Quarterly Report — Form 10-Q
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report 18 89K
3: EX-3 Articles of Incorporation/Organization or By-Laws 16 59K
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2: EX-3 Exhibit 3.1 12 66K
4: EX-31 Exhibit 31.1 2± 10K
5: EX-31 Exhibit 31.2 2± 9K
6: EX-32 Certification per Sarbanes-Oxley Act (Section 906) 1 7K
-- ex32
EX-3 — Exhibit 3.1
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RESTATED
CERTIFICATE OF INCORPORATION
OF
ARTESIAN RESOURCES CORPORATION
(originally incorporated under the name
Artesian Water Company on February 10, 1927)
FIRST: The name of the Corporation shall be ARTESIAN RESOURCES
CORPORATION.
SECOND: The location of the registered office in the State of Delaware
is 664 Churchmans Road, in the City of Newark (19702), in the County of New
Castle. The name of the registered agent therein and in charge thereof against
whom process may be served is the Corporation itself.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware, including but not limited to manufacturing,
processing, owning, using and dealing in personal property of every class and
description, engaging in research and development, furnishing services, and
acquiring, owning, using and disposing of real property of any nature
whatsoever. The Corporation shall not engage in any activity which the
Corporation could not engage in prior to January 1, 1984 unless, if any shares
of cumulative Prior Preferred Stock are then outstanding, the consent of the
holders of such Cumulative Prior Preferred stock thereto shall first be obtained
as provided by Section 4.15(A)(c) of Article Fourth hereof.
FOURTH: Section I. Authorized Shares and Designations. The total number
of shares of all classes of stock which the Corporation shall have authority to
issue is 16,230,868. Such shares shall be divided as follows:
1. 10,868 shares of 7% Prior Preferred Stock, par value $25.00
per share, designated 7% Prior Preferred Stock, aggregating
$271,700.00;
2. 80,000 shares of Cumulative Prior Preferred Stock, par value
$25.00 per share, designated Cumulative Prior Preferred Stock,
aggregating $2,000,000.00;
3. 15,000,000 shares of Class A Non-Voting Common Stock, par
value $1.00 per share, designated Class A Non-Voting Common
Stock;
4. 1,040,000 shares of Class B Common Stock, par value $1.00 per
share, designated Class B Common Stock; and
5. 100,000 shares of Series Preferred Stock, par value $1.00 per
share.
The powers, preferences, and rights, and the qualifications,
limitations, or restrictions of the designated classes and series of stock of
the Corporation are as follows:
PART I
7% PRIOR PREFERRED STOCK
------------------------
Section 4.01. Dividends Generally. The 7% Prior Preferred Stock shall
entitle the holders thereof to cumulative dividends thereon at the rate of, but
not exceeding, 7 per centum, per annum, payable out of the net earnings of the
Corporation quarter-yearly on the first day of February, May, August, and
November in each year.
Section 4.02. Dividend Priority. No dividends may be declared and paid
on the Series Preferred Stock, or the Common Stock in any year unless and until
the full dividends on the 7% Prior Preferred Stock then outstanding shall have
been paid or declared and set apart for payment.
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Section 4.03. Redemption. The 7% Prior Preferred Stock may, at the
discretion of the Board of Directors, be redeemed in whole or in part at any
time or from time to time, upon at least 30 days' notice, at the price of $30
for each share, plus accrued but unpaid dividends.
Section 4.04. Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the corporation or the sale by the Corporation of
all of its assets, the holders of the 7% Prior Preferred Stock shall be entitled
to be paid in cash the par value of said shares, together with an amount equal
to accrued but unpaid dividends, before anything shall be paid to the holders of
junior stock. The holders of the 7% Prior Preferred Stock shall not be entitled
to receive any amounts with respect thereto upon any liquidation, dissolution,
or winding up of the Corporation other than the amounts referred to in this
paragraph. The consolidation or merger of the Corporation with any other
corporation or corporations shall not be deemed to be a liquidation,
dissolution, or winding up of the Corporation.
Section 4.05. Pari Passu Status as to Dividends. The 7% Prior Preferred
Stock and the Cumulative Prior Preferred Stock shall rank equally with respect
to the payment of dividends so that no dividends shall be declared on the 7%
Prior Preferred Stock or an any series of the Cumulative Prior Preferred Stock
unless there shall likewise be declared on all shares of the 7% Prior Preferred
Stock and on all shares of all series of the Cumulative Prior Preferred Stock at
the time outstanding, like proportionate dividends, ratably, in proportion to
the respective annual divided rates fixed therefore, in respect of the same
quarter-yearly dividend period, to the extent that such shares are entitled to
receive dividends for such quarter-yearly dividend period.
Section 4.06. Pari Passu Status as to Liquidation. Except that the sale
of all of its assets by the Corporation shall be deemed to be a liquidation,
dissolution, or winding up of the Corporation in the case of the 7% Prior
Preferred Stock and shall not be so deemed in the case of the Cumulative Prior
Preferred Stock, the 7% Prior Preferred Stock and the Cumulative Prior Preferred
Stock shall rank equally with respect to distributions upon any liquidation,
dissolution, or winding up of the Corporation, so that the holders of the 7%
Prior Preferred Stock and of each series of the Cumulative Prior Preferred Stock
at the time outstanding shall be entitled upon any liquidation, dissolution, or
winding up of the Corporation, and after paying or providing for the payment of
all creditors of the Corporation, to be paid in cash the amount for the 7% Prior
Preferred Stock or the particular series of the Cumulative Prior Preferred Stock
fixed therefore as herein provided, together with an amount equal to accrued but
unpaid dividends; but no payments on account of such distributive amounts shall
be made to the holders of the 7% Prior Preferred Stock or of any series of the
Cumulative Prior Preferred Stock unless there shall likewise be paid at the same
time to the holders of the 7% Prior Preferred Stock and (except in the case of a
sale of all of the assets of the Corporation) like proportionate distributive
amounts to the holders of all series of the Cumulative Prior Preferred Stock at
the time outstanding, ratably, in proportion to the full distributive amounts to
which they are respectively entitled as herein provided.
Section 4.07. Voting Rights. The holders of the 7% Prior Preferred
Stock shall have no voting power in the Corporation, except in statutory
proceedings as to which their vote may be required by law.
Section 4.08. Designation. The 7% Prior Preferred Stock constitutes a
redesignation of the previously-authorized class heretofore designated as the
"7% Preferred Stock."
PART II
CUMULATIVE PRIOR PREFERRED STOCK
--------------------------------
General Provisions
------------------
Section 4.09. Issuable in Series. The Cumulative Prior Preferred Stock
may be issued from time to time in one or more series. The designations,
preferences and other rights, and limitations or restrictions of the Cumulative
Prior Preferred Stock of each series shall be such as are stated and expressed
in this article, and to the extent not stated and expressed herein, shall be
such as may be fixed by the Board of Directors (authority so to do being hereby
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expressly granted) and stated and expressed in a resolution or resolutions
adopted by the Board of Directors providing for the initial issue of Cumulative
Prior Preferred Stock of such series. Each series shall be designated so as to
distinguish the shares thereof from the shares of all other series. All shares
of the Cumulative Prior Preferred Stock of all series, whether now or hereafter
created, shall be of equal rank and all shares of any particular series of the
Cumulative Prior Preferred Stock shall be identical except as to the date or
dates from which dividends thereon shall be cumulative as provided in Section
4.10 hereof. The shares of the Cumulative Prior Preferred Stock of different
series, subject to any applicable provision of law, may vary as to the following
rights and preferences, and restrictions and qualifications thereof, which shall
be fixed, in the case of each such series, at any time prior to the issuance of
the shares thereof in the manner provided in this section and in Section 4.14
hereof:
(a) The annual dividend rate (within such limits as shall be permitted by
law) for the particular series and the date from which dividends on all shares
of such series issued prior to the record date for the first dividend for such
series shall be cumulative;
(b) The redemption price or prices for the particular series and the terms
and conditions of which shares may be redeemed;
(c) The amount or amounts per share for the particular series payable to
the holders thereof upon any voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation;
(d) The terms and amount of any sinking fund provided for the purchase or
redemption of shares of the particular series;
(e) The terms upon which the stock of the particular series may be
converted into or exchanged for stock of any other series, class or classes; and
(f) The designations, preferences, and relative, participating, optional,
or other special rights, and the qualifications, limitations, or restrictions,
if any, of the particular series.
Section 4.10. Dividend Rights. The holders of each series of the Cumulative
Prior Preferred Stock at the time outstanding shall be entitled to receive, but
only when and as declared by the Board of Directors, out of funds legally
available for payment of dividends, dividends at the annual dividend rate for
the particular series fixed therefore as herein provided, payable quarter-yearly
on the first day of February, May, August, and November in each year, to
stockholders of record on the respective dates, not exceeding thirty (30) days
preceding such dividend payment dates, fixed for the purpose by the Board of
Directors in advance of the payment of the respective dividends. No dividends
shall be declared on any series of the Cumulative Prior Preferred Stock in
respect of any quarter-yearly dividend period unless there shall likewise be
declared on all shares of all series of the Cumulative Prior Preferred Stock at
the time outstanding, like proportionate dividends, ratably, in proportion to
the respective annual dividend rates fixed therefore, in respect of the same
quarter-yearly dividend period, to the extent that such shares are entitled to
receive dividends for such quarter-yearly dividend period. The dividends on
shares of all series of the Cumulative Prior Preferred Stock shall be
cumulative. In the case of all shares of each particular series, the dividends
on shares of such series shall be cumulative:
(a) If issues prior to the record date for the first dividend on the shares
of such series, then from the date for the particular series fixed therefore as
herein provided;
(b) If issued during the period commencing immediately after a record date
for a dividend and terminating as the close of the payment date for such
dividend, then from such dividend payment date; and
(c) Otherwise from the quarter-yearly dividend payment date next preceding
the date of issue of such shares; so that unless dividends on all outstanding
shares of each series of the Cumulative Prior Preferred Stock, at the annual
dividend rate and from the dates for accumulation thereof fixed as herein
provided, shall have been paid for all past quarter-yearly dividend periods, but
without interest on cumulative dividends, no dividends shall be paid or declared
and no other distribution shall be made on stock ranking junior to the
Cumulative Prior Preferred Stock with respect to the payment of dividends, and
no such stock shall be purchased or otherwise acquired for value by the
Corporation. The holders of Cumulative Prior Preferred Stock of any series shall
not be entitled to receive any dividends thereon other than the dividends
referred to in this Section 4.10.
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Section 4.11. Redemption. The Corporation, by action of its Board of
Directors, subject to the terms and conditions on which shares of a particular
series of the Cumulative Prior Preferred Stock may be redeemed, may redeem the
whole or any part of any series of the Cumulative Prior Preferred Stock, at any
time or from time to time, by paying in cash the redemption price of the shares
of the particular series fixed therefore as herein provided, together with
accrued but unpaid dividends in the case of each share of each series so to be
redeemed; provided, that the Corporation shall not redeem any shares of any
series of the Cumulative Prior Preferred Stock (other than redemptions through a
fixed sinking fund) or any shares of the 7% Prior Preferred Stock at any time
when the Corporation shall be in default with respect to the setting aside or
application of any sinking fund installment for any series of Cumulative Prior
Preferred Stock or at any time when the Corporation shall be in default with
respect to the payment of any dividend on any series of Cumulative Prior
Preferred Stock. The Corporation shall pay from its general funds all accrued
dividends payable on any such redemption and all expenses in connection
therewith. Notice of redemption shall be given at least thirty (30) day prior to
the date fixed for such redemption by first class mail to the holders of record
of the shares of the Cumulative Prior Preferred Stock so to be redeemed, at
their respective addresses as the same shall appear on the books of the
Corporation. In case of the redemption of a part only of any series of the
Cumulative Prior Preferred Stock at the time outstanding, the shares to be
redeemed shall be selected by lot or pro-rata, in such manner as the Board of
Directors may determine. The Board of Directors shall have full power and
authority, subject to the limitations and provisions herein contained, to
prescribe the manner in which and the terms and conditions upon which the shares
of the Cumulative Prior Preferred Stock shall be redeemed from time to time. If
such notice of redemption shall have been duly given, and if on or before the
redemption date specified in such notice all funds necessary for such redemption
shall have been set aside by the Corporation, separate and apart from its other
funds, in trust for the account of the holders of the shares to be redeemed, so
as to be and continue to be available therefore, then, notwithstanding that any
certificate for such shares so called for redemption shall not have been
surrendered for cancellation, from and after the date fixed for redemption, the
shares represented thereby shall no longer be deemed outstanding, the right to
receive dividends thereon shall cease to accrue and all rights with respect to
such shares so called for redemption shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive,
out of the funds so set aside in trust, the amount payable upon redemption
thereof, without interest; provided, however, the Corporation may, after giving
notice of any such redemption as herein before provided or after giving to the
bank or trust company hereinafter referred to irrevocable authorization to give
such notice, and at any time prior to the redemption date specified in such
notice, deposit in trust, for the account of the holders of the shares to be
redeemed, funds necessary for such redemption, with a bank or trust company in
good standing, organized under the laws of the United States of America, or of
the State of Delaware or of the Commonwealth of Pennsylvania, doing business in
the City of Wilmington, Delaware, or in Philadelphia, Pennsylvania, and having
capital, surplus and undivided profits aggregating at least $2,000,000,
designated in such notice of redemption; and upon such deposit in trust, all
shares with respect to which such deposit shall have been made shall no longer
be deemed to be outstanding, and all rights with respect to such shares shall
forthwith cease and terminate, except only the right of the holders thereof to
receive, out of the funds so deposited in trust, from and after the date of such
deposit, the amount payable upon the redemption thereof, without interest.
The Corporation may purchase or otherwise acquire any shares of any series
of the Cumulative Prior Preferred Stock, provided, that in the case of any
series of the Cumulative Prior Preferred Stock for which there is a sinking
fund, the purchase price shall not be in excess of the sinking fund redemption
price of the shares of the particular series so purchased or otherwise acquired;
and provided, further, that the Corporation shall not purchase or otherwise
acquire for value any shares of any series of Cumulative Prior Preferred Stock
(other than redemptions through a fixed sinking fund) or any shares of the 7%
Prior Preferred Stock at any time when the Corporation shall be in default with
respect to the setting aside or application of any sinking fund installment for
any series of Cumulative Prior Preferred Stock or any time when the Corporation
shall be in default with respect to the payment of any dividend on any series of
Cumulative Prior Preferred Stock.
Section 4.12 Sinking Fund. There shall be set aside on or before February 1
in each year cash required for sinking fund payments in such year with respect
to all series of Cumulative Prior Preferred Stock for which a sinking fund
requirement must be met in that year. To the extent that the terms of any series
permit the sinking fund requirement for such series to be met by the surrender
of stock, the aggregate par value of the shares surrendered for such purpose
shall be considered as equivalent in amount to cash set aside for such series.
The sinking fund requirement for each series of the Cumulative Prior Preferred
Stock for which a sinking fund has been established shall be cumulative, so that
if in any year the Corporation shall not satisfy the sinking fund requirement
for such year, the amount of the deficiency shall be added to the sinking fund
4
requirement for the next succeeding year. Unless and until all such deficiencies
shall have been made good, no dividends shall be declared or paid and no other
payment or distribution shall be made on stock ranking junior to the Cumulative
Prior Preferred Stock with respect to the payment of dividends, and no such
stock shall be purchased, redeemed or otherwise acquired for value by the
Corporation.
Section 4.13. Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation, the holders of each series of the
Cumulative Prior Preferred Stock at the time outstanding shall be entitled to be
paid in cash the amount for the particular series fixed therefore as herein
provided, together with an amount equal to accrued but unpaid dividends, before
any amount shall be paid to, or any assets distributed among, the holders of
stock ranking junior to the Cumulative Prior Preferred Stock with respect to
payments upon liquidation, dissolution, or winding up; but no payments on
account of such distributive amounts shall be made to the holders of any series
of the Cumulative Prior Preferred Stock unless there shall likewise be paid at
the same time to the holders of each other series of the Cumulative Prior
Preferred Stock at the time outstanding like proportionate distributive amounts,
ratably, in proportion to the full distributive amounts to which they are
respectively entitled as herein provided. The holders of the Cumulative Prior
Preferred Stock of any series shall not be entitled to receive any amounts with
respect thereto upon any liquidation, dissolution or winding up of the
Corporation other than the amounts referred to in this section. Neither the
consolidation or merger of the Corporation with any other corporation or
corporations, nor the sale or transfer by the Corporation of all or any part of
its assets, shall for the purpose of this Section 4.13 be deemed to be a
liquidation, dissolution or winding up of the Corporation.
Section 4.14. Power of Board With Respect to Series. The Corporation may,
at any time or from time to time, within the then total authorized amount of the
Cumulative Prior Preferred Stock of all series, increase the authorized amount
of any series of the Cumulative Prior Preferred Stock or of any unclassified
Cumulative Prior Preferred Stock, classify or reclassify any unissued shares of
the Cumulative Prior Preferred Stock as shares of the Cumulative Prior Preferred
Stock of any series or as unclassified Cumulative Prior Preferred Stock, create
one or more additional series of the Cumulative Prior Preferred Stock, fix the
authorized amount of any series (which amount shall be subject to change from
time to time by like action), and fix the designations and the rights and
preferences, and restrictions and qualifications thereof, of any series of the
Cumulative Prior Preferred Stock in the respects in which the shares of any
series may vary from the shares of other series of the Cumulative Prior
Preferred Stock as provided in Section 4.09 hereof, by the vote of a majority in
interest of the total number of shares of each series of the Series Preferred
Stock and of a majority in interest of the total number of shares of the Class B
Common Stock of the Corporation then outstanding given at a meeting called for
that purpose in accordance with the provisions of Section 4.30 hereof, and no
vote or consent of the holders of shares of the Cumulative Prior Preferred
Stock, as a class or otherwise, shall be required in connection therewith nor
shall the holders of shares of the Cumulative Prior Preferred Stock be entitled
to notice of any such meeting. In case and to the extent that under the laws of
Delaware at the time in effect, the Board of Directors of the Corporation shall
be authorized by law to create new series of the Cumulative Prior Preferred
Stock or to fix the amounts, designations, rights and preferences, and
restrictions and qualifications thereof, of the shares of any series of the
Cumulative Prior Preferred Stock or to take any other action with respect to the
Cumulative Prior Preferred Stock of the Corporation specified in this Section
4.14, no action of stockholders of the Corporation with respect thereto shall be
required under the provisions of this Section 4.14 and all action authorized by
the provisions of this Section 4.14 to be taken by vote of the holders of the
Class B Common Stock may be taken by vote of the Board of Directors of the
Corporation.
Section 4.15. Restrictions on Corporate Action.
(A) So long as any shares of the Cumulative Prior Preferred Stock of any
series are outstanding, the corporation shall not, without the consent (given in
writing or by vote at a meeting called for that purpose in accordance with the
provisions of Section 4.30 hereof) of the holders of at least three-fourths of
the total number of shares of the Cumulative Prior Preferred Stock of all series
then outstanding:
(a) Incur any long-term indebtedness if, after giving effect thereto, the
total long-term indebtedness will exceed sixty-five percent (65%) of the
capitalization of the Corporation. For the purpose of this Subsection (a), the
term "long-term indebtedness" shall mean all indebtedness of the Corporation
except indebtedness which by its terms matures within twelve (12) months of the
date as of which the computation is made and which is not by its terms renewable
or extendable at the option of the Corporation so as to mature more than twelve
(12) months after said date and purchase money obligations maturing within two
(2) years after said date. For the purpose of this paragraph (a), (i)
5
"capitalization" of the Corporation shall be deemed to consist of the total of
the long-term indebtedness of the Corporation, the aggregate par or stated value
of all issued and outstanding shares of stock of the Corporation (including
premiums on capital stock) and (ii) any write-up of the Corporation's properties
made on the books of the Corporation subsequent to December 31, 1960, or any
charges (whether against income or surplus) representing provision for the
amortization or the write-down or write-off of any excess of book value of the
Corporation's properties over the original cost thereof or over the cost thereof
to any previous owner, made on the books of the Corporation subsequent to
December 31, 1960, shall be disregarded;
(b) Create or authorize any class of stock unless such stock ranks junior
to the Cumulative Prior Preferred Stock with respect both to the payment of
dividends and distributions upon liquidation, dissolution, or winding up of the
Corporation, or create or authorize any obligation or security convertible into
shares of stock of any class other than shares of a class the creation or
authorization of which is permitted as aforesaid;
(c) Amend, alter, change, or repeal any of the provisions of the
Certificate of Incorporation dealing with the purposes of the Corporation so as
to substantially change such purposes (an expansion, contraction, or change in
territory to be served not being considered, within the meaning of the foregoing
provision, as a change in purpose), or amend, alter, change, or repeal any of
the express terms, whether in the Certificate of Incorporation or the
authorizing resolution, of the Cumulative Prior Preferred Stock or of any series
of the Cumulative Preferred Stock then outstanding in a manner prejudicial to
the holders thereof; provided, however, that if any such amendment, alteration,
change, or repeal would be prejudicial to the holders of one or more, but not
all, of the series of the Cumulative Prior Preferred Stock at the time
outstanding, the consent of the holders of at least three-fourths of the total
number of shares of each series of Cumulative Prior Preferred Stock then
outstanding and so affected (each such series being considered separately as a
class) shall be required in lieu of the consent of the holders of at least
three-fourths of the total number of shares of the Cumulative Prior Preferred
Stock of all series then outstanding;
(d) Issue any shares of any series of the Cumulative Prior Preferred Stock
or any shares of stock ranking prior to or on a parity with the Cumulative Prior
Preferred Stock with respect to the payment of dividends or distributions upon
liquidations, dissolution, or winding up of the Corporation,
(i) unless the gross income of the Corporation (determined in
accordance with accepted accounting principles after deduction of
all taxes based on income but before deduction of the interest
charges hereinafter described), for any twelve (12) consecutive
calendar months within the fifteen (15) calendar months preceding
the calendar month within which such additional shares of stock
shall be issued, shall have been at least 140% of the sum of (x)
an amount equal to the interest for one (1) year on all
indebtedness of the Corporation to be outstanding after the
proposed issuance, except indebtedness which by its terms matures
within twelve (12) months of the date on which such additional
shares shall be issued and which is not by its terms renewable or
extendable at the option of the Corporation so as to mature more
than twelve (12) months after said date and except purchase money
obligations maturing within two (2) years after said date, and (y)
an amount equal to the dividend requirement for one (1) year on
all shares of Cumulative Prior Preferred Stock of all series and
on all other shares of stock ranking equally with or prior to the
Cumulative Prior Preferred Stock with respect to the payment of
dividends or distributions upon liquidation, dissolution or
winding up of the Corporation, to be outstanding immediately after
such issue, (including the shares proposed to be issued but not
including any shares proposed to be redeemed or otherwise retired
in connection with such issue); and
(ii) unless, after such issuance, the equity of junior stock shall
equal or exceed the sum of the total par value, accrued and unpaid
dividends, and any premium payable upon a voluntary liquidation
applicable to all outstanding shares of Cumulative Prior Preferred
Stock and any class ranking prior to or on a parity with the
Cumulative Prior Preferred Stock with respect to the payment of
dividends or distributions upon liquidation, dissolution or
winding up of the Corporation; or
(e) Reissue any shares of the Cumulative Prior Preferred Stock previously
purchased, redeemed, or retired, whether or not purchased, redeemed, or retired
through operation of any sinking fund; or
6
(f) Merge or consolidate if the purposes of the resulting corporation would
be substantially different from those of the Corporation (an expansion,
contraction or change in territory to be served not being considered, within the
meaning of the foregoing provision, as a change in purpose), or if any adverse
change in the terms and provisions of the Cumulative Prior Preferred Stock would
result, or if the voting rights or potential voting rights of the Cumulative
Prior Preferred Stock would be in any way diluted, or if the equity of the
Cumulative Prior Preferred Stock would be reduced below the equity applicable to
such shares determined from the balance sheet of the Corporation as of a date no
more than ninety (90) days prior to the effective date of such consolidation or
merger, or if the resulting corporation would have outstanding any stock ranking
prior to the Cumulative Prior Preferred Stock with respect to the payment of
dividends or distributions upon liquidation, dissolution or winding up of the
Corporation other than shares of stock of the Corporation outstanding
immediately prior to such effective date.
(B) So long as any shares of the Cumulative Prior Preferred Stock of any
series are outstanding, the Corporation shall not, without the consent (given in
writing or by vote at the meeting called for that purpose in accordance with the
provisions of Section 4.30 hereof) of the holders of at least a majority of the
total number of shares of the Cumulative Prior Preferred Stock of all series
then outstanding, increase the total number of authorized shares of the
Cumulative Prior Preferred Stock of all series so that such authorized number of
shares shall exceed Eighty Thousand (80,000).
Section 4.16. Preemptive Rights. No holder of shares of any series of the
Cumulative Prior Preferred Stock shall be entitled as such as a matter of right
to subscribe for or purchase any part of any new or additional issue of stock,
or securities convertible into stock, of any class whatsoever, whether now or
hereafter authorized, and whether issued for cash, property, services, by way of
dividends, or otherwise.
Section 4.17. Voting Rights.
(A) The holders of the Cumulative Prior Preferred Stock shall have no
voting power except as may be by statute otherwise mandatorily provided or
except as otherwise provided in Article Third or in this Section 4.17 or in
Section 4.15 of this Article Fourth.
(B) If and when dividends on any shares of the Cumulative Prior Preferred
Stock at the time outstanding shall be in default in whole or in part for each
of three (3) quarter-yearly periods, whether or not successive, then the holders
of all shares of the Cumulative Prior Preferred Stock shall be entitled to vote
as a class for not less than one-third of the Board of Directors; and, if and
when dividends on any shares of the Cumulative Prior Preferred Stock at the time
outstanding shall be in default in whole or in part for each of seven (7)
quarter-yearly periods, whether or not successive, then the holders of all
shares of the Cumulative Prior Preferred Stock shall be entitled to vote as a
class for not less than a majority of the Board of Directors.
(C) If and when the Corporation fails to pay in full the amount of the
sinking fund payment applicable to any shares of the Cumulative Prior Preferred
Stock in any year, then the holders of all shares of the Cumulative Prior
Preferred Stock shall be entitled to vote as a class for not less than one-third
of the Board of Directors, irrespective of any default in dividends or of
failure of the holders of shares of the Cumulative Prior Preferred Stock to
exercise their rights under sub-section (B) above; and, if and when the
Corporation fails to pay in full the amount of the sinking fund payment
applicable to any shares of the Cumulative Prior Preferred Stock for two years,
whether or not successive, then the holders of all shares of the Cumulative
Prior Preferred Stock shall be entitled to vote as a class for not less than a
majority of the Board of Directors, irrespective of any default in dividends or
of failure of the holders of the shares of the Cumulative Prior Preferred Stock
to exercise their rights under sub-section (B) above. The rights of the holders
of shares of the Cumulative Prior Preferred Stock to vote for directors under
this sub-section (C) shall be an alternative to, and not an addition to, their
rights under sub-section (B) above.
(D) If and when all dividends then in default on the Cumulative Prior
Preferred Stock then outstanding shall be paid (and such dividends shall be
declared and paid out of any funds legally available therefore as soon as
reasonably practicable), and if and when the Corporation has paid the full
amount of the sinking fund payments applicable to the Cumulative Prior Preferred
Stock, the Cumulative Prior Preferred Stock shall thereupon be divested of any
special rights with respect to the election of directors and the voting power of
the Cumulative Prior Preferred Stock and the Class B Common Stock shall revert
to the status existing either before the occurrence of the dividend default, as
provided in sub-section (B) hereof, or before the sinking fund payment failure,
as provided in sub-section (C) hereof; but always subject to the same provisions
7
for vesting such special rights in the Cumulative Prior Preferred Stock in case
of further like default or defaults in dividends thereon or further like failure
to pay the full amount of the sinking fund payment.
(E) In case of any vacancy in the office of a director occurring among the
directors elected by the holders of Cumulative Prior Preferred Stock, as a
class, pursuant to the foregoing provisions of sub-sections (B) and (C) hereof,
the remaining director or directors elected by the holders of Cumulative Prior
Preferred Stock may appoint a successor to hold office for the unexpired term of
the director whose place shall be vacant.
(F) Whenever under the provisions of sub-sections (B) and (C) hereof, the
right shall have accrued to the holders of the Cumulative Prior Preferred Stock
to elect directors, the Board of Directors shall within ten (10) days after
delivery to the Corporation at its principal office of a request to such effect
signed by any holder of the Cumulative Prior Preferred Stock entitled to vote,
call a special meeting of the holders of the Cumulative Prior Preferred Stock to
be held within thirty (30) days from delivery of such request for the purpose of
electing the number of directors which the Cumulative Prior Preferred Stock is
entitled to elect to serve until the next annual meeting of stockholders. At all
meetings of stockholders held for the purpose of electing directors during such
times as the holders of shares of the Cumulative Prior Preferred Stock shall
have the special right to elect directors pursuant to sub-sections (B) and (C)
hereof, the presence in person or by proxy of the holders of a majority of the
outstanding shares of all series of the Cumulative Prior Preferred Stock
entitled to vote in the election shall be required to constitute a quorum of
such class for the election of directors; provided, however, that in the absence
of such a quorum the holders of a majority of the stock of such class entitled
to vote in the election who are present in person or by proxy shall have power
to adjourn the election of the directors to be elected by such class from time
to time without notice other than announcement at the meeting until the
requisite amount of holders of such class shall be present in person or by
proxy, but such adjournment shall not be made to a date beyond the date for the
mailing of notice of the next annual meeting of the Corporation or special
meeting in lieu thereof.
Section 4.18. Designation. The Cumulative Prior Preferred Stock constitutes
a redesignation of the previously-authorized class heretofore designated as the
"Cumulative Preferred Stock."
PART III
SERIES PREFERRED STOCK
----------------------
Section 4.19. Issuable in Series. The Series Preferred Stock may be issued
from time to time in one or more series. Subject to Parts I and II of this
Article Fourth, the voting powers, full or limited, or no voting powers, and
such designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, shall
be such as may be fixed by the Board of Directors (authority so to do being
hereby expressly granted) and stated and expressed in a resolution or
resolutions adopted by the Board of Directors providing for the initial issue of
Series Preferred Stock of such series.
Section 4.20. Restrictions on Issuance. No shares of the Series Preferred
Stock shall be issued without the prior consent of the holders of the Class A
Non-Voting Common Stock.
Section 4.21. Except as otherwise provided in the express terms of any
series of the Series Preferred Stock, the number of authorized shares of the
Series Preferred Stock may be increased or decreased by the affirmative vote of
the holders of the majority of the stock entitled to vote thereon under this
Article Fourth.
8
PART IV
CLASS A NON-VOTING STOCK
------------------------
Section 4.22. Voting Rights. Except in statutory proceedings as to which
the vote of holders of Class A Non-Voting Common Stock may be required by law
and, except as provided in Section 4.20, no right to vote shall be exercised by
the holders of the Class A Non-Voting Common Stock.
Section 4.23. Dividends. Subject to the provisions of Parts I, II and III
above, such dividends (payable in cash, stock, or otherwise) as may be
determined by the Board of Directors, may be declared and paid on the Class A
Non-Voting Common Stock, but only out of funds legally available for the payment
of dividends; provided, however, that the same dividend per share is declared
and paid on the Class B Common Stock.
Section 4.24. Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation, all assets and funds of the
Corporation remaining after paying or providing for the payment of all creditors
of the Corporation and after paying or providing for the payment to the holders
of shares of the 7% Prior Preferred Stock and of all series of the Cumulative
Prior Preferred Stock and Series Preferred Stock of the full distributive
amounts to which they are respectively entitled, as provided in or pursuant to
Parts I, II and III above, shall be divided among and paid to the holders of the
Class B Common Stock and the Class A Non-Voting Common Stock according to their
respective shareholdings.
Section 4.25. Preemptive Rights. The holders of Class A Non-Voting Common
Stock shall have no preemptive rights.
PART V
CLASS B COMMON STOCK
--------------------
Section 4.26. (A) Voting Rights. The right to vote shall be exercised
exclusively by the holders of the Class B Common Stock, except as provided in
Parts II and III above with reference to voting rights of Cumulative Prior
Preferred Stock and Series Preferred Stock, and except in statutory proceedings
as to which the vote of other classes of stock may be required by law.
(B) In the event that the holders of shares of Cumulative
Prior Preferred Stock are entitled to vote for directors, pursuant to the
provisions of Part II above, then, to the extent that the right to elect
directors is not expressly given to the holders of shares of Cumulative Prior
Preferred Stock, the right to elect directors remains exclusively with the
holders of any series of the Series Preferred Stock having voting rights by the
express terms of such series and with the holders of the Class B Common Stock.
Section 4.27. Dividends. Subject to the provisions of Parts I, II and III
above, such dividends (payable in cash, stock, or otherwise) as may be
determined by the Board of Directors, may be declared and paid to the Class B
Common Stock, but only out of funds legally available for the payment of
dividends; provided, however, that the same dividend per share is declared and
paid on the Class A Non-Voting Common Stock.
Section 4.28. Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation, all assets and funds of the
Corporation remaining after paying or providing for the payment of all creditors
of the Corporation and after paying or providing for the payment to the holders
of shares of the 7% Prior Preferred Stock and of all series of the Cumulative
Prior Preferred Stock and the Series Preferred Stock of the full distributive
amounts to which they are respectively entitled, as provided in or pursuant to
Parts I, II and III above, shall be divided among and paid to the holders of the
Class B Common Stock and the Class A Non-Voting Common Stock according to their
respective shareholdings.
Section 4.29. Preemptive Rights. The holders of Class B Common Stock shall
have no preemptive rights.
9
PART VI
GENERAL PROVISIONS APPLICABLE TO ALL CLASSES OF STOCK
-----------------------------------------------------
Section 4.30. Notice of Meetings. Notice of any meeting of stockholders of
the Corporation, or of the holders of any class of stock, required or authorized
by the provisions of the Certificate of Incorporation or by law, setting forth
the purpose or purposes of such meeting, shall be mailed by the Corporation, not
less than ten (10) days nor more than sixty (60) days prior to such meeting,
unless some mandatory provision of law shall require a longer or additional
notice, to all stockholders, at their respective addresses appearing on the
books of the Corporation, entitled to vote thereat of record as of a date fixed
by the Board of Directors of the Corporation for the purpose of determining the
stockholders entitled to notice of and to vote at such meeting, unless such
notice shall have been waived, either before or after the holding of such
meeting, by all stockholders entitled to notice thereof and to vote thereat. Any
action authorized to be taken at a meeting called for that purpose in accordance
with the provisions of this Section 4.30 may be taken either at a special
meeting or at any regular or annual meeting provided that notice of such
proposed action is included in the notice of such regular or annual meeting.
Except where some mandatory provision of law shall be controlling, no other,
longer or additional notice need be given of any such meeting and all holders of
shares of stock of the Corporation, by becoming such, thereby consent to the
holding of any such meeting upon notice given as hereinbefore provided and
thereby waive, to the full extent permitted by law, any right to require the
giving of or to receive any such other, longer or additional notice.
Section 4.31. Definitions. As used in this Article Fourth, the following
words and phrases have the meanings herein specified unless the context connotes
otherwise:
(A) "Corporation" means Artesian Resources Corporation, a Delaware
corporation.
(B) "Accrued but unpaid dividends" means, in respect of each particular
share having a dividend preference, the amount of the difference between
(a) the amount computed by multiplying the following factors:
(i) dividend preference rate;
(ii) par value (except that if the share shall have no par
value, the stated amount of dividends payable with
respect to such share shall be deemed to be the
product of the dividend preference rate and the par
value for the purposes of this definition);
(iii) period of time elapsing between the date from which
dividends on such share became cumulative and the date
on which the dividends are stated to be accrued; and
(b) the aggregate amount of dividends paid on such share.
(C) "Outstanding" when used in reference to shares of stock means issued
shares, excluding shares held by the Corporation
(D) "Junior Stock" means, with respect to the Prior Preferred Stock, the
presently outstanding Class A Non-Voting Common Stock, the Class B Common Stock,
any series of the Series Preferred Stock and any stock hereafter issued if the
rights of the holders of such stock shall be subject or subordinate to the
rights of the holders of the Cumulative Prior Preferred Stock in respect of the
receipt of dividends and of amounts distributable upon any dissolution,
liquidation, or winding up, as the case may be, and with respect to the Series
Preferred Stock, and presently outstanding Class A Non-Voting Common Stock, the
Class B Common Stock, and any stock hereafter issued if the rights of the
holders of such stock shall be subject or subordinate to the rights of the
holders of any series of the Series Preferred Stock in respect of the receipt of
dividends or of amounts distributable upon any dissolution, liquidation, or
winding up, as the case may be.
(E) "Equity" of a particular class of stock means the amount of the
Corporation's capital stock and surplus accounts properly allocable to such
class of stock in accordance with accepted accounting principles.
10
FIFTH: In furtherance and not in limitation of the powers conferred by law,
the Board of Directors is expressly authorized to make, alter, amend and repeal
the By-Laws of the Corporation, subject to the power of the holders of capital
stock of the Corporation to alter, amend or repeal the By-Laws; provided,
however, that, with respect to the powers of holders of capital stock to make,
alter, amend and repeal By-Laws of the Corporation, notwithstanding any other
provision of this Restated Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the capital
stock of the Corporation required by law, this Restated Certificate of
Incorporation or any Preferred stock, the affirmative vote of the holders of at
least 75 percent of the voting power of all of the then-outstanding shares
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class, shall be required to (i) make, alter, amend
or repeal any provision of the By-Laws, or (ii) alter, amend or repeal any
provision of this Article FIFTH.
SIXTH: Section 6.01. Number, Election and Terms of Directors; Board Action.
Subject to the rights of the holders of any series of Preferred stock to elect
directors under specified circumstances, the number of directors shall be fixed
from time to time exclusively by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors which the Corporation
would have if there were no vacancies. The directors, other than those who may
be elected by the holders of any series of Preferred stock under specified
circumstances, shall be divided, with respect to the time for which they
severally hold office, into three classes with the term of office of the first
class to expire at the first annual meeting of stockholders following the
adoption of this provision, the term of office of the second class to expire at
the second annual meeting of stockholders following the adoption of this
provision, the term of office of the third class to expire at the third annual
meeting of stockholders following the adoption of this provision, with each
director to hold office until his or her successor shall have been duly elected
and qualified. At each annual meeting of stockholders, commencing with the first
annual meeting, (i) directors elected to succeed those directors whose terms
then expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until his or her successor shall have been duly elected
and qualified, and (ii) if authorized by a resolution of the Board of Directors,
directors may be elected to fill any vacancy on the Board of Directors,
regardless of how such vacancy shall have been created.
Section 6.02. Newly Created Directorships And Vacancies. Subject to
applicable law and to the rights of the holders of any series of Preferred stock
with respect to such series of Preferred stock, and unless the Board of
Directors otherwise determines, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies on the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause shall be filled only by a majority vote of
the directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been elected expires
and until such director's successor shall have been duly elected and qualified.
No decrease in the number of authorized directors constituting the entire Board
of Directors shall shorten the term of any incumbent director.
Section 6.03. Removal. Subject to the rights of the holders of any series
of Preferred stock with respect to such series of Preferred stock, any director,
or the entire Board of Directors, may be removed from office at any time, but
only for cause and only by the affirmative vote of the holders of at least 75
percent of the voting power of all of the then outstanding shares of the Voting
Stock, voting together as a single class.
Section 6.04. Amendment, Repeal or Alteration. Notwithstanding any other
provision of this Restated Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the capital
stock required by law, this Restated Certificate of Incorporation or the terms
of any Preferred stock, the affirmative vote of the holders of at least 75
percent of the voting power of all of the then-outstanding shares of the Voting
Stock, voting together as a single class, shall be required to alter, amend or
repeal this Article.
SEVENTH: The Corporation hereby elects to be governed by Section 203 of the
Delaware General Corporation Law. Any amendment of this Restated Certificate of
Incorporation reflecting an election to not be so governed shall be adopted in
accordance with Section (b) (3) of such Section 203.
EIGHTH: Elections of directors need not be by written ballot unless the
By-laws of the Corporation shall so provide.
11
NINTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in the Certificate of Incorporation, in the manner now
or hereafter prescribed by the Statutes of the State of Delaware, and all rights
conferred on officers, directors and stockholders herein are granted subject to
this reservation.
TENTH: LIABILITIES OF DIRECTORS AND OFFICERS
Section 10.01. A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is amended 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 Delaware
General Corporation Law, as so amended.
Section 10.02. Interpretation. The provisions of this Article TENTH shall
be deemed to be a contract with each director of the Corporation who serves as
such at any time while this Article is in effect, and each person who serves as
a director of the Corporation while this Article is in effect shall be deemed to
be doing so in reliance on the provisions of this Article and such provisions
are cumulative of and shall be in addition to and independent of any and all
other limitations on the liabilities of directors of the Corporation, as such,
or rights of indemnification by the Corporation to which a director of the
Corporation, as such, or rights of indemnification by the Corporation to which a
director of the Corporation may be entitled, whether such limitations or rights
arise under or are created by an statute, rule of law, By-law, agreement, vote
of stockholders or disinterested directors or otherwise. No amendment to or
repeal of this Article TENTH, nor the adoption of any provision of this
Certificate of Incorporation inconsistent with this Article, shall apply to or
have any effect on 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 adoption of an inconsistent
provision. In any action, suit or proceeding involving the application of the
provisions of this Article TENTH, the party or parties challenging the right of
a director to the benefits of this Article shall have the burden of proof.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates, integrates and amends the provisions of the Restated Certificate of
Incorporation of the Corporation and which has been duly adopted in accordance
with Sections 242 and 245 of the Delaware General Corporation Law, has been
executed by its President and attested by its Secretary this 28th day of April,
2004.
ARTESIAN RESOURCES CORPORATION
ATTEST: /s/ Joseph A. DiNunzio By: /s/ Dian C. Taylor
--------------------------- -------------------------------
Secretary (Joseph A. DiNunzio) President (Dian C. Taylor)
12
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