stock of the same class or
series.
Section 3. The holders of the Preferred Stock, of each and every class or
series, are entitled to receive, when and as declared, out of the surplus or net
profits of the Company, dividends at the rate applicable to their respective
shares, payable as the Board of Directors may determine, before any dividends
shall be set apart for or paid upon the Common Stock or before the Company shall
purchase any of its Common Stock. The dividends upon the Preferred Stock shall
be cumulative and accumulations of dividends shall not bear interest. Except as
19
provided in paragraph (b) of Section 6, the Board of Directors may declare
dividends upon the Common Stock, provided the dividends upon the Preferred
Stock, with all accumulations, including accrued dividends to the date of
payment of the Common Stock dividends, shall have been paid in full, or a sum
sufficient for the payment thereof shall have been set apart for that purpose,
but not otherwise. Except as provided in paragraph (b) of Section 6, the holders
of the Common Stock are entitled to receive all additional surplus or net
profits which the Directors may order distributed in dividends, after the
dividends above provided for shall have been paid or set apart.
Section 4. (a) If any dividend is declared on the Preferred Stock at a rate
less than sufficient to pay the full dividend called for by all the Preferred
Stock outstanding, the distribution of the dividend shall be pro rata, so that
all holders of Preferred Stock shall receive the same proportion of the full
dividend called for by their stock.
(b) If at any time dividends payable on the Preferred Stock shall be in
default in an amount equal to or exceeding four quarterly dividend payments, or
if the Company shall fail to make any required sinking fund payment on the
Preferred Stock, then, until all dividends or sinking fund payments so in
default have been paid or declared and set apart for payment, the holders of
shares of Preferred Stock of each and every class or series, voting as a single
20
class, shall be entitled, at any annual meeting during which dividends or
sinking fund payments are so in default, to elect the smallest number of
Directors necessary to constitute a majority of the full Board of Directors, the
balance of the Directors to be elected by the holders of shares having general
voting powers.
(c) Notwithstanding the provisions of Section 5 of Article III of these
By-Laws, except as provided in paragraph (b) of this Section 4, the holders of
the 8.76% Preferred Stock shall not be entitled to vote at any meeting of
Stockholders.
Section 5. In case of liquidation or dissolution of the Company, the
assets, irrespective of whether they shall consist of capital assets or
accumulated earnings, shall be distributed as follows: All holders of Preferred
Stock shall be entitled to be paid in full both the par amount of their shares
and an amount equal to the unpaid dividends accumulated and accrued thereon and,
in the case of the 8.76% Preferred Stock, if such liquidation or dissolution is
voluntary, an amount equal to the premium specified in Section 6(a) below,
before any amount shall be paid to the holders of the Common Stock, and in case
the assets shall not be sufficient to pay in full all of the Preferred Stock and
dividends accumulated and accrued thereon, and applicable premium, then the
principal thereof shall first be paid pro rata, thereafter a pro rata
distribution of any excess shall be made on account of the accumulated
21
dividends, based on the total amount of unpaid dividends accumulated and accrued
thereon, and thereafter a pro rata distribution of any excess shall be made on
account of applicable premium, based on the total amount of applicable premium,
but after such payment to the holders of the Preferred Stock, the remaining
assets and funds shall be paid to the holders of the Common Stock, according to
their respective shares.
Section 6. (a) The 7% Preferred Stock shall bear dividends at the rate of
7% per annum and shall not be redeemable. The 4% Preferred Stock, Series A,
shall bear dividends at the rate of 4% per annum and shall be redeemable at 112%
if called on or prior to October 1, 1950; at 111% thereafter through October 1,
1951; and after October 1, 1951 at 110%, plus accrued dividends in every case.
The 4 1/4% Preferred Stock shall bear dividends at the rate of 4 1/4% per annum
and shall be redeemable at 102% if called on or prior to April 1, 1954; at 101%
thereafter through April 1, 1959; and after April 1, 1959 at 100%; plus accrued
dividends in every case. Except as provided in Section 6(d) through 6(o), the
8.76% Preferred Stock shall bear dividends at the rate of 8.76% per annum and
shall not be redeemable prior to December 27, 1994. Dividends on the 8.76%
Preferred Stock shall be cumulative and paid quarterly no later than the first
business day following each January 19, April 19, July 19, and October 19. The
8.76% Preferred Stock shall be redeemable at the option of the Company as
follows:
22
At 105.63% if called on or prior to December 27, 1995;
At 105.01% if called on or prior to December 27, 1996;
At 104.38% if called on or prior to December 27, 1997;
At 103.75% if called on or prior to December 27, 1998;
At 103.13% if called on or prior to December 27, 1999;
At 102.50% if called on or prior to December 27, 2000;
At 101.88% if called on or prior to December 27, 2001;
At 101.25% if called on or prior to December 27, 2002;
At 100.63% if called on or prior to December 27, 2003;
and after December 27, 2003 at 100%;
plus accrued dividends in every case.
Preferred Stock, which is the subject of redemption, may be called in whole or
in part upon any dividend payment date by appropriate resolution adopted by the
Board of Directors at any regular or special meeting upon 60 days' written
notice to the owners thereof of record to be given by mailing copies of the
notice of redemption, postage prepaid, addressed to such owners at their
addresses as shown on the books of the Company. In the case of the 8.76%
Preferred Stock, notice of redemption to the owners thereof of record shall be
by certified mail, postage prepaid, or by a nationally recognized overnight
delivery service. If less than all of the outstanding shares of any class or
series of Preferred Stock shall be redeemed at any time, the stock to be so
redeemed shall be determined by lot, in such manner as the Board of Directors
may determine and prescribe, except that the shares of the 8.76% Preferred Stock
shall be redeemed pro rata.
23
(b) The 8.76% Preferred Stock shall also be subject to redemption through
the operation of a sinking fund (hereinafter called the Sinking Fund) at the
redemption price of $100 per share plus an amount equal to the dividends accrued
and unpaid thereon to the redemption date, whether or not earned or declared
(the Sinking Fund Redemption Price). For the purposes of the Sinking Fund, out
of any net assets of the Company legally available therefor remaining after full
cumulative dividends upon all Preferred Stock then outstanding to the end of the
current dividend period therefor shall have been paid or declared and set apart
for payment, the Company shall set aside in cash annually on December 27 in each
year commencing with December 27, 1995, an amount sufficient to redeem at the
Sinking Fund Redemption Price, 15,000 shares of the 8.76% Preferred Stock. The
Sinking Fund shall be cumulative so that if on any such December 27 the net
assets of the Company legally available therefor shall be insufficient to permit
any such amount to be set aside in full, or if for any other reason such amount
shall not have been set aside in full, the amount of the deficiency shall be set
aside, but without interest, before any dividend shall be paid or declared, or
any distribution made, on any junior shares or any junior shares shall be
purchased, redeemed, or otherwise acquired by the Company, or any moneys shall
be paid to or set aside for the purchase or redemption of any junior shares.
24
Notwithstanding the foregoing, the Company may at any time (1) pay dividends in
junior shares or (2) purchase, redeem or otherwise acquire junior shares in
exchange for, or out of the proceeds from the concurrent sale of, other junior
shares. As used herein the term "junior shares" shall mean Common Stock or any
other shares ranking junior to the 8.76% Preferred Stock either as to dividends
upon liquidation, dissolution or winding up. Moneys in the Sinking Fund shall be
applied (and disbursed) on such December 27 to redemption of the shares of the
8.76% Preferred Stock. The Company shall, prior to each such Sinking Fund
redemption, give notice of redemption, as specified in subsection (a) of this
Section 6, of such number of shares of the 8.76% Preferred Stock as may be
required to satisfy the Sinking Funds.
(c) In addition, the Company shall have the right, at its option, to
redeem at the Sinking Fund Redemption Price on December 27, 1995 and on any
December 27 thereafter an additional number of shares of the 8.76% Preferred
Stock up to but not exceeding 15,000 shares, provided, however, that the
aggregate number of shares of the 8.76% Preferred Stock which may be redeemed
pursuant to this Section 6(c) may not exceed 30,000 shares. Notice of any such
redemption shall be as specified in subsection (a) of this Section 6. These
rights shall not be cumulative and shall be lost to the extent not exercised.
Any redemption of shares of the 8.76% Preferred Stock pursuant to this Section
6(c) shall not operate to reduce the number of shares which the Company is
obligated to redeem pursuant to Section 6(b).
25
(d) At all times that dividends on the 8.76% Preferred Stock are payable
pursuant to these By-laws, the Company will treat the 8.76% Preferred Stock as
stock and not as indebtedness and will treat the dividends paid with respect to
the 8.76% Preferred Stock as dividends (within the meaning of Section 316 of the
Internal Revenue Code of 1986, as amended (the "Code")) to the maximum extent
permitted under the Code.
(e) At all times that dividends on the 8.76% Preferred Stock are payable
pursuant to these By-laws, the Company will not:
(1) take any action which would require or permit the Company to
treat the dividends paid with respect to the 8.76% Preferred Stock as
interest for any purpose or to treat the 8.76% Preferred Stock as
indebtedness for any purpose;
(2) exercise any option or election that may at any time be
available under the Code or otherwise to deduct all or part of the
dividends paid with respect to the 8.76% Preferred Stock if so doing
would reduce the after-Federal income tax yield per annum on such
dividends to any corporate holder of the 8.76% Preferred Stock;
(3) change its place of incorporation, by merger or otherwise, to
a jurisdiction other than the District of Columbia or one of the 50
states of the United States; or
(4) otherwise take any action which would cause the
Dividend-Received Deduction contained in Section 243 of the Code to
26
cease to be available with regard to dividends paid with respect to the
8.76% Preferred Stock to a corporate holder of 8.76% Preferred Stock
otherwise eligible to claim the Dividend-Received Deduction.
(f) In the event that the Company shall fail to take the action required in
subsection (d) of this Section 6, or shall take any of the actions referred to
in subsection (e) of this Section 6, then the Company will pay to each corporate
holder of 8.76% Preferred Stock, in addition to all dividends required to be
paid on the 8.76% Preferred Stock, such amount as is necessary so that the
after-Federal income tax yield per annum from dividends and such additional
payments on the 8.76% Preferred Stock is 7.8665% (or 7.5538% in the case of a
corporate holder subject to Section 832(b) of the Code) to such corporate holder
at a Federal income tax rate equal to 34%. Payments pursuant to the preceding
sentence shall be made to the extent necessary with respect to any and all
dividends on the 8.76% Preferred Stock (whether such dividends are paid before,
at the same time as or after the action or failure to act); provided, that no
such payments pursuant to this subsection (f) shall be made to any particular
corporate holder until such corporate holder has provided the Company with a
written notice specifying (1) that such holder requires indemnification under
this subsection (f), (2) the amount to be paid by the Company to such holder,
and (3) supporting calculations and that in the event that a corporate holder
makes a written demand for indemnification pursuant to this subsection (f), the
27
Company shall thereafter, on each date subsequent to the date of the action or
failure to act giving rise to such demand on which dividends are paid on the
8.76% Preferred Stock, in addition to such dividends, pay to such holder the
amount set forth in the demand for indemnification previously furnished to the
Company until such time as such holder furnishes written notice, including
supporting calculations, to the Company that indemnification is required,
whether pursuant to this subsection, subsection (h) or otherwise, at a greater
or lesser rate.
(g) If the Company shall pay a dividend in respect of the 8.76% Preferred
Stock which constitutes, in whole or in part, a return of capital for Federal
income tax purposes not eligible for the Dividend-Received Deduction, then the
Company will pay to each corporate holder of 8.76% Preferred Stock, in addition
to all dividends required to be paid on the 8.76% Preferred Stock, an amount
(the "Indemnity Amount") as is necessary so that the after-Federal income tax
yield per annum from such non-qualifying dividends and such additional payments
on the 8.76% Preferred Stock is 7.8665% (or 7.5538% in the case of a corporate
holder subject to Section 832(b) of the Code). For the purposes of calculating
the Indemnity Amount it will be assumed that each corporate holder is subject
to, and pays, Federal income tax at the highest marginal rate in the case of
"ordinary income" and the highest marginal rate in the case of long-term
28
"capital gains," in the year in which the Indemnity Amount is paid; provided,
that no such Indemnity Amount shall be paid to any particular corporate holder
until the earlier of (1) the time of the sale, exchange or redemption (including
a sinking fund purchase or redemption) of the 8.76% Preferred Stock, or (2) the
time additional Federal income taxes, including estimated taxes, resulting from
the payment of dividends on the 8.76% Preferred Stock in any calendar year which
constitute, in whole or in part, a return of capital for Federal income tax
purposes not eligible for the Dividend-Received Deduction, are paid or would
have been paid if the corporate holder were liable for Federal income tax;
provided, further, that in the case of a sale or exchange of the 8.76% Preferred
Stock, such Indemnity Amount shall be paid at the later of (1) fourteen (14)
days after notice of such sale or exchange is given to the Company by such
corporate holder, or (2) the occurrence of such sale or exchange; and provided,
further, that if such Indemnity Amount cannot be determined at the time of the
sale, exchange or redemption (i.e., the sale, exchange or redemption of the
8.76% Preferred Stock occurs in a year in which the distributions on the 8.76%
Preferred Stock are, in whole or in part, a return of capital) then the Company
shall pay such Indemnity Amount at the earlier of (1) forty-five (45) days after
the end of the calendar year, or (2) the time when the Indemnity Amount can be
determined.
29
(h) In the event that, after December 27, 1989, Federal legislation is
enacted (whether in the form of an amendment of the Code or otherwise) which
(whether by the terms of such legislation or by U.S. Treasury regulations
promulgated thereunder or a ruling published by the Internal Revenue Service)
(1) causes or makes any corporate holder of 8.76% Preferred Stock ineligible to
claim the Dividend-Received Deduction in connection with dividends paid on the
8.76% Preferred Stock or (2) reduces the effective rate, either directly or
indirectly (such as by taking into account any proration required by Section
832(b) of the Code), of the Dividend-Received Deduction which any corporate
holder of 8.76% Preferred Stock may claim in connection with dividends paid on
the 8.76% Preferred Stock, the Company will pay to each such corporate holder,
in addition to all dividends required to be paid on the 8.76% Preferred Stock,
such amount as is necessary so that the after-Federal income tax yield per annum
from dividends and such additional payments on the 8.76% Preferred Stock is
7.8665% (or 7.5538% in the case of a corporate holder subject to Section 832(b)
of the Code) to such corporate holder based on an assumed Federal income tax
rate of 34%. Payments pursuant to the preceding sentence shall be made to the
extent necessary with respect to any and all dividends on the 8.76% Preferred
Stock (whether such dividends are paid before, at the same time as or after the
enactment of such legislation or the issuance of such regulations or ruling);
provided, that no such payments shall be made to any particular corporate holder
until such holder has provided the Company with a written notice, at any time
30
subsequent to the effective date of such legislation, regulations or ruling, as
the case may be, specifying (i) that such holder requires indemnification from
the Company for the amount of loss incurred by the holder due to such
legislation, regulations or ruling, as the case may be, (ii) the amount to be
paid by the Company to such holder so that the after-Federal income tax yield
per annum from dividends and such additional payments on the 8.76% Preferred
Stock is 7.8665% (or 7.5538% in the case of a corporate holder subject to
Section 832(b) of the Code) to such corporate holder based on an assumed Federal
income tax rate of 34% and (iii) supporting calculations. In the event that a
corporate holder makes a written demand for indemnification pursuant hereto, the
Company shall thereafter, on each date subsequent to the effective date of such
legislation, regulations or ruling, as the case may be, on which dividends are
paid on the 8.76% Preferred Stock, in addition to such dividends, pay to such
holder the amount set forth in the demand for indemnification previously
furnished to the Company until such time as such holder furnishes written
notice, including supporting calculations, to the Company that indemnification
is required, whether pursuant to this subsection (h), subsection (f) or
otherwise, at a greater or lesser rate. In the event that further legislation,
U.S. Treasury regulations or rulings published by the Internal Revenue Service,
if any, further limit the eligibility to claim the Dividend-Received Deduction
in connection with dividends paid with respect to the 8.76% Preferred Stock by
any corporate holder thereof or further reduce the effective rate of the
31
Dividend-Received Deduction which any corporate holder of 8.76% Preferred Stock
may claim in connection with dividends paid on the 8.76% Preferred Stock, then
any such corporate holder may deliver another notice pursuant to this subsection
(h) requesting a new payment amount.
(i) In the event that the Company shall become obligated to make a payment
to any holder of 8.76% Preferred Stock pursuant to subsection (h) of this
Section 6, then the Company shall have the right at its option within 30 days
after receipt of notice from any holder seeking indemnification pursuant to
subsection (h) (but not at a time thereafter that the Company is no longer
obligated to make such a payment), to purchase all or a portion of the 8.76%
Preferred Stock held by such holder at $100 per share plus accrued dividends to
the date of purchase; provided, that, the Company shall have no obligation to
make a payment pursuant to subsection (h) and shall have no right to purchase
the 8.76% Preferred Stock of a holder pursuant to this subsection (i) if such
holder waives the Company's obligation to make payment pursuant to subsection
(h) within 60 days after receipt of the Company's notice exercising its right to
purchase 8.76% Preferred Stock pursuant to this subsection (i); and provided,
further, that if the Company becomes obligated (and such obligation has not been
waived) to make payments pursuant to such subsection (h) to holders of 50% or
32
more of the then outstanding 8.76% Preferred Stock, the Company shall be
entitled to so purchase all, but not part, of the then outstanding 8.76%
Preferred Stock; and provided, further, that in no event shall the Company be
relieved of its obligation to make any payment required under subsection (h)
with respect to any dividends payable, prior to the actual date of purchase by
the Company of 8.76% Preferred Stock, to any corporate holder whose 8.76%
Preferred Stock is purchased by the Company pursuant to this Section 6.
(j) In calculating the payments to be made to a corporate holder under
subsections (f), (g) or (h), such holder shall take into account any and all
payments (including, without limitation, taxes, interest and penalties) that
such holder is required to make as a result of the event or events that resulted
in the demand for indemnification pursuant to such subsections. All amounts
payable under subsections (f), (g) and (h) of this Section 6 shall be considered
contract claims taxable as ordinary income not eligible for the
Dividend-Received Deduction.
(k) In computing "after-Federal income tax yield" to any corporate holder
of 8.76% Preferred Stock in any particular taxable year from dividends paid with
respect to the 8.76% Preferred Stock for purposes of this Section 6, (1) only
Federal income taxes shall be considered, (2) the effective rate of the
Dividend-Received Deduction available to a corporate holder of 8.76% Preferred
Stock in any particular taxable year shall be determined by taking into account
33
any applicable provision of the Code (including, without limitation, Section
832(b)) that reduces or enlarges the amount of any other deduction, exclusion or
adjustment that would otherwise be available to such holder for such taxable
year, if such reduction or enlargement is required to be made because such
holder is entitled to the benefits of the Dividend-Received Deduction and by
taking into account any reduction or enlargement in the effective rate of the
Dividend-Received Deduction required to be made because such holder or any
income or loss of such holder is subject to any applicable provision of the Code
other than Section 243(a)(1), (3) except to the extent provided in clause (2)
above, the Dividend-Received Deduction for the 1990 calendar year shall be
deemed to be 70%, (4) for the purposes of subsection (j), the maximum marginal
rate applicable to dividends received by corporations in the first full taxable
year in which the 8.76% Preferred Stock is issued and outstanding shall be
deemed to be 34%, (5) except to the extent required by the provisions of clause
(2) above, the dividends paid with respect to the 8.76% Preferred Stock to a
corporate holder thereof in such particular taxable year shall be deemed to be
the only item of income for such particular taxable year of such holder, (6) the
Dividend-Received Deduction, if actually available (disregarding any
disallowance pursuant to Code Section 246A) to such holder for such particular
taxable year, and only to the extent actually available to such holder for such
particular taxable year, as detailed in clause (2) above, shall be deemed to be
the only deduction or exclusion available to such holder, except as otherwise
34
provided in clause (2) above, and (7) for the purposes of subsection (j), the
rate of Federal income tax imposed with respect to the receipt of ordinary
income (i.e., contract claims) shall be deemed to be the maximum marginal rate
applicable to ordinary income received by corporations in such particular
taxable year. In the case of a holder of 8.76% Preferred Stock who did not own
any 8.76% Preferred Stock for the 1990 calendar year, the computation shall be
made as though such holder has owned 8.76% Preferred Stock in such taxable year.
(l) Any references to the after-Federal income tax yield per annum referred
to in this Section 6 shall be adjusted in accordance with subsection (o) of this
Section 6.
(m) As referred to in Note 5 to the Company's financial statements included
in its Quarterly Report on Form 10-Q for the quarter ended September 30, 1989,
an adjustment in the Federal income tax liability of the Company has been
proposed by the Internal Revenue Service. Such proposed adjustment relates to
the Company's Federal income tax treatment of certain issues which relate to the
Company's ownership and subsequent sale of its interest in the Seabrook project
and the Company's abandonment of Seabrook Unit 2.
35
(n) In the event that, as a result of the proposed adjustment asserted
in the Internal Revenue Service Audit described in subsection (m) above,
(1) the Company shall reduce or be required by generally accepted
accounting principles, the Federal Energy Regulatory Commission
or the Maine Public Utilities Commission to reduce its Retained
Earnings in the cumulative amount, including tax liability,
interest and penalties, of $15 million or more; and
(2) during the twelve-month period subsequent to the reduction or
required reduction in Retained Earnings referred to in subsection
(n)(1) above, the holders of the 8.76% Preferred Stock shall not
have received written notification, addressed to them and dated
after the date of the reduction or required reduction in Retained
Earnings referred to in subsection (n)(1) above, from either
Moody's Investors Service, Inc. ("Moody's") or Standard and
Poor's Corporation ("S&P") that the 8.76% Preferred Stock has a
rating of at least "baa3" from Moody's or "BBB-" from S&P; and
(3) any holder provides written notice to the Company, within 30 days
after the beginning of each of the fifth through twelfth quarters
following the reduction in Retained Earnings or requirement to
36
reduce Retained Earnings referred to in subsection (n)(1) above,
that it elects to receive an increased dividend rate on the 8.76%
Preferred Stock held by it pursuant to this subsection (n);
then commencing at the beginning of the first quarter during which the notice
referred to in subsection (n)(3) above is provided, the dividend rate payable on
such 8.76% Preferred Stock for that quarter and each subsequent quarter shall
increase by 50 basis points per quarter to a maximum increase of 300 basis
points (an 11.76% dividend rate per annum); provided, that so long as the
Company is obligated to pay an increased dividend rate pursuant to this
subsection (n), the Company shall have the right at its option to purchase, upon
30 days' written notice to each holder of 8.76% Preferred Stock as to which
notice referred to in subsection (n)(3) above has been given, all, but not part,
of such 8.76% Preferred Stock held by such holder at $100 per share plus accrued
dividends to the date of purchase; provided, further, that under no
circumstances shall the Company be relieved of its obligation to pay an
increased dividend pursuant to this subsection (n) prior to the actual date of
purchase by the Company of the 8.76% Preferred Stock; and provided, further,
that if subsequent to the receipt of the notice referred to in subsection (n)(3)
above, the Company shall receive notification from Moody's or S&P that the 8.76%
Preferred Stock has a rating of at least "baa3" from Moody's or "BBB-" from S&P,
then (i) the Company shall give notice to each holder of 8.76% Preferred Stock
37
entitled to an increased dividend rate pursuant to this subsection (n) that,
commencing with the beginning of the quarter following the mailing of such
notification, the dividend rate payable on such 8.76% Preferred Stock shall be
reduced to 8.76% per annum, and (ii) the Company shall have no further right to
purchase the 8.76% Preferred Stock pursuant to this subsection (n).
(o) So long as the Company is required to pay any holder of 8.76% Preferred
Stock an increased dividend rate pursuant to subsection (n), the after-Federal
income tax yield applicable to any payments to be made pursuant to subsections
(f), (g) and (h) of this Section 6 shall be increased as follows:
After-Federal
Increase in After-Federal Income Tax Yield
Dividend Rate Income Tax to Holder Subject
(Basis Points) Yield to Section 832(b)
50 8.3155 7.9849
100 8.7645 8.4161
150 9.2135 8.8472
200 9.6625 9.2784
250 10.1115 9.7095
300 10.5605 10.1407
38
Section 7. The Board of Directors, by resolution adopted prior to the issue
of any stock having voting rights, shall determine whether the holders of any of
the classes or series of the Preferred Stock and/or the holders of the Common
Stock may have or may not have the preemptive right to subscribe for and take
shares of such stock so to be issued. Except to the extent that the Board of
Directors shall determine as above provided, no right to subscribe for or to
take any stock, whether Preferred or Common, at any time issued by the Company
shall appertain to any of the stock of this Company.
Section 8. All certificates of stock shall be signed by, or bear the
facsimile signatures of, the President or any Vice President and the Treasurer
or Assistant Treasurer, and shall have affixed thereto the corporate seal or
bear a facsimile thereof.
Section 9. The Board of Directors shall provide for the transfer and
registration of the shares of the Company's capital stock in such city or cities
as it from time to time deems necessary or advisable. Said Board of Directors
shall appoint such transfer agents, co-transfer agents, registrars and
co-registrars as are required for the foregoing purpose. All capital stock
certificates shall be countersigned by a transfer agent or co-transfer agent so
appointed, and by a registrar or co-registrar so appointed.
39
Section 10. Shares of stock of the Company shall be transferable only on
the books of the Company by the holder thereof in person, or by his or her
attorney duly authorized thereto in writing, and upon the surrender and
cancellation of the certificate therefor duly endorsed.
ARTICLE XI. Amendments
Section 1. These By-Laws may be amended, altered or repealed at any annual
meeting of the Stockholders of the Company by a vote of a majority in interest
of the Stockholders present. These By-Laws may also be amended, altered or
repealed at any special meeting of the Stockholders by a like vote, provided
notice of the proposed amendment, alteration or repeal shall have been given in
the notice of the meeting.
Section 2. These By-Laws may also be amended, altered or repealed by the
Board of Directors by a vote of a majority of all the Directors of the Company
given at any regular or special meeting, provided notice of such proposed
amendment or alteration shall have been given by resolution adopted at a meeting
of the Board of Directors held not less than two weeks previous thereto and a
copy of such resolutions shall have been sent to each member of the Board not
less than one week prior to the meeting at which such amendment or alteration is
acted upon. Any amendment to these By-Laws adopted by the Board of Directors as
herein provided shall be reported to the Stockholders at the annual meeting of
the Company.
40
I, Andrew Landry, hereby certify that I am the duly elected and qualified
Clerk of Bangor Hydro-Electric Company, and that the foregoing is a true copy of
the _________???
41
Dates Referenced Herein and Documents Incorporated by Reference
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