<PAGE> 1
EXHIBIT A-2
Amended Articles of Incorporation of CECo
<PAGE> 2
STATE OF MICHIGAN
MICHIGAN DEPARTMENT OF CONSUMER
AND INDUSTRY SERVICES
FILED CORPORATION, SECURITIES AND LAND
JUN 07 2000 DEVELOPMENT BUREAU
ADMINISTRATOR LANSING, MICHIGAN
CORP SECURITIES & LAND
DEV. BUREAU RESTATED ARTICLES OF INCORPORATION
(Profit Corporation)
021-395
These Restated Articles of Incorporation are executed pursuant to the
provisions of Sections 641 through 651, Act 284, Public Acts of 1972, as
amended, (the "Act"). These Restated Articles of Incorporation were duly
adopted on February 25, 2000 by the Board of Directors of Consumers Energy
Company, with the shareholders approval on May 26, 2000, in accordance with
provisions of Sections 611(2) and 642 or the Act. These Restated Articles of
Incorporation only restate and integrate and do not further amend the provisions
of the Articles of Incorporation heretofore amended and there is no material
discrepancy between those provisions and the provisions of these Restated
Articles.
The present name of the corporation is Consumers Energy Company. The
former names of the corporation were Consumers Power Company and Consumers Power
Company of Michigan.
Consumers Energy Company is the successor to a corporation with the
name of Consumers Power Company which was organized in Maine in 1910 and did
business in Michigan from 1915 to 1968.
The date of filing the original Articles of Incorporation in Michigan
was January 22, 1968.
RESTATED ARTICLES OF INCORPORATION
The following restated Articles of Incorporation supersede the original
Articles as amended and shall be the Articles of Incorporation of the
corporation.
ARTICLE I
The name of the corporation is CONSUMERS ENERGY COMPANY (hereinafter
called the "Company").
ARTICLE II
The purposes for which the Company is formed are as follows:
(a) To generate, manufacture, produce, gather, purchase, store,
transmit, distribute, transform, use, sell and supply electric energy or gas,
either artificial or natural, or both electric energy and gas, to the public
generally, and to public utilities, natural gas companies and to any and all
other entities (whether governmental, public or private); and generally to carry
on the electric business or the gas business, or both businesses, as a public
utility.
1
<PAGE> 3
(b) To generate, manufacture, produce, purchase, transmit, distribute,
transform, use, sell and supply hot water, steam, heat, power and energy, or any
or all thereof, to the public generally, and to any and all other entities
(whether governmental, public or private); and generally to carry on any or all
of such businesses as a public utility.
(c) To acquire by lease, purchase, grant, donation, devise, bequest or
otherwise, all such lands, easements, royalties, leaseholds, flowage rights,
water power and other property, real, personal or mixed, tangible or intangible,
and any interest therein, wherever the same may be located and whether within or
without the State of Michigan, as may be necessary, incidental or appropriate to
the carrying out of any of its purposes, and to hold, convey, mortgage or lease,
with or without any of its franchises, corporate or otherwise, any of the
foregoing.
(d) To dam any stream or streams, lake or other body of water, and
excavate, construct, maintain, repair and improve any existing stream, lake,
reservoir, body of water, or canal, or which it may excavate and construct, with
water power appurtenant thereto; to flood, flow and submerge land and property
by any means whatsoever, including but not limited to, the construction of the
necessary dams or other facilities in any canal, or in creeks, streams,
reservoirs, lakes or other bodies of water or watercourses, natural or
artificial; to excavate, construct, improve, maintain, repair, remove and
replace reservoirs, dams, dikes and other facilities; and to condemn all lands,
easements, rights of way, waterpowers, flowage rights, gas royalties, natural
gas leaseholds, royalty interests, and other property, and any and all interests
therein, to the extent authorized, and subject to the limitations imposed by the
laws of the State of Michigan or of any other State applicable thereto.
(e) To explore for, mine, produce, gather, purchase, store, transmit,
distribute, refine, sell and supply natural gas, oil and other hydrocarbons.
(f) To sell appliances and carry on an appliance business.
(g) To carry on any and all other businesses and perform any and all
other acts incident to or appropriate in connection with any of the foregoing.
(h) To guarantee, subscribe for, purchase, invest in, own, hold or
otherwise acquire, sell, assign, transfer, mortgage, pledge or otherwise dispose
of, the shares of the capital stock of, or any bonds, securities or evidences of
indebtedness created by, or any other evidences of interest in, any other
corporation or corporations or other entity of the District of Columbia or of
the State of Michigan or any other state, country, nation or government so far
as permitted by the laws applicable thereto, and while the owner thereof to
exercise all the rights, powers and privileges of ownership, including the right
to vote thereon or with respect thereto and to receive all dividends or payments
thereon, so far as
2
<PAGE> 4
permitted by the laws applicable thereto; to lend money to or aid in any lawful
manner whatsoever any corporation or other entity now existing or hereafter
formed whose shares of capital stock, bonds, securities or evidences of
indebtedness, or other evidences of interest therein, are held or are in any
manner guaranteed by the Company; and to do any and all lawful acts and things
to protect, preserve, improve or enhance the value of any such shares of
capital stock, bonds, securities, evidences of indebtedness or other interests.
(i) To acquire, purchase, hold, sell and transfer shares of its own
capital stock, bonds and other evidences of indebtedness to the extent and in
the manner authorized by, and subject to any requirements of, the laws
applicable thereto.
(j) To borrow money and issue, sell or pledge bonds, promissory notes,
bills of exchange, debentures and other obligations and evidences of
indebtedness, whether secured by mortgage, pledge or otherwise, or unsecured.
(k) To make contributions of money, property, services or otherwise for
public welfare, including, among other things, charitable, scientific,
educational and religious purposes.
(l) To conduct its business in the State of Michigan, other States, the
District of Columbia, the territories and colonies of the United States and in
foreign countries and the territories and colonies thereof and to have one or
more offices within or without the State of Michigan.
(m) To have and to exercise all such powers as may be conferred by the
laws of the State of Michigan applicable to the Company or to corporations
engaged in the State of Michigan in any business which may be carried on by the
Company.
The foregoing clauses shall be construed both as purposes and powers, but
no recitation, expression or declaration of specific or special purposes or
powers hereinabove enumerated shall be deemed to be exclusive, it being hereby
expressly declared that all purposes and powers not inconsistent therewith or
with the laws of the State of Michigan applicable to the Company are hereby
included, and the Company shall possess all such incidental and other powers as
are reasonably necessary, appropriate or convenient to the accomplishment of
any of the foregoing purposes or powers, either alone or in association with
other corporations, associations, firms, individuals or entities (whether
governmental, public or private), to the same extent and as fully as
individuals might or could do, as principals, agents, contractors or otherwise.
3
<PAGE> 5
ARTICLE III
The street and mailing address of the registered office is 212 West
Michigan Avenue, Jackson, Michigan 49201.
The name of the resident agent at the registered office is T. A. McNish.
ARTICLE IV
The total number of shares of all classes of stock which the Company shall
have authority to issue is 188,500,000: 23,500,000 shares of preferred stock,
7,500,000 of which are of the par value of $100 per share and are of a class
designated Preferred Stock, and 16,000,000 shares of which are of no par value
and are of a class designated Class A Preferred Stock; 40,000,000 shares are of
the par value of $1 per share and are of a class designated Preference Stock;
and 125,000,000 shares are of the par value of $10 per share and are of a class
designated Common Stock.
ARTICLE V
A director shall not be personally liable to the Company or its
shareholders for monetary damages for breach of duty as a director except (i)
for a breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation of
Section 551(1) of the Michigan Business Corporation Act, and (iv) any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article V, and no modification to its provisions
by law, shall apply to, or have any effect upon, the liability or alleged
liability of any director of the Company for or with respect to any acts or
omissions of such director occurring prior to such amendment, repeal or
modification.
ARTICLE VI
Each director and each officer of the Company shall be indemnified by the
Company to the fullest extent permitted by law against expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the defense
of any proceeding in which he or she was or is a party or is threatened to be
made a party by reason of being or having been a director or an officer of the
Company. Such right of idemnification is not exclusive of any other rights to
which such director or officer may be entitled under any now or hereafter
existing statute, any other provision of these Articles, bylaw, agreement, vote
of shareholders or otherwise. If the Business Corporation Act of the State of
Michigan is amended after approval by the shareholders of this Article VI to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Company shall
be eliminated or limited to the fullest extent permitted by the Business
Corporation Act of the
4
<PAGE> 6
State of Michigan, as so amended. Any repeal or modification of this Article VI
by the shareholders of the Company shall not adversely affect any right or
protection of a director of the Company existing at the time of such repeal or
modification.
ARTICLE VII
The statement of the designations and the voting and other powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the Common Stock, of the Preference Stock, of the Preferred Stock
and of the Class A Preferred Stock is as follows:
PREFERRED STOCK
Preferred Stock Issuable in Series
The shares of Preferred Stock may be divided into and issued in series.
Each such series shall be so designated as to distinguish the shares thereof
from the shares of all other series and classes, and all shares of the
Preferred Stock shall be identical, except as to the following relative rights
and preferences, as to which there may be variations between different series:
(a) The rate of dividend;
(b) The price at which shares may be redeemed, such price to be not less
than $100 or more than $115 per share, plus accrued dividends to the
date of redemption;
(c) The amount payable upon shares in event of involuntary liquidation,
which amount shall not be less than $100 per share or more than $115
per share, plus accrued dividends;
(d) The amount payable upon shares in event of voluntary liquidation,
which amount shall not be less than $100 per share or more than $115
per share, plus accrued dividends;
(e) The terms and conditions, if any, on which shares shall be by their
terms convertible into or exchangeable for shares of any other class
of stock of the Company over which the Preferred Stock has preference
as to payment of dividends and as to assets;
(f) Subject to the rights and preferences of shares of Preferred Stock set
forth under the heading "General Provisions", the terms and conditions
of a sinking or purchase fund, if any, for the redemption or purchase
of such shares.
No change shall be made in any of the rights and preferences of any series
of Preferred Stock at the time outstanding in those respects in which the
shares thereof vary from the shares of other
5
<PAGE> 7
series of Preferred Stock at the time outstanding without the affirmative vote
in favor thereof of the holders of at least 66-2/3% of the shares of such series
of Preferred Stock at the time outstanding, in addition to such other vote, if
any, as may be required for such change under the applicable provisions of these
Articles or of the Michigan Business Corporation Act.
Series Established By Articles
There are hereby established two series of Preferred Stock designated,
respectively, as $4.50 Preferred Stock and $4.16 Preferred Stock.
$4.50 Preferred Stock
The rights and preferences of the shares of $4.50 Preferred Stock in
those respects in which the shares thereof may vary from the shares of other
series are as follows:
(a) The rate of dividend is $4.50 per annum;
(b) The price at which shares may be redeemed is $110 per share, plus
accrued dividends to the date of redemption;
(c) The amount payable in event of involuntary liquidation is $100 per
share, plus accrued dividends;
(d) The amount payable in event of voluntary liquidation is $105 per
share, plus accrued dividends;
(e) Shares are not, by their terms, convertible or exchangeable;
(f) Shares are not, by their terms, entitled to the benefit of any
sinking or purchase fund.
$4.16 Preferred Stock
The rights and preferences of the shares of $4.16 Preferred Stock in
those respects in which the shares thereof may vary from the shares of other
series are as follows:
(a) The rate of dividend is $4.16 per annum;
(b) The price at which shares may be redeemed is $103.25 per share,
plus accrued dividends to the date of redemption;
(c) The amount payable in event of involuntary liquidation is $100 per
share, plus accrued dividends;
(d) The amount payable in event of voluntary liquidation is $101 per
share, plus accrued dividends;
6
<PAGE> 8
(e) Shares are not, by their terms, convertible or exchangeable;
(f) Shares are not, by their terms, entitled to the benefit of any
sinking or purchase fund.
Authority of Board of Directors as to Other Series
To the extent that series of Preferred Stock have not been established
and variations in the relative rights and preferences as between series have not
been fixed and determined as hereinbefore set forth in these Articles, authority
is vested in the Board of Directors of the Company to divide the shares of
Preferred Stock into and to establish series of Preferred Stock, to fix and
determine within the limitations hereinabove set forth in these Articles the
relative rights and preferences of the shares of any series so established, to
issue and sell any and all of the authorized and unissued shares of Preferred
Stock as shares of any series thereof established by these Articles or by action
of the Board of Directors pursuant hereto, and to create a sinking or purchase
fund for the redemption or purchase of shares of any series without the
necessity of providing a sinking or purchase fund for any other series, and in
the event that the Company shall acquire, by purchase or redemption or
otherwise, any issued shares of its Preferred Stock of any series, the Board of
Directors may resell or convert and sell or otherwise dispose of, in their
discretion, any shares so acquired as shares of the same series or of any other
duly created series of Preferred Stock.
CLASS A PREFERRED STOCK
Class A Preferred Stock Issuable in Series
The shares of Class A Preferred Stock may be divided into and issued in
series. Each such series shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes, and all shares of the
Class A Preferred Stock shall be identical, except as to the following relative
rights and preferences, as to which there may be variations between different
series:
(a) The rate of dividend;
(b) The price at which shares may be redeemed;
(c) The amount payable upon shares in event of involuntary liquidation;
(d) The amount payable upon shares in event of voluntary liquidation;
(e) The voting rights of the holders of such series, if any; provided
that such holders of all series shall have the voting rights
hereinafter specified in these Articles;
7
<PAGE> 9
(f) The terms and conditions, if any, on which shares shall be by their
terms convertible into or exchangeable for any other securities;
and
(q) The terms and conditions of a sinking or purchase fund, if any, for
the redemption or purchase of such shares.
No change shall be made in any of the rights and preferences of any
series of Class A Preferred Stock at the time outstanding in those respects in
which the shares thereof vary from the shares of other series of Class A
Preferred Stock at the time outstanding without the affirmative vote in favor
thereof of the holders of at least 66-2/3% of the shares of such series of Class
A Preferred Stock at the time outstanding, in addition to such other vote, if
any, as may be required for such change under the applicable provisions of these
Articles or of the Michigan Business Corporation Act.
Authority of Board of Directors As to Other Series
To the extent that series of Class A Preferred Stock have not been
established and variations in the relative rights and preferences as between
series have not been fixed and determined as hereinbefore set forth in these
Articles, authority is vested in the Board of Directors of the Company to divide
the shares of class A Preferred Stock into and to establish series of Class A
Preferred Stock, to fix and determine the relative rights and preferences of the
shares of any series so established, to issue and sell any and all of the
authorized and unissued shares of Class A Preferred Stock as shares of any
series thereof established by these Articles or by action of the Board of
Directors pursuant hereto, and to create a sinking or purchase fund for the
redemption or purchase of shares of any series without the necessity of
providing a sinking or purchase fund for any other series, and in the event that
the Company shall acquire, by purchase or redemption or otherwise, any issued
shares of its Class A Preferred Stock of any series, the Board of Directors may
resell or convert and sell or otherwise dispose of, in their discretion, any
shares so acquired as shares of the same series or of any other duly created
series of Class A Preferred Stock.
PREFERRED STOCK AND CLASS A PREFERRED STOCK
General Provisions
In these General Provisions, the Company's Preferred Stock, par value
$100 per share, is referred to as the "Preferred Stock"; the Company's Class A
Preferred Stock is referred to as the "Class A Preferred Stock"; and the
Preferred Stock and Class A Preferred Stock are together referred to as the
"Company Preferred Stock".
(A) The holders of the Company Preferred Stock of each series shall be
entitled to receive dividends, payable when and as declared by the Board of
Directors, at such rates as shall be
8
<PAGE> 10
determined for the respective series thereof from the first day of the current
dividend period within which such stock shall have been originally issued except
that, as to any share of Company Preferred Stock originally issued subsequent to
December 31, 1972, from the date upon which such share shall have been
originally issued, before any dividends shall be declared or paid upon or set
apart for the Common Stock or any other stock of the Company not having
preference over the Company Preferred Stock as to payment of dividends. Such
dividends shall be cumulative so that if for any dividend period or periods
dividends shall not have been paid or declared and set apart for payment upon
all outstanding Company Preferred Stock at the rates determined for the
respective series, the deficiency shall be fully paid, or declared and set apart
for payment, before any dividends shall be declared or paid upon the Common
Stock or any other stock of the Company not having preference over the Company
Preferred Stock as to payment of dividends. Dividends shall not be declared and
set apart for payment, or paid, on the Company Preferred Stock of any one
series, for any dividend period, unless dividends have been or are
contemporaneously declared and set apart for payment or paid on all series of
the Company Preferred Stock for all dividend periods terminating on the same or
an earlier date. As to all series of the Company Preferred Stock, the term
"dividend period" shall mean any of the four calendar quarters in each year
commencing, respectively, the first day of January, April, July and October and
the first days of each such calendar quarter shall be the dividend payment dates
for the regular quarterly dividends payable for the preceding dividend period on
such series.
(B) When full cumulative dividends as aforesaid upon all series of the
Company Preferred Stock then outstanding for all past dividend periods and for
the current dividend periods shall have been paid or declared and set apart for
payment, the Board of Directors may declare dividends on the Common Stock or any
other stock over which the Company Preferred Stock has a preference as to
payment of dividends, and no holders of any series of the Company Preferred
Stock as such shall be entitled to share therein; provided, however, that no
dividends (other than dividends paid in or presently thereafter repaid to the
Company for or as a capital contribution with respect to stock over which the
Company Preferred Stock has preference as to payment of dividends and as to
assets) shall be paid or any other distribution of assets made, by purchase of
shares or otherwise, on Common Stock or on any other stock over which the
Company Preferred Stock has preference as to payment of dividends or as to
assets except out of earned surplus of the Company available for distribution to
stock over which the Company Preferred Stock has preference as to payment of
dividends and as to assets, or if, at the time of declaration thereof or the
making of such distribution there shall not remain to the credit of earned
surplus account (after deducting therefrom the amount of such dividends and
distribution), an amount at least equal to (i) $7.50 per share on all then
outstanding shares of the Preferred Stock, (ii) in respect to the Class A
Preferred Stock 7.5% of the aggregate amount established by the Board of
Directors to be payable on the shares of each series thereof in the event of
9
<PAGE> 11
involuntary liquidation of the Company, and (iii) $7.50 per share on all then
outstanding shares of all other stock over which the Company Preferred Stock
does not have preference as to the payment of dividends and as to assets.
So long as any shares of the Company Preferred Stock are outstanding,
the payment of dividends on the Common Stock (other than dividends payable in
Common Stock) and the making of any distribution of assets to holders of Common
Stock by purchase of shares or otherwise (each of such actions being herein
embraced within the term "payment of Common Stock dividends") shall be subject
to the following limitations (except as such payments may be approved or
permitted by subsequent order of the Securities and Exchange Commission or any
successor thereto or any other Federal governmental agency having the same or
similar jurisdiction, or, in the event that the Company ceases to be subject to
the jurisdiction of said Commission or of any successor thereto or of any such
other Federal governmental agency, except as such payments may be permitted in
accordance with a waiver of such limitations which shall have been approved by
the affirmative vote in favor thereof of the holders of at least 66-2/3% of the
shares of Preferred Stock and Class A Preferred Stock (voting as separate
classes) at the time outstanding):
(a) If and so long as the ratio of the aggregate of the par value of,
or stated capital represented by, the outstanding shares of
Common Stock (including premiums on the Common Stock but
excluding premiums on the Company Preferred Stock) and of the
surplus of the Company to the total capitalization and surplus of
the Company at the end of a period of twelve consecutive calendar
months within the fourteen calendar months immediately preceding
the calendar month in which the proposed payment of Common Stock
dividends is to be made (which period is hereinafter referred to
as the "base period"), adjusted to reflect the proposed payment
of Common Stock dividends (which ratio is hereinafter referred to
as the "capitalization ratio"), is less than 20%, the payment of
Common Stock dividends, including the proposed payment, during
the twelve calendar months period ending with and including the
calendar month in which the proposed payment is to be made shall
not exceed 50% of the net income of the Company available for the
payment of dividends on the Common Stock during the base period;
(b) If and so long as the capitalization ratio is 20% or more but
less than 25%, the payment of Common Stock dividends, including
the proposed payment, during the twelve calendar months period
ending with and including the calendar month in which the
proposed payment is to be made shall not exceed 75% of the net
income of the Company available for the payment of dividends on
the Common Stock during the base period;
10
<PAGE> 12
(c) Except to the extent permitted under paragraphs (a) and (b)
above, the Company shall not make any payment of Common Stock
dividends which would reduce the capitalization ratio to less
than 25%.
For the purpose of the foregoing provisions, the following terms shall
have the following meanings:
(1) The term "net income of the Company available for the payment of
dividends on the Common Stock" shall mean for any base period the
balance remaining after deducting from the total gross revenues
of the Company from all sources during such period the following:
(a) All operating expenses and taxes, including charges to
income for general taxes and for federal and state taxes
measured by income, for retirement or depreciation reserve
and for amortization or other disposition of amounts, if
any, classified as amounts in excess of original cost of
utility plant; (b) the amount, if any, by which the
aggregate of the charges to income during the period in
question for repairs, maintenance and provision for
depreciation is less than the maintenance and replacement
requirement embodied in the Indenture, or any indenture
supplemental thereto, succeeding the same or in substitution
therefor; (c) all interest charges and other income
deductions, including charges to income for amortization of
debt discount, premium and expense and of the Company
Preferred Stock premium and expense; and (d) all dividends
applicable to the period in question on stock having
preference over the Common Stock as to the payment of
dividends.
(2) The term "total capitalization" shall mean the aggregate of the
principal amount of all outstanding indebtedness of the Company
maturing more than twelve months after the date of determination
of total capitalization, plus the par value of, or stated capital
represented by, the outstanding shares of all classes of stock of
the Company, including any premiums on capital stock.
(3) The term "surplus" shall include capital surplus, earned surplus
and any other surplus of the Company, adjusted to eliminate any
amounts which may then be classified by the Company on its books
as amounts in excess of the original cost of utility plant and
which are not provided for by reserve and any items set forth on
the asset side of the balance sheet of the Company as a result of
accounting convention, such as unamortized debt discount and
expense and the Company Preferred Stock expense, unless any such
amount or item, as the case may be, is being amortized or is
being provided for by reserve.
11
<PAGE> 13
(C) Upon any dissolution, liquidation or winding up of the Company,
whether voluntary or involuntary, the holders of the Company Preferred Stock of
each series, without any preference of the shares of any series of the Company
Preferred Stock over the shares of any other series of the Company Preferred
Stock, shall be entitled to receive out of the assets of the Company, whether
capital, surplus or other, before any distribution of the assets to be
distributed shall be made to the holders of Common Stock or of any other stock
not having preference as to assets over the Company Preferred Stock, the amount
determined to be payable on the shares of such series in the event of voluntary
or involuntary liquidation, as the case may be. In case the assets shall not be
sufficient to pay in full the amounts determined to be payable on all the shares
of the Company Preferred Stock in the event of voluntary or involuntary
liquidation, as the case may be, then the assets available for such payment
shall be distributed to the extent available as follows: first, to the payment,
pro rata, of $100 per share on each share of Preferred Stock outstanding
irrespective of series and the amount established by the Board of Directors to
be payable on each outstanding share of each series of Class A Preferred Stock
in the event of involuntary liquidation; second, to the payment of the accrued
dividends on such shares, such payment to be made pro rata in accordance with
the amount of accrued dividends on each such share; and, third, to the payment
of any amounts in excess of $100 per share of the Preferred Stock outstanding
and the difference between the amount established by the Board of Directors to
be payable on the outstanding shares of each series of Class A Preferred Stock
in the event of voluntary liquidation and the amount similarly determined to be
payable on such shares in the event of involuntary liquidation, plus accrued
dividends which shall have been determined to be payable on the shares of any
series in the event of voluntary or involuntary liquidation, as the case may be,
such payment also to be made pro rata in accordance with the amounts, if any, so
payable on each such share. After payment to the holders of the Company
Preferred Stock of the full preferential amounts hereinbefore provided for, the
holders of the Company Preferred Stock as such shall have no right or claim to
any of the remaining assets of the Company, either upon any distribution of such
assets or upon dissolution, liquidation or winding up, and the remaining assets
to be distributed, if any, upon a distribution of such assets or upon
dissolution, liquidation or winding up, may be distributed among the holders of
the Common Stock or of any other stock over which the Company Preferred Stock
has preference as to assets. Without limiting the right of the Company to
distribute its assets or to dissolve, liquidate or wind up in connection with
any sale, merger, or consolidation, the sale of all the property of the Company
to, or the merger or consolidation of the Company into or with any other
corporation shall not be deemed to be a distribution of assets or a dissolution,
liquidation or winding up for the purposes of this paragraph.
12
<PAGE> 14
(D) At the option of the Board of Directors of the Company, the Company
may redeem any series of the Company Preferred Stock determined to be
redeemable, or any part of any series, at any time at the redemption price
determined for such series; provided, however, that not less than thirty nor
more than sixty days previous to the date fixed for redemption a notice of the
time and place thereof shall be given to the holders of record of the Company
Preferred Stock so to be redeemed, by mail or publication, in such manner as may
be prescribed by the By-laws of the Company or by resolution of the Board of
Directors; and, provided, further, that in every case of redemption of less than
all of the outstanding shares of any one series of the Company Preferred Stock,
the shares of such series to be redeemed shall be chosen by lot in such manner
as may be prescribed by resolution of the Board of Directors. At any time after
notice of redemption has been given in the manner prescribed by the By-laws of
the Company or by resolution of the Board of Directors to the holders of stock
so to be redeemed, the Company may deposit, or may cause its nominee to deposit,
the aggregate redemption price with some bank or trust company named in such
notice, payable on the date fixed for redemption as aforesaid and in the amounts
aforesaid to the respective orders of the holders of the shares so to be
redeemed, on endorsement to the Company or its nominee, or otherwise, as may be
required, and upon surrender of the certificates for such shares. Upon the
deposit of said money as aforesaid or, if no such deposit is made, upon said
redemption date (unless the Company defaults in making payment of the redemption
price as set forth in such notice), such holders shall cease to be shareholders
with respect to said shares, and from and after the making of said deposit, or,
if no such deposit is made, after the redemption date (the Company not having
defaulted in making payment of the redemption price as set forth in such
notice), the said holders shall have no interest in or claim against the
Company, or its nominee, with respect to said shares, but shall be entitled only
to receive said moneys on the date fixed for redemption as aforesaid from said
bank or trust company, or if no such deposit is made, from the Company, without
interest thereon, upon endorsement, if required, and surrender of the
certificates as aforesaid.
If such deposit shall be made by a nominee of the Company as aforesaid,
such nominee shall upon such deposit become the owner of the shares with respect
to which such deposit was made and certificates of stock may be issued to such
nominee in evidence of such ownership.
In case the holder of any such Company Preferred Stock shall not,
within six years after said deposit, claim the amount deposited as above stated
for the redemption thereof, the Depositary shall upon demand pay over to the
Company such amounts so deposited and the Depositary shall thereupon be relieved
from all responsibility to the holder thereof.
Nothing herein contained shall limit any legal right of the Company to
purchase any shares of the Company Preferred Stock.
13
<PAGE> 15
(E) So long as any shares of the Preferred Stock are outstanding, the
Company shall not, without the affirmative vote in favor thereof of the holders
of at least 66-2/3% of the shares of the Preferred Stock (voting together as a
single class) at the time outstanding, adopt an amendment to these Articles if
such amendment would either (i) authorize or create any class of stock preferred
as to dividends or assets over the Preferred Stock or (ii) change any of the
rights and preferences of the then outstanding Preferred Stock; provided,
however, that nothing in this paragraph contained shall authorize the adoption
of any amendment of these Articles by the vote of the holders of a less number
of shares of the Preferred Stock, or of any other class of stock, or of all
classes of stock, than is required for such amendment by the laws of the State
of Michigan at the time applicable thereto.
(F) So long as any shares of Class A Preferred Stock are outstanding,
the Company shall not, without the affirmative vote in favor thereof of the
holders of at least 66-2/3% of the shares of Class A Preferred Stock at the time
outstanding (voting together as a single class) adopt an amendment to these
Articles if such amendment would either (i) authorize or create any class of
stock preferred as to dividends or assets over the Class A Preferred Stock or
(ii) change any of the rights and preferences of the then outstanding Class A
Preferred Stock; provided, however, that nothing in this paragraph contained
shall authorize the adoption of any amendment of these Articles by the vote of
the holders of a lesser number of shares of Class A Preferred Stock, or of any
other class of stock, or of all classes of stock, than is required for such
amendment by the laws of the State of Michigan at the time applicable thereto.
(G) So long as any shares of the Company Preferred Stock are
outstanding, the Company shall not, without the affirmative vote in favor
thereof of the holders of at least 66-2/3% of the shares of the Preferred Stock
and Class A Preferred Stock (voting as separate classes) at the time
outstanding,
(a) issue, sell or otherwise dispose of any shares of the Company
Preferred Stock or issue, sell or otherwise dispose of any stock over
which the Company Preferred Stock does not have preference as to the
payment of dividends and as to assets, unless, in any such case, (i)
the net income of the Company available for the payment of dividends
for a period of twelve consecutive calendar months within the fifteen
calendar months immediately preceding the issuance, sale or disposition
of such stock (including, in any case in which such stock is to be
issued, sold or otherwise disposed of in connection with the
acquisition of new property, the net income of the property to be so
acquired, computed on the same basis as the net income of the Company
available for the payment of dividends) is at least equal to two times
the annual dividend requirements on all outstanding shares of the
Company Preferred Stock and of all stock over which the Company
Preferred Stock does not have preference as to the payment of dividends
and as to assets, including the shares proposed to be issued, and (ii)
the gross
14
<PAGE> 16
income of the Company available for the payment of interest for a
period of twelve consecutive calendar months within the fifteen
calendar months immediately preceding the issuance, sale or
disposition of such stock (including, in any case in which such stock
is to be issued, sold or otherwise disposed of in connection with the
acquisition of new property, the gross income of the property to be so
acquired, computed on the same basis as the gross income of the Company
available for the payment of interest) is at least equal to one and
one-half times the aggregate of the annual interest requirements
(adjusted by provision for amortization of debt discount and expense
or of premium on debt, as the case may be) on all outstanding
indebtedness of the Company and the annual dividend requirements
(adjusted by provision for amortization of the Company Preferred Stock
premium and expense) on all outstanding shares of the Company Preferred
Stock and of all stock over which the Company Preferred Stock does not
have preference as to the payment of dividends and as to assets,
including the shares proposed to be issued; or
(b) issue, sell or otherwise dispose of any shares of the
Company Preferred Stock or issue, sell or otherwise dispose of any
stock over which the Company Preferred Stock does not have preference
as to the payment of dividends and as to assets, unless, in any such
case, the aggregate of the par value of, or stated capital represented
by, the outstanding shares of Common Stock and of the surplus of the
Company (paid-in, earned and other, if any) shall be not less than the
aggregate amount payable in the event of involuntary liquidation upon
all outstanding shares of the Company Preferred Stock and of all stock
over which the Company Preferred Stock does not have preference as to
the payment of dividends and as to assets, including the shares
proposed to be issued, provided that no portion of the surplus of the
Company utilized to satisfy the foregoing requirement shall be
available for dividends or other distributions of assets, by purchase
of shares or otherwise, on Common Stock or on any other stock over
which the Company Preferred Stock has preference as to the payment of
dividends and as to assets until shares of the Company Preferred Stock
or of stock over which the Company Preferred Stock does not have
preference as to the payment of dividends and as to assets are retired
and then only to the extent of the amount payable in the event of
involuntary liquidation upon such shares or until and then only to the
extent that the par value of, or stated capital represented by, the
outstanding shares of Common Stock shall have been increased.
For the purpose of the foregoing provisions, the following terms shall
have the following meanings:
(1) The term "net income of the Company available for the payment of
dividends" shall mean the balance remaining after deducting from
the total gross revenues of the Company from all sources the
following; (a) all operating expenses and taxes, including
charges to income for
15
<PAGE> 17
general taxes and for federal and state taxes measured by income,
for retirement or depreciation reserve and for amortization or
other disposition of amounts, if any, classified as amounts in
excess of original cost of utility plant, (b) the amount, if any,
by which the aggregate of the charges to income during the period
in question for repairs, maintenance and provision for
depreciation is less than the maintenance and replacement
requirement embodied in the Indenture, or any indenture
supplemental thereto, succeeding the same or in substitution
therefor, and (c) all interest charges and other income
deductions, including charges to income for the amortization of
debt discount, premium and expense and of the Company Preferred
Stock premium and expense.
(2) The term "gross income of the Company available for the payment of
interest" shall mean the balance remaining after deducting from
the total gross revenues of the Company from all sources the
following: (a) all operating expenses and taxes, including charges
to income for general taxes and for federal and state taxes
measured by income, for retirement or depreciation reserve and for
amortization or other disposition of amounts, if any, classified
as amounts in excess of original cost of utility plant and (b) the
amount, if any, by which the aggregate of the charges to income
during the period in question for repairs, maintenance and
provision for depreciation is less than the maintenance and
replacement requirement embodied in the Indenture, or any
indenture supplemental thereto, succeeding the same or in
substitution therefor.
(3) The term "accrued dividends" shall be deemed to mean in respect of
any share of any series of the Company Preferred Stock as of any
given date, the amount, if any, by which the product of the rate
of dividend per annum, determined upon the shares of such series,
multiplied by the number of years and any fractional part of a
year which shall have elapsed from the date after which dividends
on such stock became cumulative to such given date, exceeds the
total dividends actually paid on such stock and the dividends
declared and set apart for payment. Accumulations of dividends
shall not bear interest.
The term "outstanding", whenever used herein with respect to shares of
the Company Preferred Stock or of any other class of stock which are by their
terms redeemable, or with respect to bonds or other evidences of indebtedness
shall not include any such shares or bonds or evidences of indebtedness which
have been called for redemption in accordance with the provisions applicable
thereto, of which call for redemption notice shall have been given, as required
by such provisions and for the redemption of which a sum of money sufficient to
pay the amount payable on such redemption shall have been deposited with a bank
or trust company,
16
<PAGE> 18
irrevocably in trust for such purpose, or any bonds or other evidences of
indebtedness for the payment of which at maturity provision has been made in a
similar manner.
The term "capital represented by" whenever used herein with respect to
shares of stock of the Company shall mean at any time the amount paid in on or
contributed, transferred or otherwise then held and recorded or accounted for,
as permitted by the provisions of law applicable thereto, as capital with
respect to said shares.
COMMON STOCK
Each share of Common Stock of the Company shall be equal to every other
share of said stock in every respect. The entire consideration received for
shares of Common Stock shall be capital.
VOTING POWERS GENERALLY
At all meetings of the shareholders of the Company, the holders of the
Preferred Stock and the holders of Common Stock shall be entitled on all
questions to one vote for each share of stock held by them respectively,
regardless of class.
Whenever and as often as four quarterly dividends payable on the
Company Preferred Stock of any series shall be in default, in whole or in part,
the holders of the Company Preferred Stock of all series shall have the
exclusive right, voting separately and as a single class, to vote for and to
elect the smallest number of directors which shall constitute a majority of the
then authorized number of directors of the Company, and, in all matters other
than the election of directors, each holder of one or more shares of the Company
Preferred Stock shall be entitled to one vote for each such share of stock held.
In the event of defaults entitling the holders of Company Preferred Stock to
elect a majority of the directors as aforesaid, the holders of the Common Stock
shall, subject to the prior rights of the holders of the Preference Stock, have
the exclusive right, voting separately and as a class, to vote for and to elect
the greatest number of directors which shall constitute a minority of the then
authorized number of directors of the Company, and, in all matters other than
the election of directors, each holder of Common Stock shall be entitled to one
vote for each such share of stock held. The right of the holders of the Company
Preferred Stock to elect a majority of the directors, however, shall cease when
all defaults in the payment of dividends on their stock shall have been cured,
and such dividends shall be declared and paid out of any funds legally available
therefor as soon as, in the judgment of the Board of Directors, is reasonably
practicable. The terms of office of all persons who may be directors of the
Company at the time when the right to elect a majority of the directors shall
accrue to the holders of the Company Preferred Stock, as herein provided, shall
terminate upon the election of their successors at a meeting of the shareholders
of the Company then entitled to vote. Such election shall be held at the next
annual meeting of shareholders or may be held at a special meeting of
shareholders, which shall be held upon notice as
17
<PAGE> 19
provided in the By-laws of the Company for a special meeting of the
shareholders, at the request in writing of the holders of not less than 1,000
shares of the then outstanding Company Preferred Stock entitled to vote
addressed to the Secretary of the Company at its principal business office. Any
vacancy in the Board of Directors occurring during any period that the Company
Preferred Stock shall have elected representatives on the Board shall be filled
by a majority vote of the remaining directors (or the one director) representing
the class of stock theretofore represented by the director causing the vacancy.
Upon the termination of such exclusive right of the holders of the Company
Preferred Stock to elect a majority of the directors of the
Company, the terms of office of all the directors of the Company shall terminate
upon the election of their successors at a meeting of the shareholders of the
Company then entitled to vote. Such election shall be held at the next annual
meeting of shareholders or may be held at a special meeting of shareholders,
which shall be held upon notice as provided in the By-laws of the Company for a
special meeting of the shareholders, at the request in writing of the holders of
not less than 1,000 shares of the then outstanding Common Stock addressed to the
Secretary of the Company at its principal business office.
At all meetings of the shareholders held for the purpose of electing
directors during such times as the holders of the Company Preferred Stock shall
have the exclusive right to elect a majority of the directors of the Company,
the presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock shall be required to constitute a quorum of
such class for the election of directors, and the presence in person or by proxy
of the holders of a majority of the outstanding shares of the Company Preferred
Stock shall be required to constitute a quorum of such class for the election of
directors; provided, however, that the absence of a quorum of the holders of
stock of either class shall not prevent the election at any such meeting, or
adjournment thereof, of directors by the other class if the necessary quorum of
the holders of stock of such class is present in person or by proxy at such
meeting; and provided, further, that, in the absence of a quorum of the holders
of stock of either class, a majority of those holders of such stock who are
present in person or by proxy shall have the power to adjourn the election of
those directors to be elected by that class from time to time without notice,
other than announcement at the meeting, until the requisite amount of holders of
stock of such class shall be present in person or by proxy.
At all elections of directors, shareholders will he entitled to as many
votes as shall equal the number of their shares of stock multiplied by the
number of directors to be elected for whom such shareholders may vote, and they
may cast all of such votes for a single director or may distribute them among
the number to be voted for, or any two or more of them, as they may see fit.
For the purposes of the foregoing provisions, the Company Preferred
Stock of all series shall be deemed to be a single class.
18
<PAGE> 20
PRE-EMPTIVE RIGHTS
The holders of shares of Preferred Stock, Class A Preferred Stock, or
of Common Stock shall have no pre-emptive rights to subscribe for or purchase
any additional issues of shares of the capital stock of the Company of any class
now or hereafter authorized or any bonds, debentures, or other obligations or
rights or options convertible into or exchangeable for or entitling the holder
or owner to subscribe for or purchase any shares of capital stock, or any rights
to exchange shares issued for shares to be issued.
PREFERENCE STOCK
Preference Stock Issuable in Series
The shares of Preference Stock may be divided into and issued in
series. Each such series shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes, and all shares of the
Preference Stock shall be identical, except as to the following relative rights
and preferences, as to which there may be variations between different series:
(a) The rate of dividend;
(b) The price at which shares may be redeemed;
(c) The amount payable upon shares in event of involuntary
liquidation;
(d) The amount payable upon shares in event of voluntary liquidation;
(e) The terms and conditions, if any, on which shares shall be by
their terms convertible into or exchangeable for shares of any
other class of stock of the Company;
(f) The terms and conditions of a sinking or purchase fund, if any,
for the redemption or purchase of such shares.
No change shall be made in any of the rights and preferences of any
series of Preference Stock at the time outstanding in those respects in which
the shares thereof vary from the shares of other series of Preference Stock at
the time outstanding without the affirmative vote in favor thereof of the
holders of at least 66 2/3% of the shares of such series of Preference Stock at
the time outstanding, in addition to such other vote, if any, as may be required
for such change under the applicable provisions of these Articles or of the laws
of the State of Michigan at the time applicable thereto.
19
<PAGE> 21
PREFERENCE STOCK
Authority of Board of Directors as to Other Series
To the extent that series of Preference Stock have not been established
and variations in the relative rights and preferences as between series have not
been fixed and determined in these Articles, authority is vested in the Board of
Directors of the Company to divide the shares of Preference Stock into and to
establish series of Preference Stock, to fix and determine the relative rights
and preferences of the shares of any series so established, to issue and sell
any and all of the authorized and unissued shares of Preference Stock as shares
of any series thereof established by action of the Board of Directors pursuant
hereto, and to create a sinking or purchase fund for the redemption or purchase
of shares of any series without the necessity of providing a sinking or purchase
fund for any other series.
PREFERENCE STOCK
General Provisions
The following provisions shall apply to all shares of the Preference
Stock irrespective of series:
(A) The shares of Preference Stock shall be subordinate to the
Preferred Stock but in preference to the Common Stock as to the payment
of dividends. The holders of the Preference Stock of each series shall
be entitled to receive dividends, payable when and as declared by the
Board of Directors, at such rates as shall be determined for the
respective series, from the date upon which such share shall have been
originally issued, before any dividends shall be declared or paid upon
or set apart for the Common Stock or any other stock of the Company
not having preference over the Preference Stock as to payment of
dividends. Such dividends shall be cumulative so that if for any
dividend period or periods dividends shall not have been paid or
declared and set apart for payment upon all outstanding Preference
Stock at the rates determined for the respective series, the deficiency
shall be fully paid, or declared and set apart for payment, before any
dividends shall be declared or paid upon the Common Stock or any other
stock of the Company not having preference over the Preference Stock as
to payment of dividends. Dividends shall not be declared and set apart
for payment, or paid, on the Preference Stock of any one series, for
any dividend period, unless dividends have been or are
contemporaneously declared and set apart for payment or paid on the
Preference Stock of all series for all dividend periods terminating on
the same or an earlier date. As to all series of Preference Stock, the
term "dividend period" shall mean any of the four calendar quarters in
each year commencing, respectively, the first day of January, April,
July and October and the first days of each such calendar quarter shall
be the dividend payment dates for the regular quarterly dividends
payable for the preceding dividend period of such series.
20
<PAGE> 22
(B) When full cumulative dividends as aforesaid upon the Preference
Stock of all series then outstanding for all past dividend periods and for the
current dividend periods shall have been paid or declared and set apart for
payment, the Board of Directors may declare dividends on the Common Stock or any
other stock over which the Preference Stock has a preference as to payment of
dividends, and no holders of any series of the Preference Stock as such shall be
entitled to share therein.
(C) The shares of Preference Stock shall be subordinate to the
Preferred Stock but in preference to the Common Stock upon any dissolution,
liquidation or winding up of the Company, whether voluntary or involuntary. Upon
any such dissolution, liquidation or winding up of the Company, whether
voluntary or involuntary, the holders of Preference Stock of each series,
without any preference of the shares of any series of Preference Stock over the
shares of any other series of Preference Stock, shall be entitled to receive out
of the assets of the Company, whether capital, surplus or other, before any
distribution of the assets to be distributed shall be made to the holders of
Common Stock or of any other stock not having preference as to assets over the
Preference Stock, the amount determined to be payable on the shares of such
series in the event of voluntary or involuntary liquidation, as the case may be.
In case the assets shall not be sufficient to pay in full the amounts determined
to be payable on all the shares of Preference Stock in the event of voluntary or
involuntary liquidation, as the case may be, then the assets available for such
payment shall be distributed ratably among the holders of the Preference Stock
of all series in accordance with the amounts determined to be payable on the
shares of each series, in the event of voluntary or involuntary liquidation, as
the case may be, in proportion to the full preferential amounts to which they
are respectively entitled. After payment to the holders of the Preference Stock
of the full preferential amounts hereinbefore provided for, the holders of the
Preference Stock as such shall have no right or claim to any of the remaining
assets of the Company, either upon any distribution of such assets or upon
dissolution, liquidation or winding up, and the remaining assets to be
distributed, if any, upon a distribution of such assets or upon dissolution,
liquidation or winding up, may be distributed among the holders of the Common
Stock or of any other stock over which the Preference Stock has preference as to
assets. Without limiting the right of the Company to distribute its assets or to
dissolve, liquidate or wind up in connection with any sale, merger, or
consolidation, the sale of all the property of the Company to, or the merger or
consolidation of the Company into or with any other corporation shall not be
deemed to be a distribution of assets or a dissolution, liquidation or winding
up for the purposes of this paragraph.
(D) At the option of the Board of Directors of the Company, the Company
may redeem any series of Preference Stock determined to be redeemable, or any
part of any series, at any
21
<PAGE> 23
time at the redemption price determined for such series; provided, however,
that not less than thirty nor more than sixty days previous to the date fixed
for redemption a notice of the time and place thereof shall be given to the
holders of record of the Preference Stock so to be redeemed, by mail or
publication, in such manner as may be prescribed by the By-laws of the Company
or by resolution of the Board of Directors; and, provided, further, that in
every case of redemption of less than all of the outstanding shares of any one
series of Preference Stock, the shares of such series to be redeemed shall be
chosen by lot in such manner as may be prescribed by resolution of the Board of
Directors. At any time after notice of redemption has been given in the manner
prescribed by the By-laws of the Company or by resolution of the Board of
Directors to the holders of stock so to be redeemed, the Company may deposit,
or may cause its nominee to deposit, the aggregate redemption price with some
bank or trust company named in such notice, payable on the date fixed for
redemption as aforesaid and in the amounts aforesaid to the respective orders
of the holders of the shares so to be redeemed, on endorsement to the Company
or its nominee, or otherwise, as may be required, and upon surrender of the
certificates for such shares. Upon the deposit of said money as aforesaid,
or, if no such deposit is made, upon said redemption date (unless the Company
defaults in making payment of the redemption price as set forth in such
notice), such holders shall cease to be shareholders with respect to said
shares and from and after the making of said deposit, or, if no such deposit is
made, after the redemption date (the Company not having defaulted in making
payment of the redemption price as set forth in such notice), the said holders
shall have no interest in or claim against the Company, or its nominee, with
respect to said shares, but shall be entitled only to receive said moneys on
the date fixed for redemption as aforesaid from said bank or trust company, or
if redemption as aforesaid from said bank or trust company, or if no such
deposit is made, from the Company, without interest thereon, upon endorsement,
if required, and surrender of the certificates as aforesaid.
If such deposit shall be made by a nominee of the Company as aforesaid,
such nominee shall upon such deposit become the owner of the shares with
respect to which such deposit was made and certificates of stock may be issued
to such nominee in evidence of such ownership.
In case the holder of any such Preference Stock shall not, within six
years after said deposit, claim the amount deposited as above stated for the
redemption thereof, the Depositary shall upon demand pay over the Company such
amounts so deposited and the Depositary shall thereupon be relieved from all
responsibility to the holder thereof.
Nothing herein contained shall limit any legal right of the Company to
purchase any shares of the Preference Stock.
22
<PAGE> 24
(E-1) So long as any shares of the Preference Stock are outstanding,
the Company shall not, without the affirmative vote in favor thereof of the
holders of at least 66-2/3% of the shares of Preference Stock at the time
outstanding, adopt an amendment to these Articles if such amendment would either
(i) authorize or create, or increase the authorized amount of, any class of
stock, other than shares of the Preferred Stock (whether now or hereafter
authorized), which is entitled to dividends or assets in priority to the
Preference Stock or (ii) change any of the rights and preferences of the then
outstanding Preference Stock.
(E-2) So long as any shares of the Preference Stock are outstanding,
the Company shall not, without the affirmative vote in favor thereof of the
holders of at least a majority of the shares of Preference Stock at the time
outstanding, adopt an amendment to these Articles if such amendment would either
(i) increase the authorized amount of Preference Stock or (ii) authorize or
create, or increase the authorized amount of, any class of stock, which is
entitled to dividends or assets on a parity with the Preference Stock, provided;
however, that nothing in this paragraph or in paragraph E-1 above contained
shall authorize the adoption of any amendment of these Articles by the vote of
the holders of a less number of shares of Preference Stock, or of any other
class of stock, or of all classes of stock, than is required for such amendment
by the laws of the State of Michigan at the time applicable thereto.
PREFERENCE STOCK
Voting Powers
The holders of Preference Stock shall not have any right to vote for
the election of directors or for any other purpose, except as otherwise provided
by law, as set forth in the two immediately preceding paragraphs and as set
forth below. Whenever and as often as six quarterly dividends payable on the
Preference Stock of any series shall be in default, in whole or in part, the
holders of the Preference Stock of all series shall have the exclusive right,
voting separately and as a single class, to vote for and to elect two directors,
subject to the prior rights of the holders of the Preferred Stock. In the event
of defaults entitling the Preference Stock to elect two directors as aforesaid,
the holders of the Common Stock shall have the exclusive right, voting
separately and as a class, to elect the remaining number of directors of the
Company, subject to the prior rights of the holders of the Preferred Stock. The
right of the holders of the Preference Stock to elect two directors, however,
shall cease when all defaults in the payment of dividends on their stock shall
have been cured, and such dividends shall be declared and paid out of any funds
legally available therefor as soon as, in the judgment of the Board of
Directors, is reasonably practicable. The terms of office of all persons who may
be directors of the Company at the time when the right to elect two directors
shall accrue to the holders of the Preference Stock, as herein provided, shall
terminate upon the
23
<PAGE> 25
election of their successors at a meeting of the shareholders of the Company
then entitled to vote. Such election shall be held at the next annual meeting of
shareholders or may be held at a special meeting of shareholders, which shall be
held upon notice as provided in the By-laws of the Company for a special meeting
of the shareholders, at the request in writing of the holders of not less than
1,000 shares of the then outstanding Preference Stock addressed to the Secretary
of the Company at its principal business office. Any vacancy in the Board of
Directors occurring during any period when the Preference Stock shall have
elected representatives on the Board shall be filled by a majority vote of the
remaining directors (or the one director) representing the class of stock
theretofore represented by the director causing the vacancy. In the event of
simultaneous vacancies among directors elected by the holders of the Preference
Stock, an election, pursuant to the provisions of this paragraph, will be held.
Upon the termination of such exclusive right of the holders of the Preference
Stock to elect two directors of the Company, the terms of office of all the
directors of the Company shall terminate upon the election of their successors
at a meeting of the shareholders of the Company then entitled to vote. Such
election shall be held at the next annual meeting of shareholders or may be held
at a special meeting of shareholders, which shall be held upon notice as
provided in the By-laws of the Company for a special meeting of the shareholders
at the request in writing of the holders of not less than 1,000 shares of the
then outstanding Common Stock addressed to the Secretary of the Company at its
principal business office.
At all meetings of the shareholders held for the purpose of electing
directors during such times as the holders of the Preference Stock shall have
the exclusive right to elect two of the directors of the Company, the presence
in person or by proxy of the holders of a majority of the outstanding shares of
Common Stock shall be required to constitute a quorum of such class for the
election of directors, and the presence in person or by proxy of the holders of
a majority of the outstanding shares of Preference Stock of all series shall be
required to constitute a quorum of such class for the election of directors;
provided, however, that the absence of a quorum of the holders of stock of
either class shall not prevent the election at any such meeting, or adjournment
thereof, of directors by the other class if the necessary quorum of the holders
of stock of such class is present in person or by proxy at such meeting; and
provided, further, that, in the absence of a quorum of the holders of stock of
either class, a majority of those holders of such stock who are present in
person or by proxy shall have the power to adjourn the election of those
directors to be elected by that class from time to time without notice, other
than announcement at the meeting, until the requisite amount of holders of stock
of such class shall be present in person or by proxy.
At all elections of directors, each shareholder will be entitled to as
many votes as shall equal the number of his shares of stock multiplied by the
number of directors to be elected for whom such shareholder may vote, and he may
cast all of such votes
24
<PAGE> 26
for a single director or may distribute them between the two directors to be
voted for, as he may see fit.
For the purposes of the foregoing provisions, the Preference Stock of
all series shall be deemed to be a single class.
PREFERENCE STOCK
Pre-emptive Rights
The holders of shares of Preference Stock shall have no pre-emptive
rights to subscribe for or purchase any additional issues of shares of the
capital stock of the Company of any class now or hereafter authorized or any
bonds, debentures or other obligations or rights or options convertible into or
exchangeable for or entitling the holder or owner to subscribe for or purchase
any shares of capital stock, or any rights to exchange shares issued for shares
to be issued.
ARTICLE VIII
Any action required or permitted by the Act to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if consents in writing, setting forth the action so
taken, signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present
and voted. The written consents shall bear the date of signature of each
shareholder who signs the consent. No written consents shall be effective to
take the corporate action referred to unless, within sixty days after the record
date for determining shareholders entitled to express consent to or to dissent
from a proposal without a meeting, written consents signed by a sufficient
number of shareholders to take the action are delivered to the Company. Delivery
shall be to the Company's registered office, its principal place of business,
or an officer or agent of the Company having custody of the minutes of the
proceedings of its shareholders. Delivery made to a Company's registered office
shall be by hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to shareholders who have
not consented in writing.
25
<PAGE> 27
Signed on May 26, 2000 Consumers Energy Company
By: /s/ Thomas A. McNish
-------------------------------------
Thomas A. McNish
Vice President and Secretary
STATE OF MICHIGAN )
)SS.
COUNTY OF JACKSON )
On this 26th day of May 2000, before me appeared Thomas A. McNish, to me
personally known, who, being by me duly sworn, did say that he is Vice President
and Secretary of Consumers Energy Company, who executed the foregoing
instrument, and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its Board of Directors and Shareholders, and
said officer acknowledged said instrument to be the free act and deed of said
corporation.
/s/ Renne E. Stephens
----------------------------------
Notary Public
Jackson County, MI
Commission Expires:
03/05/2003
26
