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EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
RELIANT RESOURCES, INC.
Under Sections 242 and 245 of the
Delaware General Corporation Law
RELIANT RESOURCES, INC. (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware (the "DGCL"), hereby certifies that:
1. The current name of the Corporation is Reliant Resources, Inc. The
name under which the Corporation was originally incorporated was Reliant Energy
Unregco, Inc. The original Certificate of Incorporation of the Corporation (as
heretofore amended, the "Certificate of Incorporation") was filed with the
Secretary of State of the State of Delaware on August 9, 2000.
2. The Board of Directors of the Corporation duly adopted resolutions
proposing and declaring advisable the amendments to the Certificate of
Incorporation this Restated Certificate of Incorporation is effecting, and the
Corporation's sole stockholders has duly adopted those amendments, all in
accordance with the provisions of Sections 228, 242 and 245 of the DGCL.
3. This Restated Certificate of Incorporation restates and amends the
Certificate of Incorporation. The amendments to the Certificate of Incorporation
effected by this Restated Certificate of Incorporation include, but are not
limited to, amendments to: (i) increase the number of authorized shares of
capital stock that the Corporation shall have authority to issue; (ii)
reclassify the shares of common stock, par value $1.00 per share, of the
Corporation which are issued and outstanding immediately prior to the date this
Restated Certificate of Incorporation is filed with the Secretary of State of
the State of Delaware (the "Old Shares") by converting the 1,000 Old Shares into
a total of 240,000,000 new shares of common stock having a par value of $.001
per share (the "New Shares"), which conversion represents a 240,000-for-1 stock
split of the Old Shares; (iii) authorize preferred stock, par value $.001 per
share ("Preferred Stock"), as a new class of capital stock of the Corporation;
(iv) create a series of Preferred Stock designated as "Series A Preferred Stock"
and establish the number of shares thereof and the voting and other powers,
preferences and relative, participating, optional or other rights of the shares
of such series and the qualifications, limitations and restrictions thereof; (v)
add express provisions regarding the denial of preemptive rights and cumulative
voting; (vi) provide for certain provisions governing the Board of Directors,
including provisions governing the number, election and term of directors, the
classification of the Board of Directors into three classes upon the occurrence
of a specified future event, the procedure for removal of members of the Board
of Directors and the procedure for filling vacancies on the Board of Directors;
(vii) prohibit the
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taking of action by the stockholders of the Corporation by written consent
without a stockholders meeting following the occurrence of a specified future
event; (viii) prohibit the amendment of certain Articles of this Restated
Certificate of Incorporation without the affirmative vote of at least sixty-six
and two-thirds percent (66 2/3%) or eighty percent (80%), as applicable, of the
voting power of all outstanding shares of capital stock of the Corporation
generally entitled to vote in the election of directors, voting together as a
single class; and (ix) provide for certain provisions that regulate and define
certain aspects of the Corporation's contractual, corporate and business
relationships with Reliant Energy, Incorporated, a Texas corporation, or any
successor thereto.
4. The capital of the Corporation shall not be reduced under or by
reason of the foregoing amendments to the Certificate of Incorporation.
5. The Certificate of Incorporation is hereby superseded by this
Restated Certificate of Incorporation, which shall henceforth be the Certificate
of Incorporation of the Corporation.
6. The text of the Certificate of Incorporation is hereby restated and
amended to read in its entirety as follows (hereinafter, this Restated
Certificate of Incorporation, as it may be further amended or restated from time
to time, is referred to as this "Restated Certificate of Incorporation").
RESTATED CERTIFICATE OF INCORPORATION
FIRST: The name of the Corporation is Reliant Resources, Inc.
(hereinafter, the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle, Zip Code 19801, and the name of the registered
agent of the Corporation at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL").
FOURTH: The aggregate number of shares of capital stock that the
Corporation shall have authority to issue is 2,125,000,000, of which
2,000,000,000 shares are classified as common stock, par value $0.001 per share
("Common Stock"), and 125,000,000 shares are classified as preferred stock, par
value $.001 per share ("Preferred Stock").
The Corporation may issue shares of any class or series of its capital
stock from time to time for such consideration and for such corporate purposes
as the Board of Directors of the Corporation (the "Board of Directors") may from
time to time determine.
The following is a statement of the powers, preferences and rights, and
the qualifications, limitations or restrictions, of the Preferred Stock and the
Common Stock:
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DIVISION A. PREFERRED STOCK
The shares of Preferred Stock may be divided into and issued in one or
more series, the relative rights, powers and preferences of which series may
vary in any and all respects. The Board of Directors is expressly vested with
the authority to fix, by resolution or resolutions adopted prior to and
providing for the issuance of any shares of each particular series of Preferred
Stock and incorporate in a certificate of designations filed with the Secretary
of State of the State of Delaware, the designations, powers, preferences,
rights, qualifications, limitations and restrictions thereof, of the shares of
each series of Preferred Stock, to the extent not provided for in this Restated
Certificate of Incorporation, and with the authority to increase or decrease the
number of shares within each such series; provided, however, that the Board of
Directors may not decrease the number of shares within a series of Preferred
Stock below the number of shares within such series that is then issued. The
authority of the Board of Directors with respect to fixing the designations,
powers, preferences, rights, qualifications, limitations and restrictions of
each such series of Preferred Stock shall include, but not be limited to,
determination of the following:
(1) the distinctive designation and number of shares of that series;
(2) the rate of dividends (or the method of calculation thereof)
payable with respect to shares of that series, the dates, terms and other
conditions upon which such dividends shall be payable, and the relative rights
of priority of such dividends to dividends payable on any other class or series
of capital stock of the Corporation;
(3) the nature of the dividend payable with respect to shares of that
series as cumulative, noncumulative or partially cumulative, and if cumulative
or partially cumulative, from which date or dates and under what circumstances;
(4) whether shares of that series shall be subject to redemption, and,
if made subject to redemption, the times, prices, rates, adjustments and other
terms and conditions of such redemption (including the manner of selecting
shares of that series for redemption if fewer than all shares of such series are
to be redeemed);
(5) the rights of the holders of shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation (which rights may be different if such action is voluntary than if
it is involuntary), including the relative rights of priority in such event as
to the rights of the holders of any other class or series of capital stock of
the Corporation;
(6) the terms, amounts and other conditions of any sinking or similar
purchase or other fund provided for the purchase or redemption of shares of that
series;
(7) whether shares of that series shall be convertible into or
exchangeable for shares of capital stock or other securities of the Corporation
or of any other corporation or entity, and, if provision be made for conversion
or exchange, the times, prices, rates, adjustments, and other terms and
conditions of such conversion or exchange;
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(8) the extent, if any, to which the holders of shares of that series
shall be entitled (in addition to any voting rights provided by law) to vote as
a class or otherwise with respect to the election of directors or otherwise;
(9) the restrictions and conditions, if any, upon the issue or reissue
of any additional Preferred Stock ranking on a parity with or prior to shares of
that series as to dividends or upon liquidation, dissolution or winding up;
(10) any other repurchase obligations of the Corporation, subject to
any limitations of applicable law; and
(11) any other designations, powers, preferences, rights,
qualifications, limitations or restrictions of shares of that series.
Any of the designations, powers, preferences, rights, qualifications,
limitations or restrictions of any series of Preferred Stock may be dependent on
facts ascertainable outside this Restated Certificate of Incorporation, or
outside the resolution or resolutions providing for the issue of such series of
Preferred Stock adopted by the Board of Directors pursuant to authority
expressly vested in it by this Restated Certificate of Incorporation. Except as
applicable law or this Restated Certificate of Incorporation otherwise may
require, the terms of any series of Preferred Stock may be amended without
consent of the holders of any other series of Preferred Stock or any class of
capital stock of the Corporation.
The relative powers, preferences and rights of each series of Preferred
Stock in relation to the powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time to time by the Board
of Directors in the resolution or resolutions adopted pursuant to the authority
granted in this Division A of this Article Fourth, and the consent, by class or
series vote or otherwise, of holders of Preferred Stock of such of the series of
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock,
whether or not the powers, preferences and rights of such other series shall be
fixed by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of holders of at least a majority (or such greater proportion as shall
be therein fixed) of the outstanding shares of such series voting thereon shall
be required for the issuance of shares of any or all other series of Preferred
Stock.
Shares of any series of Preferred Stock shall have no voting rights
except as required by law or as provided in the relative powers, preferences and
rights of such series.
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SERIES A PREFERRED STOCK
1. Designation and Amount. There shall be a series of Preferred Stock
that shall be designated as "Series A Preferred Stock," and the number of shares
constituting such series shall be 2,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series A
Preferred Stock to less than the number of shares then issued and outstanding
plus the number of shares issuable upon exercise of outstanding rights, options
or warrants or upon conversion of outstanding securities issued by the
Corporation.
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of any class or
series of stock of the Corporation ranking junior to the Series A Preferred
Stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of assets of the Corporation legally available for the purpose,
quarterly dividends payable in cash on the first day of January, April, July and
October in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $10.00 or (b) the Adjustment Number (as defined below) times the
aggregate per share amount of all cash dividends, and the Adjustment Number
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. The "Adjustment Number" shall initially be
1,000. In the event the Corporation shall at any time after January 15, 2001
(the "Rights Declaration Date") (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution 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 $10.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
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(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A 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. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder
thereof to a number of votes equal to the Adjustment Number on all matters
submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided in this Restated Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock, the
holders of shares of any other class or series entitled to vote with the Common
Stock and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") that shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, (1) the number of directors shall be increased by two,
effective as of the time of election of such directors as herein provided, and
(2) the holders of Preferred Stock (including holders of the Series A Preferred
Stock) upon which these or like voting rights have been conferred and are
exercisable (the "Voting Preferred Stock") with dividends in arrears in an
amount equal to six quarterly dividends thereon, voting as a class, irrespective
of series, shall have the right to elect such two directors.
(ii) During any default period, such voting right of the holders of
Series A Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders, provided that
such voting right shall not be exercised unless the holders of at least thirty
three and one-third percent (33 1/3%) of the shares of Voting Preferred Stock
outstanding
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shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Voting Preferred
Stock of such voting right.
(iii) Unless the holders of Voting Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Voting Preferred Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of Voting Preferred
Stock, which meeting shall thereupon be called by the Chairman, the President, a
Vice President or the Corporate Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Voting Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Voting Preferred Stock by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or, in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of Voting Preferred
Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, after the holders of Voting Preferred
Stock shall have exercised their right to elect directors voting as a class, (x)
the directors so elected by the holders of Voting Preferred Stock shall continue
in office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the Board of
Directors may be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class or classes of stock which
elected the director whose office shall have become vacant. References in this
paragraph (C) to directors elected by the holders of a particular class or
classes of stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Voting Preferred Stock as a class to elect directors
shall cease, (y) the term of any directors elected by the holders of Voting
Preferred Stock as a class shall terminate and (z) the number of directors shall
be such number as may be provided for in this Restated Certificate of
Incorporation or the Bylaws of the Corporation irrespective of any increase made
pursuant to the provisions of paragraph (C) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in this
Restated Certificate of Incorporation or the Bylaws of the Corporation). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
directors.
(D) Except as set forth herein, holders of Series A 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 herein) for taking any corporate action.
4. Certain Restrictions.
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(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation 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 A 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 A
Preferred Stock, except dividends paid ratably on the Series A
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; or
(iii) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of Series A Preferred Stock, or to all such holders and
the holders of any such shares ranking on a parity therewith,
upon such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative power,
preferences and rights 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 Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of capital stock
of the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner.
5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation 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 and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth in this Restated Certificate
of Incorporation.
6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal to the
quotient
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obtained by dividing (i) the Series A Liquidation Preference by (ii) the
Adjustment Number. Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Preferred Stock and Common Stock, respectively, holders of
Series A Preferred Stock and holders of shares of Common Stock shall, subject to
the prior rights of all other series of Preferred Stock, if any, ranking prior
thereto, receive their ratable and proportionate share of the remaining assets
to be distributed in the ratio of the Adjustment Number to 1 with respect to
such Series A Preferred Stock and Common Stock, on a per share basis,
respectively.
(A) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any, that
rank on a parity with the Series A Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(B) Neither the merger or consolidation of the Corporation into or with
another corporation nor the merger or consolidation of any other corporation
into or with the Corporation shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6, but the
sale, lease or conveyance of all or substantially all of the Corporation's
assets shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6.
7. Consolidation, Merger, etc. In case the Corporation 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 each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share equal to the Adjustment Number 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 changed or
exchanged.
8. Redemption. (A) The Corporation, at its option, may redeem shares of
the Series A Preferred Stock in whole at any time and in part from time to time,
at a redemption price equal to the Adjustment Number times the current per share
market price (as such term is hereinafter defined) of the Common Stock on the
date of the mailing of the notice of redemption, together with unpaid
accumulated dividends to the date of such redemption. The "current per share
market price" on any date shall be deemed to be the average of the closing price
per share of such Common Stock for the ten consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date; provided, however,
that in the event that the current per share market price of the Common Stock is
determined during a period following the announcement of (A) a dividend or
distribution on the Common Stock other than a regular quarterly cash dividend or
(B) any subdivision, combination or reclassification of such Common Stock and
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, shall not have occurred prior
to the commencement of such ten Trading Day period, then, and in each such case,
the current per share market price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sales price, regular way, or, in case no such sale takes place on such day, the
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average of the closing bid and asked prices, regular way, in either case as
reported in the principal transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange, or, if
the Common Stock is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange but sales price
information is reported for such security, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System ("Nasdaq")
or such other self-regulatory organization or registered securities information
processor (as such terms are used under the Securities Exchange Act of 1934, as
amended) that then reports information concerning the Common Stock, or, if sales
price information is not so reported, the average of the high bid and low asked
prices in the over-the-counter market on such day, as reported by Nasdaq or such
other entity, or, if on any such date the Common Stock is not quoted by any such
entity, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors. If on any such date no such market maker is making a market
in the Common Stock, the fair value of the Common Stock on such date as
determined in good faith by the Board of Directors shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business, or, if the Common Stock is not listed or admitted
to trading on any national securities exchange but is quoted by Nasdaq, a day on
which Nasdaq reports trades, or, if the Common Stock is not so quoted, a Monday,
Tuesday, Wednesday, Thursday or Friday on which banking institutions in the
State of New York or Texas are not authorized or obligated by law or executive
order to close.
(A) In the event that fewer than all of the outstanding shares of the
Series A Preferred Stock are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors and the shares to be redeemed
shall be determined by lot or pro rata as may be determined by the Board of
Directors or by any other method that may be determined by the Board of
Directors in its sole discretion to be equitable.
(B) Notice of any such redemption shall be given by mailing to the
holders of the shares of Series A Preferred Stock to be redeemed a notice of
such redemption, first class postage prepaid, not later than the fifteenth day
and not earlier than the sixtieth day before the date fixed for redemption, at
their last address as the same shall appear upon the books of the Corporation.
Each such notice shall state: (i) the redemption date; (ii) the number of shares
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on the close of
business on such redemption date. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the stockholder received such notice, and failure duly to give such notice by
mail, or any defect in such notice, to any holder of Series A Preferred Stock
shall not affect the validity of the proceedings for the redemption of any other
shares of Series A Preferred Stock that are to be redeemed. On or after the date
fixed for redemption as stated in such notice, each holder of the shares called
for redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If fewer than
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all the shares represented by any such surrendered certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares.
(C) The shares of Series A Preferred Stock shall not be subject to the
operation of any purchase, retirement or sinking fund.
9. Ranking. The Series A Preferred Stock shall rank junior to all other
series of Preferred Stock (other than any such series of Preferred Stock the
terms of which shall provide otherwise) in respect to dividend and liquidation
rights, and shall rank senior to the Common Stock as to such matters.
10. Amendment. At any time that any shares of Series A Preferred Stock
are outstanding, this Restated Certificate of Incorporation shall not be amended
in any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least sixty six and two-thirds
percent (66 2/3%) of the outstanding shares of Series A Preferred Stock, voting
separately as a class.
11. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
DIVISION B. COMMON STOCK
1. Dividends. Dividends may be paid on the Common Stock, as the Board
of Directors shall from time to time determine, out of any assets of the
Corporation available for such dividends after full cumulative dividends on all
outstanding shares of capital stock of all series ranking senior to the Common
Stock in respect of dividends and liquidation rights (referred to in this
Division B as "stock ranking senior to the Common Stock") have been paid, or
declared and a sum sufficient for the payment thereof set apart, for all past
quarterly dividend periods, and after or concurrently with making payment of or
provision for dividends on the stock ranking senior to the Common Stock for the
then current quarterly dividend period.
2. Distribution of Assets. In the event of any liquidation, dissolution
or winding up of the Corporation, or any reduction or decrease of its capital
stock resulting in a distribution of assets to the holders of the Common Stock,
after there shall have been paid to or set aside for the holders of the stock
ranking senior to the Common Stock the full preferential amounts to which they
are respectively entitled, the holders of the Common Stock shall be entitled to
receive, pro rata, all of the remaining assets of the Corporation available for
distribution to its stockholders. The Board of Directors, by vote of a majority
of the members thereof, may distribute in kind to the holders of the Common
Stock such remaining assets of the Corporation, or may sell, transfer or
otherwise dispose of all or any of the remaining property and assets of the
Corporation to any other corporation or other purchaser and receive payment
therefor wholly or partly in cash or property, and/or in stock of any such
corporation, and/or in obligations of such corporation or other purchaser, and
may sell all or any part of the consideration received therefor and distribute
the same or the proceeds thereof to the holders of the Common Stock.
3. Voting Rights. Subject to the voting rights expressly conferred
under prescribed conditions upon the stock ranking senior to the Common Stock,
the holders of the Common
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Stock shall exclusively possess full voting power for the election of directors
and for all other purposes.
4. Stock Split and Reclassification of Common Stock. This Restated
Certificate of Incorporation amends the Certificate of Incorporation of the
Corporation so as to reclassify the shares of common stock, par value $1.00 per
share, of the Corporation which are issued and outstanding immediately prior to
the date this Restated Certificate of Incorporation is filed with the Secretary
of State of the State of Delaware (the "Old Shares") by converting the 1,000 Old
Shares into a total of 240,000,000 validly issued, fully paid and non-assessable
new shares of Common Stock having a par value of $.001 per share (the "New
Shares"), which conversion represents a 240,000-for-1 stock split of the Old
Shares.
This Restated Certificate of Incorporation shall become effective on
the date it is filed with the Secretary of State of the State of Delaware (the
"Effective Date"). On the Effective Date, the Old Shares shall, automatically
and without any action on the part of the Corporation or the holders thereof, be
reclassified as 240,000,000 New Shares, and each holder of a certificate or
certificates that immediately prior to the Effective Date represented Old Shares
(each, an "Old Certificate") shall be entitled to receive, on the surrender of
the holder's Old Certificate or Old Certificates to the Corporate Secretary of
the Corporation for cancellation, a certificate or certificates (the "New
Certificates," whether one or more) representing in the aggregate that number of
whole duly authorized, validly issued, fully paid and nonassessable New Shares
into which the Old Shares formerly represented by that Old Certificate or Old
Certificates so surrendered have been reclassified by this Restated Certificate
of Incorporation. From and after the Effective Date, Old Certificates will
represent only the right to receive New Certificates pursuant to the provisions
hereof.
DIVISION C. OTHER PROVISIONS APPLICABLE TO THE CORPORATION'S CAPITAL STOCK
1. Preemptive Rights. No holder of any stock of the Corporation shall
be entitled as of right to purchase or subscribe for any part of any unissued or
treasury stock of the Corporation, or of any additional stock of any class, to
be issued by reason of any increase of the authorized capital stock of the
Corporation, or to be issued from any unissued or additionally authorized stock,
or of bonds, certificates of indebtedness, debentures or other securities
convertible into stock of the Corporation, but any such unissued or treasury
stock, or any such additional authorized issue of new stock or securities
convertible into stock, may be issued and disposed of by the Board of Directors
to such persons, firms, corporations or associations, and upon such terms as the
Board of Directors may, in its discretion, determine, without offering to the
stockholders then of record, or any class of stockholders, any thereof, on the
same terms or any terms.
2. Votes Per Share. Any stockholder of the Corporation having the right
to vote at any meeting of the stockholders or of any class or series thereof,
shall be entitled to one vote for each share of stock held by him, provided that
no holder of Common Stock shall be entitled to cumulate his votes for the
election of one or more directors or for any other purpose.
FIFTH: (a) Directors. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors. In addition to
the authority and powers conferred on the Board of Directors by the DGCL or by
the other provisions of this Restated Certificate of Incorporation, the Board of
Directors is authorized and empowered to
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exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject to the provisions of the DGCL, this Restated
Certificate of Incorporation and the Bylaws of the Corporation; provided,
however, that no Bylaws hereafter adopted, or any amendments thereto, shall
invalidate any prior act of the Board of Directors that would have been valid if
such Bylaws or amendment had not been adopted.
(b) Number, Election and Terms of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
from time to time by a majority of the directors then in office, subject to an
increase in the number of directors by reason of any provisions contained in or
established pursuant to Article FOURTH, but in any event shall not be less than
one nor more than 15. Effective upon and commencing as of the date on which REI
shall first cease to own, either directly or indirectly, at least a majority of
the then issued and outstanding shares of Common Stock (such date hereinafter
referred to as the "Trigger Date"), the directors, other than those who may be
elected by the holders of any series of Preferred Stock, shall be divided into
three classes: Class I, Class II and Class III. As used in this Restated
Certificate of Incorporation, "REI" shall mean Reliant Energy, Incorporated, a
Texas corporation ("Reliant Energy"), any successor to Reliant Energy by means
of reorganization, merger, consolidation, conveyance or transfer or any ultimate
parent company of Reliant Energy. Such classes shall be as nearly equal in
number of directors as possible. Each director shall serve for a term ending on
the third annual meeting of stockholders following the annual meeting of
stockholders at which that director was elected; provided, however, that the
directors first designated as Class I directors shall serve for a term expiring
at the annual meeting of stockholders next following the date of their
designation as Class I directors, the directors first designated as Class II
directors shall serve for a term expiring at the second annual meeting of
stockholders next following the date of their designation as Class II directors,
and the directors first designated as Class III directors shall serve for a term
expiring at the third annual meeting of stockholders next following the date of
their designation as Class III directors. Each director shall hold office until
the annual meeting of stockholders at which that director's term expires and,
the foregoing notwithstanding, shall serve until his successor shall have been
duly elected and qualified or until his earlier death, resignation or removal.
At each annual election, the directors chosen to succeed those whose
terms then expire shall be of the same class as the directors they succeed,
unless, by reason of any intervening changes in the authorized number of
directors, the Board of Directors shall have designated one or more
directorships whose term then expires as directorships of another class in order
to more nearly achieve equality of number of directors among the classes.
In the event of any change in the authorized number of directors, each
director then continuing to serve as such shall nevertheless continue as a
director of the class of which he is a member until the expiration of his
current term, or his prior death, resignation or removal. The Board of Directors
shall specify the class to which a newly created directorship shall be
allocated.
Election of directors need not be by written ballot unless the Bylaws
of the Corporation so provide.
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(c) Removal of Directors. Effective upon and commencing as of
the Trigger Date, no director of the Corporation may be removed from office as a
director by vote or other action of the stockholders or otherwise except for
cause, and then only by the affirmative vote of the holders of at least a
majority of the voting power of all outstanding shares of capital stock of the
Corporation generally entitled to vote in the election of directors, voting
together as a single class. Except as applicable law otherwise provides, cause
for the removal of a director shall be deemed to exist only if the director
whose removal is proposed: (i) has been convicted, or has been granted immunity
to testify in any proceeding in which another has been convicted, of a felony by
a court of competent jurisdiction and that conviction is no longer subject to
direct appeal; (ii) has been found to have been negligent or guilty of
misconduct in the performance of his duties to the Corporation in any matter of
substantial importance to the Corporation by (A) the affirmative vote of at
least 80% of the directors then in office at any meeting of the Board of
Directors called for that purpose or (B) a court of competent jurisdiction; or
(iii) has been adjudicated by a court of competent jurisdiction to be mentally
incompetent, which mental incompetency directly affects his ability to serve as
a director of the Corporation. Notwithstanding the foregoing, whenever holders
of outstanding shares of one or more series of Preferred Stock are entitled to
elect members of the Board of Directors pursuant to the provisions applicable in
the case of arrearages in the payment of dividends or other defaults contained
in this Restated Certificate of Incorporation or the Board of Directors'
resolution providing for the establishment of any series of Preferred Stock, any
such director of the Corporation so elected may be removed in accordance with
the provisions of this Restated Certificate of Incorporation or that Board of
Directors' resolution.
(d) Vacancies. Except as a Board of Directors' resolution
providing for the establishment of any series of Preferred Stock may provide
otherwise, newly created directorships resulting from any increase in the number
of directors and any vacancies on the Board of Directors resulting from death,
resignation, removal, disqualification or other cause shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until that director's successor shall have
been elected and qualified or until his earlier death, resignation or removal.
No decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
(e) Amendment of this Article FIFTH. In addition to any other
affirmative vote required by applicable law, this Article FIFTH may not be
amended, modified or repealed except by the affirmative vote of the holders of
at least sixty six and two-thirds percent (66 2/3%) of the voting power of all
outstanding shares of capital stock of the Corporation generally entitled to
vote in the election of directors, voting together as a single class.
SIXTH: (a) Action by Written Consent; Special Meetings. Effective upon
and commencing as of the Trigger Date, no action required to be taken or that
may be taken at any annual or special meeting of the stockholders of the
Corporation may be taken without a meeting, and the power of the stockholders of
the Corporation to consent in writing to the taking of any action by written
consent without a meeting is specifically denied. Unless otherwise
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provided by the DGCL, by this Restated Certificate of Incorporation or by any
provisions established pursuant to Article FOURTH hereof with respect to the
rights of holders of one or more outstanding series of Preferred Stock,
effective upon and commencing as of the Trigger Date, special meetings of the
stockholders of the Corporation may be called at any time only by the Chairman
of the Board of Directors, the President and Chief Executive Officer of the
Corporation, or by the Board of Directors pursuant to a resolution approved by
the affirmative vote of at least a majority of the members of the Board of
Directors, and no such special meeting may be called by any other person or
persons.
(b) Amendment of this Article SIXTH. In addition to any other
affirmative vote required by applicable law, this Article SIXTH may not be
amended, modified or repealed except by the affirmative vote of the holders of
at least sixty six and two-thirds percent (66 2/3%) of the voting power of all
outstanding shares of capital stock of the Corporation generally entitled to
vote in the election of directors, voting together as a single class.
SEVENTH: No director of the Corporation shall be personally liable to
the Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director of the Corporation; provided, however, that this
Article SEVENTH shall not eliminate or limit the liability of such a director
(1) for any breach of such director's duty of loyalty to the Corporation or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) under Section 174 of
the DGCL, as the same exists or as such provision may hereafter be amended,
supplemented or replaced, or (4) for any transactions from which such director
derived an improper personal benefit. If the DGCL is amended after the filing of
this Restated Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be limited to the fullest extent permitted by
such law, as so amended. Any repeal or modification of this Article SEVENTH by
the stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
EIGHTH: (a) Certain Acknowledgments; Certain Fiduciary Duties. In
anticipation (i) that the Corporation will cease to be a wholly owned subsidiary
of REI, but that REI will remain a stockholder of the Corporation and have
continued contractual, corporate and business relations with the Corporation,
and in anticipation that the Corporation and REI may enter into contracts and/or
otherwise transact business with each other and that the Corporation may derive
benefits therefrom, (ii) that directors, officers and/or employees of REI and/or
of its Affiliated Companies (as hereinafter defined) may serve as directors
and/or officers of the Corporation, (iii) that REI and/or its Affiliated
Companies engage and are expected to continue to engage in the same, similar or
related lines of business as those in which the Corporation, directly or
indirectly, may engage and/or other business activities in each case that may
overlap with or compete with those in which the Corporation and its Affiliated
Companies, directly or indirectly, may engage, and that REI and/or its
Affiliated Companies may compete with the Corporation in any of such business
lines and/or business activities and with respect to business opportunities
relating to any such business lines and/or business activities, (iv) that the
Corporation and its Affiliated Companies may engage in material business
transactions with REI and its Affiliated Companies, and (v) that, as a
consequence of the foregoing, it is in the best
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interests of the Corporation that the respective rights and duties of the
Corporation and of REI and their Affiliated Companies, and the duties of any
directors, officers or employees of the Corporation who are also directors,
officers or employees of REI or its Affiliated Companies, be determined and
delineated in respect of any transactions between, or opportunities that may be
suitable for, both the Corporation and its Affiliated Companies, on the one
hand, and REI and its Affiliated Companies, on the other hand, the provisions of
this Article EIGHTH shall regulate and define the conduct of certain of the
business and affairs of the Corporation in relation to REI and its Affiliated
Companies. Any contract or business relation that does not comply with the
procedures set forth in this Article EIGHTH, shall not by reason thereof be
deemed void or voidable or unfair or result in any breach of fiduciary duty or
duty of loyalty or failure to act in good faith or in the best interests of the
Corporation or constitute derivation of any improper personal benefit, but shall
be governed by the provisions of this Restated Certificate of Incorporation, the
Bylaws of the Corporation, the DGCL and other applicable law.
(b) Certain Agreements and Transactions Permitted. No contract,
agreement, arrangement or transaction (or any amendment, modification or
termination thereof) between the Corporation and REI or between the Corporation
and one or more of the directors or officers of the Corporation, REI, or any of
its Affiliated Companies or between the Corporation and any Affiliated Company
shall be void or voidable or be considered to be unfair to the Corporation
solely for the reason that REI, any Affiliated Company, or any one or more of
the officers or directors of the Corporation, REI, or any Affiliated Company are
parties thereto, or because any such directors or officers are present at or
participate in any meeting of the Board of Directors or committee thereof which
authorizes the contract, agreement, arrangement, or transaction (or the
amendment, modification or termination thereof), or because his, her or their
votes are counted for such purpose. Further, no such contract, agreement or
arrangement (or the amendment, modification or termination thereof), or the
performance thereof by the Corporation or by REI, or by any Affiliated Company
thereof, shall be considered to be for any of the foregoing reasons contrary to
(x) any fiduciary duty that REI or any Affiliated Company thereof may owe to the
Corporation or any Affiliated Company thereof or to any stockholder or other
owner of an equity interest in the Corporation or any Affiliated Company thereof
by reason of REI or any Affiliated Company thereof being a controlling
stockholder of the Corporation or participating in the control of the
Corporation or of any Affiliated Company thereof; or (y) any fiduciary duty of
any director or officer of the Corporation or of any Affiliated Company thereof
who is also a director, officer or employee of REI or any Affiliated Company
thereof to the Corporation or such Affiliated Company, or to any stockholder
thereof; and REI, any Affiliated Company, and such directors and officers shall
be deemed to have acted in good faith and in a manner such persons reasonably
believe to be in and not opposed to the best interests of the Corporation and
shall be deemed not to have breached their duties of loyalty to the Corporation
and its stockholders and not to have derived an improper personal benefit
therefrom, if any of the following conditions shall have been satisfied:
(i) such contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) shall have been entered into
before the Corporation ceased to be a wholly owned subsidiary of REI and
continued in effect in respect of any such transaction or opportunity after such
time; or
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(ii) the material facts as to the contract, agreement, arrangement or
transaction (or the amendment, modification or termination thereof) are
disclosed or are known to the Board of Directors or the committee thereof which
authorizes the contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof), and the Board of Directors or
such committee authorizes and approves the contract, agreement, arrangement or
transaction (or the amendment, modification or termination thereof) (a) by the
affirmative vote of a majority of the directors who are not Interested Persons
(as hereinafter defined) in respect of such contract, agreement, arrangement,
transaction, amendment, modification or termination, even though the
disinterested directors be less than a quorum; (b) by the affirmative vote of a
majority of the members of a committee constituted solely of members who are not
Interested Persons in respect of such contract, agreement, arrangement,
transaction, amendment, modification or termination or (c) by one or more
officers or employees of the Corporation (including officers or employees of the
Corporation acting as directors, officers, trustees, partners or members of, or
in any similar capacity of behalf of, any Affiliated Company of the Corporation)
who in each case is not an Interested Person in respect of such contract,
agreement, arrangement, transaction, amendment, modification or termination and
to whom the authority to approve such contract, agreement, arrangement,
transaction, amendment, modification or termination has been delegated either by
the Board of Directors by the same affirmative vote required by subclause (a) of
this subparagraph for approval of such contract, agreement, arrangement,
transaction, amendment, modification or termination by the Board of Directors or
by a committee of the Board of Directors constitute as provided by and acting by
the same affirmative vote as required by subclause (b) of this subparagraph for
approval of such contract, agreement, arrangement, transaction, amendment,
modification or termination by such committee or, in the case of an employee, to
whom such authority has been delegated by an officer to whom authority to
approve such contract, agreement, arrangement, transaction, amendment,
modification or termination has been so delegated; or
(iii) the material facts as to the contract, agreement, arrangement or
transaction (or the amendment, modification or termination thereof) are
disclosed or are known to the holders of voting stock entitled to vote thereon,
and the contract, agreement, arrangement, or transaction (or the amendment,
modification or termination thereof) is approved by vote of the holders of a
majority of the voting power of all outstanding shares of capital stock of the
Corporation generally entitled to vote in the election of directors not owned by
REI or an Affiliated Company, as the case may be; or
(iv) such contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) is fair as to the Corporation as
of the time it is authorized, approved or ratified by the Board of Directors, a
committee thereof or the stockholders of the Corporation; or
(v) in the case of any such transaction that was not entered into in
the performance of a contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) that satisfied the requirements
of clauses (i), (ii), (iii) or (iv) of this sentence, such transaction shall
have been approved or ratified by (a) the Board of Directors by the affirmative
vote of a majority of the members (even though less than a quorum) who are not
Interested Persons in respect of such transaction or (b) by a committee of the
Board of Directors constituted solely of members who are not Interested Persons
in respect of such transaction or (c)
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by one or more officers or employees of the Corporation (including officers or
employees of the Corporation acting as directors, officers, trustees, partners
or members of, or in any similar capacity on behalf of, any Affiliated Company
of the Corporation) who in each case is not an Interested Person in respect of
such transaction and to whom the authority to approve such transaction has been
delegated either by the Board of Directors by the same affirmative vote required
by subclause (a) of this subparagraph for approval of such transaction of the
Board of Directors or a committee of the Board of Directors constituted as
provided by and acting by the same affirmative vote as required by subclause (b)
of this subparagraph for approval of such transaction by such committee or, in
the case of an employee, to whom such authority has been delegated by an officer
to whom authority to approve such transaction has been so delegated; provided,
however, that, before such approval or ratification, the material facts of the
relationship between the Corporation or such Affiliated Company thereof, on the
one hand, and REI or such Affiliated Company thereof, on the other hand, and the
material facts as to such transaction were disclosed to or were known by the
members of the Board of Directors or of such committee or the officer or
officers or employee or employees who acted on approval or ratification of such
transaction, as the case may be; or
(vi) in the case of any such transaction that was not entered into in
the performance of a contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) that satisfied the requirements
of clause (i), (ii), (iii) or (iv) of this sentence, such transaction was fair
to the Corporation as of the time it was entered into by the Corporation; or
(vii) in the case of any such transaction that was not entered into in
the performance of a contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) that satisfied the requirements
of clause (i), (ii), (iii) or (iv) of this sentence, such transaction was
approved or ratified by the affirmative vote of the holders of a majority of the
shares of capital stock of the Corporation entitled to vote thereon and who do
vote thereon, exclusive of REI and any Affiliated Company thereof and any
Interested Person in respect of such transaction.
Neither REI nor any Affiliated Company thereof, as a stockholder of the
Corporation or participant in control of the Corporation, shall have or be under
any fiduciary duty to refrain from entering into any contract, agreement,
arrangement or transaction (or the amendment, modification or termination
thereof) or participating in any transaction that meets the requirements of any
of clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) of the immediately
preceding sentence and no director, officer or employee of the Corporation who
is also a director, officer or employee of REI or any Affiliated Company thereof
shall have or be under any fiduciary duty to the Corporation to refrain from
acting on behalf of the Corporation or any Affiliated Company thereof in respect
of any such contract, agreement, arrangement or transaction (or the amendment,
modification or termination thereof) or performing any such contract, agreement,
arrangement or transaction (or the amendment, modification or termination
thereof) in accordance with its terms. Directors of the Corporation who are also
directors or officers of REI or any Affiliated Company may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract, agreement, arrangement, or
transaction (or the amendment, modification or termination thereof). Capital
stock of the Corporation owned by REI and any Affiliated Companies thereof may
be
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counted in determining the presence of a quorum at a meeting of stockholders
which authorizes the contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof). Any person purchasing or
otherwise acquiring any shares of capital stock of the Corporation, or any
interest therein, shall be deemed to have notice of and to have consented to the
provisions of this Article EIGHTH. The failure of any contract, agreement,
arrangement or transaction (or the amendment, modification or termination
thereof) between the Corporation or an Affiliated Company thereof, on the one
hand, and REI or an Affiliated Company thereof, on the other hand, to satisfy
the requirements of this Article EIGHTH shall not, by itself, cause such
contract, agreement, arrangement or transaction (or the amendment, modification
or termination thereof) to constitute any breach of any fiduciary duty to the
Corporation or to any Affiliated Company thereof, or any to stockholder or other
owner of an equity interest therein, by any controlling stockholder of the
Corporation or such Affiliated Company thereof or by any director or officer of
the Corporation.
For purposes of this Article EIGHTH, any contract, agreement,
arrangement, or transaction (or amendment, modification, or termination thereof)
with any corporation, partnership, joint venture, association, or other entity
in which the Corporation owns (directly or indirectly) 50% or more of the
outstanding voting stock, voting power, partnership interests, or similar
ownership interest, or with any officer or director thereof, shall be deemed to
be a contract, agreement, arrangement or transaction with the Corporation.
(c) Certain Corporate Opportunities. REI and/or its Affiliated
Companies shall have no duty to refrain from engaging in the same or similar
activities or lines of business as the Corporation, and except as provided
below, neither REI and/or its Affiliated Companies nor any officer, director or
employee thereof shall be liable to the Corporation or its stockholders for
breach of any fiduciary duty by reason of any such activities of REI and/or its
Affiliated Companies or of such person. In the event that REI acquires knowledge
of a potential transaction or matter which may be a corporate opportunity for
both REI (and/or its Affiliated Companies) and the Corporation (and/or its
Affiliated Companies), REI shall have no duty to communicate or offer such
corporate opportunity to the Corporation and/or its Affiliated Companies and
shall not be liable to the Corporation or its stockholders for breach of any
fiduciary duty as a stockholder of the Corporation by reason of the fact that
REI pursues or acquires such corporate opportunity for itself or for its
Affiliated Companies, directs such corporate opportunity to another person
(including one or more of its Affiliated Companies), or does not communicate
information regarding such corporate opportunity to the Corporation.
Similarly, in the event that a director or officer of the Corporation
(and/or one or more of its Affiliated Companies), who is also a director or
officer of REI and/or one or more of its Affiliated Companies, acquires
knowledge of a potential transaction or matter which may be a corporate
opportunity for both the Corporation (and/or one or more of its Affiliated
Companies) and REI (and/or one or more of its Affiliated Companies), such
director or officer shall have no duty to communicate or offer such corporate
opportunity to the Corporation and/or its Affiliated Companies and shall not be
liable to the Corporation or its stockholders for breach of any fiduciary duty
as a director or officer of the Corporation by reason of the fact that REI
pursues or acquires such corporate opportunity for itself or for its Affiliated
Companies, directs such corporate opportunity to another person (including one
or more of its Affiliated Companies), or does not communicate information
regarding such corporate opportunity to the Corporation.
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(d) Certain Definitions. For purposes of this Article EIGHTH, the
following definitions shall apply:
"Affiliated Company" shall mean in respect of REI, any corporation,
limited liability company, partnership, association, joint-stock company or
business trust which is controlled by REI, controls REI or is under common
control with REI (other than the Corporation and any company that is controlled
by the Corporation), and in respect of the Corporation shall mean any company
controlled by the Corporation.
"company" shall mean any corporation, limited liability company,
partnership, association, joint-stock company, business trust or other legal
entity.
"Interested Person" in respect of an agreement or transaction referred
to in this Article EIGHTH shall mean any director, officer or employee of REI or
an Affiliated Company thereof and any person who has a financial interest that
is material to such person in REI or such Affiliated Company or otherwise has a
personal financial interest that is material to such person in such agreement or
transaction; provided, however, that no such financial interest shall be
considered material by reason of a person's ownership of securities of REI or an
Affiliated Company thereof, if such ownership of securities has been determined
in good faith not to be reasonably likely to influence such individual's
decision on behalf of the Corporation or an Affiliated Company thereof in
respect of the contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) either in the specific instance
by, or pursuant to a policy adopted by, the Board of Directors by the
affirmative vote of a majority of the members (even though less than a quorum)
who are not directors, officers or employees of REI or any Affiliated Company
thereof or a committee of the Board of Directors of the Corporation constituted
solely of members who are not directors, officers or employees of REI or any
Affiliated Company thereof by the affirmative vote of a majority of such
committee.
The provisions of this Article EIGHTH shall have no further force or
effect at such time as REI and any company controlling, controlled by or under
common control with REI shall first cease to be the owner, in the aggregate, of
stock representing twenty percent (20%) or more of the voting power of all
outstanding shares of capital stock of the Corporation generally entitled to
vote in the election of directors, voting together as a single class; provided,
however, that such termination shall not terminate the effect of such provisions
with respect to (i) any contract, agreement, arrangement or transaction (or the
amendment, modification or termination thereof) between the Corporation or an
Affiliated Company thereof and REI or an Affiliated Company thereof that was
entered into before such time or any transaction entered into in the performance
of any such contract, agreement, arrangement or transaction (or the amendment,
modification or termination thereof), whether entered into before or after such
time, or (ii) any transaction entered into between the Corporation or an
Affiliated Company thereof and REI or an Affiliated Company thereof or the
allocation of any opportunity between them before such time.
In addition to any other affirmative vote required by applicable law,
this Article EIGHTH may not be amended, modified or repealed except by the
affirmative vote of the holders of not less than sixty six and two-thirds
percent (66 2/3%) of the voting power of all outstanding shares of capital stock
of the Corporation generally entitled to vote in the election of directors,
voting together as a single class.
NINTH: The Board of Directors is expressly empowered to adopt, amend or
repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the
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Corporation by the Board of Directors shall require the affirmative vote of at
least eighty percent (80%) of all directors then in office at any regular or
special meeting of the Board of Directors called for that purpose. In addition
to any other affirmative vote required by applicable law, this Article NINTH may
not be amended, modified or repealed except by the affirmative vote of the
holders of at least eighty percent (80%) of the voting power of all outstanding
shares of capital stock of the Corporation generally entitled to vote in the
election of directors, voting together as a single class.
TENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of the DGCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of the DGCL, order a meeting of the creditors or
class of creditors, and/or the stockholders or a class of stockholders of the
Corporation as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which said application has
been made, be binding on all of the creditors or class of creditors, and/or the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
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IN WITNESS WHEREOF, the Corporation has caused the Restated Certificate
of Incorporation to be signed and attested by its duly authorized officers, this
5th day of January, 2001.
RELIANT RESOURCES, INC.
By: /s/ Hugh Rice Kelly
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Name: Hugh Rice Kelly
Title: Senior Vice President, General
Counsel and Corporate Secretary
