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Exhibit 99.2
RESTATED ARTICLES OF INCORPORATION
OF
PUGET ENERGY, INC.
ARTICLE 1. NAME
The name of this corporation is Puget Energy, Inc.
ARTICLE 2. SHARES
2.1 Authorized Capital
The total number of shares which the corporation is authorized to issue is
300,000,000, consisting of 250,000,000 shares of Common Stock having a par value
of $.01 per share and 50,000,000 shares of Preferred Stock having a par value of
$.01 per share. The Common Stock is subject to the rights and preferences of the
Preferred Stock as set forth below.
2.2 Issuance of Preferred Stock in Series
The Preferred Stock may be issued from time to time in one or more series
in any manner permitted by law and the provisions of these Articles of
Incorporation, as determined from time to time by the Board of Directors and
stated in the resolution or resolutions providing for its issuance, prior to the
issuance of any shares. The Board of Directors shall have the authority to fix
and determine and to amend, subject to these provisions, the designation,
preferences, limitations and relative rights of the shares of any series that is
wholly unissued or to be established. Unless otherwise specifically provided in
the resolution establishing any series, the Board of Directors shall further
have the authority, after the issuance of shares of a series whose number it has
designated, to amend the resolution establishing such series to decrease the
number of shares of that series, but not below the number of shares of such
series then outstanding.
2.3 Designation of Rights and Preferences of Series R Participating Cumulative
Preferred Stock
The following series of Preferred Stock is hereby designated, which
series shall have the rights, preferences and privileges and limitations set
forth below:
2.3.1 Designation of Series R Participating Cumulative Preferred Stock
The shares of such series shall be designated the "Series R
Participating Cumulative Preferred Stock" (the "Series R Preferred Stock"),
par value $0.01 per share. The number of shares initially constituting the
Series R Preferred Stock shall be 1,000,000; provided, however, if more
than a total of 1,000,000 shares of Series R Preferred Stock shall be
issuable upon the exercise of Rights (the "Rights") issued pursuant to the
Rights Agreement dated as of December 21, 2000 between the Company
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and Mellon Investor Services LLC, as Rights Agent (the "Rights Agreement"),
the Company's Board of Directors, pursuant to Section 23B.06.020 of the
Revised Code of Washington, shall direct by resolution or resolutions that
Articles of Amendment be properly executed and filed with the Washington
Secretary of State providing for the total number of shares of Series R
Preferred Stock authorized for issuance to be increased (to the extent that
the Restated Articles of Incorporation then permit) to the largest number
of whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights. In addition, such number of shares may be
decreased by resolution of the Board of Directors; provided, however, that
no decrease shall reduce the number of shares of Series R Preferred Stock
to a number less than the number of shares then outstanding plus the number
of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series R Preferred Stock.
2.3.2 Dividends and Distributions
(a) Subject to the prior and superior rights of the holders of
shares of any other series of Preferred Stock or other class of capital
stock of the Company ranking prior and superior to the shares of Series R
Preferred Stock with respect to dividends, the holders of shares of Series
R Preferred Stock shall be entitled to receive, when, as, and if declared
by the Board of Directors, out of the assets of the Company legally
available therefor, quarterly dividends payable in cash on the last day of
each fiscal quarter in each year, or such other dates as the Company's
Board of Directors shall approve (each such date being referred to in this
Designation as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share
or a fraction of a share of Series R Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (i) $.01 and
(ii) the Formula Number (as hereinafter defined) then in effect times the
cash dividends then to be paid on each share of Common Stock. In addition,
if the Company shall pay any dividend or make any distribution on the
Common Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of
Common Stock), then, in each such case, the Company shall simultaneously
pay or make on each outstanding whole share of Series R Preferred Stock a
dividend or distribution in like kind equal to the Formula Number then in
effect times such dividend or distribution on each share of Common Stock.
As used in this Designation and in the Rights Agreement, the "Formula
Number" shall be 100; provided, however, that if at any time after December
29, 2000 the Company shall (i) declare or pay any dividend on the Common
Stock payable in shares of Common Stock or make any distribution on the
Common Stock in shares of Common Stock, (ii) subdivide (by a stock split or
otherwise) the outstanding shares of Common Stock into a larger number of
shares of Common Stock, or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then in each such event the Formula Number shall be
adjusted to a number determined by multiplying the Formula Number in effect
immediately prior to such event by a fraction, the numerator of which is
the number of shares of Common Stock that are outstanding immediately after
such event
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and the denominator of which is the number of shares of Common Stock that
are outstanding immediately prior to such event (and rounding the result to
the nearest whole number); and provided further, that if at any time after
December 29, 2000 the Company shall issue any shares of its capital stock
in a merger, reclassification or change of the outstanding shares of Common
Stock, then in each such event the Formula Number shall be appropriately
adjusted to reflect such merger, reclassification or change so that each
share of Preferred Stock continues to be the economic equivalent of a
Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series R Preferred Stock as provided in Section 2.3.2(a) immediately prior
to or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); provided, however, that in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series R Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Corporation's Board of Directors may fix a record date for the
determination of holders of shares of Series R Preferred Stock entitled to
receive a dividend or distribution declared thereon, which record date
shall be the same as the record date for any corresponding dividend or
distribution on the Common Stock and which shall not be more than 60 days
prior to the date fixed for payment thereof.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series R Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series R Preferred Stock; provided, however, that dividends on such shares
that are originally issued after the record date for the determination of
holders of shares of Series R Preferred Stock entitled to receive a
quarterly dividend on or prior to the next succeeding Quarterly Dividend
Payment Date shall begin to accrue and be cumulative from and after such
Quarterly Dividend Payment Date. Notwithstanding the foregoing, dividends
on shares of Series R Preferred Stock that are originally issued prior to
the record date for the determination of holders of shares of Series R
Preferred Stock entitled to receive a quarterly dividend on or prior to the
first Quarterly Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal quarter (or such other Quarterly
Dividend Payment Date as the Company's Board of Directors shall approve)
next preceding the date of original issuance of such shares. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series R Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.
(d) So long as any shares of Series R Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required
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by this Section 2.3.2 to be declared on the Series R Preferred Stock shall
have been declared.
(e) The holders of shares of Series R Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
in this Designation.
2.3.3 Voting Rights
The holders of shares of Series R Preferred Stock shall have the following
voting rights:
(a) Each holder of Series R Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect for each share
of Series R Preferred Stock held of record on each matter on which holders
of the Common Stock or shareholders generally are entitled to vote,
multiplied by the maximum number of votes per share that any holders of the
Common Stock or shareholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided in this Designation or by
applicable law, the holders of shares of Series R Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Company having general voting rights shall vote together as one class for
the election of directors of the Company and on all other matters submitted
to a vote of shareholders of the Company.
(c) Except as provided in this Designation or by applicable law,
holders of Series R Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth in this Designation) for
authorizing or taking any corporate action.
2.3.4 Certain Restrictions
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series R Preferred Stock as provided in
Section 2.3.2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series R
Preferred Stock outstanding shall have been paid in full, the Company shall
not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series R Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series R Preferred Stock, except dividends
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paid ratably on the Series R Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) with the Series R Preferred
Stock; provided, however, that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding
up) to the Series R Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series R Preferred Stock, or any shares of stock
ranking on a parity with the Series R Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Company's Board of Directors) to all holders
of such shares upon such terms as the Company's Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (a) of this Section
2.3.4, purchase or otherwise acquire such shares at such time and in such
manner.
2.3.5 Liquidation Rights
Upon the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, no distribution shall be made to (a) the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series R Preferred Stock
unless, prior thereto, the holders of shares of Series R Preferred Stock
shall have received an amount equal to the greater of (i) $.01 per share
and (ii) the accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an aggregate
amount per share equal to the Formula Number then in effect times the
aggregate amount to be distributed per share to holders of Common Stock or
(b) the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series R
Preferred Stock, except distributions made ratably on the Series R
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
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2.3.6 Consolidation, Merger, etc.
In case the Company shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any
other property, then in any such case the then outstanding shares of Series
R Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share equal to the Formula Number then in effect times
the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is exchanged or changed. In the event both this Section
2.3.6 and Section 2.3.2 appear to apply to a transaction, this Section
2.3.6 will control.
2.3.7 No Redemption; No Sinking Fund
(a) The shares of Series R Preferred Stock shall not be subject to
redemption by the Company or at the option of any holder of Series R
Preferred Stock; provided, however, that the Company may purchase or
otherwise acquire outstanding shares of Series R Preferred Stock in the
open market or by offer to any holder or holders of shares of Series R
Preferred Stock.
(b) The shares of Series R Preferred Stock shall not be subject to
or entitled to the operation of a retirement or sinking fund.
2.3.8 Ranking
The Series R Preferred Stock shall rank junior to all other series
of Preferred Stock of the Company, unless the Company's Board of Directors
shall specifically determine otherwise in fixing the powers, preferences
and relative, participating, optional and other special rights of the
shares of such series and the qualifications, limitations and restrictions
thereof.
2.3.9 Fractional Shares
The Series R Preferred Stock shall be issuable upon exercise of the
Rights issued pursuant to the Rights Agreement in whole shares or in any
fractional share that is one one-hundredth (1/100th) of a share or any
integral multiple of such fraction, and shall entitle the holder, in
proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and have the benefit
of all other rights of holders of Series R Preferred Stock. In lieu of
fractional shares, the Company, prior to the first issuance of a share or a
fractional share of Series R Preferred Stock, may elect to (a) make a cash
payment as provided in the Rights Agreement for a fractional share other
than one one-hundredth (1/100th) of a share or any integral multiple
thereof or (b) issue depository receipts evidencing such authorized
fractional share of Series R Preferred Stock pursuant to an appropriate
agreement between the Company and a depository selected by the Company;
provided, however, that such agreement shall provide that the
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holders of such depository receipts shall have all the rights, privileges
and preferences to which they are entitled as holders of the Series R
Preferred Stock.
2.3.10 Reacquired Shares
Any shares of Series R Preferred Stock purchased or otherwise
acquired by the Company in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred
Stock, without designation as to series until such shares are once more
designated as part of a particular series by the Company's Board of
Directors pursuant to the provisions of the Articles of Incorporation.
2.3.11 Amendment
None of the powers, preferences and relative, participating,
optional and other special rights of the Series R Preferred Stock as
provided in this Designation or in the Articles of Incorporation shall be
amended in any manner that would alter or change the powers, preferences,
rights or privileges of the holders of Series R Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series R Preferred Stock,
voting as a separate class.
ARTICLE 3. REGISTERED OFFICE AND AGENT
The name of the initial registered agent of this corporation and the
address of its initial registered office are as follows:
James W. Eldredge
411 - 108/th/ Avenue N.E.
Bellevue, Washington 98004-5515
ARTICLE 4. INCORPORATOR
The name and address of the incorporator are as follows:
James W. Eldredge
411 - 108/th/ Avenue N.E.
Bellevue, Washington 98004-5515
ARTICLE 5. PREEMPTIVE RIGHTS
No preemptive rights shall exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
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ARTICLE 6. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not exist
with respect to shares of stock of this corporation.
ARTICLE 7. DIRECTORS
The number of Directors of this corporation shall not be less than nine
nor more than fifteen, the exact number to be determined in the manner provided
by the Bylaws and may be increased or decreased from time to time in the manner
provided therein. The Directors shall be divided into three classes, each class
to be as nearly equal in number as possible. The terms of the Directors in the
first class shall expire at the first annual shareholders' meeting after their
election, the terms of the Directors in the second class shall expire at the
second annual shareholders' meeting after their election, and the terms of the
Directors in the third class shall expire at the third annual shareholders'
meeting after their election. At each annual shareholders' meeting held
thereafter, the Directors shall be chosen for a term of three years to succeed
those whose terms expire. The Directors of this corporation may be removed only
for cause in the manner provided by the Bylaws.
ARTICLE 8. BYLAWS
The Board of Directors shall have the power to adopt, amend or repeal
the Bylaws of this corporation, subject to the power of the shareholders to
amend or repeal such Bylaws. The shareholders shall also have the power to amend
or repeal the Bylaws of this corporation and to adopt new Bylaws.
ARTICLE 9. AMENDMENTS TO ARTICLES OF INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in these Articles of Incorporation in any manner now or
hereafter permitted by the Washington Business Corporation Act, and the rights
of the shareholders of this corporation are granted subject to this reservation.
ARTICLE 10. LIMITATION OF DIRECTOR LIABILITY
Except as such limitation or elimination of director liability is
specifically prohibited by the Washington Business Corporation Act, as now in
effect or as it may hereafter be amended, a Director of this corporation shall
not be liable to this corporation or its shareholders for monetary damages for
conduct as a Director. Any amendments to or repeal of this Article 10 shall not
adversely affect any right or protection of a Director of this corporation for
or with respect to any acts or omissions of such Director occurring prior to
such amendment or repeal.
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ARTICLE 11. INDEMNIFICATION
11.1 Definitions.
Capitalized terms used in this Article 11 have the meaning given to such
terms in Section 23B.08.500 of the Washington Business Corporation Act.
11.2 Indemnification
This corporation shall indemnify its Directors, officers, employees and
agents against Liability and Expenses and shall advance Expenses to its
Directors, officers, employees and agents in connection with any proceeding to
the fullest extent permitted by the Washington Business Corporation Act, as now
in effect or as it may hereafter be amended.
ARTICLE 12. SHAREHOLDER ACTIONS
Any action required or permitted to be taken at a shareholders' meeting
may be taken without a meeting or a vote if the action is taken by all
shareholders entitled to vote on the action.
ARTICLE 13. SPECIAL MEETINGS
Shareholders shall not have the right to call a special meeting.
Dated: December 21, 2000.
PUGET ENERGY, INC.
/s/ James W. Eldredge
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James W. Eldredge
Corporate Secretary
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