Document/Exhibit Description Pages Size
1: 10-K Annual Report 199 989K
2: EX-3.C Restated Articles of Incorporation Dated 5/26/00 28 89K
3: EX-4.B 78th Supplemental Indenture 22 92K
4: EX-12 Computation of Ratio of Earnings 2± 11K
5: EX-21.A Subsidiaries of Cms Energy 6 36K
6: EX-21.B Subsidiaries of Consumers 1 8K
7: EX-23.A Consent of Arthur Andersen LLP for Cms Energy 1 8K
8: EX-23.B Consent of Arthur Andersen LLP for Consumers 1 7K
9: EX-24.A Power of Attorney for Cms Energy 1 11K
10: EX-24.B Power of Attorney for Consumers 1 11K
11: EX-24.C Power of Attorney for Panhandle 1 9K
EX-3.C — Restated Articles of Incorporation Dated 5/26/00
Exhibit Table of Contents
EXHIBIT 3(c)
STATE OF MICHIGAN
MICHIGAN DEPARTMENT OF CONSUMER
AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND
DEVELOPMENT BUREAU
LANSING, MICHIGAN
RESTATED ARTICLES OF INCORPORATION
(Profit Corporation)
021-395
These Restated Articles of Incorporation are executed pursuant to the
provisions of Sections 641 through 651, Act 284, Public Acts of 1972, as
amended, (the "Act"). These Restated Articles of Incorporation were duly adopted
on February 25, 2000 by the Board of Directors of Consumers Energy Company, with
the shareholders approval on May 26, 2000, in accordance with provisions of
Sections 611(2) and 642 of the Act. These Restated Articles of Incorporation
only restate and integrate and do not further amend the provisions of the
Articles of Incorporation heretofore amended and there is no material
discrepancy between those provisions and the provisions of these Restated
Articles.
The present name of the corporation is Consumers Energy Company. The
former names of the corporation were Consumers Power Company and Consumers Power
Company of Michigan.
Consumers Energy Company is the successor to a corporation with the name
of Consumers Power Company which was organized in Maine in 1910 and did business
in Michigan from 1915 to 1968.
The date of filing the original Articles of Incorporation in
Michigan was January 22, 1968.
RESTATED ARTICLES OF INCORPORATION
The following restated Articles of Incorporation supersede the original
Articles as amended and shall be the Articles of Incorporation of the
corporation.
ARTICLE I
The name of the corporation is CONSUMERS ENERGY COMPANY (hereinafter
called the "Company").
ARTICLE II
The purposes for which the Company is formed are as follows:
1
(a) To generate, manufacture, produce, gather, purchase, store,
transmit, distribute, transform, use, sell and supply electric energy or gas,
either artificial or natural, or both electric energy and gas, to the public
generally, and to public utilities, natural gas companies and to any and all
other entities (whether governmental, public or private); and generally to carry
on the electric business or the gas business, or both businesses, as a public
utility.
(b) To generate, manufacture, produce, purchase, transmit, distribute,
transform, use, sell and supply hot water, steam, heat, power and energy, or any
or all thereof, to the public generally, and to any and all other entities
(whether governmental, public or private); and generally to carry on any or all
of such businesses as a public utility.
(c) To acquire by lease, purchase, grant, donation, devise, bequest or
otherwise, all such lands, easements, royalties, leaseholds, flowage rights,
water power and other property, real, personal or mixed, tangible or intangible,
and any interest therein, wherever the same may be located and whether within or
without the State of Michigan, as may be necessary, incidental or appropriate to
the carrying out of any of its purposes, and to hold, convey, mortgage or lease,
with or without any of its franchises, corporate or otherwise, any of the
foregoing.
(d) To dam any stream or streams, lake or other body of water, and
excavate, construct, maintain, repair and improve any existing stream, lake,
reservoir, body of water, or canal, or which it may excavate and construct, with
water power appurtenant thereto; to flood, flow and submerge land and property
by any means whatsoever, including but not limited to, the construction of the
necessary dams or other facilities in any canal, or in creeks, streams,
reservoirs, lakes or other bodies of water or watercourses, natural or
artificial; to excavate, construct, improve, maintain, repair, remove and
replace reservoirs, dams, dikes and other facilities; and to condemn all lands,
easements, rights of way, waterpowers, flowage rights, gas royalties, natural
gas leaseholds, royalty interests, and other property, and any and all interests
therein, to the extent authorized, and subject to the limitations imposed by the
laws of the State of Michigan or of any other State applicable thereto.
(e) To explore for, mine, produce, gather, purchase, store, transmit,
distribute, refine, sell and supply natural gas, oil and other hydrocarbons.
(f) To sell appliances and carry on an appliance business.
(g) To carry on any and all other businesses and perform any and all
other acts incident to or appropriate in connection with any of the foregoing.
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(h) To guarantee, subscribe for, purchase, invest in, own, hold or
otherwise acquire, sell, assign, transfer, mortgage, pledge or otherwise dispose
of, the shares of the capital stock of, or any bonds, securities or evidences of
indebtedness created by, or any other evidences of interest in, any other
corporation or corporations or other entity of the District of Columbia or of
the State of Michigan or any other State, country, nation or government so far
as permitted by the laws applicable thereto, and while the owner thereof to
exercise all the rights, powers and privileges of ownership, including the right
to vote thereon or with respect thereto and to receive all dividends or payments
thereon, so far as permitted by the laws applicable thereto; to lend money to or
aid in any lawful manner whatsoever any corporation or other entity now existing
or hereafter formed whose shares of capital stock, bonds, securities or
evidences of indebtedness, or other evidences of interest therein, are held or
are in any manner guaranteed by the Company; and to do any and all lawful acts
and things to protect, preserve, improve or enhance the value of any such shares
of capital stock, bonds, securities, evidences of indebtedness or other
interests.
(i) To acquire, purchase, hold, sell and transfer shares of its own
capital stock, bonds and other evidences of indebtedness to the extent and in
the manner authorized by, and subject to any requirements of, the laws
applicable thereto.
(j) To borrow money and issue, sell or pledge bonds, promissory notes,
bills of exchange, debentures and other obligations and evidences of
indebtedness, whether secured by mortgage, pledge or otherwise, or unsecured.
(k) To make contributions of money, property, services or otherwise for
public welfare, including, among other things, charitable, scientific,
educational and religious purposes.
(l) To conduct its business in the State of Michigan, other States, the
District of Columbia, the territories and colonies of the United States and in
foreign countries and the territories and colonies thereof and to have one or
more offices within or without the State of Michigan.
(m) To have and to exercise all such powers as may be conferred by the
laws of the State of Michigan applicable to the Company or to corporations
engaged in the State of Michigan in any business which may be carried on by the
Company.
The foregoing clauses shall be construed both as purposes and powers,
but no recitation, expression or declaration of specific or special purposes or
powers hereinabove enumerated shall be deemed
3
to be exclusive, it being hereby expressly declared that all purposes and powers
not inconsistent therewith or with the laws of the State of Michigan applicable
to the Company are hereby included, and the Company shall possess all such
incidental and other powers as are reasonably necessary, appropriate or
convenient to the accomplishment of any of the foregoing purposes or powers,
either alone or in association with other corporations, associations, firms,
individuals or entities (whether governmental, public or private), to the same
extent and as fully as individuals might or could do, as principals, agents,
contractors or otherwise.
ARTICLE III
The street and mailing address of the registered office is 212 West
Michigan Avenue, Jackson, Michigan 49201.
The name of the resident agent at the registered office is T. A. McNish.
ARTICLE IV
The total number of shares of all classes of stock which the Company
shall have authority to issue is 188,500,000: 23,500,000 shares of preferred
stock, 7,500,000 of which are of the par value of $100 per share and are of a
class designated Preferred Stock, and 16,000,000 shares of which are of no par
value and are of a class designated Class A Preferred Stock; 40,000,000 shares
are of the par value of $1 per share and are of a class designated Preference
Stock; and 125,000,000 shares are of the par value of $10 per share and are of a
class designated Common Stock.
ARTICLE V
A director shall not be personally liable to the Company or its
shareholders for monetary damages for breach of duty as a director except (i)
for a breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation of
Section 551(1) of the Michigan Business Corporation Act, and (iv) any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article V, and no modification to its provisions
by law, shall apply to, or have any effect upon, the liability or alleged
liability of any director of the Company for or with respect to any acts or
omissions of such director occurring prior to such amendment, repeal or
modification.
4
ARTICLE VI
Each director and each officer of the Company shall be indemnified by
the Company to the fullest extent permitted by law against expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the defense of
any proceeding in which he or she was or is a party or is threatened to be made
a party by reason of being or having been a director or an officer of the
Company. Such right of indemnification is not exclusive of any other rights to
which such director or officer may be entitled under any now or hereafter
existing statute, any other provision of these Articles, bylaw, agreement, vote
of shareholders or otherwise. If the Business Corporation Act of the State of
Michigan is amended after approval by the shareholders of this Article VI to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Company shall be
eliminated or limited to the fullest extent permitted by the Business
Corporation Act of the State of Michigan, as so amended. Any repeal or
modification of this Article VI by the shareholders of the Company shall not
adversely affect any right or protection of a director of the Company existing
at the time of such repeal or modification.
ARTICLE VII
The statement of the designations and the voting and other powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the Common Stock, of the Preference Stock, of the Preferred Stock
and of the Class A Preferred Stock is as follows:
PREFERRED STOCK
Preferred Stock Issuable in Series
The shares of Preferred Stock may be divided into and issued in series.
Each such series shall be so designated as to distinguish the shares thereof
from the shares of all other series and classes, and all shares of the Preferred
Stock shall be identical, except as to the following relative rights and
preferences, as to which there may be variations between different series:
(a) The rate of dividend;
(b) The price at which shares may be redeemed, such price to be not
less than $100 or more than $115 per share, plus accrued
dividends to the date of redemption;
5
(c) The amount payable upon shares in event of involuntary
liquidation, which amount shall not be less than $100 per share
or more than $115 per share, plus accrued dividends;
(d) The amount payable upon shares in event of voluntary
liquidation, which amount shall not be less than $100 per share
or more than $115 per share, plus accrued dividends;
(e) The terms and conditions, if any, on which shares shall be by
their terms convertible into or exchangeable for shares of any
other class of stock of the Company over which the Preferred
Stock has preference as to payment of dividends and as to
assets;
(f) Subject to the rights and preferences of shares of Preferred
Stock set forth under the heading "General Provisions", the
terms and conditions of a sinking or purchase fund, if any, for
the redemption or purchase of such shares.
No change shall be made in any of the rights and preferences of any
series of Preferred Stock at the time outstanding in those respects in which the
shares thereof vary from the shares of other series of Preferred Stock at the
time outstanding without the affirmative vote in favor thereof of the holders of
at least 66-2/3% of the shares of such series of Preferred Stock at the time
outstanding, in addition to such other vote, if any, as may be required for such
change under the applicable provisions of these Articles or of the Michigan
Business Corporation Act.
Series Established By Articles
There are hereby established two series of Preferred Stock designated,
respectively, as $4.50 Preferred Stock and $4.16 Preferred Stock.
$4.50 Preferred Stock
The rights and preferences of the shares of $4.50 Preferred Stock in
those respects in which the shares thereof may vary from the shares of other
series are as follows:
(a) The rate of dividend is $4.50 per annum;
(b) The price at which shares may be redeemed is $110 per share,
plus accrued dividends to the date of redemption;
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(c) The amount payable in event of involuntary liquidation is $100
per share, plus accrued dividends;
(d) The amount payable in event of voluntary liquidation is $105 per
share, plus accrued dividends;
(e) Shares are not, by their terms, convertible or exchangeable;
(f) Shares are not, by their terms, entitled to the benefit of any
sinking or purchase fund.
$4.16 Preferred Stock
The rights and preferences of the shares of $4.16 Preferred Stock in
those respects in which the shares thereof may vary from the shares of other
series are as follows:
(a) The rate of dividend is $4.16 per annum;
(b) The price at which shares may be redeemed is $103.25 per share,
plus accrued dividends to the date of redemption;
(c) The amount payable in event of involuntary liquidation is $100
per share, plus accrued dividends;
(d) The amount payable in event of voluntary liquidation is $101 per
share, plus accrued dividends;
(e) Shares are not, by their terms, convertible or exchangeable;
(f) Shares are not, by their terms, entitled to the benefit of any
sinking or purchase fund.
Authority of Board of Directors as to Other Series
To the extent that series of Preferred Stock have not been established
and variations in the relative rights and preferences as between series have not
been fixed and determined as hereinbefore set forth in these Articles, authority
is vested in the Board of Directors of the Company to divide the shares of
Preferred Stock into and to establish series of Preferred Stock, to fix and
determine within the limitations hereinabove set forth in these Articles the
relative rights and preferences of the shares of any series so established, to
issue and sell any and all of the authorized and unissued shares of Preferred
Stock as shares of any
7
series thereof established by these Articles or by action of the Board of
Directors pursuant hereto, and to create a sinking or purchase fund for the
redemption or purchase of shares of any series without the necessity of
providing a sinking or purchase fund for any other series, and in the event that
the Company shall acquire, by purchase or redemption or otherwise, any issued
shares of its Preferred Stock of any series, the Board of Directors may resell
or convert and sell or otherwise dispose of, in their discretion, any shares so
acquired as shares of the same series or of any other duly created series of
Preferred Stock.
CLASS A PREFERRED STOCK
Class A Preferred Stock Issuable in Series
The shares of Class A Preferred Stock may be divided into and issued in
series. Each such series shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes, and all shares of the
Class A Preferred Stock shall be identical, except as to the following relative
rights and preferences, as to which there may be variations between different
series:
(a) The rate of dividend;
(b) The price at which shares may be redeemed;
(c) The amount payable upon shares in event of involuntary
liquidation;
(d) The amount payable upon shares in event of voluntary
liquidation;
(e) The voting rights of the holders of such series, if any;
provided that such holders of all series shall have the voting
rights hereinafter specified in these Articles;
(f) The terms and conditions, if any, on which shares shall be by
their terms convertible into or exchangeable for any other
securities; and
(g) The terms and conditions of a sinking or purchase fund, if any,
for the redemption or purchase of such shares.
No change shall be made in any of the rights and preferences of any
series of Class A Preferred Stock at the time outstanding in those respects in
which the shares thereof vary from the shares of other series of Class A
Preferred Stock at the time outstanding without the affirmative vote in favor
thereof of the holders of at least 66-2/3% of the shares of such series of Class
A Preferred
8
Stock at the time outstanding, in addition to such other vote, if any, as may be
required for such change under the applicable provisions of these Articles or of
the Michigan Business Corporation Act.
Authority of Board of Directors As to Other Series
To the extent that series of Class A Preferred Stock have not been
established and variations in the relative rights and preferences as between
series have not been fixed and determined as hereinbefore set forth in these
Articles, authority is vested in the Board of Directors of the Company to divide
the shares of Class A Preferred Stock into and to establish series of Class A
Preferred Stock, to fix and determine the relative rights and preferences of the
shares of any series so established, to issue and sell any and all of the
authorized and unissued shares of Class A Preferred Stock as shares of any
series thereof established by these Articles or by action of the Board of
Directors pursuant hereto, and to create a sinking or purchase fund for the
redemption or purchase of shares of any series without the necessity of
providing a sinking or purchase fund for any other series, and in the event that
the Company shall acquire, by purchase or redemption or otherwise, any issued
shares of its Class A Preferred Stock of any series, the Board of Directors may
resell or convert and sell or otherwise dispose of, in their discretion, any
shares so acquired as shares of the same series or of any other duly created
series of Class A Preferred Stock.
PREFERRED STOCK AND CLASS A PREFERRED STOCK
General Provisions
In these General Provisions, the Company's Preferred Stock, par value
$100 per share, is referred to as the "Preferred Stock"; the Company's Class A
Preferred Stock is referred to as the "Class A Preferred Stock"; and the
Preferred Stock and Class A Preferred Stock are together referred to as the
"Company Preferred Stock".
(A) The holders of the Company Preferred Stock of each series shall be
entitled to receive dividends, payable when and as declared by the Board of
Directors, at such rates as shall be determined for the respective series
thereof from the first day of the current dividend period within which such
stock shall have been originally issued except that, as to any share of Company
Preferred Stock originally issued subsequent to December 31, 1972, from the date
upon which such share shall have been originally issued, before any dividends
shall be declared or paid upon or set apart for the Common Stock or any other
stock of the Company not having
9
preference over the Company Preferred Stock as to payment of dividends. Such
dividends shall be cumulative so that if for any dividend period or periods
dividends shall not have been paid or declared and set apart for payment upon
all outstanding Company Preferred Stock at the rates determined for the
respective series, the deficiency shall be fully paid, or declared and set apart
for payment, before any dividends shall be declared or paid upon the Common
Stock or any other stock of the Company not having preference over the Company
Preferred Stock as to payment of dividends. Dividends shall not be declared and
set apart for payment, or paid, on the Company Preferred Stock of any one
series, for any dividend period, unless dividends have been or are
contemporaneously declared and set apart for payment or paid on all series of
the Company Preferred Stock for all dividend periods terminating on the same or
an earlier date. As to all series of the Company Preferred Stock, the term
"dividend period" shall mean any of the four calendar quarters in each year
commencing, respectively, the first day of January, April, July and October and
the first days of each such calendar quarter shall be the dividend payment dates
for the regular quarterly dividends payable for the preceding dividend period on
such series.
(B) When full cumulative dividends as aforesaid upon all series of the
Company Preferred Stock then outstanding for all past dividend periods and for
the current dividend periods shall have been paid or declared and set apart for
payment, the Board of Directors may declare dividends on the Common Stock or any
other stock over which the Company Preferred Stock has a preference as to
payment of dividends, and no holders of any series of the Company Preferred
Stock as such shall be entitled to share therein; provided, however, that no
dividends (other than dividends paid in or presently thereafter repaid to the
Company for or as a capital contribution with respect to stock over which the
Company Preferred Stock has preference as to payment of dividends and as to
assets) shall be paid or any other distribution of assets made, by purchase of
shares or otherwise, on Common Stock or on any other stock over which the
Company Preferred Stock has preference as to payment of dividends or as to
assets except out of earned surplus of the Company available for distribution to
stock over which the Company Preferred Stock has preference as to payment of
dividends and as to assets, or if, at the time of declaration thereof or the
making of such distribution there shall not remain to the credit of earned
surplus account (after deducting therefrom the amount of such dividends and
distribution), an amount at least equal to (i) $7.50 per share on all then
outstanding shares of the Preferred Stock, (ii) in respect to the Class A
Preferred Stock 7.5% of the aggregate amount established by the Board of
Directors to be payable on the shares of each series thereof in the event of
involuntary liquidation of the Company, and (iii) $7.50 per share
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on all then outstanding shares of all other stock over which the Company
Preferred Stock does not have preference as to the payment of dividends and as
to assets.
So long as any shares of the Company Preferred Stock are outstanding,
the payment of dividends on the Common Stock (other than dividends payable in
Common Stock) and the making of any distribution of assets to holders of Common
Stock by purchase of shares or otherwise (each of such actions being herein
embraced within the term "payment of Common Stock dividends") shall be subject
to the following limitations (except as such payments may be approved or
permitted by subsequent order of the Securities and Exchange Commission or any
successor thereto or any other Federal governmental agency having the same or
similar jurisdiction, or, in the event that the Company ceases to be subject to
the jurisdiction of said Commission or of any successor thereto or of any such
other Federal governmental agency, except as such payments may be permitted in
accordance with a waiver of such limitations which shall have been approved by
the affirmative vote in favor thereof of the holders of at least 66-2/3% of the
shares of Preferred Stock and Class A Preferred Stock (voting as separate
classes) at the time outstanding):
(a) If and so long as the ratio of the aggregate of the par value
of, or stated capital represented by, the outstanding shares of
Common Stock (including premiums on the Common Stock but
excluding premiums on the Company Preferred Stock) and of the
surplus of the Company to the total capitalization and surplus
of the Company at the end of a period of twelve consecutive
calendar months within the fourteen calendar months immediately
preceding the calendar month in which the proposed payment of
Common Stock dividends is to be made (which period is
hereinafter referred to as the "base period"), adjusted to
reflect the proposed payment of Common Stock dividends (which
ratio is hereinafter referred to as the "capitalization ratio"),
is less than 20%, the payment of Common Stock dividends,
including the proposed payment, during the twelve calendar
months period ending with and including the calendar month in
which the proposed payment is to be made shall not exceed 50% of
the net income of the Company available for the payment of
dividends on the Common Stock during the base period;
(b) If and so long as the capitalization ratio is 20% or more but
less than 25%, the payment of Common Stock dividends, including
the proposed payment, during the twelve calendar months period
ending with and including the calendar month in which the
proposed payment is to be made shall not
11
exceed 75% of the net income of the Company available for the
payment of dividends on the Common Stock during the base period;
(c) Except to the extent permitted under paragraphs (a) and (b)
above, the Company shall not make any payment of Common Stock
dividends which would reduce the capitalization ratio to less
than 25%.
For the purpose of the foregoing provisions, the following terms shall
have the following meanings:
(1) The term "net income of the Company available for the payment of
dividends on the Common Stock" shall mean for any base period the
balance remaining after deducting from the total gross revenues
of the Company from all sources during such period the following:
(a) All operating expenses and taxes, including charges to
income for general taxes and for federal and state taxes
measured by income, for retirement or depreciation
reserve and for amortization or other disposition of
amounts, if any, classified as amounts in excess of
original cost of utility plant; (b) the amount, if any,
by which the aggregate of the charges to income during
the period in question for repairs, maintenance and
provision for depreciation is less than the maintenance
and replacement requirement embodied in the Indenture,
or any indenture supplemental thereto, succeeding the
same or in substitution therefor; (c) all interest
charges and other income deductions, including charges
to income for amortization of debt discount, premium and
expense and of the Company Preferred Stock premium and
expense; and (d) all dividends applicable to the period
in question on stock having preference over the Common
Stock as to the payment of dividends.
(2) The term "total capitalization" shall mean the aggregate of the
principal amount of all outstanding indebtedness of the Company
maturing more than twelve months after the date of determination
of total capitalization, plus the par value of, or stated capital
represented by, the outstanding shares of all classes of stock of
the Company, including any premiums on capital stock.
(3) The term "surplus" shall include capital surplus, earned surplus
and any other surplus of the Company, adjusted to eliminate any
amounts which may then be classified by the
12
Company on its books as amounts in excess of the original cost
of utility plant and which are not provided for by reserve and
any items set forth on the asset side of the balance sheet of
the Company as a result of accounting convention, such as
unamortized debt discount and expense and the Company Preferred
Stock expense, unless any such amount or item, as the case may
be, is being amortized or is being provided for by reserve.
(C) Upon any dissolution, liquidation or winding up of the
Company, whether voluntary or involuntary, the holders of the Company
Preferred Stock of each series, without any preference of the shares of
any series of the Company Preferred Stock over the shares of any other
series of the Company Preferred Stock, shall be entitled to receive out
of the assets of the Company, whether capital, surplus or other, before
any distribution of the assets to be distributed shall be made to the
holders of Common Stock or of any other stock not having preference as
to assets over the Company Preferred Stock, the amount determined to be
payable on the shares of such series in the event of voluntary or
involuntary liquidation, as the case may be. In case the assets shall
not be sufficient to pay in full the amounts determined to be payable on
all the shares of the Company Preferred Stock in the event of voluntary
or involuntary liquidation, as the case may be, then the assets
available for such payment shall be distributed to the extent available
as follows: first, to the payment, pro rata, of $100 per share on each
share of Preferred Stock outstanding irrespective of series and the
amount established by the Board of Directors to be payable on each
outstanding share of each series of Class A Preferred Stock in the event
of involuntary liquidation; second, to the payment of the accrued
dividends on such shares, such payment to be made pro rata in accordance
with the amount of accrued dividends on each such share; and, third, to
the payment of any amounts in excess of $100 per share of the Preferred
Stock outstanding and the difference between the amount established by
the Board of Directors to be payable on the outstanding shares of each
series of Class A Preferred Stock in the event of voluntary liquidation
and the amount similarly determined to be payable on such shares in the
event of involuntary liquidation, plus accrued dividends which shall
have been determined to be payable on the shares of any series in the
event of voluntary or involuntary liquidation, as the case may be, such
payment also to be made pro rata in accordance with the amounts, if any,
so payable on each such share. After payment to the holders of the
Company Preferred Stock of the full preferential amounts hereinbefore
provided for, the holders of the Company Preferred Stock as such shall
have no right or claim to any of the remaining assets of the
13
Company, either upon any distribution of such assets or upon
dissolution, liquidation or winding up, and the remaining assets to be
distributed, if any, upon a distribution of such assets or upon
dissolution, liquidation or winding up, may be distributed among the
holders of the Common Stock or of any other stock over which the Company
Preferred Stock has preference as to assets. Without limiting the right
of the Company to distribute its assets or to dissolve, liquidate or
wind up in connection with any sale, merger, or consolidation, the sale
of all the property of the Company to, or the merger or consolidation of
the Company into or with any other corporation shall not be deemed to be
a distribution of assets or a dissolution, liquidation or winding up for
the purposes of this paragraph.
(D) At the option of the Board of Directors of the Company, the Company
may redeem any series of the Company Preferred Stock determined to be
redeemable, or any part of any series, at any time at the redemption price
determined for such series; provided, however, that not less than thirty nor
more than sixty days previous to the date fixed for redemption a notice of the
time and place thereof shall be given to the holders of record of the Company
Preferred Stock so to be redeemed, by mail or publication, in such manner as may
be prescribed by the By-laws of the Company or by resolution of the Board of
Directors; and, provided, further, that in every case of redemption of less than
all of the outstanding shares of any one series of the Company Preferred Stock,
the shares of such series to be redeemed shall be chosen by lot in such manner
as may be prescribed by resolution of the Board of Directors. At any time after
notice of redemption has been given in the manner prescribed by the By-laws of
the Company or by resolution of the Board of Directors to the holders of stock
so to be redeemed, the Company may deposit, or may cause its nominee to deposit,
the aggregate redemption price with some bank or trust company named in such
notice, payable on the date fixed for redemption as aforesaid and in the amounts
aforesaid to the respective orders of the holders of the shares so to be
redeemed, on endorsement to the Company or its nominee, or otherwise, as may be
required, and upon surrender of the certificates for such shares. Upon the
deposit of said money as aforesaid, or, if no such deposit is made, upon said
redemption date (unless the Company defaults in making payment of the redemption
price as set forth in such notice), such holders shall cease to be shareholders
with respect to said shares, and from and after the making of said deposit, or,
if no such deposit is made, after the redemption date (the Company not having
defaulted in making payment of the redemption price as set forth in such
notice), the said holders shall have no interest in or claim against the
Company, or its nominee, with respect to said shares, but shall be entitled only
to
14
receive said moneys on the date fixed for redemption as aforesaid from said
bank or trust company, or if no such deposit is made, from the Company, without
interest thereon, upon endorsement, if required, and surrender of the
certificates as aforesaid.
If such deposit shall be made by a nominee of the Company as aforesaid,
such nominee shall upon such deposit become the owner of the shares with respect
to which such deposit was made and certificates of stock may be issued to such
nominee in evidence of such ownership.
In case the holder of any such Company Preferred Stock shall not, within
six years after said deposit, claim the amount deposited as above stated for the
redemption thereof, the Depositary shall upon demand pay over to the Company
such amounts so deposited and the Depositary shall thereupon be relieved from
all responsibility to the holder thereof.
Nothing herein contained shall limit any legal right of the Company to
purchase any shares of the Company Preferred Stock.
(E) So long as any shares of the Preferred Stock are outstanding, the
Company shall not, without the affirmative vote in favor thereof of the holders
of at least 66-2/3% of the shares of the Preferred Stock (voting together as a
single class) at the time outstanding, adopt an amendment to these Articles if
such amendment would either (i) authorize or create any class of stock preferred
as to dividends or assets over the Preferred Stock or (ii) change any of the
rights and preferences of the then outstanding Preferred Stock; provided,
however, that nothing in this paragraph contained shall authorize the adoption
of any amendment of these Articles by the vote of the holders of a less number
of shares of the Preferred Stock, or of any other class of stock, or of all
classes of stock, than is required for such amendment by the laws of the State
of Michigan at the time applicable thereto.
(F) So long as any shares of Class A Preferred Stock are outstanding,
the Company shall not, without the affirmative vote in favor thereof of the
holders of at least 66-2/3% of the shares of Class A Preferred Stock at the time
outstanding (voting together as a single class) adopt an amendment to these
Articles if such amendment would either (i) authorize or create any class of
stock preferred as to dividends or assets over the Class A Preferred Stock or
(ii) change any of the rights and preferences of the then outstanding Class A
Preferred Stock; provided, however, that nothing in this paragraph contained
shall authorize the adoption of any amendment of these Articles by the vote of
the holders of a lesser number of shares of Class A Preferred Stock, or of any
other class of stock, or of all classes of stock, than is required for
15
such amendment by the laws of the State of Michigan at the time applicable
thereto.
(G) So long as any shares of the Company Preferred Stock are
outstanding, the Company shall not, without the affirmative vote in favor
thereof of the holders of at least 66-2/3% of the shares of the Preferred Stock
and Class A Preferred Stock (voting as separate classes) at the time
outstanding,
(a) issue, sell or otherwise dispose of any shares of the Company
Preferred Stock or issue, sell or otherwise dispose of any stock over
which the Company Preferred Stock does not have preference as to the
payment of dividends and as to assets, unless, in any such case, (i) the
net income of the Company available for the payment of dividends for a
period of twelve consecutive calendar months within the fifteen calendar
months immediately preceding the issuance, sale or disposition of such
stock (including, in any case in which such stock is to be issued, sold
or otherwise disposed of in connection with the acquisition of new
property, the net income of the property to be so acquired, computed on
the same basis as the net income of the Company available for the
payment of dividends) is at least equal to two times the annual dividend
requirements on all outstanding shares of the Company Preferred Stock
and of all stock over which the Company Preferred Stock does not have
preference as to the payment of dividends and as to assets, including
the shares proposed to be issued, and (ii) the gross income of the
Company available for the payment of interest for a period of twelve
consecutive calendar months within the fifteen calendar months
immediately preceding the issuance, sale or disposition of such stock
(including, in any case in which such stock is to be issued, sold or
otherwise disposed of in connection with the acquisition of new
property, the gross income of the property to be so acquired, computed
on the same basis as the gross income of the Company available for the
payment of interest) is at least equal to one and one-half times the
aggregate of the annual interest requirements (adjusted by provision for
amortization of debt discount and expense or of premium on debt, as the
case may be) on all outstanding indebtedness of the Company and the
annual dividend requirements (adjusted by provision for amortization of
the Company Preferred Stock premium and expense) on all outstanding
shares of the Company Preferred Stock and of all stock over which the
Company Preferred Stock does not have preference as to the payment of
dividends and as to assets, including the shares proposed to be issued;
or
(b) issue, sell or otherwise dispose of any shares of the Company
Preferred Stock or issue, sell or otherwise dispose of
16
any stock over which the Company Preferred Stock does not have
preference as to the payment of dividends and as to assets, unless, in
any such case, the aggregate of the par value of, or stated capital
represented by, the outstanding shares of Common Stock and of the
surplus of the Company (paid-in, earned and other, if any) shall be not
less than the aggregate amount payable in the event of involuntary
liquidation upon all outstanding shares of the Company Preferred Stock
and of all stock over which the Company Preferred Stock does not have
preference as to the payment of dividends and as to assets, including
the shares proposed to be issued, provided that no portion of the
surplus of the Company utilized to satisfy the foregoing requirement
shall be available for dividends or other distributions of assets, by
purchase of shares or otherwise, on Common Stock or on any other stock
over which the Company Preferred Stock has preference as to the payment
of dividends and as to assets until shares of the Company Preferred
Stock or of stock over which the Company Preferred Stock does not have
preference as to the payment of dividends and as to assets are retired
and then only to the extent of the amount payable in the event of
involuntary liquidation upon such shares or until and then only to the
extent that the par value of, or stated capital represented by, the
outstanding shares of Common Stock shall have been increased.
For the purpose of the foregoing provisions, the following terms shall
have the following meanings:
(1) The term "net income of the Company available for the payment of
dividends" shall mean the balance remaining after deducting from
the total gross revenues of the Company from all sources the
following: (a) all operating expenses and taxes, including
charges to income for general taxes and for federal and state
taxes measured by income, for retirement or depreciation reserve
and for amortization or other disposition of amounts, if any,
classified as amounts in excess of original cost of utility
plant, (b) the amount, if any, by which the aggregate of the
charges to income during the period in question for repairs,
maintenance and provision for depreciation is less than the
maintenance and replacement requirement embodied in the
Indenture, or any indenture supplemental thereto, succeeding the
same or in substitution therefor, and (c) all interest charges
and other income deductions, including charges to income for the
amortization of debt discount, premium and expense and of the
Company Preferred Stock premium and expense.
17
(2) The term "gross income of the Company available for the payment
of interest" shall mean the balance remaining after deducting
from the total gross revenues of the Company from all sources the
following: (a) all operating expenses and taxes, including
charges to income for general taxes and for federal and state
taxes measured by income, for retirement or depreciation reserve
and for amortization or other disposition of amounts, if any,
classified as amounts in excess of original cost of utility plant
and (b) the amount, if any, by which the aggregate of the charges
to income during the period in question for repairs, maintenance
and provision for depreciation is less than the maintenance and
replacement requirement embodied in the Indenture, or any
indenture supplemental thereto, succeeding the same or in
substitution therefor.
(3) The term "accrued dividends" shall be deemed to mean in respect
of any share of any series of the Company Preferred Stock as of
any given date, the amount, if any, by which the product of the
rate of dividend per annum, determined upon the shares of such
series, multiplied by the number of years and any fractional part
of a year which shall have elapsed from the date after which
dividends on such stock became cumulative to such given date,
exceeds the total dividends actually paid on such stock and the
dividends declared and set apart for payment. Accumulations of
dividends shall not bear interest.
The term "outstanding", whenever used herein with respect to shares of
the Company Preferred Stock or of any other class of stock which are by their
terms redeemable, or with respect to bonds or other evidences of indebtedness
shall not include any such shares or bonds or evidences of indebtedness which
have been called for redemption in accordance with the provisions applicable
thereto, of which call for redemption notice shall have been given, as required
by such provisions and for the redemption of which a sum of money sufficient to
pay the amount payable on such redemption shall have been deposited with a bank
or trust company, irrevocably in trust for such purpose, or any bonds or other
evidences of indebtedness for the payment of which at maturity provision has
been made in a similar manner.
The term "capital represented by" whenever used herein with respect to
shares of stock of the Company shall mean at any time the amount paid in on or
contributed, transferred or otherwise then held and recorded or accounted for,
as permitted by the provisions of law applicable thereto, as capital with
respect to said shares.
18
COMMON STOCK
Each share of Common Stock of the Company shall be equal to every other
share of said stock in every respect. The entire consideration received for
shares of Common Stock shall be capital.
VOTING POWERS GENERALLY
At all meetings of the shareholders of the Company, the holders of the
Preferred Stock and the holders of Common Stock shall be entitled on all
questions to one vote for each share of stock held by them respectively,
regardless of class.
Whenever and as often as four quarterly dividends payable on the Company
Preferred Stock of any series shall be in default, in whole or in part, the
holders of the Company Preferred Stock of all series shall have the exclusive
right, voting separately and as a single class, to vote for and to elect the
smallest number of directors which shall constitute a majority of the then
authorized number of directors of the Company, and, in all matters other than
the election of directors, each holder of one or more shares of the Company
Preferred Stock shall be entitled to one vote for each such share of stock held.
In the event of defaults entitling the holders of Company Preferred Stock to
elect a majority of the directors as aforesaid, the holders of the Common Stock
shall, subject to the prior rights of the holders of the Preference Stock, have
the exclusive right, voting separately and as a class, to vote for and to elect
the greatest number of directors which shall constitute a minority of the then
authorized number of directors of the Company, and, in all matters other than
the election of directors, each holder of Common Stock shall be entitled to one
vote for each such share of stock held. The right of the holders of the Company
Preferred Stock to elect a majority of the directors, however, shall cease when
all defaults in the payment of dividends on their stock shall have been cured,
and such dividends shall be declared and paid out of any funds legally available
therefor as soon as, in the judgment of the Board of Directors, is reasonably
practicable. The terms of office of all persons who may be directors of the
Company at the time when the right to elect a majority of the directors shall
accrue to the holders of the Company Preferred Stock, as herein provided, shall
terminate upon the election of their successors at a meeting of the shareholders
of the Company then entitled to vote. Such election shall be held at the next
annual meeting of shareholders or may be held at a special meeting of
shareholders, which shall be held upon notice as provided in the By-laws of the
Company for a special meeting of the shareholders, at the request in writing of
the holders of not less than 1,000 shares of the then outstanding Company
Preferred Stock
19
entitled to vote addressed to the Secretary of the Company at its principal
business office. Any vacancy in the Board of Directors occurring during any
period that the Company Preferred Stock shall have elected representatives on
the Board shall be filled by a majority vote of the remaining directors (or the
one director) representing the class of stock theretofore represented by the
director causing the vacancy. Upon the termination of such exclusive right of
the holders of the Company Preferred Stock to elect a majority of the directors
of the Company, the terms of office of all the directors of the Company shall
terminate upon the election of their successors at a meeting of the shareholders
of the Company then entitled to vote. Such election shall be held at the next
annual meeting of shareholders or may be held at a special meeting of
shareholders, which shall be held upon notice as provided in the By-laws of the
Company for a special meeting of the shareholders, at the request in writing of
the holders of not less than 1,000 shares of the then outstanding Common Stock
addressed to the Secretary of the Company at its principal business office.
At all meetings of the shareholders held for the purpose of electing
directors during such times as the holders of the Company Preferred Stock shall
have the exclusive right to elect a majority of the directors of the Company,
the presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock shall be required to constitute a quorum of
such class for the election of directors, and the presence in person or by proxy
of the holders of a majority of the outstanding shares of the Company Preferred
Stock shall be required to constitute a quorum of such class for the election of
directors; provided, however, that the absence of a quorum of the holders of
stock of either class shall not prevent the election at any such meeting, or
adjournment thereof, of directors by the other class if the necessary quorum of
the holders of stock of such class is present in person or by proxy at such
meeting; and provided, further, that, in the absence of a quorum of the holders
of stock of either class, a majority of those holders of such stock who are
present in person or by proxy shall have the power to adjourn the election of
those directors to be elected by that class from time to time without notice,
other than announcement at the meeting, until the requisite amount of holders of
stock of such class shall be present in person or by proxy.
At all elections of directors, shareholders will be entitled to as many
votes as shall equal the number of their shares of stock multiplied by the
number of directors to be elected for whom such shareholders may vote, and they
may cast all of such votes for a single director or may distribute them among
the number to be voted for, or any two or more of them, as they may see fit.
20
For the purposes of the foregoing provisions, the Company Preferred
Stock of all series shall be deemed to be a single class.
PRE-EMPTIVE RIGHTS
The holders of shares of Preferred Stock, Class A Preferred Stock, or of
Common Stock shall have no pre-emptive rights to subscribe for or purchase any
additional issues of shares of the capital stock of the Company of any class now
or hereafter authorized or any bonds, debentures, or other obligations or rights
or options convertible into or exchangeable for or entitling the holder or owner
to subscribe for or purchase any shares of capital stock, or any rights to
exchange shares issued for shares to be issued.
PREFERENCE STOCK
Preference Stock Issuable in Series
The shares of Preference Stock may be divided into and issued in series.
Each such series shall be so designated as to distinguish the shares thereof
from the shares of all other series and classes, and all shares of the
Preference Stock shall be identical, except as to the following relative rights
and preferences, as to which there may be variations between different series:
(a) The rate of dividend;
(b) The price at which shares may be redeemed;
(c) The amount payable upon shares in event of involuntary
liquidation;
(d) The amount payable upon shares in event of voluntary
liquidation;
(e) The terms and conditions, if any, on which shares shall be by
their terms convertible into or exchangeable for shares of any
other class of stock of the Company;
(f) The terms and conditions of a sinking or purchase fund, if any,
for the redemption or purchase of such shares.
No change shall be made in any of the rights and preferences of any
series of Preference Stock at the time outstanding in those respects in which
the shares thereof vary from the shares of other series of Preference Stock at
the time outstanding without the affirmative vote in favor thereof of the
holders of at least 66-
21
2/3% of the shares of such series of Preference Stock at the time outstanding,
in addition to such other vote, if any, as may be required for such change under
the applicable provisions of these Articles or of the laws of the State of
Michigan at the time applicable thereto.
PREFERENCE STOCK
Authority of Board of Directors as to Other Series
To the extent that series of Preference Stock have not been established
and variations in the relative rights and preferences as between series have not
been fixed and determined in these Articles, authority is vested in the Board of
Directors of the Company to divide the shares of Preference Stock into and to
establish series of Preference Stock, to fix and determine the relative rights
and preferences of the shares of any series so established, to issue and sell
any and all of the authorized and unissued shares of Preference Stock as shares
of any series thereof established by action of the Board of Directors pursuant
hereto, and to create a sinking or purchase fund for the redemption or purchase
of shares of any series without the necessity of providing a sinking or purchase
fund for any other series.
PREFERENCE STOCK
General Provisions
The following provisions shall apply to all shares of the Preference
Stock irrespective of series:
(A) The shares of Preference Stock shall be subordinate to the
Preferred Stock but in preference to the Common Stock as to the payment
of dividends. The holders of the Preference Stock of each series shall
be entitled to receive dividends, payable when and as declared by the
Board of Directors, at such rates as shall be determined for the
respective series, from the date upon which such share shall have been
originally issued, before any dividends shall be declared or paid upon
or set apart for the Common Stock or any other stock of the Company not
having preference over the Preference Stock as to payment of dividends.
Such dividends shall be cumulative so that if for any dividend period or
periods dividends shall not have been paid or declared and set apart for
payment upon all outstanding Preference Stock at the rates determined
for the respective series, the deficiency shall be fully paid, or
declared and set apart for payment, before any dividends shall be
declared or paid upon the Common Stock or any other stock of the Company
not having preference over the Preference Stock as to payment
22
of dividends. Dividends shall not be declared and set apart for payment,
or paid, on the Preference Stock of any one series, for any dividend
period, unless dividends have been or are contemporaneously declared and
set apart for payment or paid on the Preference Stock of all series for
all dividend periods terminating on the same or an earlier date. As to
all series of Preference Stock, the term "dividend period" shall mean
any of the four calendar quarters in each year commencing, respectively,
the first day of January, April, July and October and the first days of
each such calendar quarter shall be the dividend payment dates for the
regular quarterly dividends payable for the preceding dividend period of
such series.
(B) When full cumulative dividends as aforesaid upon the
Preference Stock of all series then outstanding for all past dividend
periods and for the current dividend periods shall have been paid or
declared and set apart for payment, the Board of Directors may declare
dividends on the Common Stock or any other stock over which the
Preference Stock has a preference as to payment of dividends, and no
holders of any series of the Preference Stock as such shall be entitled
to share therein.
(C) The shares of Preference Stock shall be subordinate to the
Preferred Stock but in preference to the Common Stock upon any
dissolution, liquidation or winding up of the Company, whether voluntary
or involuntary. Upon any such dissolution, liquidation or winding up of
the Company, whether voluntary or involuntary, the holders of Preference
Stock of each series, without any preference of the shares of any series
of Preference Stock over the shares of any other series of Preference
Stock, shall be entitled to receive out of the assets of the Company,
whether capital, surplus or other, before any distribution of the assets
to be distributed shall be made to the holders of Common Stock or of any
other stock not having preference as to assets over the Preference
Stock, the amount determined to be payable on the shares of such series
in the event of voluntary or involuntary liquidation, as the case may
be. In case the assets shall not be sufficient to pay in full the
amounts determined to be payable on all the shares of Preference Stock
in the event of voluntary or involuntary liquidation, as the case may
be, then the assets available for such payment shall be distributed
ratably among the holders of the Preference Stock of all series in
accordance with the amounts determined to be payable on the shares of
each series, in the event of voluntary or involuntary liquidation, as
the case may be, in proportion to the full preferential amounts to which
they are respectively entitled. After payment to the holders of the
Preference Stock of the full preferential amounts hereinbefore provided
for, the holders of the Preference Stock as such shall have no right or
claim to any of
23
the remaining assets of the Company, either upon any distribution of
such assets or upon dissolution, liquidation or winding up, and the
remaining assets to be distributed, if any, upon a distribution of such
assets or upon dissolution, liquidation or winding up, may be
distributed among the holders of the Common Stock or of any other stock
over which the Preference Stock has preference as to assets. Without
limiting the right of the Company to distribute its assets or to
dissolve, liquidate or wind up in connection with any sale, merger, or
consolidation, the sale of all the property of the Company to, or the
merger or consolidation of the Company into or with any other
corporation shall not be deemed to be a distribution of assets or a
dissolution, liquidation or winding up for the purposes of this
paragraph.
(D) At the option of the Board of Directors of the Company, the
Company may redeem any series of Preference Stock determined to be
redeemable, or any part of any series, at any time at the redemption
price determined for such series; provided, however, that not less than
thirty nor more than sixty days previous to the date fixed for
redemption a notice of the time and place thereof shall be given to the
holders of record of the Preference Stock so to be redeemed, by mail or
publication, in such manner as may be prescribed by the By-laws of the
Company or by resolution of the Board of Directors; and, provided,
further, that in every case of redemption of less than all of the
outstanding shares of any one series of Preference Stock, the shares of
such series to be redeemed shall be chosen by lot in such manner as may
be prescribed by resolution of the Board of Directors. At any time after
notice of redemption has been given in the manner prescribed by the
By-laws of the Company or by resolution of the Board of Directors to the
holders of stock so to be redeemed, the Company may deposit, or may
cause its nominee to deposit, the aggregate redemption price with some
bank or trust company named in such notice, payable on the date fixed
for redemption as aforesaid and in the amounts aforesaid to the
respective orders of the holders of the shares so to be redeemed, on
endorsement to the Company or its nominee, or otherwise, as may be
required, and upon surrender of the certificates for such shares. Upon
the deposit of said money as aforesaid, or, if no such deposit is made,
upon said redemption date (unless the Company defaults in making payment
of the redemption price as set forth in such notice), such holders shall
cease to be shareholders with respect to said shares and from and after
the making of said deposit, or, if no such deposit is made, after the
redemption date (the Company not having defaulted in making payment of
the redemption price as set forth in such notice), the said holders
shall have no interest in or claim against the
24
Company, or its nominee, with respect to said shares, but shall be
entitled only to receive said moneys on the date fixed for redemption as
aforesaid from said bank or trust company, or if no such deposit is
made, from the Company, without interest thereon, upon endorsement, if
required, and surrender of the certificates as aforesaid.
If such deposit shall be made by a nominee of the Company as
aforesaid, such nominee shall upon such deposit become the owner of the
shares with respect to which such deposit was made and certificates of
stock may be issued to such nominee in evidence of such ownership.
In case the holder of any such Preference Stock shall not, within
six years after said deposit, claim the amount deposited as above stated
for the redemption thereof, the Depositary shall upon demand pay over to
the Company such amounts so deposited and the Depositary shall thereupon
be relieved from all responsibility to the holder thereof.
Nothing herein contained shall limit any legal right of the
Company to purchase any shares of the Preference Stock.
(E-1) So long as any shares of the Preference Stock are
outstanding, the Company shall not, without the affirmative vote in
favor thereof of the holders of at least 66-2/3% of the shares of
Preference Stock at the time outstanding, adopt an amendment to these
Articles if such amendment would either (i) authorize or create, or
increase the authorized amount of, any class of stock, other than shares
of the Preferred Stock (whether now or hereafter authorized), which is
entitled to dividends or assets in priority to the Preference Stock or
(ii) change any of the rights and preferences of the then outstanding
Preference Stock.
(E-2) So long as any shares of the Preference Stock are
outstanding, the Company shall not, without the affirmative vote in
favor thereof of the holders of at least a majority of the shares of
Preference Stock at the time outstanding, adopt an amendment to these
Articles if such amendment would either (i) increase the authorized
amount of Preference Stock or (ii) authorize or create, or increase the
authorized amount of, any class of stock, which is entitled to dividends
or assets on a parity with the Preference Stock, provided; however, that
nothing in this paragraph or in paragraph E-1 above contained shall
authorize the adoption of any amendment of these Articles by the vote of
the holders of a less number of shares of Preference Stock, or of any
other class of stock, or of all
25
classes of stock, than is required for such amendment by the laws of the
State of Michigan at the time applicable thereto.
PREFERENCE STOCK
Voting Powers
The holders of Preference Stock shall not have any right to vote for the
election of directors or for any other purpose, except as otherwise provided by
law, as set forth in the two immediately preceding paragraphs and as set forth
below. Whenever and as often as six quarterly dividends payable on the
Preference Stock of any series shall be in default, in whole or in part, the
holders of the Preference Stock of all series shall have the exclusive right,
voting separately and as a single class, to vote for and to elect two directors,
subject to the prior rights of the holders of the Preferred Stock. In the event
of defaults entitling the Preference Stock to elect two directors as aforesaid,
the holders of the Common Stock shall have the exclusive right, voting
separately and as a class, to elect the remaining number of directors of the
Company, subject to the prior rights of the holders of the Preferred Stock. The
right of the holders of the Preference Stock to elect two directors, however,
shall cease when all defaults in the payment of dividends on their stock shall
have been cured, and such dividends shall be declared and paid out of any funds
legally available therefor as soon as, in the judgment of the Board of
Directors, is reasonably practicable. The terms of office of all persons who may
be directors of the Company at the time when the right to elect two directors
shall accrue to the holders of the Preference Stock, as herein provided, shall
terminate upon the election of their successors at a meeting of the shareholders
of the Company then entitled to vote. Such election shall be held at the next
annual meeting of shareholders or may be held at a special meeting of
shareholders, which shall be held upon notice as provided in the By-laws of the
Company for a special meeting of the shareholders, at the request in writing of
the holders of not less than 1,000 shares of the then outstanding Preference
Stock addressed to the Secretary of the Company at its principal business
office. Any vacancy in the Board of Directors occurring during any period when
the Preference Stock shall have elected representatives on the Board shall be
filled by a majority vote of the remaining directors (or the one director)
representing the class of stock theretofore represented by the director causing
the vacancy. In the event of simultaneous vacancies among directors elected by
the holders of the Preference Stock, an election, pursuant to the provisions of
this paragraph, will be held. Upon the termination of such exclusive right of
the holders of the Preference Stock to elect two directors of the Company, the
terms of office of all the directors of the Company shall terminate upon the
election of their
26
successors at a meeting of the shareholders of the Company then entitled to
vote. Such election shall be held at the next annual meeting of shareholders or
may be held at a special meeting of shareholders, which shall be held upon
notice as provided in the By-laws of the Company for a special meeting of the
shareholders at the request in writing of the holders of not less than 1,000
shares of the then outstanding Common Stock addressed to the Secretary of the
Company at its principal business office.
At all meetings of the shareholders held for the purpose of electing
directors during such times as the holders of the Preference Stock shall have
the exclusive right to elect two of the directors of the Company, the presence
in person or by proxy of the holders of a majority of the outstanding shares of
Common Stock shall be required to constitute a quorum of such class for the
election of directors, and the presence in person or by proxy of the holders of
a majority of the outstanding shares of Preference Stock of all series shall be
required to constitute a quorum of such class for the election of directors;
provided, however, that the absence of a quorum of the holders of stock of
either class shall not prevent the election at any such meeting, or adjournment
thereof, of directors by the other class if the necessary quorum of the holders
of stock of such class is present in person or by proxy at such meeting; and
provided, further, that, in the absence of a quorum of the holders of stock of
either class, a majority of those holders of such stock who are present in
person or by proxy shall have the power to adjourn the election of those
directors to be elected by that class from time to time without notice, other
than announcement at the meeting, until the requisite amount of holders of stock
of such class shall be present in person or by proxy.
At all elections of directors, each shareholder will be entitled to as
many votes as shall equal the number of his shares of stock multiplied by the
number of directors to be elected for whom such shareholder may vote, and he may
cast all of such votes for a single director or may distribute them between the
two directors to be voted for, as he may see fit.
For the purposes of the foregoing provisions, the Preference Stock of
all series shall be deemed to be a single class.
PREFERENCE STOCK
Pre-emptive Rights
The holders of shares of Preference Stock shall have no pre-emptive
rights to subscribe for or purchase any additional issues of shares of the
capital stock of the Company of any class now or hereafter authorized or any
bonds, debentures or other obligations
27
or rights or options convertible into or exchangeable for or entitling the
holder or owner to subscribe for or purchase any shares of capital stock, or any
rights to exchange shares issued for shares to be issued.
ARTICLE VIII
Any action required or permitted by the Act to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if consents in writing, setting forth the action so
taken, signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present and
voted. The written consents shall bear the date of signature of each shareholder
who signs the consent. No written consents shall be effective to take the
corporate action referred to unless, within sixty days after the record date for
determining shareholders entitled to express consent to or to dissent from a
proposal without a meeting, written consents signed by a sufficient number of
shareholders to take the action are delivered to the Company. Delivery shall be
to the Company's registered office, its principal place of business, or an
officer or agent of the Company having custody of the minutes of the proceedings
of its shareholders. Delivery made to a Company's registered office shall be by
hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who have not
consented in writing.
Signed on May 26, 2000 Consumers Energy Company
By: /s/ Thomas A. McNish
-------------------------------
Thomas A. McNish
Vice President and Secretary
STATE OF MICHIGAN )
) SS.
COUNTY OF JACKSON )
On this 26th day of May 2000, before me appeared Thomas A. McNish, to me
personally known, who, being by me duly sworn, did say that he is Vice President
and Secretary of Consumers Energy Company, who executed the foregoing
instrument, and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its Board of Directors and Shareholders, and
said officer acknowledged said instrument to be the free act and deed of said
corporation.
/s/ Renee E. Stephens
----------------------------------
Notary Public
28
Dates Referenced Herein and Documents Incorporated by Reference
5 Subsequent Filings that Reference this Filing
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