Page 1 of 16
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1995
Commission File Number 1-3376-2
THE POTOMAC EDISON COMPANY
(Exact name of registrant as specified in its charter)
Maryland and Virginia 13-5323955
(States of Incorporation) (I.R.S. Employer Identification No.)
10435 Downsville Pike, Hagerstown, Maryland 21740-1766
Telephone Number - 301-790-3400
The registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
At November 9, 1995, 22,385,000 shares of the Common Stock (no par
value) of the registrant were outstanding, all of which are held by Allegheny
Power System, Inc., the Company's parent.
<PAGE>
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THE POTOMAC EDISON COMPANY
Form 10-Q for Quarter Ended September 30, 1995
Index
Page
No.
PART I--FINANCIAL INFORMATION:
Statement of income - Three and nine months ended
September 30, 1995 and 1994 3
Balance sheet - September 30, 1995
and December 31, 1994 4
Statement of cash flows - Nine months ended
September 30, 1995 and 1994 5
Notes to financial statements 6-8
Management's discussion and analysis of financial
condition and results of operations 9-14
PART II--OTHER INFORMATION 15-16
<PAGE>
<TABLE>
<CAPTION>
- 3 -
THE POTOMAC EDISON COMPANY
Statement of Income
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES:
<S> <C> <C> <C> <C>
Residential $ 74,986 $ 65,199 $ 231,921 $ 224,699
Commercial 38,027 34,783 107,673 101,693
Industrial 50,211 48,745 148,720 143,415
Nonaffiliated utilities 33,084 24,477 94,222 84,446
Other, including affiliates 8,741 5,911 22,267 19,556
Total Operating Revenues 205,049 179,115 604,803 573,809
OPERATING EXPENSES:
Operation:
Fuel 36,887 36,793 102,113 109,894
Purchased power and exchanges, net 58,327 49,243 179,679 171,064
Deferred power costs, net 4,245 832 12,137 (2,132)
Restructuring charge 3,956 - 3,956 -
Other 22,516 22,295 68,537 63,532
Maintenance 14,841 14,856 43,397 44,380
Depreciation 17,276 14,782 51,707 44,602
Taxes other than income taxes 12,130 11,668 36,075 35,615
Federal and state income taxes 8,101 5,538 23,992 25,461
Total Operating Expenses 178,279 156,007 521,593 492,416
Operating Income 26,770 23,108 83,210 81,393
OTHER INCOME AND DEDUCTIONS:
Allowance for other than borrowed funds
used during construction (406) 833 664 2,651
Other income, net 3,295 2,874 9,385 7,013
Total Other Income and Deductions 2,889 3,707 10,049 9,664
Income Before Interest Charges 29,659 26,815 93,259 91,057
INTEREST CHARGES:
Interest on long-term debt 12,119 11,907 36,937 32,735
Other interest 543 403 1,506 1,292
Allowance for borrowed funds used during
construction 270 (523) (439) (1,665)
Total Interest Charges 12,932 11,787 38,004 32,362
Income Before Cumulative Effect of
Accounting Change 16,727 15,028 55,255 58,695
Cumulative Effect of Accounting Change, Net - - - 16,471
NET INCOME $ 16,727 $ 15,028 $ 55,255 $ 75,166
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- 4 -
THE POTOMAC EDISON COMPANY
Balance Sheet
September 30 December 31
1995 1994
ASSETS: (Thousands of Dollars)
Property, Plant, and Equipment:
At original cost, including $46,346,000
<S> <C> <C>
and $76,365,000 under construction $ 2,029,803 $ 1,978,396
Accumulated depreciation (717,610) (673,853)
1,312,193 1,304,543
Investments and Other Assets:
Allegheny Generating Company - common stock at equity 60,621 62,364
Other 929 938
61,550 63,302
Current Assets:
Cash and temporary cash investments 4,101 2,196
Accounts receivable:
Electric service, net of $1,419,000 and $1,175,000
uncollectible allowance 73,389 68,714
Affiliated and other 3,217 2,403
Notes receivable from affiliates - 1,900
Materials and supplies--at average cost:
Operating and construction 29,722 27,800
Fuel 17,929 22,316
Prepaid taxes 13,149 13,168
Other 5,338 5,000
146,845 143,497
Deferred Charges:
Regulatory assets 97,381 88,758
Unamortized loss on reacquired debt 19,155 8,344
Other 12,825 21,091
129,361 118,193
Total Assets $ 1,649,949 $ 1,629,535
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 447,700 $ 447,700
Other paid-in capital 2,690 2,724
Retained earnings 210,179 207,722
660,569 658,146
Preferred stock:
Not subject to mandatory redemption 16,378 36,378
Subject to mandatory redemption - 25,200
Long-term debt 628,761 604,749
1,305,708 1,324,473
Current Liabilities:
Short-term debt 5,500 -
Long-term debt and preferred stock
due within one year 18,700 1,200
Accounts payable 23,722 37,126
Accounts payable to affiliates 13,842 10,485
Taxes accrued:
Federal and state income 9,081 3,565
Other 16,696 11,874
Interest accrued 14,870 9,195
Other 25,182 17,399
127,593 90,844
Deferred Credits and Other Liabilities:
Unamortized investment credit 26,372 28,041
Deferred income taxes 157,650 149,299
Regulatory liabilities 16,143 16,957
Other 16,483 19,921
216,648 214,218
Total Capitalization and Liabilities $ 1,649,949 $ 1,629,535
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- 5 -
THE POTOMAC EDISON COMPANY
Statement of Cash Flows
Nine Months Ended
September 30
1995 1994
(Thousands of Dollars)
CASH FLOWS FROM OPERATIONS:
<S> <C> <C>
Net income $ 55,255 $ 75,166
Depreciation 51,707 44,602
Deferred investment credit and income taxes, net 3,665 (3,000)
Deferred power costs, net 12,137 (2,132)
Unconsolidated subsidiaries' dividends in excess of earnings 1,809 1,652
Allowance for other than borrowed funds used
during construction (664) (2,651)
Cumulative effect of accounting change before income taxes - (26,163)
Changes in certain current assets and
liabilities:
Accounts receivable, net, excluding cumulative
effect of accounting change (5,489) 10,988
Materials and supplies 2,465 (3,939)
Accounts payable (10,047) (10,206)
Taxes accrued 10,338 18,093
Interest accrued 5,675 5,007
Other, net (4,498) 749
122,353 108,166
CASH FLOWS FROM INVESTING:
Construction expenditures (61,060) (99,036)
Allowance for other than borrowed funds used
during construction 664 2,651
(60,396) (96,385)
CASH FLOWS FROM FINANCING:
Retirement of preferred stock (48,396) (1,190)
Issuance of long-term debt 207,018 86,877
Retirement of long-term debt (175,249) (16,000)
Short-term debt, net 5,500 -
Notes receivable from affiliates 1,900 (29,100)
Dividends on capital stock:
Preferred stock (2,250) (3,256)
Common stock (48,575) (49,023)
(60,052) (11,692)
NET CHANGE IN CASH AND TEMPORARY CASH INVESTMENTS 1,905 89
Cash and Temporary Cash Investments at January 1 2,196 1,489
Cash and Temporary Cash Investments at September 30 $ 4,101 $ 1,578
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 32,129 $ 26,749
Income taxes 16,764 22,174
See accompanying notes to financial statements.
</TABLE>
<PAGE>
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THE POTOMAC EDISON COMPANY
Notes to Financial Statements
1. The Company's Notes to Financial Statements in the Allegheny
Power System companies' combined Annual Report on Form 10-K for
the year ended December 31, 1994, should be read with the
accompanying financial statements and the following notes.
With the exception of the December 31, 1994 balance sheet in
the aforementioned annual report on Form 10-K, the accompanying
financial statements appearing on pages 3 through 5 and these
notes to financial statements are unaudited. In the opinion of
the Company, such financial statements together with these
notes thereto contain all adjustments (which consist only of
normal recurring adjustments) necessary to present fairly the
Company's financial position as of September 30, 1995, the
results of operations for the three and nine months ended
September 30, 1995 and 1994, and cash flows for the nine months
ended September 30, 1995 and 1994.
2. The Statement of Income reflects the results of past operations
and is not intended as any representation as to future results.
For purposes of the Balance Sheet and Statement of Cash Flows,
temporary cash investments with original maturities of three
months or less, generally in the form of commercial paper,
certificates of deposit, and repurchase agreements, are
considered to be the equivalent of cash.
3. Earnings for the 1994 periods have been restated to reflect
retroactively the effect of an accounting change adopted as of
January 1994 to record unbilled revenues.
4. As previously announced, the System is undergoing a
reorganization and reengineering process (restructuring) to
simplify its management structure and to increase efficiency.
A workforce reduction will occur as departments are subjected
to the process.
The restructuring efforts completed to date, primarily for the
Bulk Power Supply Department of the affiliated Allegheny Power
Service Corporation, will result in a workforce reduction of
approximately 210 employees, who will be offered an option of
immediate resignation under a Voluntary Separation Program
(VSP) or to remain employed subject to involuntary separation
(layoff) after one year, if during that year they have not
found other employment within the System. The VSP consists of
enhanced severance benefits and other incentives. In
connection with this workforce reduction, the Company recorded,
in the third quarter of 1995, a $4.0 million restructuring
charge for the estimated liabilities incurred to date. The
restructuring charge, net of income taxes, reduced third
quarter net income by about $2.5 million. Additional
separation costs for these employees will be recorded in 1996
depending upon those employees who elect early separation under
the VSP.
<PAGE>
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Additional restructuring costs will be incurred as the
restructuring process is completed by other departments, and
additional workforce reductions are identified. The costs
associated with any additional workforce reductions cannot be
estimated at this time. It is expected that the costs
associated with the restructuring program will be recovered
through cost savings in less than two years.
5. In June 1995, the Company issued $21 million of 6.15%, 20-year
pollution control revenue notes, to refund $21 million of 7.30%
Series B pollution control revenue notes due 2008.
The Company issued $65 million of 7.75% and $80 million of
7.625% 30-year first mortgage bonds in May 1995 to refund $65
million of 9.25% series due 2019 and $80 million of 9.625%
series due 2020, respectively. The Company also issued $45.5
million of 8% Junior Subordinated Deferrable Interest
Debentures in June 1995 to replace the following issues of
preferred stock: $5 million of $7.00 Series D, $5 million of
$8.32 Series F, $10 million of $8.00 Series G, and $25.5
million of $7.16 Series J.
6. Other paid-in capital decreased $34,000 in the nine months
ended September 30, 1995, as a result of losses on reacquired
preferred stock.
7. The Company owns 28% of the common stock of Allegheny
Generating Company (AGC), and affiliates of the Company own the
remainder. AGC owns an undivided 40% interest, 840 MW, in the
2,100-MW pumped-storage hydroelectric station in Bath County,
Virginia, operated by the 60% owner, Virginia Power Company, a
nonaffiliated utility. Following is a summary of income
statement information for AGC:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Electric operating revenues $21,573 $22,337 $65,730 $66,637
Operation & maintenance expense 1,324 1,653 4,691 4,930
Depreciation 4,274 4,236 12,722 12,708
Taxes other than income taxes 1,221 1,399 3,768 4,267
Federal income taxes 3,410 3,498 10,135 10,419
Interest charges 4,385 4,467 13,802 13,380
Other income, net (5) (3) (14) (10)
Net income $ 6,964 $ 7,087 $20,626 $20,943
</TABLE>
The Company's share of the equity in earnings above was $1.9
million and $2.0 million for each of the three months ended
September 30, 1995 and 1994, and $5.8 million and $5.9 million
for the nine months ended September 30, 1995 and 1994,
respectively, and was included in other income, net, on the
Statement of Income.
<PAGE>
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8. Common stock dividends per share declared and paid during the
periods for which income statements are included are as
follows:
<TABLE>
<CAPTION>
1995 1994
Number Amount Number Amount
of Shares Per Share of Shares Per Share
<S> <C> <C> <C> <C>
First Quarter 22,385,000 $.73 22,385,000 $.78
Second Quarter 22,385,000 $.73 22,385,000 $.79
Third Quarter 22,385,000 $.71 22,385,000 $.62
</TABLE>
Earnings per share are not reported inasmuch as the common
stock of the Company is 100% owned by its parent, Allegheny
Power System, Inc.
<PAGE>
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THE POTOMAC EDISON COMPANY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMPARISON OF THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1995
WITH THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1994
NET INCOME
Net income for the third quarter of 1995 was $16.7
million, after reflecting a restructuring charge net of taxes described
below of about $2.5 million, compared with $15.0 million for the
corresponding 1994 period. For the first nine months of 1995, net income
was $55.3 million, reflecting the restructuring charge, compared with
$58.7 million for the corresponding 1994 period, before the cumulative
effect of an accounting change to record unbilled revenues.
The restructuring charge reflects an estimate of the
liabilities incurred to date for separation costs of announced staff
reductions in connection with ongoing reorganization and reengineering
efforts (see Note 4 to Financial Statements). Net income for the third
quarter and income before the cumulative effect of accounting change for
the first nine months of 1995 reflect increased retail revenues resulting
from greater kilowatthour (kWh) sales to retail customers as described
below and from previously reported rate increases. The increased retail
revenues in the first nine months of 1995 were more than offset by
increases in depreciation, interest, and other expenses.
SALES AND REVENUES
Retail kWh sales to residential, commercial, and
industrial customers increased 13%, 8%, and 3%, respectively, in the third
quarter. In the first nine months, retail kWh sales to commercial and
industrial customers increased 1% and 3%, respectively, and to residential
customers decreased 1%. The change in kWh sales to residential customers
was primarily due to variances in weather-related sales. Extremely hot
summer weather resulted in cooling degree days in the third quarter 15%
above normal and 37% above the moderate temperatures in the third quarter
of 1994. These increases in the third quarter were offset by milder
weather in the first six months of 1995 as compared to some of the coldest
temperatures ever recorded in much of the Company's service territory
during the first quarter of 1994. The increase in commercial sales
reflects growth in the number of customers for the third quarter and first
nine months, as well as increased usage during the third quarter. The
increase in kWh sales to industrial customers occurred in almost all
industrial groups, the most significant from paper and aluminum customers.
<PAGE>
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The increase in revenues from retail customers resulted
from the following:
<TABLE>
<CAPTION>
Change from Prior Periods
Quarter Nine Months
(Millions of Dollars)
<S> <C> <C>
Increased kWh sales $13.0 $ 7.0
Fuel and energy cost adjustment clauses (1) .5 (.5)
Rate changes (2):
Maryland 3.7 15.7
West Virginia .3 2.1
Virginia (1.9) (3.5)
2.1 14.3
Other (1.1) (2.3)
$14.5 $18.5
</TABLE>
(1) Changes in revenues from fuel and energy cost adjustment
clauses have little effect on net income.
(2) Reflects primarily rate increases on an annual basis of $19.6
million in Maryland effective November 11, 1994 and a $1.5
million annual increase in West Virginia effective November
11, 1994. These rate increases include recovery of carrying
charges on investment, depreciation, and operating costs
required to comply with Phase I of the Clean Air Act
Amendments of 1990 (CAAA), and other increasing levels of
expense. See page 13 for further information on the West
Virginia rate case.
KWh sales to and revenues from nonaffiliated utilities
are comprised of the following items:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
KWh sales (in billions):
<S> <C> <C> <C> <C>
From Company generation .1 .1 .2 .3
From purchased power 1.1 .5 3.1 2.2
1.2 .6 3.3 2.5
Revenues (in millions):
From Company generation $ 1.5 $ 1.7 $ 4.1 $ 7.6
From sales of purchased power 31.6 22.8 90.1 76.8
$33.1 $24.5 $94.2 $84.4
</TABLE>
Sales from Company generation in the first nine months
decreased because of growth of kWh sales to retail customers which reduces
the amount available for sale, and because of decreased demand and
continuing price competition. Sales of purchased power vary depending on
the availability of eastern utilities' generating equipment, demand for
energy, and competition. About 95% of the aggregate benefits from sales
to nonaffiliated utilities is passed on to retail customers and has little
effect on net income.
<PAGE>
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The increase in other revenue in the third quarter and
the nine month periods resulted primarily from increased transmission
service revenues and revenue reductions in the 1994 periods for provisions
recorded for rate refunds which are no longer subject to refund.
OPERATING EXPENSES
Fuel expenses for the third quarter and first nine
months of 1995 reflect a 9% decrease in average coal prices. This
decrease in the third quarter was offset by an 8% increase in kWh
generated. The reduced average coal prices are primarily the result of
renegotiations of long-term fuel contracts which reduced fuel prices
effective January 1995. Fuel expenses are primarily subject to deferred
power cost accounting procedures with the result that changes in fuel
expenses have little effect on net income.
"Purchased power and exchanges, net" represents power
purchases from and exchanges with nonaffiliated utilities, capacity
charges paid to Allegheny Generating Company (AGC) and other transactions
with affiliates made pursuant to a power supply agreement whereby each
company uses the most economical generation available in the Allegheny
Power System at any given time, and is comprised of the following items:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(Millions of Dollars)
Nonaffiliated transactions:
Purchased power:
<S> <C> <C> <C> <C>
For resale to other utilities $28.8 $20.3 $ 80.5 $ 68.0
Other 2.2 2.6 10.5 10.0
Power exchanges, net (1.0) (.9) (.5) (.7)
Affiliated transactions:
AGC capacity charges 6.9 7.2 21.2 21.8
Other affiliated capacity charges 11.5 9.5 33.9 28.3
Energy and spinning reserve charges 9.9 10.5 34.1 43.7
$58.3 $49.2 $179.7 $171.1
</TABLE>
The amount of power purchased from nonaffiliated
utilities for use by the Company and for resale to nonaffiliated utilities
depends upon the availability of the Company's generating equipment,
transmission capacity, and fuel, and its cost of generation and the cost
of operations of nonaffiliated utilities from which such purchases are
made. The cost of power purchased from nonaffiliates for use by the
Company, AGC capacity charges in West Virginia, and affiliated energy and
spinning reserve charges are mostly recovered from customers currently
through the regular fuel and energy cost recovery procedures followed by
the Company's regulatory commissions and is primarily subject to deferred
power cost procedures with the result that changes in such costs have
little effect on net income. The primary reason for the increases in
purchases for resale to other utilities is described under SALES AND
REVENUES above.
<PAGE>
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While the Company does not currently purchase
generation from qualified facilities under the Public Utility Regulatory
Policies Act of 1978 (PURPA), an agreement has been reached with one
facility to commence purchasing generation in 1999. This project may
significantly increase the cost of power purchases passed on to customers.
The increase in other operation expense, excluding the
restructuring charge which is discussed on pages 6 and 7, for the nine
month period resulted primarily from increases in salaries and wages and
employee benefits, and increased power station operating costs, including
expenses related to the Harrison scrubbers which became available for
service in November 1994. This increase was offset in part by
environmental liabilities recorded in the first quarter of 1994.
Maintenance expenses represent costs incurred to
maintain the power stations, the transmission and distribution (T&D)
system, and general plant, and reflect routine maintenance of equipment
and rights-of-way as well as planned major repairs and unplanned
expenditures, primarily from forced outages at the power stations and
periodic storm damage on the T&D system. The Company is also
experiencing, and expects to continue to experience, increased
expenditures due to the aging of its power stations. Variations in
maintenance expense result primarily from unplanned events and planned
major projects, which vary in timing and magnitude depending upon the
length of time equipment has been in service without a major overhaul and
the amount of work found necessary when equipment is dismantled.
The increases in depreciation expense for the third
quarter and first nine months of 1995 resulted from additions to electric
plant, primarily because of the Harrison scrubbers which became available
for service in November 1994, offset in part by a decrease in depreciation
rates in West Virginia concurrent with the West Virginia base rate
increase effective in November 1994.
The net increase of $2.6 million in federal and state
income taxes for the third quarter resulted primarily from an increase in
income before taxes. The net decrease of $1.5 million for the first nine
months resulted primarily from a decrease in income before taxes.
The combined decreases of $2.0 million and $3.2 million
in allowance for funds used during construction (AFUDC) for the third
quarter and the first nine month periods, respectively, reflect decreases
in capital expenditures upon substantial completion of Phase I of the CAAA
as well as an adjustment of $1.4 million due to a revised in-service date.
The increase in other income, net for the third quarter
and first nine month periods was due primarily to income from demand-side
management programs and in the nine-month period also from an increase in
interest income earned on funds available as a result of the timing of the
debt and preferred stock refinancings in the second quarter of 1995.
Interest on long-term debt increased $4.2 million for
the first nine months due primarily to the timing of the refinancing of
$145 million of first mortgage bonds and $21 million of pollution control
revenue notes, interest related to the issuance of $45.5 million of Junior
Subordinated Deferrable Interest Debentures, and new security issues in
1994. Fluctuations in other interest expense reflect changes in the level
of short-term debt maintained by the Company.
<PAGE>
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LIQUIDITY AND CAPITAL RESOURCES
The Company's discussion on Liquidity and Capital
Resources in the Allegheny Power System companies' combined Annual Report
on Form 10-K for the year ended December 31, 1994, should be read with the
following information.
In March 1995, in response to requests for
reconsideration of the rate order in West Virginia in mid-November 1994,
the Public Service Commission of West Virginia (PSC) ordered a
considerable number of changes from the November order, including
reallocations of the rate increases among customer classes and that
certain Harrison scrubber-related expenses be reviewed as part of the
annual Expanded Net Energy Cost (ENEC) review procedure in June 1995. The
PSC later agreed with its staff to delay implementation of the March 1995
order until completion of the ENEC review. Following the March 1995
order, the Company petitioned the West Virginia Supreme Court of Appeals
to review the PSC's order as to various issues, including the low allowed
return on equity of 10.85%. Effective July 1, 1995, following the ENEC
review, the PSC reduced the Company's annual base rates by $.5 million
related to scrubber expenses and stated that those items would be again
reviewed in the 1996 ENEC review. On July 10, 1995 the Company filed a
petition for reconsideration related to the scrubber expenses. This
petition was rejected by the PSC in August 1995.
The Virginia State Corporation Commission on March 9,
1995, issued an order in the Company's rate case which authorized an
increase in revenues of about $3 million on an annual basis. The Company
had been collecting higher rates, subject to refund, from its Virginia
customers since November 1994. A refund of revenues collected in excess
of the amount authorized was completed in May 1995, for which adequate
reserves had been provided.
The parties have agreed to settlements in the Company's
Federal Energy Regulatory Commission (FERC) rate case filing for wholesale
customers, which resulted in an increase in annual revenues under three-
year contracts of about $2.3 million effective on June 25, 1995.
In the normal course of business, the Company is
subject to various contingencies and uncertainties relating to its
operations and construction programs, including cost recovery in the
regulatory process, laws, regulations and uncertainties related to
environmental matters, and legal actions.
As previously reported, Monongahela Power Company, an
affiliated company, has been named as a defendant along with multiple
other defendants in 2,626 pending asbestos cases involving one or more
plaintiffs, and the Company and its affiliates have been named as
defendants along with multiple other defendants in an additional 2,375
cases by one or more plaintiffs, including 2,660 new cases filed in 1995
to date. While the cumulative number of claims appears to be significant,
previous cases have been settled for an amount substantially less than the
anticipated cost of defense. Also as previously reported, the Company and
its affiliates and approximately 875 others have been identified by the
Environmental Protection Agency as potentially responsible parties in a
Superfund site subject to cleanup. The Company believes that provisions
for liabilities and insurance recoveries are such that final resolution of
these matters will not have a material effect on its financial position.
<PAGE>
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In March 1995, the FERC published a Notice of Proposed
Rulemaking (NOPR) that would mandate sweeping changes to promote increased
competition in the wholesale electric industry. The proposals would
require that utilities file nondiscriminatory open access transmission
tariffs and offer comparable transmission services to eligible third
parties. It also would allow utilities the opportunity to recover
stranded costs. The Company has submitted comments to the FERC. The
Company has filed open access transmission tariffs with the FERC that
generally are consistent with this NOPR.
<PAGE>
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THE POTOMAC EDISON COMPANY
Part II - Other Information to Form 10-Q
for Quarter Ended September 30, 1995
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER
1. (a) Date and Kind of Meeting:
None
(b) Election of Directors:
None
(c) Other Matters Voted Upon:
By Waiver of Notice and Consent dated September
14, 1995 and October 23, 1995, the holder of all
22,385,000 outstanding shares of the Common Stock
of the Corporation waived notice and the holding
of a stockholder's meeting and consented to the
amendment of the Charter of the Corporation as
set forth in Articles of Amendment dated October
20, 1995 and October 23, 1995, which reclassified
four series of preferred stock as authorized but
unissued.
ITEM 5. OTHER INFORMATION
On September 6, 1995, MidAtlantic Energy, the developer
of the now defunct Marshall County PURPA project, filed a civil action
against the Company, Monongahela Power Company, Allegheny Power System,
Inc., and its former development partner Babcock & Wilcox, alleging that
actions taken by the defendants made it impossible for the company to
continue with its 230-megawatt cogeneration project and other projects
contemplated with Babcock & Wilcox. The Company is unable to predict the
outcome of this proceeding.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
(3) (i) Agreement and Articles of Merger, dated as
of May 31, 1974, as amended, including
amendments filed October 20 and October
23, 1995, amending Article VI of the
Charter to delete reference to four (4)
series of redeemed Cumulative Preferred
Stock and to reclassify the redeemed stock
as authorized but unissued stock.
(ii) By-laws of the Company, as amended
September 7, 1995, reflecting a change in
the number of permitted directors.
(27) Financial Data Schedule
<PAGE>
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(b) Reports on Form 8-K:
No reports on Form 8-K were filed on behalf of the
Company for the quarter ended September 30, 1995.
Signature
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE POTOMAC EDISON COMPANY
THOMAS J. KLOC
Thomas J. Kloc
Controller
(Chief Accounting Officer)
November 9, 1995
Agreement and Articles of Merger
THE POTOMAC EDISON COMPANY OF VIRGINIA
MONTEREY UTILITIES CORPORATION
THE POTOMAC EDISON COMPANY OF WEST VIRGINIA
AND
THE POTOMAC EDISON COMPANY OF PENNSYLVANIA
INTO
THE POTOMAC EDISON COMPANY
Agreement and Articles of Merger, dated as of
May 31, 1974, among The Potomac Edison Company, a
Maryland corporation ("Potomac Edison"), The Potomac
Edison Company of Virginia, a Virginia corporation all
of whose issued and outstanding capital stock is owned by
Potomac Edison ("PE Virginia"), Monterey Utilities
Corporation, a Virginia corporation all of whose issued
and outstanding capital stock is owned by PE Virginia
("Monterey"), The Potomac Edison Company of West
Virginia, a West Virginia corporation all of whose issued
and outstanding capital stock is owned by Potomac Edison
("PE West Virginia") and The Potomac Edison Company of
Pennsylvania, a Pennsylvania corporation all of whose
issued and outstanding capital stock is owned by Potomac
Edison ("PE Pennsylvania"),
WITNESSETH:
The parties hereby agree that PE Virginia, Monterey,
PE West Virginia and PE Pennsylvania shall be merged
into Potomac Edison in the manner authorized and
prescribed by the provisions of Article 23 of the 1957
Code of Maryland, as amended, Title 13.1 of the 1950
Code of Virginia, as amended, Chapter 31 of the West
Virginia Code of 1961, as amended, and the Pennsylvania
Business Corporation Law, Act 106, Laws of 1933, as
revised by Act 519, Laws of 1965, and hereby set forth
as follows:
FIRST
PURSUANT TO ARTICLE 23 OF THE 1957 CODE OF MARYLAND
1.1 The terms and conditions of the merger and the
mode of carrying the same into effect are as follows:
1.2 PE Virginia, Monterey, PE West Virginia and PE
Pennsylvania agree to effect the merger into Potomac
Edison, hereinafter designated the "Surviving
Corporation" and sometimes referred to in this part as
the "Corporation" which agrees to effect the merger with
the said corporations.
1.3 The corporation to survive the merger is
Potomac Edison. The state under the laws of which the
Surviving Corporation was formed is Maryland but the
Surviving Corporation shall continue as a corporation
under the laws each of Maryland and Virginia. The name
under which the Surviving Corporation will continue is
The Potomac Edison Company.
1.4 The name and state of incorporation of each
corporation party to this Agreement and Articles of
Merger are as follows:
The Potomac Edison Company Maryland
The Potomac Edison Company of VA Virginia
Monterey Utilities Corporation Virginia
The Potomac Edison Company of WV West Virginia
The Potomac Edison Company of PA Pennsylvania
The date of incorporation of PE Virginia is June 20,
1904, and it was incorporated under general law. The
date of incorporation of Monterey is April 29, 1930, and
it was incorporated under general law. The date of
incorporation of PE West Virginia is July 27, 1916, and
it was incorporated under general law. The date of
incorporation of PE Pennsylvania, is March 1, 1917, and
it was incorporated under general law. Neither PE
Virginia, Monterey, PE West Virginia nor PE Pennsylvania
is now qualified or registered to do business in
Maryland.
1.5 The charter of the Surviving Corporation is
hereby amended and restated to read in its entirety as
set forth in part SIXTH hereof.
1.6 The total number of shares of stock of all
classes which Potomac Edison has authority to issue, and
the number and par value of the shares of each class, or
a statement that such shares are without par value, and,
in the case of shares having par value, the aggregate par
value of all such shares of all classes are as set forth
in Article V of part SIXTH thereof.
The total number of shares of stock of all classes
which PE Virginia has authority to issue is 400 000
shares of the par value of $100 each and all of one
class. The aggregate par value of all such shares is
$40 000 000.
The total number of shares of stock of all classes
which Monterey has authority to issue is 3 000 shares of
the par value of $100 each and all of one class. The
aggregate par value of all such shares is $300 000.
The total number of shares of stock of all classes
which PE West Virginia has authority to issue is 400 000
shares of the par value of $100 each and all of one
class. The aggregate par value of all such shares is
$40 000 000.
The total number of shares of stock of all classes
which PE Pennsylvania has authority to issue is 3 598 000
shares without par value.
1.7 There shall be no conversion or exchange of the
issued and outstanding shares of either class of the
Surviving Corporation and the said shares shall remain
issued and outstanding.
All of the outstanding 270 250 shares of stock of PE
Virginia shall be retired and cancelled and no shares in
the Surviving Corporation shall be issued in lieu
thereof.
All of the outstanding 3 000 shares of stock of
Monterey shall be retired and cancelled and no shares in
the Surviving Corporation shall be issued in lieu
thereof.
All of the outstanding 350 000 shares of stock of PE
West Virginia shall be retired and cancelled and no
shares in the Surviving Corporation shall be issued in
lieu thereof.
All of the outstanding 3 438 000 shares of stock of
PE Pennsylvania shall be retired and cancelled and no
shares in the Surviving Corporation shall be issued in
lieu thereof.
No consideration is to be paid, transferred or
issued by the Surviving Corporation for shares of stock
of each of the corporations party to this Agreement and
Articles of Merger.
1.8 The location of the principal office of Potomac
Edison is Downsville Pike, Hagerstown, Washington
County, Maryland. Neither PE Virginia, Monterey, PE West
Virginia nor PE Pennsylvania has a principal office in
Maryland. None of the corporations party to this
Agreement and Articles of Merger, other than the
Surviving Corporation, owns property in Maryland the
title to which could be affected by the recording of an
instrument among the land records.
1.9 This Agreement and Articles of Merger, including
the charter as amended and restated, were duly advised by
the Board of Directors and approved by the stockholder of
Potomac Edison in the manner required by the General
Corporation Law of Maryland and by the charter of Potomac
Edison.
1.10 The merger to be effected hereby was duly
advised, authorized and approved in the manner and by
the vote required by the charters of PE Virginia,
Monterey, PE West Virginia and PE Pennsylvania and by the
laws of the States under which said corporations are
organized.
SECOND
PURSUANT TO TITLE 13.1 OF THE 1950 CODE OF VIRGINIA AS
AMENDED
2.1 The plan of merger is set forth in Sections 1.2,
1.3 and 1.7 of this Agreement and Articles of Merger.
2.2 The board of directors of PE Virginia approved
the plan at a meeting on June 18, 1973; the sole
stockholder of record adopted the plan by consent on
May 23, 1974 in the manner provided in the Stock
Corporation Act.
The board of directors of Monterey approved the plan
at a meeting on July 16, 1973; the sole stockholder of
record adopted the plan by consent on May 23, 1974 in the
manner provided in the Stock Corporation Act.
2.3 The number of shares of PE Virginia outstanding
and entitled to vote on the merger is 270 250 shares of
common stock.
The number of shares of Monterey outstanding and
entitled to vote on the merger is 3 000 shares of common
stock.
2.4 The number of shares of PE Virginia which
consented to the plan of merger was 270 250 and the
consent was unanimous.
The number of shares of Monterey which consented to
the plan of merger was 3 000 and the consent was
unanimous.
2.5 The amount of stated capital of the Surviving
Corporation on the effective date of the merger is
$125 708 100.
The merger is permitted by the laws of the states
under which Potomac Edison, PE West Virginia and PE
Pennsylvania are organized, and all conditions required
by the laws of such states have been satisfied.
The Surviving Corporation is to be both a domestic
corporation and a Maryland corporation.
THIRD
PURSUANT TO CHAPTER 31 OF THE WEST VIRGINIA CODE OF 1961
3.1 The terms and conditions of the merger are as
provided in Sections 1.2, 1.3 and 1.7 of this Agreement
and Articles of Merger.
3.2 The mode of carrying the merger into effect is
as provided in Sections 1.2, 1.3 and 1.7 of this
Agreement and Articles of Merger.
3.3 The manner of converting the shares of each of
the constituent corporations into shares or other
securities of the Surviving Corporation is as provided in
Section 1.7 of this Agreement and Articles of Merger.
3.4 The laws of the States of Maryland and Virginia
are selected as the laws which shall govern the
Surviving Corporation.
3.5 The name of the Surviving Corporation is The
Potomac Edison Company.
3.6 The post office address of the principal place
of business of the Surviving Corporation is Downsville
Pike, Hagerstown, Maryland 21740.
3.7 The objects of the Surviving Corporation are as
set forth in part SIXTH of this Agreement and Articles
of merger.
3.8 The total number of shares of all classes of
stock which the surviving Corporation shall have
authority to issue and (1) the number of shares of each
class thereof that are to have a par value and the par
value of each such class, (2) the number of such shares
that are to be without par value, and (3) a statement of
all or any of the designations and the powers,
preferences and rights, and the qualifications,
limitations or restrictions thereof, are set forth in
part SIXTH of this Agreement and Articles of Merger.
3.9 The number of directors of the Surviving
Corporation, and their names and addresses, is as set
forth in part SIXTH of this Agreement and Articles of
Merger.
FOURTH
PURSUANT TO THE PENNSYLVANIA BUSINESS CORPORATION LAW
4.1 The terms and conditions of the merger are as
set forth in Sections 1.2, 1.3 and 1.7 of this Agreement
and Articles of Merger.
4.2 The mode of carrying the Merger into effect is
as set forth in Sections 1.2, 1.3 and 1.7 of this
Agreement and Articles of Merger.
4.3 The manner of converting the shares of each
corporation into shares or other securities or
obligations of the Surviving Corporation is as set forth
in Section 1.7 of this Agreement and Articles of Merger.
4.4 The name of the Surviving Corporation is The
Potomac Edison Company and its domiciliary States are
Maryland and Virginia. The locations of its offices
registered with such states are Downsville Pike,
Hagerstown, Maryland and 20 South Cameron Street,
Winchester, Virginia.
4.5 The name and location of the registered offices
of each other domestic business corporation and
qualified foreign business corporation which is a party
to the plan of merger are The Potomac Edison Company of
Pennsylvania, North Grant Street Extended, Waynesboro,
Pennsylvania and The Potomac Edison Company, North Grant
Street Extended, Waynesboro, Pennsylvania.
4.6 The plan of merger is to be effective as
provided in Section 5.8 of this Agreement and Articles of
Merger
4.7 The plan of merger was adopted by the sole
shareholder of PE Pennsylvania by consent dated May 23,
1974. The plan of merger was authorized, adopted or
approved, as the case may be, by each of the foreign
corporations party to the plan in accordance with the
laws of the jurisdiction in which it was formed.
4.8 The Secretary of the Commonwealth and his
successor in office are hereby designated as the true and
lawful attorney of the Surviving Corporation, upon whom
may be served all lawful process in any action or
proceeding against it for enforcement against it of any
obligation of any constituent domestic corporation, or
any obligation arising from the merger proceedings, or
any action or proceeding to determine and enforce the
rights of any shareholder under the provisions of Section
908 of the Pennsylvania Business Corporation Law. Service
of process upon the Secretary of the Commonwealth shall
be of the same legal force and validity as if served on
such corporation, and the authority for such service of
process shall continue in force as long as any of the
aforesaid obligations and rights remain outstanding in
this Commonwealth.
FIFTH
GENERAL
5.1 PE West Virginia shall further evidence the
title to any real property owned or held by it in West
Virginia immediately prior to the effective date of the
merger by executing and acknowledging for record a
confirmatory deed or deeds to its property, which deed or
deeds shall be recorded in the office of the clerks of
the county of the respective counties in which such
property is situate; and such deed or deeds shall recite
as the consideration therefor the merger and shall be
deemed confirmatory of the title of such property in the
Surviving Corporation.
5.2 PE Virginia, Monterey, PE West Virginia and PE
Pennsylvania each hereby agrees that from time to time,
as and when requested by the Surviving Corporation or by
its successors or assigns, it will execute and deliver
all such deeds and other instruments and will take or
cause to be taken such further or other actions as the
Surviving Corporation may deem necessary or desirable in
order to vest or perfect in, or confirm of record or
otherwise to, the Surviving Corporation title to and
possession of all said property, rights, privileges,
powers and franchises and otherwise to carry out the
purposes of this Agreement and Articles of Merger.
5.3 The Surviving Corporation shall pay all the
expenses of carrying this Agreement and Articles of
Merger into effect and of accomplishing the merger.
5.4 For the convenience of the parties and to
facilitate the filing or recording hereof, any number of
counterparts hereof may be executed, and each such
executed counterpart shall be deemed to be one and the
same instrument.
5.5 The officers of the Corporation shall be a
President, one or more Vice-Presidents, a Secretary and
one or more Assistant Secretaries, a Treasurer and one or
more Assistant Treasurers. Other offices may be created,
from time to time, pursuant to the by-laws of the
Corporation. The names of those who shall be the officers
of the Corporation are as follows:
Name Office
Charles B. Finch President
John M. McCardell Exec. Vice President
and General Manager
John Adams Vice President
Paul M. Horst, Jr. Vice President
Robert B. Murdock Vice President
William H. MacMullen Secretary & Treasurer
John H. Larson Asst. Treasurer
Dale F. Zimmerman Asst. Treasurer
and Asst. Secretary
Carroll E. Summers Asst. Secretary
James W. Nicol Comptroller
Dale W. Hollinger Asst. Comptroller
5.6 The present by-laws of Potomac Edison, altered
as may be necessary to conform to the express provisions
hereof where any inconsistency exists, shall be the
bylaws of the Surviving Corporation.
5.7 The Surviving Corporation shall, to the extent
permitted by the laws of the States of Maryland,
Virginia, West Virginia and Pennsylvania, possess all the
rights, privileges, immunities, powers, franchises, and
authority, of a public as well as of a private nature, of
each of the constituent corporations; and all property of
every description, and every interest therein, and all
obligations, including subscriptions to shares, of or
belonging to or due to each of the constituent
corporations shall thereafter be taken and deemed to be
transferred to and vested in the Surviving Corporation
without further act or deed; and title to any real
estate, or any interest therein, vested in any of the
constituent corporations shall not revert or in any way
be impaired by reason of the merger.
The Surviving Corporation shall be liable for all the
obligations of each of the constituent corporations, and
all the rights of creditors of each of the constituent
corporations shall be preserved unimpaired, and all liens
upon the property of any of the constituent corporations
shall be preserved unimpaired. Any claim existing or
action or proceeding pending by or against any of the
constituent corporations may be prosecuted to judgment,
with right of appeal as in other cases, as if the merger
had not taken place, or the Surviving Corporation may be
substituted in the place of such constituent corporation.
The Surviving Corporation shall execute an
appropriate supplemental indenture to the Indenture dated
as of October 1, 1944 from itself to Chemical Bank
evidencing the transactions contemplated hereby and in
connection herewith.
5.8 The plan of merger is to be effective on the
later of the close of business on May 31, 1974 and the
date of completion of the filing and recording of this
Agreement and Articles of Merger in accordance with the
provisions of Article 23 of the 1957 Code of Maryland, as
amended, Title 13.1 of the 1956 Code of Virginia, as
amended, Chapter 31 of the West Virginia Code of 1961, as
amended, and the Pennsylvania Business Corporation Law.
When the plan of merger becomes effective the separate
existences of PE Virginia, Monterey, PE West Virginia and
PE Pennsylvania shall cease.
5.9 This Agreement and Articles of Merger, including
the charter amendments effected hereby, is subject to
all requisite regulatory authorities.
5.10 At any time prior to the filing of this
Agreement and Articles of Merger with the State
Department of Assessments and Taxation of Maryland, the
State Corporation Commission of Virginia, the Secretary
of State of the State of West Virginia or the Department
of State of the Commonwealth of Pennsylvania, the plan of
merger may be terminated by majority vote of the board of
directors of any corporation which is a party to the plan
notwithstanding approval of the plan by the shareholders
of all or any of the corporations which are parties to
the plan.
SIXTH
ARTICLES OF INCORPORATION
I.
The name of the corporation (hereinafter referred to
as the "Corporation") shall be THE POTOMAC EDISON
COMPANY.
II.
The Corporation is to conduct business as a public
service company. The purposes for which the Corporation
is formed and the business or objects to be carried on
and promoted by it are more fully stated as follows:
(a) To produce, generate, buy, sell, lease,
deal in, transmit and distribute (i) power, light,
energy and heat in the form of electricity, (ii)
by-products thereof and (iii) devices, facilities
and equipment for the use in connection therewith;
(b) To acquire (by construction, purchase,
condemnation, lease or otherwise), use, maintain,
operate, deal in and dispose of, power plants,
dams, substations, office machinery, property
(real, personal and mixed) and facilities
(including water power, nuclear and other sites),
and all fixtures, equipments and appliances,
necessary, appropriate, incidental or convenient
for its corporate purposes; and
(c) To conduct business as a public service
company, which business is briefly described as the
purchase, generation, transmission, distribution
and sale, both at whole sale and at retail, of
electricity for light, heat and power purposes in
the State of Maryland, the State of West Virginia,
the Commonwealth of Virginia, the Commonwealth of
Pennsylvania and elsewhere.
The above purposes and powers shall be the only
purposes and powers of the Corporation to be exercised in
the Commonwealth of Virginia.
In addition to the above purposes and powers, the
Corporation shall be authorized to exercise and enjoy all
powers, rights, franchises, and privileges granted to or
conferred upon corporations by the laws of the State of
Maryland, including but not limited to the following:
(a) To transact any business in which
electricity may be applied to any useful purpose;
to manufacture, or otherwise generate or produce,
whether by hydraulic, steam, nuclear fission or
other power, and to buy, sell, accumulate, store,
transmit, furnish, supply, distribute and otherwise
deal in and with and to use electric current for
light, heat, power and any other purposes.
(b) To purchase, lease or otherwise acquire,
construct, erect, hold, own, improve, enlarge,
maintain, operate and manage and to sell, lease or
otherwise dispose of power plants, generating
stations and other buildings, transmission lines,
poles, wires, conduits and other works, equipment,
machinery and appliances for the manufacture,
generation, accumulation, storage, transmission,
distribution and use of electric current.
(c) To manufacture, produce, buy, sell, lease,
install and otherwise deal in and with fixtures,
chandeliers, brackets, lamps, globes and other
supplies, devices and appliances used for and in
connection with the generation, transmission,
distribution or use of electric current for light,
heat or power or otherwise.
(d) To purchase, lease or otherwise acquire,
hold, own, develop, improve, maintain, operate and
manage, and to sell, lease or otherwise dispose of
any lands containing coal, gas, oil, uranium or
other minerals or ores, stone, sand or clay, or
bearing timber, and any and all rights or interests
whatsoever therein or thereto.
(e) To mine, quarry, or otherwise extract or
remove coal, timber, gas, oil, uranium, stone, sand
or clay, or other ores, minerals, materials or
substances from any such lands, or in the exercise
of any such rights or interests, to prepare the
same for market by any mining, metallurgical,
milling, refining or other process desired, and to
store, supply, ship, transport, exchange, sell,
deal in or otherwise dispose of the same and all
by-products thereof.
(f) To purchase, lease or otherwise acquire,
construct, erect, hold, own, improve, enlarge,
maintain, operate and manage, and to sell, lease or
otherwise dispose of works and plants for the
production, generation, purification and storage of
gas (both natural and artificial) and for the
refinement and storage of oil, and pipe lines,
mains, pipes, conduits, ducts, services, meters and
all necessary and proper apparatus and appliances
for the distribution, measuring and sale of such
gas and oil for light, heat, power and any other
purpose to which the same are now or hereafter may
be applied.
(g) To carry on the business of manufacturing
and furnishing steam for heating or other purposes
through conduits laid in streets or otherwise.
(h) To acquire by purchase, subscription or
otherwise, and to hold, sell, assign, transfer,
exchange, lease, mortgage, pledge or otherwise
dispose of, any shares of stock or any bonds or
other securities or evidences of indebtedness
issued or created by any other corporation, and
while the owner or holder of any such shares of
stock, bonds or other obligations, to possess and
exercise in respect thereof any and all the
rights, powers and privileges of individual
holders, including the right to vote on any shares
of stock so held or owned.
(i) To guarantee the payment of dividends upon
any shares of stock of, or the performance of any
contract by, any other corporation in which this
Corporation has an interest, and to endorse or
otherwise guarantee the payment of the principal
and the interest, or either, of any bonds,
debentures, notes, securities or other evidences of
indebtedness created or issued by any such other
corporation.
(j) To acquire the good will, rights, property
both real and personal and assets of all kinds of
any person, firm or corporation, domestic or
foreign, and pay for the same in money, stock,
bonds, debentures or other securities of this
Corporation or otherwise in any manner permitted by
law.
(k) To borrow money, issue bonds, debentures
or obligations of the Company, from time to time,
for moneys borrowed in payment for property
purchased, or for any of the other objects or
purposes of the Corporation; to secure the same by
mortgage or mortgages or deed or deeds of trust
upon or pledge of any or all of the property,
rights, privileges or franchises of the Corporation
wherever situated, acquired or to be acquired in
the manner permitted by law, and to sell or
otherwise dispose of any or all such bonds,
debentures or obligations, in such manner and upon
such terms as the Board of Directors may deem
judicious.
(l) To purchase shares of its capital stock of
any class now or hereafter authorized.
(m) To engage in or carry on any other
business which may conveniently be conducted in
conjunction with any of the business of the
Corporation. And in general to do any and all
things and exercise any and all powers which it may
now or hereafter be lawful for the Corporation to
do or exercise under and in pursuance of the laws
of the State of Maryland and of the Commonwealth of
Virginia.
It is the intention that the objects and purposes
specified in this Article Second shall not, unless
otherwise specified herein, be in any wise limited or
restricted by reference to or inference from the terms of
any other clause of this or any other Article in this
Certificate of Incorporation, but that the objects and
purposes specified in each of the clauses of this Article
shall be regarded as independent objects and purposes. It
is also the intention that said clauses be construed both
as purposes and powers, and not as limitations, and
generally that the Corporation shall be authorized to
exercise and enjoy all powers, rights, franchises and
privileges granted to or conferred upon corporations of
this character by the laws of the State of Maryland and
of the Commonwealth of Virginia, and the enumeration of
certain powers as herein specified is not intended as
exclusive of or as a waiver of any of the powers,
rights, franchises or privileges granted or conferred by
the laws of said State and of said Commonwealth now or
hereafter in force.
III.
(a) The post office address of the place at which
the principal office of the Corporation in the State of
Maryland will be located is Downsville Pike, Hagerstown,
Maryland 21740. The resident agents of the Corporation
who will be in charge of its principal office are William
H. MacMullen and Dale F. Zimmerman whose post office
address is Downsville Pike, Hagerstown, Maryland 21740.
Each said resident agent is a citizen of the State of
Maryland and actually resides therein.
(b) The post office address of the registered
office of the Surviving Corporation in Virginia is 20
South Cameron Street, in the City of Winchester, Virginia
22601 and the name of its registered agent at such
address is J. Sloan Kuykendall, Esq. Said registered
agent is a resident of Virginia and a member of the
Virginia State Bar.
IV.
The number, names and addresses of the directors who
shall act as such until their successors are duly chosen
and qualified, are as follows:
Directors. The number of directors shall be
fourteen, unless and until such number shall be changed,
from time to time, in the manner permitted by law. The
names and addresses of the directors are as follows:
Name Address
J. Lee Rice, Jr., Chairman c/o Treasure Cay Limited
of the Board P.O. Box 3941,
Miami, Fla. 33101
John Adams Allegheny Power Sys., Inc.,
320 Park Ave.,
New York, N.Y. 10022
Charles B. Finch Allegheny Power Sys., Inc.,
320 Park Ave.,
New York, N.Y. 10022
William A. Lyon 742 Lexington Ave.,
New York, N.Y. 10022
Francis H. May, Jr. Greenwood Plaza,
Denver, Colo. 80217
Francis J. McAlary Allegheny Power Sys., lnc.,
320 Park Ave.,
New York, N.Y. 10022
Clarence F. Michalis Bayville Road
Locust Valley, N.Y. 11560
Blake T. Newton, Jr. 277 Park Avenue
New York, N.Y. 10017
Charles W. Nichols, Jr. 630 Fifth Ave., Room 1525,
New York, N.Y. 10022
Janet Gerdes Short 146 Nichols Road
Cohasset, Mass. 02025
Joseph H. Taggart 37 Washington Square West,
New York, N.Y. 10011
Edward H. Walworth, Jr. 516 West 59th Street
New York, N.Y. 10019
E. Wallace Wilkinson 81 Hillcrest Avenue,
Summit, N.J. 07901
John W. Riely 18th Fl., 700 E. Main St.,
Richmond, Virginia 23212
V.
The total amount of the authorized capital stock of
the Corporation is 9 575 000 shares, of which 5 450 000
shares of the par value of $100 each are Cumulative
Preferred Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or more series as
provided in Article VI hereof) and 4 125 000 shares
without nominal or par value are Common Stock.
VI.
The following is a description of each class of
stock of the Corporation, with the preferences, voting
powers, restrictions and qualifications of each class,
the fixed annual dividends thereon, the times and prices
of redemption thereof, and the conversion rights thereof,
together with an express grant of authority to the Board
of Directors to fix by resolution or resolutions certain
thereof with respect to shares of the several series of
the Cumulative Preferred Stock:
(1) The Cumulative Preferred Stock may be issued
from time to time in one or more series, with such
distinctive serial designations as may be stated or
expressed in this Article or in a resolution or
resolutions providing for the issue of such stock adopted
from time to time by the Board of Directors; and, in such
resolution or resolutions providing for the issue of
shares of each particular series, the Board of Directors
is also expressly vested with authority to fix the
following provisions of the shares of such series
(a) The designation of such series and the
number of shares which shall constitute such
series, which number may be increased or decreased
(but not below the number of shares thereof then
outstanding) from time to time by like action of
the Board of Directors;
(b) The annual rate of dividends payable on
shares of such series and the date from which
dividends on all shares of such series issued prior
to the record date for the first dividend on shares
of such series shall be cumulative;
(c) The times and prices of redemption for
shares of such series;
(d) The amount payable on shares of such
series in the event of any liquidation, dissolution
or winding up of the affairs of the Corporation,
which amount may differ in the case of a voluntary
or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation;
(e) The rights, if any, of the holders of
shares of such series to convert such shares into
shares of stock of the Corporation of any class or
of any series of any class and the terms and
conditions of such conversion; and
(f) Any other preferences, rights, voting
powers, restrictions or qualifications of shares of
such series:
so far as not inconsistent with the provisions of this
Article applicable to all series of Cumulative Preferred
Stock, and to the full extent now or hereafter permitted
by the laws of the State of Maryland and of the
Commonwealth of Virginia. All shares of Cumulative
Preferred Stock shall be of equal rank and shall be
identical, except in respect of the particulars that are
fixed as hereinabove in this subsection provided; and all
shares of each series shall be identical in all respects
except as to the dates from which dividends thereon shall
be cumulative.
63,784 shares of the Cumulative Preferred Stock
shall be a series of said Cumulative Preferred Stock
designated as the 3.60% Cumulative Preferred Stock;
18 297 shares of the Cumulative Preferred Stock shall be
a series of the Cumulative Preferred Stock designated as
the 4.70% Cumulative Preferred Stock, Series B; 100 000
shares of the Cumulative Preferred Stock shall be a
series of the Cumulative Preferred Stock designated as
the $5.88 Cumulative Preferred Stock, Series C; 50 000
shares of the Cumulative Preferred Stock shall be a
series of the Cumulative Preferred Stock designated as
the $7.00 Cumulative Preferred Stock, Series D; 50 000
shares of the Cumulative Preferred Stock shall be a
series of the Cumulative Preferred Stock designated as
the $9.40 Cumulative Preferred Stock, Series E; 50 000
shares of the Cumulative Preferred Stock shall be a
series of the Cumulative Preferred Stock designated as
the $8.32 Cumulative Preferred Stock, Series F; and
100 000 shares of the Cumulative Preferred Stock shall be
a series of the Cumulative Preferred Stock designated as
the $8.00 Cumulative Preferred Stock, Series G.
(2) The following is a statement of the powers,
preferences and rights of the 3.60% Cumulative Preferred
Stock to the extent not set forth elsewhere herein:
(a) The annual rate of dividends payable on
shares of such series shall be three and sixty
hundredths per cent (3.60%) per annum of the par
value thereof, and the date from which dividends
shall be cumulative on all shares of such series,
issued prior to the record date for the first
dividend on shares of such series, shall be
February 1, 1946;
(b) The redemption price for shares of such
series shall be $103.75 per share;
(c) The amount payable on shares of such
series in the event of any voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation shall be $103.75 per share, and the
amount payable upon any involuntary liquidation,
dissolution or winding up of the affairs of the
Corporation shall be the par value thereof;
(d) The holders of shares of such series
shall not have the right to convert such shares
into shares of the stock of the Corporation of any
class or of any series of any class; and
(e) Unless and to the extent necessary to
make good or prevent an impairment of its capital,
the Corporation will not seek from the holders of
the shares of such series, reimbursement for any
State or local personal property taxes imposed with
respect to such shares which it may be required to
pay for the account of such holders by or under any
present or future law of the State of Maryland, and
will not charge such taxes in reduction of any
amounts due to such holders as dividends or
otherwise.
(3) The following is a statement of the powers,
preferences and rights of the 4.70% Cumulative Preferred
Stock, Series B, to the extent not set forth elsewhere
herein:
(a) The annual rate of dividends payable on
shares of such series shall be four and seventy
hundredths per cent (4.70%) per annum of the par
value thereof, and the date from which dividends
shall be cumulative on all shares of such series,
issued prior to the record date for the first
dividend on shares of such series shall be
December 1, 1948;
(b) The redemption price for shares of such
series shall be $101 per share;
(c) The amount payable on shares of such
series in the event of any voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation shall be $101 per share, and the amount
payable upon any involuntary liquidation,
dissolution or winding up of the affairs of the
Corporation shall be the par value thereof;
(d) The holders of shares of such series
shall not have the right to convert such shares
into shares of the stock of the Corporation of any
class or of any series of any class;
(e) Unless and to the extent necessary to
make good or prevent an impairment of its capital,
the Corporation will not seek from the holders of
the shares of such series, reimbursement for any
State or local personal property taxes imposed with
respect to such shares which it may be required to
pay for the account of such holders by or under any
present or future law of the State of Maryland, and
will not charge such taxes in reduction of any
amounts due to such holders as dividends or
otherwise; and
(f) The Corporation, as a purchase fund for
the benefit of shares of such series will endeavor
to purchase annually each calendar year on a
national securities exchange (if shares of such
series are listed thereon) or in the open market
(if not so listed), 2-1/2% of the maximum number of
shares of such series at any time issued and
outstanding, at prices not exceeding, as to any
shares so purchased, $100 per share plus accrued
and unpaid dividends to the date of purchase. To
the extent that such purchases with respect to any
calendar year are not effected prior to November 5
of such year, the Corporation shall, by notice
published once in each of two consecutive calendar
weeks (on any day of each such week) in one daily
newspaper printed in the English language and of
general circulation in the Borough of Manhattan,
City of New York, and in one daily newspaper
printed in the English language and of general
circulation in the City of Baltimore, Maryland
(the first publication in each city to be on or
prior to November 15 of such year), invite tenders
from all holders of shares of such series to sell
to the Corporation shares of such series at the
price of $100 per share plus accrued and unpaid
dividends to the date of purchase. The Corporation
shall not be obligated to purchase any shares of
such series during the period in any calendar year
subsequent to November 4 in such year except
pursuant to such invitation for tenders. The
Corporation shall not be obligated to expend during
any calendar year for purchases of shares of such
series pursuant to this paragraph (whether made on
a national securities exchange, in the open market
or pursuant to an invitation for tenders) an
amount which would exceed the net income of the
Corporation, after payment of dividends on the
Cumulative Preferred Stock of all series and on the
shares of stock of any other class ranking prior to
or on a parity as to dividends or assets with the
Cumulative Preferred Stock, for the preceding
calendar year or to make any such purchases of
shares of such series if any dividends shall then
be in arrears on the Cumulative Preferred Stock of
any series or on shares of stock of any other class
ranking prior to or on a parity as to dividends or
assets with the Cumulative Preferred Stock or to
make any such purchases except to the extent that
it shall have funds legally available therefor.
For the purpose of the foregoing provisions, the
term "net income of the Corporation, after payment of
dividends on the Cumulative Preferred Stock of all series
and on the shares of stock of any other class ranking
prior to or on a parity as to dividends or assets with
the Cumulative Preferred Stock" shall mean the balance
remaining after deducting from the total gross revenues
(including non-operating income) of the Corporation from
all sources (i) all operating expenses and taxes,
including charges to income for general taxes and for
federal and state taxes measured by income, for
depreciation and for amortization or other disposition of
amounts, if any, classified as amounts in excess of
original cost of utility plant, (ii) the amount, if any,
by which the charge to income during the year in question
for depreciation as recorded on the books of the
Corporation shall have been less than the minimum amount
required therefor under the provisions of any then
existing general indenture of mortgage or deed of trust
of the Corporation, (iii) all interest charges and other
income deductions, including charges to income for the
amortization of debt discount, premium and expense and
amortization of excess of carrying value of investments
of the Corporation in securities of its subsidiaries over
the underlying book equity of such subsidiaries at their
respective dates of acquisition, (iv) amortization of
preferred stock discount and expense, provided that such
amortization shall be as recorded on the books of the
Corporation and shall be pursuant to a regular or
definite program of the Corporation for such
amortization, and (v) all dividends applicable to the
period in question on the Cumulative Preferred Stock of
all series and on the shares of stock of any other class
ranking prior to or on a parity as to dividends or assets
with the Cumulative Preferred Stock.
All shares of such series purchased pursuant to the
foregoing provisions shall be retired.
Each invitation for tenders shall set forth the
method of making tenders and shall specify the number of
shares of such series as to which tenders are being
invited, the price to be paid for shares, the date on or
prior to which tenders must be received (which date shall
be not less than twenty-one nor more than twenty-eight
days after the date on which such invitation is first
published) and the date of purchase by the Corporation of
and payment for shares tendered (which date shall be not
more than seven days after the date on or prior to which
tenders must be received). If the number of shares
tendered shall in the aggregate equal or be less than the
number of shares specified in the invitation for tenders,
the Corporation shall accept all tenders. Should there
be tenders aggregating more than the number of shares
specified in the invitation for tenders, the Corporation
shall purchase the number of shares specified in such
invitation, selecting such shares by lot in such manner
as the Corporation shall determine. All tenders shall be
subject to acceptance as a whole or in part. Any
determination made by the Corporation in the acceptance
of tenders shall be conclusive.
If the Corporation shall have duly performed its
obligations under the foregoing provisions during any
calendar year, the fact that it shall not have purchased
or invited tenders for a number of shares of such series
equal to 2% of the maximum number of shares of such
series at any one time outstanding shall not increase the
number of shares it is obligated to purchase or with
respect to which it is obligated to invite tenders during
any subsequent calendar year. In the event that the
Corporation shall at any time be in default in the
performance of its obligations under the foregoing
provisions, no dividends (other than dividends payable in
junior stock) shall be paid or any other distribution of
assets made, by purchase of shares or otherwise, on the
Common Stock or on any other class of stock of the
Corporation ranking junior as to dividends or assets to
the Cumulative Preferred Stock.
(4) The following is a statement of the powers,
preferences and rights of the $5.88 Cumulative Preferred
Stock, Series C, to the extent not set forth elsewhere
herein:
(a) The annual rate of dividends payable on
shares of such series shall be five and eighty-
eight hundredths dollars ($5.88) per share per
annum, and the date from which dividends shall be
cumulative on all shares of such series, issued
prior to the record date for the first dividend on
shares of such series shall be May 1, 1967;
(b) The redemption price for shares of such
series shall be $107.26 per share, if redeemed on
or before May 1, 1972; $105.79 per share, if
redeemed thereafter and on or before May 1, 1977;
and $104.32 per share, if redeemed thereafter and
on or before May 1, 1982; and $102.85 per share, if
redeemed after May 1, 1982;
(c) The amount payable on shares of such
series in the event of any voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation shall be an amount per share equal to
the then current redemption price thereof, and the
amount payable on shares of such series in the
event of any involuntary liquidation, dissolution
or winding up of the affairs of the Corporation
shall be the par value thereof; and
(d) The holders of shares of such series shall
not have the right to convert such shares into
shares of the stock of the Corporation of any class
or of any series of any class.
(5) The following is a statement of the powers,
preferences and rights of the $7.00 Cumulative Preferred
Stock, Series D, to the extent not set forth elsewhere
herein:
(a) Dividends are payable on shares of the
$7.00 Cumulative Preferred Stock, Series D, at the
rate of $7.00 per annum. Dividends on all shares of
such series issued prior to the record date for the
first dividend on shares of such series are
cumulative from April 18, 1968. Dividends on all
other shares of such series are cumulative from
the dates specified in subdivision (9) of this
Article VI.
(b) The redemption price of shares of such
series is $108.45 per share, if redeemed on or
before April 1, 1973; $106.70 per share, if
redeemed thereafter and on or before April 1, 1978;
$104.95 per share, if redeemed thereafter and on or
before April 1, 1983; and $103.20 per share, if
redeemed after April 1, 1983 (together in each
case, as provided in the charter, with an amount,
in the case of each share, computed at the rate of
$7.00 per annum from the date on which dividends on
such share became cumulative, to and including the
date of redemption, less the aggregate of all
dividends theretofore paid thereon).
(c) The amount payable on shares of such
series in the event of a voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation is an amount per share equal to the
then current redemption price thereof and in the
case of an involuntary liquidation, dissolution or
winding up of the affairs of the Corporation is
$100 per share (together, in each case, as provided
in the charter, with an amount, in the case of each
share, computed at the rate of $7.00 per annum from
the date on which dividends on such share became
cumulative, to and including the date fixed for
such payment, less the aggregate of all dividends
theretofore paid thereon).
(6) The following is a statement of the powers,
preferences and rights of the $9.40 Cumulative Preferred
Stock, Series E, to the extent not set forth elsewhere
herein:
(a) Dividends are payable on shares of the
$9.40 Cumulative Preferred Stock, Series E, at the
rate of $9.40 per annum. Dividends on all shares of
such series issued prior to the record date for the
first dividend on shares of such series are
cumulative from May 7, 1970.
(b) The redemption price of shares of such
series is $111.02 per share, if redeemed on or
before April 1, 1975; $108.67 per share, if
redeemed thereafter and on or before April 1, 1980;
$106.32 per share, if redeemed thereafter and on or
before April 1, 1985; and $103.97 per share, if
redeemed after April 1, 1985 (together in each
case, as provided in the charter, with an amount,
in the case of each share, computed at the rate of
$9.40 per annum from the date on which dividends on
such share became cumulative, to and including the
date of redemption, less the aggregate of all
dividends theretofore paid thereon).
(c) The amount payable on shares of such
series in the event of a voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation is an amount per share equal to the
then current redemption price thereof and in the
case of an involuntary liquidation, dissolution or
winding up of the affairs of the Corporation is
$100 per share (together, in each case, as provided
in the charter, with an amount, in the case of each
share, computed at the rate of $9.40 per annum from
the date on which dividends on such share became
cumulative, to and including the date fixed for
such payment, less the aggregate of all dividends
theretofore paid thereon).
(7) The following is a statement of the powers,
preferences and rights of the $8.32 Cumulative Preferred
Stock, Series F, to the extent not set forth elsewhere
herein:
(a) Dividends are payable on shares of the
$8.32 Cumulative Preferred Stock, Series F, at the
rate of $8.32 per annum. Dividends on all shares of
such series issued prior to the record date for the
first dividend on shares of such series are
cumulative from May 6, 1971.
(b) Before May 1, 1976, no shares of such
series may be redeemed with or in anticipation of
(i) moneys borrowed at an interest cost to the
Company of less than 8.32% a year or (ii) the
proceeds of preferred stock sold by the Company at
a price per share (exclusive of accrued dividends)
the division of which into the annual dollar
dividend rate per share of such stock produces a
quotient of less than 8.32%. Otherwise the shares
of such series may be redeemed, as a whole or in
part, by the Corporation at any time or from time
to time.
(c) The redemption price of shares of such
series is $109.78 per share, if redeemed on or
before May 1, 1976; $107.70 per share, if redeemed
thereafter and on or before May 1, 1981; $105.62
per share, if redeemed thereafter and on or before
May 1, 1986; and $103.54 per share, if redeemed
after May 1, 1986 (together in each case, as
provided in the charter, with an amount, in the
case of each share, computed at the rate of $8.32
per annum from the date on which dividends on such
share became cumulative, to and including the date
of redemption, less the aggregate of all dividends
theretofore paid thereon).
(d) The amount payable on shares of such
series in the event of a voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation is an amount per share equal to the
then current redemption price thereof and in the
case of an involuntary liquidation, dissolution or
winding up of the affairs of the Corporation is
$100 per share (together, in each case, as provided
in the charter, with an amount, in the case of each
share, computed at the rate of $8.32 per annum from
the date on which dividends on such share became
cumulative, to and including the date fixed for
such payment, less the aggregate of all dividends
theretofore paid thereon).
(8) The following is a statement of the powers,
preferences and rights of the $8.00 Cumulative Preferred
Stock, Series G, to the extent not set forth elsewhere
herein:
(a) Dividends are payable on shares of the
$8.00 Cumulative Preferred Stock, Series G, at the
rate of $8.00 per annum. Dividends on all shares of
such series issued prior to the record date for the
first dividend on shares of such series are
cumulative from May 18, 1972.
(b) Before May 1, 1977, no shares of such
series may be redeemed directly or indirectly with
or in anticipation of (i) moneys borrowed at an
interest cost to the Company of less than 7.99% a
year or (ii) the proceeds of preferred stock sold
by the Company at a price per share (exclusive of
accrued dividends) the division of which into the
annual dollar dividend rate per share of such stock
produces a quotient of less than 7.99%. Otherwise
the shares of such series may be redeemed, as a
whole or in part, by the Corporation at any time or
from time to time.
(c) The redemption price of shares of such
series is $109.25 per share, if redeemed on or
before May 1, 1977; $107.25 per share, if redeemed
thereafter and on or before May 1, 1982; $105.25
per share, if redeemed thereafter and on or before
May 1, 1987; and $103.25 per share, if redeemed
after May 1, 1987 (together in each case, as
provided in the charter, with an amount, in the
case of each share, computed at the rate of $8.00
per annum from the date on which dividends on such
share became cumulative, to and including the date
of redemption, less the aggregate of all dividends
theretofore paid thereon).
(d) The amount payable on shares of such series in
the event of a voluntary liquidation, dissolution
or winding up of the affairs of the Corporation is
an amount per share equal to the then current
redemption price thereof and in the case of an
involuntary liquidation, dissolution or winding up
of the affairs of the Corporation is $100 per share
(together, in each case, as provided in the
charter, with an amount, in the case of each share,
computed at the rate of $8.00 per annum from the
date on which dividends on such share became
cumulative, to and including the date fixed for
such payment, less the aggregate of all dividends,
theretofore paid thereon).
(9) The holders of the Cumulative Preferred Stock
of each series, in preference to the holders of any class
of stock ranking junior to the Cumulative Preferred
Stock, shall be entitled to receive, as and when declared
by the Board of Directors out of any funds legally
available therefor, cash dividends, at the rate for such
series fixed under the provisions of subdivision (1), or
set forth in subdivisions (2) through (8) inclusive, of
this Article and no more, payable quarterly on the first
days of February, May, August and November, respectively,
in each year, with respect to the quarterly period ending
on the day preceding each such respective payment date.
Such dividends shall be paid to stockholders of record on
the respective date, not exceeding twenty days prior to
such payment dates, fixed by the Board of Directors for
such purpose. Such dividends shall be cumulative, in the
case of shares of each particular series:
(a) if issued prior to the record date for the
first dividend on shares of such series, then from
the date fixed for the purpose under the provisions
of subdivision (1), or set forth in subdivisions
(2) through (8) inclusive, of this Article:
(b) if issued during the period commencing
immediately after the record date for a dividend on
shares of such series and terminating at the close
of the payment date for such dividend, then from
such dividend payment date; and
(c) otherwise from the quarterly dividend payment
date next preceding the date of issue of such
shares.
No dividend shall be paid, upon, or declared or set apart
for, any share of Cumulative Preferred Stock for any
quarterly dividend period unless at the same time a like
proportionate dividend for the same quarterly dividend
period, ratably in proportion to the respective annual
dividend rates fixed therefor, shall be paid upon, or
declared and set apart for, all shares of Cumulative
Preferred Stock of all series then issued and outstanding
and entitled to receive such dividend.
(10) So long as any shares of Cumulative Preferred
Stock shall be outstanding, the Corporation shall not
declare any dividends or make any distribution in respect
of outstanding shares of any stock (in this subdivision
called "junior stock") of the Corporation ranking junior
to the Cumulative Preferred Stock as to dividends or
assets, other than dividends in shares of junior stock,
or purchase or otherwise acquire for value any
outstanding shares of junior stock (each such dividend,
distribution, purchase or acquisition being in this
subdivision called a "dividend") in contravention of the
following:
(a) If and so long as the junior stock equity at
the end of the calendar month immediately preceding
the date on which a dividend on the junior stock is
declared is, or as a result of such dividend would
become, less than twenty per cent. (20%) of total
consolidated capitalization, the Corporation shall
not declare such dividends in an amount which,
together with all other dividends on the junior
stock paid within the year ending with and
including the date on which such dividend is
payable, exceeds fifty per cent. (50%) of the
consolidated net income of the Corporation and its
subsidiaries available for dividends on the junior
stock for the twelve full calendar months
immediately preceding the calendar month in which
such dividends are declared, except in an amount
not exceeding the aggregate of dividends on the
junior stock which under the restriction set forth
above in this paragraph could have been, and have
not been, declared; and
(b) If and so long as the junior stock equity at
the end of the calendar month immediately preceding
the date on which a dividend on the junior stock is
declared is, or as a result of such dividend would
become, less than twenty-five per cent. (25%) but
not less than twenty per cent (20%) of total
consolidated capitalization, the Corporation shall
not declare dividends on the junior stock in an
amount which, together with all other dividends on
the junior stock paid within the year ending with
and including the date on which such dividend is
payable, exceeds seventy-five per cent (75%) of the
consolidated net income of the Corporation and its
subsidiaries available for dividends on the junior
stock for the twelve full calendar months
immediately preceding the calendar month in which
such dividends are declared, except in an amount
not exceeding the aggregate of dividends on junior
stock which under the restriction set forth in
paragraph (a) of this subdivision and in this
paragraph could have been, and have not been,
declared.
For the purposes of this subdivision "junior stock
equity" shall mean the aggregate of the par value of, or
stated capital represented by, the outstanding shares of
junior stock, all earned surplus, capital or paid-in
surplus and any premiums on the junior stock then carried
on the books of the Corporation and its consolidated
subsidiaries less (i) the excess, if any, of the
aggregate amount payable on involuntary liquidation of
the Corporation upon all outstanding shares of Cumulative
Preferred Stock over the sum of (x) the aggregate par
value of the shares of Cumulative Preferred Stock and (y)
any premiums thereon; (ii) any amounts on the books of
the Corporation and its consolidated subsidiaries known,
or estimated, if not known, to represent the excess, if
any, of recorded value over original cost of used or
useful utility plant; and (iii) any intangible items set
forth on the asset side of the consolidated balance sheet
of the Corporation and its subsidiaries in accordance
with generally accepted accounting principles, such as
unamortized debt discount and expense; provided, however,
that no deduction shall be required to be made in respect
of items referred to in clauses (ii) and (iii) of this
paragraph in cases in which such items are being
amortized or are provided for, or are being provided for,
by reserves.
For the purposes of this subdivision "total
consolidated capitalization" shall mean the aggregate of
(i) the principal amount of all outstanding indebtedness
of the Corporation and its consolidated subsidiaries
maturing more than twelve months after the date of issue
thereof; and (ii) the par value of, or stated capital
represented by, and any premiums carried on the books of
the Corporation and its consolidated subsidiaries in
respect of, the outstanding shares (except any eliminated
in consolidation) of all classes of the capital stock of
the Corporation and its consolidated subsidiaries, earned
surplus and capital or paid-in surplus, less any amounts
required to be deducted pursuant to clauses (ii) and
(iii) of the immediately preceding paragraph of this
subdivision in the determination of junior stock equity.
Subject to the foregoing and to any further
limitations prescribed in accordance with the provisions
of subdivisions (1) and (15) of this Article, the Board
of Directors may declare, out of any funds legally
available therefor, dividends upon the then outstanding
shares of any class of stock ranking junior to the
Cumulative Preferred Stock, and no holders of shares of
Cumulative Preferred stock of any series shall be
entitled to share therein.
(11) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, then,
before any distribution or payment shall be made to the
holders of any class of stock ranking junior to the
Cumulative Preferred Stock, the holders of the Cumulative
Preferred Stock shall be entitled to be paid in full the
respective amounts fixed under the provisions of
subdivision (1), or set forth in subdivisions (2) through
(8) inclusive, of this Article, together with an amount,
in the case of each share, computed at the annual
dividend rate for the series of which the particular
share is a part, from the date on which dividends on such
share became cumulative to and including the date fixed
for such distribution or payment, less the aggregate
amount of all dividends theretofore paid thereon. If
such payment shall have been made in full to the holders
of the Cumulative Preferred Stock, the remaining assets
and funds of the Corporation shall be distributed among
the holders of the classes of stock ranking junior to the
Cumulative Preferred Stock, according to their respective
rights and preferences and in each case according to
their respective shares. If, upon any liquidation,
dissolution or winding up of the affairs of the
Corporation, the amounts so payable are not paid in full
to the holders of all outstanding shares of Cumulative
Preferred Stock, the holders of all series of Cumulative
Preferred Stock shall share ratably in any distribution
of assets in proportion to the full amounts to which they
would otherwise be respectively entitled. Neither the
consolidation or merger of the Corporation nor the sale
or transfer of all or a part of its assets shall be
deemed a liquidation, dissolution or winding up of the
affairs of the Corporation within the meaning of the
foregoing provisions of this subdivision.
(12) The Cumulative Preferred Stock of any series
may be redeemed, as a whole or in part, at the option of
the Corporation, by vote of the Board of Directors, at
any time or from time to time, or at the times fixed for
such series under the provisions of subdivision (1) of
this Article, at the applicable redemption price fixed
for such series under such provisions, or set forth in
subdivisions (2) through (8) inclusive, of this Article,
together with an amount (hereinafter referred to as
accrued dividends to the redemption date), in the case of
each share, computed at the annual dividend rate for the
series of which the particular share is a part, from the
date on which dividends on such share became cumulative
to and including the date of redemption, less the
aggregate amount of all dividends theretofore paid
thereon. If less than all the outstanding shares of
Cumulative Preferred Stock of any series are to be
redeemed, the shares to be redeemed shall be determined
by lot in such manner as the Board of Directors may
prescribe. Unless all dividends on the Cumulative
Preferred Stock of all series for all past quarterly
dividend periods shall have been paid or declared and a
sum sufficient for the payment thereof set apart, the
Corporation shall not acquire any shares of Cumulative
Preferred Stock (except by redemption of all outstanding
shares of Cumulative Preferred Stock) without obtaining
approval under the Public Utility Holding Company Act of
1935 for such acquisition.
Notice of every redemption of Cumulative Preferred
Stock shall be mailed, addressed to the holders of
record of the shares to be redeemed at their respective
addresses as they shall appear on the stock books of the
Corporation (but no failure to mail such notice or any
defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption), and
notice shall also be published at least once in one daily
newspaper printed in the English language and published
and of general circulation in the Borough of Manhattan,
The City of New York, the first publication and such
mailing to be at least thirty days and not more than
sixty days prior to the date fixed for redemption.
If notice of redemption shall have been duly
published and if, on or before the redemption date
specified in the notice, all funds necessary for the
redemption shall have been deposited in trust with a bank
or trust company of the character described in the
following paragraph and designated in the notice of
redemption, for the pro rata benefit of the holders of
the shares so called for redemption, so as to be and
continue to be available therefor, then, from and after
the date of redemption so designated, notwithstanding
that any certificate for shares of Cumulative Preferred
Stock so called for redemption shall not have been
surrendered for cancellation, the shares represented
thereby shall no longer be deemed outstanding, the
dividends thereon shall cease to accumulate, and all
rights with respect to the shares of Cumulative Preferred
Stock so called for redemption shall forthwith on the
redemption date cease and terminate, except only the
right of the holders thereof to receive the redemption
price of the shares so redeemed, including accrued
dividends to the redemption date, but without interest.
The Corporation may also, at any time prior to the
redemption date specified in the notice of redemption,
deposit in trust, for the account of the holders of the
Cumulative Preferred Stock to be redeemed, with a bank or
trust company in good standing, organized under the laws
of the United States of America or of the State of New
York, doing business in the Borough of Manhattan, The
City of New York, having capital, surplus and undivided
profits aggregating at least Two Million Dollars
($2 000 000), designated in the notice of redemption, all
funds necessary for the redemption, and deliver
irrevocable written instructions authorizing such bank or
trust company, on behalf and at the expense of the
Corporation, to cause notice of redemption to be duly
mailed and publication of notice to be made as herein
provided promptly upon receipt of such irrevocable
instructions. Thereupon, notwithstanding that any
certificate for shares of Cumulative Preferred Stock so
called for redemption shall not have been surrendered for
cancellation, all shares of Cumulative Preferred Stock
with respect to which the deposit shall have been made
shall no longer be deemed to be outstanding, and all
rights with respect to such shares of Cumulative
Preferred Stock shall forthwith, upon such deposit in
trust accompanied by irrevocable instructions as provided
above, cease and terminate except only the right of the
holders thereof to receive from such bank or trust
company, at any time after the time of the deposit, the
redemption price, including accrued dividends to the
redemption date, but without interest, of the shares so
to be redeemed, and the right to exercise, on or before
the date fixed for redemption, privileges of conversion
or exchange, if any, not theretofore expiring.
Any moneys deposited by the Corporation pursuant to
this subdivision which shall not be required for the
redemption because of the exercise of any such right of
conversion or exchange subsequent to the date of the
deposit shall be repaid to the Corporation forthwith. Any
other moneys deposited by the Corporation pursuant to
this subdivision and unclaimed at the end of six years
from the date fixed for redemption shall be repaid to the
Corporation upon its request expressed in a resolution of
its Board of Directors, after which repayment the
holders of the shares so called for redemption shall look
only to the Corporation for the payment thereof.
(13) Except as may be mandatorily required by law
regardless of limitations contained in the charter, at
all meetings of the stockholders, every registered holder
of Common Stock shall be entitled to vote and shall have
one vote for each share standing in his name on the books
of the Corporation on any record date fixed for such
purpose or, if no such date be fixed, on the date of such
meeting, and the holders of Cumulative Preferred Stock
shall have no right to vote except as provided
hereinafter in this Article or in accordance with
subdivision (1) of this Article. Each present and future
stockholder of the Corporation by becoming such thereby
waives, to the full extent permitted by law, any right to
vote for the election of Directors other than as provided
in this subdivision.
If, at any time, dividends on any of the outstanding
shares of Cumulative Preferred Stock shall be in default
in an amount equivalent to four or more full quarterly
dividends, the Cumulative Preferred Stock, voting
separately as a class, shall be entitled to elect the
smallest number of Directors necessary to constitute a
majority of the full Board, which right may be exercised
until all arrears in payment of quarterly dividends on
the Cumulative Preferred Stock shall have been paid, or
deposited in trust for payment on or before the next
succeeding dividend payment date. When all such arrears
have been so paid or deposited in trust (and such arrears
shall be so paid or deposited in trust as soon as lawful
and reasonably practicable out of any assets of the
Corporation available therefor), the Cumulative Preferred
Stock shall be divested of such voting power, but
subject always to the same provisions for the vesting of
such voting power in the Cumulative Preferred Stock in
the case of any future such default or defaults. So long
as the Cumulative Preferred Stock shall have the right so
to elect a majority of the Directors, the holders of the
Common Stock, voting separately as a class, shall be
entitled to vote for and elect the remaining Directors,
and their right to vote for Directors shall be limited
accordingly.
The foregoing right of the Cumulative Preferred
Stock to elect a majority of the Directors of the
Corporation may be exercised at any annual meeting of
shareholders or, within the limitations hereinafter
provided, at a special meeting of stockholders held for
such purpose. If the date upon which such right of the
holders of the Cumulative Preferred Stock shall become
vested shall be less than forty-five days or more than
ninety days preceding the date of the next ensuing annual
meeting of shareholders as fixed by the Bylaws of the
Corporation, the President of the Corporation shall call
a special meeting of the holders of the Cumulative
Preferred Stock and Common Stock to be held not less than
forty-five days and not more than ninety days after the
date upon which such right of the holders of the
Cumulative Preferred Stock shall have been vested for the
purpose of electing a new Board of Directors, of which a
majority shall be elected by a vote of the Cumulative
Preferred Stock and the remainder shall be elected by a
vote of the Common Stock, to serve until the next annual
meeting or until their successors shall be elected and
shall qualify. Notice of such meeting shall be mailed to
each stockholder not less than ten days prior to the
date of such meeting. The term of office of all Directors
of the Corporation shall terminate at the time of any
such meeting held for the purpose of electing a new Board
of Directors, notwithstanding that the term for which
such Directors had been elected shall not then have
expired. In the event that at any meeting at which
holders of the Cumulative Preferred Stock shall be
entitled to elect a majority of the Board of Directors,
a quorum of the holders of such stock shall not be
present in person or by proxy, the holders of the Common
Stock, if a quorum thereof be present, may temporarily
elect the Directors whom the holders of the Cumulative
Preferred Stock are entitled but fail to elect, such
Directors to be designated as having been so elected and
their term of office to expire at such time thereafter as
their successors shall be elected by the holders of the
Cumulative Preferred Stock as herein provided.
If, at the time of any meeting at which holders of
the Cumulative Preferred Stock shall be entitled to elect
a majority of the Directors of the Corporation the number
constituting the full Board of Directors of the
Corporation shall be more than fifteen, such number shall
be automatically reduced to fifteen and the right of the
holders of Cumulative Preferred Stock to elect Directors
shall be to elect a majority of the number of Directors
as so reduced. The holders of the Cumulative Preferred
Stock may at such meeting, prior to the election of such
Directors, amend the Bylaws so as to fix the number of
Directors at fifteen if necessary or desirable in order
to effect such reduction, which number shall not be
increased until the Cumulative Preferred Stock shall be
divested of its right to elect a majority of the
Directors of the Corporation.
Whenever the Cumulative Preferred Stock shall be
entitled to elect a majority of the Board of Directors,
any holder of such stock shall have the right, during
regular business hours, in person or by a duly authorized
representative, to examine and to make transcripts of the
stock records of the Corporation for the Cumulative
Preferred Stock for the purpose of communicating with
other holders of such stock with respect to the exercise
of such right of election.
Whenever the Cumulative Preferred Stock shall be
divested of such voting power, the President of the
Corporation shall, within ten days after delivery to the
Corporation at its principal office of a request to such
effect signed by any holder of Common Stock, call a
special meeting of the holders of the Common Stock to be
held within forty days after the delivery of such request
for the purpose of electing a new Board of Directors to
serve until the next annual meeting or until their
respective successors shall be elected and shall qualify.
If, at any such special meeting, any Director shall not
be re-elected, his term of office shall terminate upon
the election and qualification of his successor,
notwithstanding that the term for which such Director was
originally elected shall not then have expired.
At any annual or special meeting of stockholders
held for the purpose of electing Directors when the
holders of the Cumulative Preferred Stock shall be
entitled to elect a majority of the Board of Directors,
the presence in person or by proxy of the holders of
thirty-five percent (35%) of the outstanding shares of
the Cumulative Preferred Stock shall be required to
constitute a quorum for the election by such class of a
majority of the Board of Directors, and 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 for the election by such class of the
remaining Directors or for the election temporarily by
such class of a majority of the Board of Directors as
herein provided, however, that the majority of the
holders of either such class of stock who are present in
person or by proxy shall have power to adjourn such
meeting for the election of Directors by such class from
time to time without notice other than announcement at
the meeting. No delay or failure by the holders of either
such class of stock to elect the members of the Board of
Directors which such holders are entitled to elect shall
invalidate the election of the remaining members of the
Board of Directors by the holders of the other such class
of stock. At any such election of Directors by the
holders of shares of Cumulative Preferred Stock, each
such holder shall have one vote for each share of such
stock standing in his name on the books of the
Corporation on any record date filed for such purpose or,
if no such date be fixed, on the date on which the
election is held.
If, during any interval between annual meetings of
shareholders for the election of Directors and while the
Cumulative Preferred Stock shall be entitled to elect a
majority of the Directors, the number of Directors in
office who have been elected by the holders of the
Cumulative Preferred Stock or Common Stock, as the case
may be, shall, by reason of resignation, death or
removal, be less than the total number of Directors
subject to election by the holders of shares of such
class, (a) the vacancy or vacancies shall, if permitted
by law, be filled by a majority vote of the remaining
Directors then in office who were elected by such class
or succeeded to a Director so elected, although such
majority be less than a quorum, and (b) if not so filled
within forty days after the creation thereof, the
President of the Corporation shall call a special meeting
of the holders of shares of such class and such vacancy
or vacancies shall be filled at such special meeting.
Any Director may be removed from office by vote of
the holders of a majority of the shares of the class of
stock by which his successor would be elected. A special
meeting of the holders of shares of such class may be
called by a majority vote of the Board of Directors for
the purpose of removing a Director in accordance with the
provisions of this paragraph. The President of the
Corporation shall, in any event, within ten days after
delivery to the Corporation at its principal office of a
request to such effect signed by the holders of at least
five percent (5%) of the outstanding shares of such
class, call a special meeting for such purpose to be held
within forty days after the delivery of such request.
Except as may be mandatorily required by law
regardless of limitations contained in the charter,
holders of Cumulative Preferred Stock shall not be
entitled to receive notice of any meeting of stockholders
at which they are not entitled to vote or consent.
(14) So long as any shares of Cumulative Preferred
Stock are outstanding, the consent of the holders of more
than two-thirds of the Cumulative Preferred Stock at the
time outstanding, given in person or by proxy, either in
writing or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating any one or
more of the following:
(a) Any amendment, alteration or repeal of
any of the provisions of the charter, which affects
adversely the powers, preferences or rights of the
holders of the Cumulative Preferred Stock;
provided, however, that if such amendment,
alteration or repeal affects adversely the powers,
preferences or rights of one or more but not all
series of Cumulative Preferred Stock at the time
outstanding, only the consent of the holders of
more than two-thirds of the total number of
outstanding shares of all series so affected shall
be required; and provided, further, that the
amendment of the provisions of the charter so as to
increase or decrease the authorized amount of the
Cumulative Preferred Stock or so as to authorize or
create, or so as to increase or decrease the
authorized amount of, any new class of stock
ranking on a parity as to dividends or assets with
or any class of stock ranking junior to the
Cumulative Preferred Stock or any security
convertible into any such stock or into Cumulative
Preferred Stock shall not be deemed to affect
adversely the powers, preferences or rights of the
holders of the Cumulative Preferred Stock or any
series thereof, and the right is hereby reserved to
make any such amendment upon the vote prescribed in
subdivision (16) of this Article; or
(b) The authorization or creation, or the
increase in the authorized amount, of any stock of
any class or any security convertible into stock of
any class, ranking prior as to dividends or assets
to the Cumulative Preferred Stock or the issue
(other than upon conversion) of any shares of any
such prior ranking stock more than twelve months
after the date as of which the Corporation was
empowered to create or authorize such prior ranking
stock;
provided, however, that no such consent of the holders of
the Cumulative Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any
such prior stock or convertible security is to be made,
as the case may be, provision is made for the redemption
of all shares of Cumulative Preferred Stock at the time
outstanding or, in the case of any such amendment,
alteration or repeal as to which the consent of less than
all series of the Cumulative Preferred Stock would
otherwise be required, for the redemption of all shares
of the series of Cumulative Preferred Stock the consent
of which would otherwise be required.
(15) So long as any shares of Cumulative Preferred
Stock are outstanding, the consent of the holders of at
least a majority of the Cumulative Preferred Stock at the
time outstanding, given in person or by proxy, either in
writing or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating any one or
more of the following:
(a) The issue of any unsecured notes,
debentures or other securities representing
unsecured indebtedness, or the assumption of any
such unsecured securities, for a purpose other than
the refunding or renewing of outstanding unsecured
securities theretofore issued or assumed by the
Corporation resulting in equal or longer maturities
or the redemption or other retirement of all
outstanding shares of Cumulative Preferred Stock,
if, immediately after such issuance or assumption,
(i) the total principal amount of all unsecured
notes, debentures or other securities representing
unsecured indebtedness issued or assumed by the
Corporation and then outstanding would thereby
exceed twenty percent (20%) of the aggregate of (x)
the total principal amount of all bonds or other
securities representing secured indebtedness issued
or assumed by the Corporation and then outstanding
and (y) the capital stock, premiums thereon and
surplus of the Corporation as then stated on the
books of account of the Corporation, or (ii) the
total principal amount of all unsecured notes,
debentures or other securities representing
unsecured indebtedness issued or assumed by the
Corporation and then outstanding having maturities
of less than ten years would thereby exceed ten
percent (10%) of such aggregate. Payment due upon
the maturity of unsecured debt having an original
single maturity of ten years or more or the payment
due upon the final maturity of any unsecured
serial debt which had original maturities of ten
years or more shall not be regarded for purposes of
clause (ii) of this paragraph as unsecured debt of
a maturity of less than ten years until such
payment is required to be made within three years;
(b) The issue of any additional shares or the
reissue of any reacquired shares of Cumulative
Preferred Stock or any shares of stock of any
class ranking on a parity as to dividends or assets
with the Cumulative Preferred Stock for any purpose
other than to refinance an equal par amount or
stated value of Cumulative Preferred Stock or of
any class of outstanding stock ranking prior to or
on a parity as to dividends or assets with the
Cumulative Preferred Stock, unless the consolidated
gross income of the Corporation and its
subsidiaries (after all taxes including taxes based
on income) for twelve consecutive calendar months
within a period of fifteen calendar months
immediately preceding the calendar month of such
issuance is equal to at least one and one-half
times the aggregate of the annual interest charges
on indebtedness of the Corporation and its
consolidated subsidiaries (excluding interest
charges on indebtedness to be retired by the
application of the proceeds from the issuance of
such shares) and the annual dividend requirements
on all preferred stock (including dividend
requirements on any class of stock ranking prior to
or on a parity with the shares to be issued, as to
dividends or assets), which will be outstanding
immediately after the issuance of such shares. If,
during the period as of which consolidated gross
income is to be determined for the purpose set
forth in this paragraph, the amount, if any,
required to be expended by the Corporation and its
consolidated subsidiaries for property additions
pursuant to a renewal and replacement fund or
similar fund established under any then existing
general indenture or mortgage or deed of trust of
the Corporation shall exceed the amount deducted in
the determination of such consolidated gross income
on account of depreciation and amortization of
electric plant acquisition adjustments, such excess
shall also be deducted in determining such gross
consolidated income;
(c) The issue of any additional shares or the
reissue of any reacquired shares of Cumulative
Preferred Stock or of any shares of stock of any
class ranking on a parity with the Cumulative
Preferred Stock, as to dividends or assets for any
purpose other than to refinance an equal par amount
or stated value of Cumulative Preferred Stock or of
any class of outstanding stock ranking prior to or
on a parity as to dividends or assets with the
Cumulative Preferred Stock unless the aggregate of
the junior stock equity (as defined in subdivision
(10) of this Article), shall be not less than the
aggregate amount payable upon involuntary
liquidation, dissolution or winding up of the
affairs of the Corporation to the holders of all
shares of the Cumulative Preferred Stock and of any
shares of stock of any class ranking prior thereto,
or on a parity as to dividends and assets with the
Cumulative Preferred Stock to be outstanding
immediately after such proposed issue, excluding
from such computation all indebtedness and stock to
be retired through such proposed issue. If for the
purposes of meeting the foregoing requirement, it
shall have been necessary to take into
consideration any of the consolidated earned
surplus of the Corporation and its subsidiaries,
the Corporation shall not thereafter pay any
dividends on or make any distributions in respect
of, or purchase or otherwise acquire for value,
shares of stock of the Corporation of any class
ranking junior to the Cumulative Preferred Stock
which would result in reducing said junior stock
equity to an amount less than the amount payable on
involuntary liquidation of the Corporation with
respect to all shares of the Cumulative Preferred
Stock and all shares ranking prior to or on a
parity with the Cumulative Preferred Stock as to
dividends or assets, at the time outstanding; or
(d) The sale or other disposition of all or
substantially all of the assets of the Corporation
or the consolidation or merger of the Corporation;
provided, however, that except as may be
mandatorily required by law regardless of
limitations contained in the charter, no such
consent shall be required with respect to (i) a
sale or other disposition of all or substantially
all of the assets of the Corporation or a
consolidation or merger of the Corporation if such
sale, other disposition, consolidation or merger,
or the issuance or assumption of all securities to
be issued or assumed in connection therewith, shall
have been ordered or approved under the Public
Utility Holding Company Act of 1935 or (ii) a sale
or other disposition of all or substantially all of
the assets of the Corporation to a subsidiary of
the Corporation or a consolidation or merger of the
Corporation with a subsidiary of the Corporation if
none of the powers, preferences or rights of the
holders of the Cumulative Preferred Stock will be
adversely affected thereby, and if none of the
property or business of the Corporation will
thereby become subject to the lien of any mortgage,
deed of trust or other encumbrance, and if the
company resulting from or surviving such sale,
other disposition, consolidation or merger will be
authorized to carry on the business then being
conducted by the Corporation and will have
authorized or outstanding, after such sale, other
disposition, consolidation or merger, no stock of
any class or other securities ranking prior to or
on a parity with the Cumulative Preferred Stock, or
securities convertible into any such stock or
securities, except the same number of shares of
stock and the same amount of other securities with
the same powers, preferences and rights as the
stock and securities of the Corporation authorized
and outstanding immediately preceding such sale,
other disposition, consolidation or merger, and if
each holder of Cumulative Preferred Stock at the
time of such sale, other disposition, consolidation
or merger will receive the same number of shares,
with the same powers, preferences and rights, of
the resulting or surviving company as he held of
the Cumulative Preferred Stock; provided, however,
that no such consent of the holders of the
Cumulative Preferred Stock shall be required if, at
or prior to the time when the issuance of any such
securities representing unsecured indebtedness or
when the issuance of any such parity stock or
convertible security or any such additional shares
of Cumulative Preferred Stock is to be made, or
when such sale, other disposition, consolidation or
merger is to take effect as the case may be,
provision is made for the redemption of all shares
of Cumulative Preferred Stock at the time
outstanding.
(16) The Corporation reserves the right, subject
only to any requisite vote or consent of the holders of
any other class of stock specifically required by the
provisions of the charter or mandatorily required by law,
to amend or change any and all provisions of the charter
(including a change in the preferences given to any one
or more classes of stock by the charter or an increase or
decrease in the amount of the authorized stock of such
class or classes or an increase or decrease in the par
value thereof) by the vote in favor thereof, given in
person or by proxy at any meeting called for the purpose,
of the holders of a majority of the outstanding shares of
Common Stock. The holders of the Cumulative Preferred
Stock shall have no right to vote or consent with respect
to any such amendment except as specifically provided in
subdivisions (14) and (15) of this Article or in
accordance with subdivision (1) of this Article.
(17) Except when mandatorily required by law and
except as otherwise provided with respect to any
particular series in accordance with the provisions of
subdivision (1) of this Article, whenever shares of two
or more series of the Cumulative Preferred Stock are
outstanding, no particular series of the Cumulative
Preferred Stock shall be entitled to vote or consent as
a separate series on any matter, and all shares of
Cumulative Preferred Stock of all series shall be deemed
to constitute but one class for any purpose for which a
vote or consent of the shareholders by classes may now or
hereafter be required.
(18) No holder of any shares of Cumulative Preferred
Stock of any series shall be entitled as such, as a
matter of right, to purchase or subscribe for any shares
of stock of the Corporation of any class, whether now or
hereafter authorized or whether issued for cash, property
or services or as a dividend or otherwise, or any
securities convertible into shares of stock of the
Corporation or carrying or evidencing any right to
purchase shares of stock of any class.
(19) Any shares of Cumulative Preferred Stock which
are redeemed or retired, except shares retired through
conversion or through the operation of any sinking fund
or redemption or purchase account, shall thereafter have
the status of authorized but unissued shares of
Cumulative Preferred Stock of the Corporation and may
thereafter be reclassified and reissued by the Board of
Directors in the same manner as any other authorized and
unissued shares of Cumulative Preferred Stock.
(20) Subject to the limitations set forth in this
Article, all or any of the shares of stock of the
Corporation of any class and securities convertible into
stock of any class may be issued by the Corporation,
acting through its Board of Directors, without action by
the stockholders, from time to time, for such
consideration, or by way of dividend, in such manner and
upon such terms as may be determined and deemed advisable
from time to time by the Board of Directors. Such
consideration, in the case of shares having a par value,
shall not be less than the par value thereof and, in the
case of securities convertible into shares of stock
having a par value, shall not be less than the par value
of the shares into which such securities are convertible,
except as otherwise permitted by law. Such consideration
may consist of cash, labor done, real and/or personal
property, or the use thereof, and the value of any such
consideration consisting of such labor or property or the
use thereof shall be as determined by the Board of
Directors. All shares of stock so issued, for which the
consideration so fixed has been received by the
Corporation, shall be deemed fully paid stock and shall
not be liable to any further calls or assessments
thereon .
VII.
The Corporation may purchase shares of its stock of
any class, at not exceeding the redemption price
thereof, if any.
VIII.
No contract or other transaction of the Corporation
shall be affected by the fact that any of the directors
of the Corporation are in any way interested in or
connected with any other party to such contract or
transaction, or are themselves parties to such contract
or transaction, provided that at the meeting of the Board
of Directors or of the Committee authorizing or
confirming such contract or transaction, there shall be
present a quorum of directors not so interested or
connected and such contract or transaction shall be
approved by a majority of such quorum, which majority
shall consist of directors not so interested or
connected. Any contract, transaction or act of the
Corporation or of the Board of Directors or of any
Committee which shall be ratified by a majority of a
quorum of the stockholders at any annual meeting or any
special meeting called for such purpose shall be as valid
and as binding as though ratified by every stockholder of
the Corporation.
IN WITNESS WHEREOF, the directors, or a majority of
them, of each of the parties hereto have hereunto set
their hands and affixed their seals and each of the
parties hereto has caused this Agreement and Articles of
Merger to be signed in its name and on its behalf by its
President or one of its Vice Presidents and by its
Secretary or one of its Assistant Secretaries and its
corporate seal to be hereunto affixed and attested by its
Secretary or one of its Assistant Secretaries.
THE POTOMAC EDISON COMPANY
[CORPORATE SEAL]
By PAUL M. HORST, JR.
Paul M. Horst, Jr., Vice President
WILLIAM H. MacMULLEN
William H. MacMullen, Secretary
Attest DALE F. ZIMMERMAN
Assistant Secretary
JOHN ADAMS L.S.
John Adams
CHARLES B. FINCH L.S.
Charles B. Finch
WILLIAM A. LYON L.S.
William A. Lyon
FRANCIS H. MAY, JR. L.S.
Francis H. May, Jr.
FRANCIS J. McALARY L.S.
Francis J. McAlary
CLARENCE F. MICHALIS L.S.
Clarence F. Michalis
<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland and having its
registered office in the Commonwealth of Virginia at 20
South Cameron Street, Winchester, Virginia (hereinafter
called the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 10 075 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 4 625 000 shares without nominal or par
value are Common Stock.
Second: The board of directors of the Corporation on
May 23, 1974 at a meeting duly convened and held adopted
a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and directing that
it be submitted for action thereon to the stockholders of
the Corporation.
Third: That by Waiver and Consent in writing dated
the 25th day of June, 1974, Allegheny Power System, Inc.,
the holder of all 4 125 000 outstanding shares of Common
Stock of the Corporation, being all of the shares that
would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 4 125 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 432 081 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the board of directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
9 575 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 4 125 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes of
stock of the Corporation as increased is 10 075 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 4 625 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
and qualifications, of each class of stock of the
Corporation as increased are as set forth in the Articles
of Incorporation included as part SIXTH of the Agreement
and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, its Executive Vice President and
General Manager, or one of its other Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
June 25 1974.
THE POTOMAC EDISON COMPANY
BY: JOHN M. McCARDELL
John M. McCardell
Executive Vice President
and General Manager
(SEAL)
Attest:
WILLIAM H. MacMULLEN
William H. MacMullen
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland and having its
registered office in the Commonwealth of Virginia at 20
South Cameron Street, Winchester, Virginia (hereinafter
called the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated June 25, 1974, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized capital stock of
the Corporation is 10 575 000 shares, of which 5 450 000
shares of the par value of $100 each are Cumulative
Preferred Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or more series as
provided in Article VI hereof) and 5 125 000 shares
without nominal or par value are Common Stock.
Second: The board of directors of the Corporation on
March 20, 1975, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and directing that
it be submitted for action thereon to the stockholders of
the Corporation
Third: That by Waiver and Consent in writing dated
the 15th day of May, 1975, Allegheny Power System, Inc.,
the holder of all 4 625 000 outstanding shares of Common
Stock of the Corporation, being all of the shares that
would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 4 625 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 431 266 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the board of directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
10 075 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 4 625 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes of
stock of the Corporation as increased is 10 575 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 5 125 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
and qualifications, of each class of stock of the
Corporation as increased are as set forth in the Articles
of Incorporation included as part SIXTH of the Agreement
and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, its Executive Vice President and
General Manager, or one of its other Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
May 20, 1975.
THE POTOMAC EDISON COMPANY
By JOHN M. McCARDELL
John M. McCardell
Executive Vice President
(SEAL) and General Manager
Attest:
WILLIAM H. MacMULLEN
William H. MacMullen
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland and having its
registered office in the Commonwealth of Virginia at 20
South Cameron Street, Winchester, Virginia (hereinafter
called the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated May 20, 1975, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 11 450 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 6 000 000 shares without nominal or par
value are Common Stock.
Second: The board of directors of the Corporation on
March 4, 1976, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and directing that
it be submitted for action thereon to the stockholders of
the Corporation.
Third: That by Waiver and Consent in writing dated
the 14th day of April, 1976, Allegheny Power System,
Inc., the holder of all 4 875 000 outstanding shares of
Common Stock of the Corporation, being all of the shares
that would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 4 875 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 430 122 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the board of directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
10 575 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 5 125 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes of
stock of the Corporation as increased is 11 450 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 6 000 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
and qualifications, of each class of stock of the
Corporation as increased are as set forth in the Articles
of Incorporation included as part SIXTH of the Agreement
and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, its Executive Vice President and
General Manager, or one of its other Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
April 15, 1976.
THE POTOMAC EDISON COMPANY
By JOHN M. McCARDELL
John M. McCardell
(SEAL) Executive Vice President
and General Manager
Attest:
WILLIAM H. MacMULLEN
William H. MacMullen
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary ( Maryland )
Articles of Serial Designation (Virginia)
1. The name of the corporation is
THE POTOMAC EDISON COMPANY
2. Pursuant to the provisions of subdivision (I) of
Article VI of Part SIXTH of the Agreement and
Articles of Merger, dated as of May 31, 1974, as
amended, the Board of Directors of the Corporation,
on June 17, 1976, duly adopted the following
resolution:
RESOLVED that, in accordance with the
provisions of paragraph (I) of Article VI of
the Agreement and Articles of Merger of the
Corporation, there is hereby established a new
series of the Cumulative Preferred Stock as
follows:
(a) The designation of such series is the $9.64
Cumulative Preferred Stock, Series H, and the
number of shares which shall constitute such
series is 150 000;
(b) The annual rate of dividends payable on shares
of such series is $9.64 and the date from
which dividends on all shares of such series
issued prior to the record date for the first
dividend on shares of such series shall be
cumulative is June 24, 1976;
(c) The shares of such series shall be subject to
redemption at the following prices; $111.11
per share, if redeemed on or before June 1,
1981; $108.70 per share, if redeemed
thereafter and on or before June 1, 1986;
$106.29 per share, if redeemed thereafter and
on or before June 1, 1991; and $103.88 per
share, if redeemed after June 1, 1991
(together, in each case, as provided in the
Agreement and Articles of Merger, with an
amount, in the case of each share, computed at
the rate of $9.64 per annum from the date on
which dividends on such share become
cumulative, to and including the date of
redemption, less the aggregate of all
dividends theretofore paid thereon); provided,
however, that before June 1, 1981, no shares
of such series may be redeemed directly or
indirectly with or in anticipation of (i)
moneys borrowed at an interest cost to the
Corporation of less than 9.64% a year or (ii)
the proceeds of Cumulative Preferred Stock
sold by the Corporation at a price per share
(exclusive of accrued dividends) the division
of which into the annual dollar dividend rate
per share of such stock produces a quotient of
less than 9.64%;
(d) The amount payable on shares of such
series in the event of a voluntary
liquidation, dissolution or winding up of
the affairs of the Corporation is an
amount per share equal to the then
current redemption price thereof, and in
the case of an involuntary liquidation,
dissolution or winding up of the affairs
of the Corporation is $100 per share
(together, in each case, as provided in
the Agreement and Articles of Merger,
with an amount, in the case of each
share, computed at the rate of $9.64 per
annum from the date on which dividends on
such share became cumulative, to and
including the date fixed for such
payment, less the aggregate of all
dividends theretofore paid thereon); and
(e) The holders of the shares of Cumulative
Preferred Stock of such series shall not
have any right to convert such shares
into shares of stock of the Corporation
of any class or of any series of any
class.
Dated: June 18, 1976.
THE POTOMAC EDISON COMPANY
BY CHARLES B. FINCH
President
And by CARROLL E. SUMMERS
Assistant Secretary
<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland and having its
registered office in the Commonwealth of Virginia at
20 South Cameron Street, Winchester, Virginia
(hereinafter called the Corporation), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated April 15, 1976, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized capital
stock of the Corporation is 12 325 000 shares,
of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock
(amounting in the aggregate to $545 000 000
par value, issuable in one or more series as
provided in Article VI hereof) and 6 875 000
shares without nominal or par value are Common
Stock.
Second: The board of directors of the Corporation on
March 3, 1977, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and directing that
it be submitted for action thereon to the stockholders of
the Corporation.
Third: That by Waiver and Consent in writing dated
the 13th day of May, 1977, Allegheny Power System, Inc.,
the holder of all 5 375 000 outstanding shares of Common
Stock of the Corporation, being all of the shares that
would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 5 375 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 579 081 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the board of directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
11 450 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 6 000 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes
of stock of the Corporation as increased is 12 325 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 6 875 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, and qualifications, of each class of stock of
the Corporation as increased are as set forth in the
Articles of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, its Executive Vice President and
General Manager, or one of its other Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
May 16, 1977.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Paul M. Horst, Jr.
(SEAL) Vice President
Attest:
WILLIAM H. MACMULLEN
William H. MacMullen
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland and having its
registered office in the Commonwealth of Virginia at 20
South Cameron Street, Winchester, Virginia (hereinafter
called the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated May 16, 1977, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 13 575 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 8 125 000 shares without nominal or par
value are Common Stock.
Second: The board of directors of the Corporation on
February 2, 1978, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and directing that
it be submitted for action thereon to the stockholders
of the Corporation.
Third: That by Waiver and Consent in writing dated
the 17th day of April, 1978, Allegheny Power System,
Inc., the holder of all 6 625 000 outstanding shares of
Common Stock of the Corporation, being all of the shares
that would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 6 625 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 578 672 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the board of directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
12 325 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 6 875 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes of
stock of the Corporation as increased is 13 515 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value and 8 125 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
and qualifications, of each class of stock of the
Corporation as increased are as set forth in the Articles
of Incorporation included as part SIXTH of the Agreement
and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, its Executive Vice President and
General Manager, or one of its other Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
April 17, 1978.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
WILLIAM H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at 20
South Cameron Street, Winchester, Virginia (hereinafter
called the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
V.
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated April 17, 1978, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
The total amount of the authorized
capital stock of the Corporation is 15 075 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 9 625 000 shares without nominal or par
value are Common Stock.
Second: The Board of directors of the Corporation on
December 7, 1978, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
Third: That by Waiver and Consent in writing dated
the 14th day of February, 1979, Allegheny Power System,
Inc., the holder of all 8 125 000 outstanding shares of
Common Stock of the Corporation, being all of the shares
that would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 8 125 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 578 331 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the board of directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all
classes of stock of the Corporation heretofore authorized
was 13 575 000 shares, of which 5 450 000 of the par
value of $100 each were Cumulative Preferred Stock
(amounting in the aggregate to $545 000 000 par value)
and 8 125 000 shares without nominal or par value were
Common Stock
(b) The total number of shares of all classes
of stock of the Corporation as increased is 15 075 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 9 625 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, and qualifications, of each class of stock of
the Corporation as increased are as set forth in the
Articles of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on
its behalf by its President, its Executive Vice President
and General Manager, or one of its other Vice Presidents
and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant
Secretaries on February 16, 1979.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at
20 South Cameron Street, Winchester, Virginia
(hereinafter called the Corporation), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated February 16, 1979, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 15 825 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 10 375 000 shares without nominal or par
value are Common Stock.
Second: The Board of Directors of the Corporation on
January 3, 1980, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
Third: That by Waiver and Consent in writing dated
the 21st day of April, 1980 Allegheny Power System, Inc.,
the holder of all 9 125 000 outstanding shares of Common
Stock of the Corporation, being all of the shares that
would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 9 125 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 576 831 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
15 075 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 9 625 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes
of stock of the Corporation as increased is 15 825 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 10 375 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, and qualifications, of each class of stock of
the Corporation as increased are as set forth in the
Articles of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, its Executive Vice President and
General Manager, or one of its other Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
April 30, 1980.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Serial Designation (Virginia)
1. The name of the Corporation is THE POTOMAC EDISON
COMPANY.
2. Pursuant to the provisions of subdivision (1) of
Article VI of the Articles of Incorporation of the
Corporation included as Part SIXTH of the Agreement
and Articles of Merger, dated as of May 31, 1974,
as amended, the Board of Directors of the
Corporation, on December 11, 1980, duly adopted the
following resolution:
RESOLVED that, in accordance with the
provisions of subdivision (1) of Article VI of the
Articles of Incorporation of the Corporation
included as Part SIXTH of the Agreement and
Articles of Merger, dated as of May 31, 1974, as
amended, there is hereby established a new series
of the Cumulative Preferred Stock as follows:
(a) The designation of such series is the $15.64
Cumulative Preferred Stock, Series I, and the
number of shares which shall constitute such
series is 250 000;
(b) The annual rate of dividends payable on shares
of such series is $15.64 per share, and the
date from which dividends on all shares of
such series issued prior to the record date
for the first dividend on shares of such
series shall be cumulative is December 18,
1980;
(c) The shares of such series shall be subject to
redemption by the Corporation, as a whole or
in part, at any time or from time to time;
provided, however, that before December 1,
1985, no shares of such series may be redeemed
directly or indirectly with or in anticipation
of (i) moneys borrowed at an interest cost to
the Corporation of less than 15.88% a year or
(ii) the proceeds of preferred stock sold by
the Corporation where the division of the
annual dollar dividend rate per share of such
stock by the price received by the corporation
per share of such stock (exclusive of accrued
dividends and after deducting from such price
the amount per share of any compensation paid
by the Corporation for the sale, underwriting
or purchase of such shares by underwriters or
dealers or others performing similar services)
produces a quotient of less than 15.88%. The
redemption price of shares of such series,
other than shares redeemed pursuant to
subparagraph (d) hereof, shall be: $115.64 per
share, if redeemed on or before December 1,
1985; $111.73 per share, if redeemed
thereafter and on or before December 1, 1990;
$107.82 per share, if redeemed thereafter and
on or before December 1, 1995; and $103.91 per
share, if redeemed after December 1, 1995
(together, in each case, as provided in the
Articles of Incorporation, with an amount, in
the case of each share, computed at the rate
of $15.64 per annum from the date on which
dividends on such share became cumulative to
and including the date of redemption, less the
aggregate of all dividends theretofore paid
thereon);
(d) Shares of such series shall be entitled to the
benefits of a sinking fund as follows:
(i) So long as any shares of such series are
outstanding, the Corporation shall, as a
sinking fund for the retirement of shares
of such series, redeem, out of funds
legally available therefore, 10 000
shares of such series on December 1 in
each year, commencing with 1986, in each
case at $100.00 per share (together, in
each case, as provided in the Articles of
Incorporation, with an amount, in the
case of each share, computed at the rate
of $15.64 per annum from the date on
which dividends on such share became
cumulative to and including the date of
redemption, less the aggregate of all
dividends theretofore paid thereon). The
Corporation shall have the option also on
December 1 in each year, commencing with
1986, to redeem up to an additional
10 000 shares of such series in each case
at $100.00 per share (together, in each
case, as provided in the Articles of
Incorporation, with an amount, in the
case of each share, computed at the rate
of $15.64 per annum from the date on
which dividends on such share became
cumulative to and including the date of
redemption, less the aggregate of all
dividends theretofore paid thereon); the
right to redeem such additional shares in
each year shall be noncumulative;
(ii) All redemptions pursuant to this
subparagraph (d) shall be made in
accordance with subdivision (12) of
Article VI of the Articles of
Incorporation. Shares of such series
theretofore redeemed or otherwise
acquired by the Corporation which have
not been previously credited against the
mandatory sinking fund requirement set
forth in this subparagraph (d) may, at
the election of the Corporation, be
credited against, and shall to the extent
thereof relieve the Corporation from, the
mandatory sinking fund requirement set
forth in this subparagraph (d); and
(iii) If the Corporation should for any reason
fail to meet the mandatory sinking fund
requirement set forth in this
subparagraph (d), the mandatory sinking
fund requirement for the next year shall
be increased by the amount of the
deficiency, and, so long as any shares of
such series shall remain outstanding, in
no event shall any dividends, whether in
cash or property, be paid or declared, or
any distribution made, on any stock (in
this subdivision called "junior stock")
of the Corporation ranking junior to the
Cumulative Preferred Stock as to
dividends or assets nor shall any shares
of any junior stock be purchased,
redeemed or otherwise acquired for value
by the Corporation or any subsidiary of
the Corporation unless the Corporation
shall have redeemed, pursuant to this
subparagraph (d), the number of shares of
such series required to have been
theretofore redeemed pursuant to
subparagraph (d) (i) hereof (after
adjustment for any credit pursuant to
subparagraph (d)(ii) hereof but without
reference to any provisions of
subparagraph (d)(i) hereof which limits
the requirement to make such redemption),
but a deficiency in meeting the sinking
fund requirements shall have no other
consequences. The provisions of this
subparagraph (d)(iii) shall not, however,
apply to any dividend or distribution
payable or made in any junior stock, or
to any acquisition of shares of any
junior stock in exchange for shares of
any other junior stock;
(e) The amount payable on shares of such series in
the event of a voluntary liquidation,
dissolution or winding up of the affairs of
the Corporation is an amount per share equal
to the then current redemption price thereof
set forth in subparagraph (c) hereof, and in
the case of an involuntary liquidation,
dissolution or winding up of the affairs of
the Corporation is $100.00 per share
(together, in each case, as provided in the
Articles of Incorporation, with an amount, in
the case of each share, computed at the rate
of $15.64 per annum from the date on which
dividends on such share became cumulative to
and including the date fixed for such payment,
less the aggregate of all dividends
theretofore paid thereon); and
(f) The holders of the shares of Cumulative
Preferred Stock of such series shall not have
any right to convert such shares into shares
of stock of the Corporation of any class or of
any series of any class.
Dated: December 11, 1980
THE POTOMAC EDISON COMPANY
BY JOHN ADAMS
Vice President
And by CARROLL E. SUMMERS
Assistant Secretary
<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at 20
South Cameron Street, Winchester, Virginia (hereinafter
called the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated April 30, 1980, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 17 525 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 12 075 000 shares without nominal or par
value are Common Stock.
Second: The Board of Directors of the Corporation on
January 8, 1981, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
Third: That by Waiver and Consent in writing dated
the 29th day of May, 1981, Allegheny Power System, Inc.,
the holder of all 10 125 000 outstanding shares of Common
Stock of the Corporation, being all of the shares that
would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 10 125 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 826 081 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
15 825 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 10 375 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes
of stock of the Corporation as increased is 17 525 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 12 075 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, and qualifications, of each class of stock of
the Corporation as increased are as set forth in the
Articles of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, or one of its Vice Presidents
and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant
Secretaries on July 20, 1981.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at
20 South Cameron Street, Winchester, Virginia
(hereinafter called the Corporation), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated July 20, 1981, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 18 525 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 13 075 000 shares without nominal or par
value are Common Stock.
Second: The Board of Directors of the Corporation on
April 14, 1982, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
Third: That by Waiver and Consent in writing dated
the 11th day of August, 1982, Allegheny Power System,
Inc., the holder of all 11 225 000 outstanding shares of
Common Stock of the Corporation, being all of the shares
that would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 11 225 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 825 331 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
17 525 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 12 075 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes
of stock of the Corporation as increased is 18 525 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 13 075 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, and qualifications, of each class of stock of
the Corporation as increased are as set forth in the
Articles of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, or one of its Vice Presidents
and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant
Secretaries on August 12, 1982.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at
208 South Loudoun Street, Winchester, Virginia
(hereinafter called the Corporation), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated August 12, 1982, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized capital stock of
the Corporation is 18 850 000 shares, of which 5 450 000
shares of the par value of $100 each are Cumulative
Preferred Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or more series as
provided in Article VI hereof) and 13 400 000 shares
without nominal or par value are Common Stock.
Second: The Board of Directors of the Corporation on
February 7, 1985, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
Third: That by Waiver and Consent in writing dated
June 17, 1985, Allegheny Power System, Inc., the holder
of all 11 775 000 outstanding shares of Common Stock of
the Corporation, being all of the shares that would have
been entitled to vote upon the aforesaid amendment, did
waive the holding of a stockholders meeting for the
purpose of voting upon said amendment and consented and
agreed, by a vote of 11 775 000 shares of said stock, to
the adoption of the aforesaid resolution. The holders of
all 823 831 outstanding shares of Cumulative Preferred
Stock were not entitled to vote on the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
18 525 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 13 075 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all classes
of stock of the Corporation as increased is 18 850 000
shares, of which 5 450 000 shares of the par value of
$100 each are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and 13 400 000
shares without nominal or par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, and qualifications, of each class of stock of
the Corporation as increased are as set forth in the
Articles of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President, or one of its Vice Presidents
and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant
Secretaries on June 20, 1985.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
1. The name of the Corporation is THE POTOMAC EDISON
COMPANY.
2. Pursuant to the provisions of subdivision (1) of
Article VI of the Articles of Incorporation of the
Corporation included as Part SIXTH of the Agreement
and Articles of Merger, dated as of May 31, 1974,
as amended, the Board of Directors of the
Corporation, on September 9, 1986, duly adopted the
following resolution:
RESOLVED that, in accordance with the
provisions of subdivision (1) of Article VI of
the Articles of Incorporation of the
Corporation included as Part SIXTH of the
Agreement and Articles of Merger, dated as of
May 31, 1974, as amended, there is hereby
established a new series of the Cumulative
Preferred Stock as follows:
(a) The designation of such series is the
$7.16 Cumulative Preferred Stock,
Series J, and the number of shares which
shall constitute such series is 300 000;
(b) The annual rate of dividends payable on
shares of such series is $7.16 per share,
and the date from which dividends on all
shares of such series issued prior to the
record date for the first dividend on
shares of such series shall be cumulative
is September 16, 1986;
(c) The shares of such series shall be
subject to redemption by the Corporation,
as a whole or in part, at any time or
from time to time; provided, however,
that before September 1, 1991, no shares
of such series may be redeemed directly
or indirectly with or in anticipation of
(i) moneys borrowed at an interest cost
to the Corporation of less than 7.20% a
year or (ii) the proceeds of preferred
stock sold by the Corporation where the
division of the annual dollar dividend
rate per share of such stock by the price
received by the Corporation per share of
such stock (exclusive of accrued
dividends and after deducting from such
price the amount per share of any
compensation paid by the Corporation for
the sale, underwriting or purchase of
such shares by underwriters or dealers or
others performing similar services)
produces a quotient of less than 7.20%.
The redemption price of shares of such
series, other than shares redeemed
pursuant to subparagraph (d) hereof,
shall be: $107.16 per share, if redeemed
on or before September 1, 1991; $105.37
per share, if redeemed thereafter and on
or before September 1,1996; $103.58 per
share, if redeemed thereafter and on or
before September 1, 2001; $101.79 per
share, if redeemed thereafter and on or
before September 1, 2006; and $100.00
per share, if redeemed after September 1,
2006 (together, in each case, as provided
in the Articles of Incorporation, with an
amount, in the case of each share,
computed at the rate of $7.16 per annum
from the date on which dividends on such
share became cumulative to and including
the date of redemption, less the
aggregate of all dividends theretofore
paid thereon);
(d) Shares of such series shall be entitled to the
benefits of a sinking fund as follows:
(i) So long as any shares of such series are
outstanding, the Corporation shall, as a
sinking fund for the retirement of shares of
such series, redeem, out of funds legally
available therefor, 12,000 shares of such
series on September 1 in each year, commencing
with 1992, in each case at $100.00 per share
(together, in each case, as provided in the
Articles of Incorporation, with an amount, in
the case of each share, computed at the rate
of $7.16 per annum from the date on which
dividends on such share became cumulative to
and including the date of redemption, less the
aggregate of all dividends theretofore paid
thereon). The Corporation shall have the
option also on September 1 in each year,
commencing with 1992, to redeem up to an
additional 12 000 shares of such series in
each case at $100.00 per share (together, in
each case, as provided in the Articles of
Incorporation, with an amount, in the case of
each share, computed at the rate of $7.16 per
annum from the date on which dividends on such
share became cumulative to and including the
date of redemption, less the aggregate of all
dividends theretofore paid thereon); the right
to redeem such additional shares in each year
shall be noncumulative;
(ii) All redemptions pursuant to this
subparagraph (d) shall be made in accordance
with subdivision (12) of Article VI of the
Articles of Incorporation. Shares of such
series theretofore redeemed or otherwise
acquired by the Corporation which have not
been previously credited against the mandatory
sinking fund requirement set forth in this
subparagraph (d) may, at the election of the
Corporation, be credited against, and shall to
the extent thereof relieve the Corporation
from, the mandatory sinking fund requirement
set forth in this subparagraph (d); and
(iii) If the Corporation should for any reason
fail to meet the mandatory sinking fund
requirement set forth in this subparagraph
(d), the mandatory sinking fund requirement
for the next year shall be increased by the
amount of the deficiency, and, so long as any
shares of such series shall remain
outstanding, in no event shall any dividends,
whether in cash or property, be paid or
declared, or any distribution made, on any
stock (in this subdivision called "junior
stock") of the Corporation ranking junior to
the Cumulative Preferred Stock as to dividends
or assets nor shall any shares of any junior
stock be purchased, redeemed or otherwise
acquired for value by the Corporation or any
subsidiary of the Corporation unless the
Corporation shall have redeemed, pursuant to
this subparagraph (d), the number of shares of
such series required to have been theretofore
redeemed pursuant to subparagraph (d)(i)
hereof (after adjustment for any credit
pursuant to subparagraph (d)(ii) hereof but
without reference to any provisions of
subparagraph (d)(i) hereof which limits the
requirement to make such redemption), but a
deficiency in meeting the sinking fund
requirements shall have no other
consequences. The provisions of this
subparagraph (d)(iii) shall not, however,
apply to any dividend or distribution payable
or made in any junior stock, or to any
acquisition of shares of any junior stock in
exchange for shares of any other junior stock;
(e) The amount payable on shares of such series in
the event of a voluntary liquidation,
dissolution or winding up of the affairs of
the Corporation is an amount per share equal
to the then current redemption price thereof
set forth in subparagraph (c) hereof, and in
the case of an involuntary liquidation,
dissolution or winding up of the affairs of
the Corporation is $100.00 per share
(together, in each case, as provided in the
Articles of Incorporation, with an amount, in
the case of each share, computed at the rate
of $7.16 per annum from the date on which
dividends on such share became cumulative to
and including the date fixed for such payment,
less the aggregate of all dividends
theretofore paid thereon); and
(f) The holders of the shares of Cumulative
Preferred Stock of such series shall not have
any right to convert such shares into shares
of stock of the Corporation of any class or of
any series of any class.
Dated: September 9, 1986
THE POTOMAC EDISON COMPANY
By JOHN ADAMS
Vice President
And by CARROLL E. SUMMERS
Assistant Secretary
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
1. The name of the Corporation is THE POTOMAC EDISON
COMPANY.
2. Pursuant to the provisions of Article I of the
Articles of Incorporation of the Corporation
included as Part SIXTH of the Agreement and
Articles of Merger, dated as of May 31, 1974, as
amended, the Board of Directors of the Corporation
has the power to redeem and reclassify shares of
its Cumulative Preferred Stock.
3. Pursuant to said authority, the Board of Directors
on June 26, 1986 approved the redemption of all the
Corporation's outstanding $15.64 Cumulative
Preferred Stock, Series I, on July 11, 1986.
4. All rights pertaining to the $15.64 Cumulative
Preferred Stock, Series I, are cancelled effective
July 11, 1986.
5. The 250 000 shares redeemed constitute authorized
but unissued shares of the same class, but
undesignated as to series.
Dated: September 30, 1986
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
W. H. MacMULLEN
Secretary
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on Downsville Pike, Hagerstown, County
of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at
208 South Loudoun Street, Winchester, Virginia
(hereinafter called the Corporation), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia, that:
First: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated June 20, 1985, of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized
capital stock of the Corporation is 21 450 000
shares, of which 5 450 000 shares of the par
value of $100 each are Cumulative Preferred
Stock (amounting in the aggregate to
$545 000 000 par value, issuable in one or
more series as provided in Article VI hereof)
and 16 000 000 shares without nominal or par
value are Common Stock.
Second: The Board of Directors of the Corporation on
June 4, 1987, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
Third: That by Waiver and Consent in writing dated
the 23rd day of November, 1987, Allegheny Power System,
Inc., the holder of all 13 385 000 outstanding shares of
Common Stock of the Corporation, being all of the shares
that would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 13 385 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 872 310 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
Fourth: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
Fifth: (a) The total number of shares of all classes
of stock of the Corporation heretofore authorized was
18 850 000 shares, of which 5 450 000 of the par value of
$100 each were Cumulative Preferred Stock amounting in
the aggregate to $545 000 000 par value) and 13 400 000
shares without nominal or par value were Common Stock.
(b) The total number of shares of all
classes of stock of the Corporation as
increased is 21 450 000 shares, of which
5 450 000 shares of the par value of $100 each
are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and
16 000 000 shares without nominal or par value
are Common Stock.
(c) The preferences, conversion and
other rights, voting powers, restrictions,
limitations as to dividends, and
qualifications, of each class of stock of the
Corporation as increased are as set forth in
the Articles of Incorporation included as
part SIXTH of the Agreement and Articles of
Merger dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President or one of its Vice Presidents and
its corporate seal to be hereunto affixed and attested by
its Secretary or one of its Assistant Secretaries on
December 7, 1987.
THE POTOMAC EDISON COMPANY
By PAUL M. HORST, JR.
Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and Virginia
corporation having its principal office on Downsville
Pike, Hagerstown, Washington County, Maryland and having
its registered office in the Commonwealth of Virginia at
208 South Loudoun Street, Winchester, Virginia
(hereinafter called "the Corporation"), hereby certifies
to the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia that:
FIRST: The Charter of the Corporation is hereby
amended by adding a new Article IX to the Articles
of Incorporation included as part SIXTH of the
Agreement and Articles of Merger dated May 31,
1974:
IX.
No director or officer of the Corporation
shall be liable to the Corporation or its
stockholders for monetary damages for
breach of fiduciary duty as a director or
officer, provided that the foregoing
shall not eliminate or limit liability of
a director or officer (i) to the extent
that it is proved that the person
actually received an improper benefit or
profit in money, property or services,
for the amount of the benefit or profit
in money, property, or services actually
received; or (ii) to the extent that a
judgment or final adjudication adverse to
the person is entered in a proceeding
based on a finding in the proceeding that
the person's action or failure to act,
was the result of active and deliberate
dishonesty and was material to the cause
of action adjudicated in the proceeding;
or (iii) if the officer or director
engaged in willful misconduct or a
knowing violation of the criminal law or
of any federal or state securities law.
SECOND: The Board of Directors of the Corporation
on April 7, 1988, at a meeting duly convened and
held, adopted a resolution in which was set forth
the foregoing amendment to the Charter, declaring
that the said amendment of the Charter was
advisable and in the best interests of the
Corporation and directing that it be submitted for
action thereon to the stockholders of the
Corporation.
THIRD: That by Waiver of Notice and Consent in
writing dated the 20th day of January, 1989,
Allegheny Power System, Inc., the holder of all
13 385 000 outstanding shares of Common Stock of
the Corporation, being all of the shares entitled
to vote upon the aforesaid amendment, did waive the
holdings of a stockholder's meeting for the purpose
of voting upon said amendment and consented and
agreed, by a vote of 13 385 000 shares of said
stock, to the adoption of the aforesaid resolution.
The holders of all 870 830 outstanding shares of
Cumulative Preferred Stock received notice of the
foregoing amendment to the Charter but were not
entitled to vote on the amendment.
FOURTH: The amendment of the Charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
IN WITNESS WHEREOF, The Potomac Edison Company has
caused these presents to be signed in its name and on its
behalf by one of its Vice Presidents and its corporate
seal to be hereunto affixed and attested by its Secretary
or one of its Assistant Secretaries on this 23rd day of
January, 1989 and its Vice President acknowledges that
these Articles of Amendment are the act and deed of The
Potomac Edison Company and, under the penalties of
perjury, that the matters and facts set forth herein with
respect to authorization and approval are true in all
material respects to the best of his knowledge,
information and belief.
THE POTOMAC EDISON COMPANY
By: J. D. LATIMER
J. D. Latimer, Vice President
(SEAL)
Attest:
W. H. MacMULLEN
Secretary
<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a Virginia
corporation having its principal office in the State of
Maryland on 10435 Downsville Pike, Hagerstown, County of
Washington, State of Maryland, and having its registered
office in the Commonwealth of Virginia at 208 South
Loudoun Street, Winchester, Virginia (hereinafter called
the Corporation), hereby certifies to the State
Department of Assessments and Taxation of Maryland and
the State Corporation Commission of the Commonwealth of
Virginia, that:
FIRST: The charter of the Corporation is hereby
amended by striking out Article V, as amended
by Articles of Amendment dated December 7,
1987, of the Articles of Incorporation
included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and
inserting in lieu thereof the following:
V.
The total amount of the authorized capital stock of
the Corporation is 25 450 000 shares, of which
5 450 000 shares of the par value of $100 each are
Cumulative Preferred Stock (amounting in the
aggregate to $545 000 000 par value, issuable in
one or more series as provided in Article VI
hereof) and 20 000 000 shares without nominal or
par value are Common Stock.
SECOND: The Board of Directors of the Corporation on
November 7, 1991, at a meeting duly convened
and held, adopted a resolution in which was
set forth the foregoing amendment to the
charter, declaring that the said amendment of
the charter was advisable and in the best
interests of the Corporation and directing
that it be submitted for action thereon to the
stockholders of the Corporation.
THIRD: That by Waiver and Consent in writing dated
the 20th day of February, 1992, Allegheny
Power System, Inc., the holder of all
15 885 000 outstanding shares of Common Stock
of the Corporation, being all of the shares
that would have been entitled to vote upon the
aforesaid amendment, did waive the holding of
a stockholders meeting for the purpose of
voting upon said amendment and consented and
agreed, by a vote of 15 885 000 shares of said
stock, to the adoption of the aforesaid
resolution. The holders of all 868 580
outstanding shares of Cumulative Preferred
Stock were not entitled to vote on the
amendment.
FOURTH: The amendment of the charter of the
Corporation as hereinabove set forth has been
duly advised by the Board of Directors and
approved and adopted by the stockholders of
the Corporation.
FIFTH: (a) The total number of shares of all classes
of stock of the Corporation heretofore
authorized was 21 450 000 shares, of
which 5 450 000 of the par value of $100
each were Cumulative Preferred Stock
(amounting in the aggregate to
$545 000 000 par value) and 16 000 000
shares without nominal or par value were
Common Stock.
(b) The total number of shares of all classes
of stock of the Corporation as increased
is 25 450 000 shares, of which 5 450 000
shares of the par value of $100 each are
Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value)
and 20 000 000 shares without nominal or
par value are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions,
limitations as to dividends, and
qualifications, of each class of stock of
the Corporation as increased are as set
forth in the Articles of Incorporation
included as part SIXTH of the Agreement
and Articles of Merger dated May 31,
1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has caused
these presents to be signed in its name and on its behalf
by its President or one of its Vice Presidents and its
corporate seal to be hereunto affixed and attested by its
Secretary or one of its Assistant Secretaries on
March 18, 1992.
THE POTOMAC EDISON COMPANY
(SEAL) By ROBERT B. MURDOCK
Vice President
Attest:
DALE F. ZIMMERMAN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
ARTICLES OF AMENDMENT
The Potomac Edison Company, a Maryland and a
Virginia corporation having its principal office in the
State of Maryland on 10435 Downsville Pike, Hagerstown,
County of Washington, State of Maryland, and having its
registered office in the Commonwealth of Virginia at
208 South Loudoun Street, Winchester, Virginia
(hereinafter called the Corporation), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the State Corporation Commission of the
Commonwealth of Virginia, that:
FIRST: The charter of the Corporation is hereby
amended by striking out Article V, as amended by Articles
of Amendment dated March 18, 1992 of the Articles of
Incorporation included as part SIXTH of the Agreement and
Articles of Merger dated May 31, 1974, and inserting in
lieu thereof the following:
V.
The total amount of the authorized capital stock of
the Corporation is 28 450 000 shares, of which
5 450 000 shares of the par value of $100 each are
Cumulative Preferred Stock (amounting in the
aggregate to $545 000 000 par value, issuable in
one or more series as provided in Article VI
hereof) and 23 000 000 shares without nominal or
par value are Common Stock.
SECOND: The Board of Directors of the Corporation
on November 5, 1992, at a meeting duly convened and held,
adopted a resolution in which was set forth the foregoing
amendment to the charter, declaring that the said
amendment of the charter was advisable and in the best
interests of the Corporation and directing that it be
submitted for action thereon to the stockholders of the
Corporation.
THIRD: That by Waiver and Consent in writing dated
the 21st day of December, 1992, Allegheny Power System,
Inc., the holder of all 19 885 000 outstanding shares of
Common Stock of the Corporation, being all of the shares
that would have been entitled to vote upon the aforesaid
amendment, did waive the holding of a stockholders
meeting for the purpose of voting upon said amendment and
consented and agreed, by a vote of 19 885 000 shares of
said stock, to the adoption of the aforesaid resolution.
The holders of all 656 580 outstanding shares of
Cumulative Preferred Stock were not entitled to vote on
the amendment.
FOURTH: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved and
adopted by the stockholders of the Corporation.
FIFTH: (a) The total number of shares of all
classes of stock of the Corporation heretofore authorized
was 25 450 000 shares, of which 5 450 000 of the par
value of $100 each were Cumulative Preferred Stock
(amounting in the aggregate to $545 000 000 par value)
and 20 000 000 shares without nominal or par value were
Common Stock.
(b) The total number of shares of all
classes of stock of the Corporation as
increased is 28 450 000 shares, of which
5 450 000 shares of the par value of $100 each
are Cumulative Preferred Stock (amounting in
the aggregate to $545 000 000 par value) and
23 000 000 shares without nominal or par value
are Common Stock.
(c) The preferences, conversion and other
rights, voting powers, restrictions, limitations as
to dividends, and qualifications, of each class of
stock of the Corporation as increased are as set
forth in the Articles of Incorporation included as
part SIXTH of the Agreement and Articles of Merger
dated May 31, 1974.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its President or one of its Vice Presidents and
its corporate seal to be hereunto affixed and attested
by its Secretary or one of its Assistant Secretaries on
December 29, 1992.
THE POTOMAC EDISON COMPANY
By: J. D. LATIMER
Vice President
(SEAL)
Attest:
DALE. F. ZIMMERMAN
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
1. The name of the corporation is The Potomac Edison
Company.
2. Pursuant to the provisions of Article I of the
Articles of Incorporation of the corporation
included as Part Sixth of the Agreement and
Articles of Merger, dated as of May 31, 1974, as
amended, the Board of Directors of the Corporations
has the power to redeem and reclassify shares of
its Cumulative Preferred Stock.
3. Pursuant to said authority, the Board of Directors
on September 10, 1992, approved the redemption of
all the corporation's outstanding $9.40 Cumulative
Preferred Stock, Series E, on November 20, 1992.
4. All rights to the $9.40 Cumulative Preferred Stock,
Series E, are cancelled effective November 20,
1992.
5. The 50 000 shares redeemed constitute authorized
but unissued shares of the same class, but
undesignated as to series.
Dated: December 29, 1992
THE POTOMAC EDISON COMPANY
By: J. D. LATIMER
Vice President
DALE F. ZIMMERMAN
Secretary
THE POTOMAC EDISON COMPANY
Articles Supplemental (Maryland)
Articles of Amendment (Virginia)
1. The name of the corporation is The Potomac Edison
Company.
2. Pursuant to the provisions of Article I of the
Articles of Incorporation of the corporation
included as Part Sixth of the Agreement and
Articles of Merger, dated as of May 31, 1974, as
amended, the Board of Directors of the Corporations
has the power to redeem and reclassify shares of
its Cumulative Preferred Stock.
3. Pursuant to said authority, the Board of Directors
on September 10, 1992, approved the redemption of
all the corporation's outstanding $9.64 Cumulative
Preferred Stock, Series H, on November 20, 1992.
4. All rights to the $9.64 Cumulative Preferred Stock,
Series H, are cancelled effective November 20,
1992.
5. The 150 000 shares redeemed constitute authorized
but unissued shares of the same class, but
undesignated as to series.
Dated: December 29, 1992
THE POTOMAC EDISON COMPANY
BY: J. D. LATIMER
Vice President
DALE F. ZIMMERMAN
Secretary
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
The Potomac Edison Company, a Maryland and Virginia
corporation, having its principal office at 10435
Downsville Pike, Hagerstown, Maryland 21740 (hereinafter
referred to as the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the Virginia State Corporation Commission
that:
First: The name of the corporation is The
Potomac Edison Company.
Second: Pursuant to the provisions of Article VI
of the Articles of Incorporation of the Corporation
included as Part SIXTH of the Agreement and
Articles of Merger, dated as of May 31, 1974, as
amended, the Board of Directors of the Corporation
has authorized and acquired:
a) 25 954 shares of 4.70% Cumulative Preferred
Stock, Series B through its purchase fund; and
b) 24 000 shares of $7.16 Cumulative Preferred
Stock, Series J through its mandatory sinking fund.
By the terms of Article VI of the Articles of
Incorporation of the Corporation, said shares of
Cumulative Preferred Stock may not be reissued.
Third: The number of authorized shares of the
corporation remaining after the acquisition of the
outstanding shares, itemized by class and series is as
follows:
a) 23 000 000 shares of Common Stock without
nominal or par value;
b) 5 400 046 shares of Cumulative Preferred Stock,
$100 par value consisting of the following series:
1. 63 784 shares of 3.60% Cumulative
Preferred Stock;
2. 100 000 shares of $5.88 Cumulative
Preferred Stock, Series C;
3. 50 000 shares of $7.00 Cumulative
Preferred Stock, Series D;
4. 50 000 shares of $8.32 Cumulative
Preferred Stock, Series F;
5. 100 000 shares of $8.00 Cumulative
Preferred Stock, Series G;
6. 276 000 shares of $7.16 Cumulative
Preferred Stock, Series J; and
7. 4 760 262 shares of undesignated preferred
stock.
Fourth: No amendment to the charter is effected by
the articles supplementary filed in Maryland, their sole
purpose being to record the reduction of authorized
shares resulting from the acquisition of shares that by
the terms of the charter may not be reissued.
Fifth: The reduction in the number of authorized
shares has heretofore been authorized by the Board of
Directors of the Corporation and the Board of Directors
at their meeting on November 3, 1993 duly advised the
adoption of the foregoing articles supplementary and
articles of amendment.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its Vice President and its corporate seal to be
hereunder affixed and attested by its Secretary on this
4th day of November, 1993, and its Vice President
acknowledges that these articles supplementary and
articles of amendment are the act and deed of THE POTOMAC
EDISON COMPANY and, under the penalties of perjury, that
the matters and facts set forth herein are true in all
material respects to the best of his knowledge,
information and belief.
The Potomac Edison Company
By: J. D. LATIMER
James D. Latimer
Vice President
Attest:
DALE F. ZIMMERMAN
Dale F. Zimmerman
Secretary<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
The Potomac Edison Company, a Maryland and Virginia
corporation, having its principal office at 10435
Downsville Pike, Hagerstown, Maryland 21740 (hereinafter
referred to as the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of
Maryland and the Virginia State Corporation Commission
that:
First: The name of the corporation is The Potomac
Edison Company.
Second: Pursuant to the provisions of Article VI
of the Articles of Incorporation of the Corporation
included as Part SIXTH of the Agreement and Articles of
Merger, dated as of May 31, 1974, as amended, the Board
of Directors of the Corporation has authorized and
acquired 12 000 shares of $7.16 Cumulative Preferred
Stock, Series J through its mandatory sinking fund.
By the terms of Article VI of the Articles of
Incorporation of the Corporation, said shares of
Cumulative Preferred Stock may not be reissued.
Third: The number of authorized shares of the
corporation remaining after the acquisition of the
outstanding shares, itemized by class and series is as
follows:
a) 23 000 000 shares of Common Stock without
nominal or par value;
b) 5 388 046 shares of Cumulative Preferred Stock,
$100 par value consisting of the following series:
1. 63 784 shares of 3.60% Cumulative
Preferred Stock;
2. 100 000 shares of $5.88 Cumulative
Preferred Stock, Series C;
3. 50 000 shares of $7.00 Cumulative
Preferred Stock, Series D;
4. 50 000 shares of $8.32 Cumulative
Preferred Stock, Series F;
5. 100 000 shares of $8.00 Cumulative
Preferred Stock, Series G;
6. 264 000 shares of $7.16 Cumulative
Preferred Stock, Series J; and
7. 4 760 262 shares of undesignated preferred
stock.
Fourth: No amendment to the charter is effected by
the articles supplementary filed in Maryland, their sole
purpose being to record the reduction of authorized
shares resulting from the acquisition of shares that by
the terms of the charter may not be reissued.
Fifth: The reduction in the number of authorized
shares has heretofore been authorized by the Board of
Directors of the Corporation and the Board of Directors
at their meeting on September 8, 1994 duly advised the
adoption of the foregoing articles supplementary and
articles of amendment.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its Vice President and its corporate seal to be
hereunder affixed and attested by its Secretary on this
5th day of October, 1994, and its Vice President
acknowledges that these articles supplementary and
articles of amendment are the act and deed of THE POTOMAC
EDISON COMPANY and, under the penalties of perjury, that
the matters and facts set forth herein are true in all
material respects to the best of his knowledge,
information and belief.
The Potomac Edison Company
By: ROBERT B. MURDOCK
Robert B. Murdock, Vice
President
Attest:
DALE F. ZIMMERMAN
Dale F. Zimmerman, Secretary
<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
The Potomac Edison Company, a Maryland and Virginia
corporation, having its principal office at 10435
Downsville Pike, Hagerstown, Maryland 21740-1766
(hereinafter referred to as the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland and the Virginia State Corporation
Commission that:
First: The name of the corporation is The Potomac
Edison Company.
Second: Pursuant to the provisions of Article VI
of the Articles of Incorporation of the Corporation
included as Part SIXTH of the Agreement and Articles of
Merger, dated as of May 31, 1974, as amended, the Board
of Directors of the Corporation has authorized and the
Corporation has acquired:
a) 50 000 shares of $7.00 Cumulative Preferred
Stock, Series D;
b) 50 000 shares of $8.32 Cumulative Preferred
Stock, Series F;
c) 100 000 shares of $8.00 Cumulative Preferred
Stock, Series G; and
d) 254 565 shares of $7.16 Cumulative Preferred
Stock, Series J.
The shares so acquired will be treated as authorized and
undesignated shares of the Corporation's preferred stock.
Third: The number of authorized shares of the
corporation remaining after the acquisition of the
outstanding shares, itemized by class and series is as
follows:
a) 23 000 000 shares of Common Stock without
nominal or par value;
b) 5 388 046 shares of Cumulative Preferred Stock,
$100 par value consisting of the following series:
1. 63 784 shares of 3.60% Cumulative
Preferred Stock;
2. 100 000 shares of $5.88 Cumulative
Preferred Stock, Series C;
3. 9 435 shares of $7.16 Cumulative Preferred
Stock, Series J; and
4. 5 214 827 shares of undesignated preferred
stock.
Fourth: The increase in the number of undesignated
shares has heretofore been authorized by the Board of
Directors of the Corporation and the Board of Directors
at their meeting on May 11, 1995 duly advised the
adoption of the foregoing Articles Supplementary and
Articles of Amendment.
Fifth: That by Waiver and Consent in writing
dated the 14th day of September, 1995, Allegheny Power
System, Inc., the holder of all 22,385,000 outstanding
shares of common stock of the Corporation, being all of
the shares that would have been entitled to vote upon the
aforesaid amendment, did waive the holding of a
stockholders meeting for the purpose of voting upon said
amendment and consented and agreed by a vote of
22 385 000 shares of said stock, to the adoption of the
aforesaid resolution. The holders of all 173 219
outstanding shares of Cumulative Preferred Stock were not
entitled to vote on the amendment.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its Vice President and its corporate seal to be
hereunder affixed and attested by its Assistant Secretary
on this 20th day of October, 1995, and its Vice President
acknowledges that these Articles Supplementary and
Articles of Amendment are the act and deed of THE POTOMAC
EDISON COMPANY and, under the penalties of perjury, that
the matters and facts set forth herein are true in all
material respects to the best of his knowledge,
information and belief.
THE POTOMAC EDISON COMPANY
By: R. A. ROSCHLI
R. A. Roschli, Vice President
Attest:
EUGENE W. McCAULEY, JR.
Eugene W. McCauley, Jr.
Assistant Secretary<PAGE>
THE POTOMAC EDISON COMPANY
Articles Supplementary (Maryland)
Articles of Amendment (Virginia)
The Potomac Edison Company, a Maryland and Virginia
corporation, having its principal office at 10435
Downsville Pike, Hagerstown, Maryland 21740-1766
(hereinafter referred to as the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland and the Virginia State Corporation
Commission that:
First: The name of the corporation is The Potomac
Edison Company.
Second: Pursuant to the provisions of Article VI
of the Articles of Incorporation of the Corporation
included as Part SIXTH of the Agreement and Articles of
Merger, dated as of May 31, 1974, as amended, the Board
of Directors of the Corporation has authorized and the
Corporation has acquired 9,435 shares of $7.16 Cumulative
Preferred Stock, Series J through its mandatory sinking
fund.
By the terms of Article VI of the Articles of
Incorporation, said shares of cumulative preferred stock
may not be reissued.
Third: The number of authorized shares of the
corporation remaining after the acquisition of the
outstanding shares, itemized by class and series is as
follows:
a) 23 000 000 shares of Common Stock without
nominal or par value;
b) 5 378 611 shares of Cumulative Preferred Stock,
$100 par value consisting of the following series:
1. 63 784 shares of 3.60% Cumulative
Preferred Stock;
2. 100 000 shares of $5.88 Cumulative
Preferred Stock, Series C; and
3. 5 214 827 shares of undesignated preferred
stock.
Fourth: No amendment to the charter is effected by
the articles supplementary filed in Maryland, their sole
purpose being to record the reduction of authorized
shares resulting from the acquisition of shares that by
the terms of the charter may be reissued.
Fifth: The reduction in the number of authorized
shares has heretofore been authorized by the Board of
Directors of the Corporation and the Board of Directors
at their meeting on October 5, 1995 duly advised the
adoption of the foregoing Articles Supplementary and
Articles of Amendment.
Sixth: That by Waiver and Consent in writing
dated the 23rd day of October, 1995, Allegheny Power
System, Inc., the holder of all 22,385,000 outstanding
shares of common stock of the Corporation, being all of
the shares that would have been entitled to vote upon the
aforesaid amendment, did waive the holding of a
stockholders meeting for the purpose of voting upon said
amendment and consented and agreed by a vote of
22 385 000 shares of said stock, to the adoption of the
aforesaid resolution. The holders of all 163 784
outstanding shares of Cumulative Preferred Stock were not
entitled to vote on the amendment.
IN WITNESS WHEREOF, THE POTOMAC EDISON COMPANY has
caused these presents to be signed in its name and on its
behalf by its Vice President and its corporate seal to be
hereunder affixed and attested by its Assistant Secretary
on this 23rd day of October, 1995, and its Vice President
acknowledges that these Articles Supplementary and
Articles of Amendment are the act and deed of THE POTOMAC
EDISON COMPANY and, under the penalties of perjury, that
the matters and facts set forth herein are true in all
material respects to the best of his knowledge,
information and belief.
THE POTOMAC EDISON COMPANY
BY: R. A. ROSCHLI
R. A. Roschli
Vice President
Attest:
D. F. ZIMMERMAN
Dale F. Zimmerman
Secretary
BY-LAWS
of
THE POTOMAC EDISON COMPANY
ARTICLE 1.
Definitions, etc.
Section 1.1. For all purposes of these By-laws, unless the
context otherwise requires:
(a) "Charter" shall mean the Articles of Incorporation
included as Part SIXTH of the Agreement and Articles of Merger,
dated as of May 31, 1974, among The Potomac Edison Company, The
Potomac Edison Company of Virginia, Monterey Utilities Corporation,
The Potomac Edison Company of West Virginia and The Potomac Edison
Company of Pennsylvania, as from time to time amended by all
amendments thereto, and all other charter documents of The Potomac
Edison Company, a corporation of the State of Maryland and the
Commonwealth of Virginia.
(b) "Board" shall mean the Board of Directors of the
Corporation.
(c) Whenever reference is made to stockholders present at a
meeting, the reference shall include every stockholder present in
person or by proxy appointed by instrument in writing and subscribed
by such stockholder or by his attorney thereunto authorized; and,
whenever reference is made to action by any stockholder at or in
connection with any meeting, the reference shall include action in
person or by such proxy. No proxy shall be valid after 11 months
from its date, unless otherwise provided in the proxy.
(d) "Stock Book" shall mean a book or list containing the
names, alphabetically arranged, of all stockholders of the
Corporation with their mailing addresses and the respective numbers
and classes of shares of stock held by them.
(e) All references to Articles and Sections are to Articles
and Sections of these By-laws; and the words "herein," "hereof,
"hereby" and "hereunder" and other equivalent words, refer to these
By-laws and not to any particular Article, Section or subdivision.
Section 1.2. Except as otherwise expressly provided by law or
in the Charter any action which might be taken at a meeting of
stockholders, the Board, or any committee, may be taken without a
meeting by a written consent setting forth such action, signed by
all persons who would be entitled to vote at the meeting if it were
held and filed with the minutes of proceedings of the stock holders,
the Board or such committee, as the case may be.
ARTICLE 2.
Meetings of Stockholders
Section 2.1. Annual Meeting. The annual meeting of
stockholders for the election of directors and for the transaction
of such other business as may properly come before it shall be held
on the fourth Wednesday in April in each year, but if that be a
legal holiday under the laws of the state where such meeting is to
be held, then on the next succeeding day not a holiday, at such hour
as may be named in the notice of said meeting.
Section 2.2. Special Meetings. A special meeting of
stockholders may be called at any time by the Chairman of the Board,
if there be one, or by the President, and shall be called by the
Secretary when so ordered by a majority of the directors or upon the
written request, stating the purpose of the meeting, of stockholders
holding of record issued and outstanding shares of stock of the
Corporation entitled to not less than twenty-five per cent of all
the votes entitled to be cast at such meeting.
Section 2.3. Place of Meetings. All meetings of stockholders
shall be held at the principal office of the Corporation in Maryland
or at such other place within the United States as may from time to
time be fixed by the Board and specified in the respective notices
of such meetings or any waivers of notice thereof.
Section 2.4. Notice of Meetings. Except as otherwise
provided by law, notice of each meeting shall be in writing and
signed by the President or a Vice President or the Secretary or an
Assistant Secretary and shall state the purpose for which the
meeting is called and the time and place it is to be held. A copy
shall be served either personally or by mail upon each stockholder
entitled to vote at the meeting not less than 10 nor more than 90
days before the meeting. If mailed, it shall be directed, postage
prepaid, to the stockholder at his address as it appears on the
Stock Book. Except as otherwise expressly provided by law, no
publication or advertisement of any notice of any meeting of stock
holders and no notice of any adjourned meeting of stockholders shall
be required.
Section 2.5. Quorum. Except as otherwise provided by law or
by the Charter, at each meeting of stockholders the holders of
record of a majority in number of the issued and outstanding shares
of stock of the Corporation entitled to vote thereat must be present
to constitute a quorum for the transaction of business. Whether or
not there is a quorum at any meeting, the stockholders present and
entitled to cast a majority of the votes thereat, or in the absence
of all the stockholders any officer entitled to preside or act as
secretary at such meeting, may adjourn the meeting from time to
time. At any such adjourned meeting at which a quorum is present,
any business may be transacted which might have been transacted at
the meeting as originally called.
Section 2.6. Organization. At each meeting of stockholders,
the Chairman of the Board, or, in his absence, the President, or, in
his absence, a Vice President designated by the Chairman of the
Board, or, in the absence of such designation, a chairman chosen by
the stockholders present and entitled to cast a majority of the
votes thereat, shall preside. The Secretary of the Corporation or,
in his absence, an Assistant Secretary, or, if none is present, some
other person designated by the chairman of the meeting, shall act as
secretary of the meeting.
Section 2.7. Voting. Except as otherwise provided by law or
by the Charter, at any meeting of stockholders every stockholder
present shall be entitled to 1 vote for each share of stock entitled
to vote thereat standing in his name on the books of the
Corporation.
(a) at the record date fixed as provided in Section 8.3, or
(b) if no such record date shall have been fixed, then 10
days prior to such meeting;
provided, however, that, except where the transfer books of the
Corporation shall have been closed or such a record date shall have
been so fixed, no share of stock of the Corporation which shall have
been transferred on the books of the Corporation within 20 days next
preceding any election of directors shall be voted on at such
election of directors.
Shares of its own stock owned directly or indirectly by the
Corporation shall not be voted at any meeting and shall not be
counted in determining the total number of outstanding shares
entitled to vote at any given time, but shares of its own stock held
by it in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given
time.
Except as otherwise provided by law or by the Charter, all
matters which shall properly come before any meeting of stockholders
shall be decided by the affirmative vote of stockholders present and
entitled to cast a majority of the votes thereat, a quorum being
present. A stock vote upon any question shall be taken upon a
demand therefor by any stockholder present and entitled to vote.
ARTICLE 3.
Board of Directors
Section 3.1. General Powers. The property, affairs and
business of the Corporation, except as otherwise expressly provided
by law or by the Charter, shall be managed by the Board.
Section 3.2. Number, Election and Term of Office. A Board of
Directors shall be elected at the annual meeting of stockholders,
and, subject to Sections 3.8 and 3.9, each director shall hold
office until the next annual meeting of stockholders and until his
successor shall have been elected and qualified, or until his death,
resignation, disqualification or removal. Except as otherwise
provided herein or in the Charter, directors shall be elected by a
majority of the votes of the stockholders entitled to vote at each
meeting of stockholders for the election of a director or directors.
Directors need not be stockholders. The number of directors shall
be not more than fifteen, but the number of directors may be
increased to any number not exceeding fifteen, or may be decreased
to not less than three, by the affirmative vote of a majority of the
whole Board without a vote of the stockholders. The tenure of
office of a director shall not be affected by any decrease in the
number of directors so made by the Board.
Section 3.3. Meetings. The Board shall hold its first
regular meeting, as soon as practicable after the meeting of the
stockholders at which such Board shall have been elected, for the
purpose of organization and the election of officers, and for the
transaction of such other business as may be required by law or by
these By-laws or designated by the Board. In case such meeting is
not held within 30 days after such meeting of stockholders, it may
be called by any director by giving notice in the manner set forth
in Section 3.5.
The Board by resolution may provide for other regular meetings
and may fix the time and place of such meetings.
Special meetings shall be held whenever called by the Chairman
of the Board or by the President or by a majority of the directors.
Section 3.4. Place of Meetings. The Board may hold its
meetings at such place or places, within or without the State of
Maryland, as the Board from time to time may determine or as may be
designated in waivers of notice thereof signed by all the directors.
Section 3.5. Notice of Meeting. Except as provided in
Section 3.3, notice need not be given of the first regular meeting
of the Board. Notice need not be given of any other regular meeting
of the Board if the time and place of such meeting are specified in
a resolution of the Board prior to the meeting and if notice of the
adoption of such resolution is given, in the manner herein provided
for giving notice of meetings, to each director who was absent from
the meeting at which the resolution was adopted. Except as
otherwise required by law, notice of the time and place of each
other meeting of the Board shall be mailed to each director at his
residence or usual place of business or at such other address as he
may have designated in writing to the Secretary, at least 2 days
before the day of the meeting, or shall be sent to him at such
address by telegram or cablegram, or given personally or by
telephone, at least 24 hours before the time for the meeting.
Notice of a meeting of the Board need not state the purpose thereof,
except as otherwise expressly provided by law or by Section l2.l.
Section 3.6. Quorum and Manner of Acting. Except as
otherwise provided in Section 3.l0, at each meeting of the Board a
majority of the total number of directors, but not less than three
directors, shall constitute a quorum for the transaction of
business, and, except as otherwise provided by law or in the Charter
or in Section 3.10, 4.1, 4.5, 4.6, 5.3, or 12.1, the act of a
majority of the directors present at any such meeting at which a
quorum is present shall be the act of the Board. Whether or not
there is a quorum at a meeting, a majority of the directors who are
present may adjourn the meeting from time to time to a day certain.
No notice of an adjourned meeting need be given.
Any action required or permitted to be taken at a meeting of
the Board may be taken without a meeting if the action is taken by
the whole Board and is evidenced by one or more written consents
describing the action taken, signed by all directors on the Board,
and filed with the minutes or corporate records of Board
proceedings. Members of the Board may participate in a regular or
special meeting of the Board by means of conference telephone or
similar communications equipment by which all persons participating
can simultaneously hear each other. Participation in a meeting by
these communications means constitutes presence in person at the
meeting. The directors shall act only as a Board, and the
individual directors shall have no power as such.
Section 3.7. Organization. At each meeting of the Board, the
Chairman of the Board, if there be one, or, in his absence, the
President or, in his absence, a chairman (who shall be a Vice
President, if any is present) chosen by a majority of the directors
present, shall preside. The Secretary of the Corporation or, in his
absence, an Assistant Secretary or, if none is present, some other
person designated by the chairman of the meeting, shall act as
secretary of the meeting.
Section 3.8. Resignations. Any director may resign at any
time by giving written notice to the Chairman of the Board or to the
Secretary of the Corporation or to the Board. A resignation shall
take effect at the time specified therein and, unless otherwise
specified therein, acceptance of such resignation shall not be
necessary to make it effective.
Section 3.9. Removal of Directors. Except as otherwise
provided by law or by the Charter, any director may be removed,
either with or without cause, at any time, by the affirmative vote
of the holders of record of a majority in number of the issued and
outstanding shares of stock of the Corporation entitled to vote for
the election of directors, at a special meeting of the stockholders
called and held for that purpose.
Section 3.10. Vacancies. Except as otherwise provided by law
or by the Charter, (a) any vacancy occurring in the Board for any
cause other than by reason of an increase in the number of
directors, may be filled by a majority of the remaining members of
the Board, although such majority is less than a quorum, (b) any
vacancy occurring by reason of an increase in the number of
directors may be filled by action of a majority of the entire Board,
and (c) any vacancy occurring in the Board for any cause whatsoever
may be filled by the stockholders entitled to vote upon an election
of directors, at the next annual meeting held, or at the meeting of
stockholders at which such vacancy was created, or at a meeting of
stockholders called for the purpose of filling such vacancy. The
directors so appointed or elected shall, subject to Sections 3.8 and
3.9, hold office until the next annual election of directors and
until their successors have been duly elected and qualified.
Section 3.11. Remuneration. Directors shall be entitled to
receive such remuneration as may be fixed from time to time by
resolutions of the Board, in the form of payment of a fixed sum per
month or of fees for attendance at meetings of the Board and
committees thereof, or both. Directors shall also be entitled to be
reimbursed for expenses incurred in attending any meeting or
otherwise in connection with their attention to the affairs of the
Corporation. Nothing herein shall preclude any director from serving
in any other capacity or receiving compensation for such service.
ARTICLE 4.
Executive and Other Committees
Section 4.1. General Powers and Membership. The Board, by
resolution adopted by a majority of the whole Board, may elect from
its members, an Executive Committee and one or more other
committees, each consisting of not less than 3 and not more than 5
members. Unless otherwise expressly provided by law or by the
Charter or by resolution of the Board, the Executive Committee shall
have all the powers of the Board (except the power to appoint or
remove a member of the Executive Committee or other committee, to
fill vacancies in the Board, to remove an officer appointed by the
Board, to alter, amend or repeal these By-laws, to declare
dividends, to issue stock or to recommend to stock holders any
action requiring stockholders' approval) when the Board is not in
session, and each other committee shall have such powers as the
Board shall confer. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or
not they constitute a quorum, may appoint a member of the Board to
act in the place of such absent member. In so far as the rights of
third parties shall not be affected thereby, all action by any
committee shall be subject to revision and alteration by the Board.
Section 4.2. Organization. Unless otherwise provided by
resolution of the Board, a chairman chosen by each committee shall
preside, and the Secretary of the Corporation shall act as
secretary, at all meetings of each committee thereof. In the
absence of the Secretary, the chairman of the meeting shall
designate an Assistant Secretary, or, if none is present, some other
person, to act as secretary of the meeting.
Section 4.3. Meetings. Each committee may determine the time
and place, and the method of calling, its meetings and the conduct
of its proceedings. Any action required or permitted to be taken at
a meeting of the members of the Executive or any other committee may
be taken without a meeting if the action is taken by the whole
committee and is evidenced by one or more written consents
describing the action taken, signed by all members of the committee,
and filed with the minutes or corporate records of committee
proceedings. Members of any committee may participate in a regular
or special meeting of such committee by means of conference
telephone or similar communications equipment by which all persons
participating can simultaneously hear each other. Participation in
a meeting by these communications means constitutes presence in
person at the meeting.
Section 4.4. Quorum and Manner of Acting. Except as
otherwise provided in Section 4.1, a majority of the members at any
meeting of a committee shall constitute a quorum for the transaction
of business, and the act of a majority of the members present at any
such meeting at which a quorum is present shall be the act of such
committee. The committees shall keep minutes of their proceedings
and shall report the same to the Board at the meeting of the Board
next ensuing. The members of each committee shall act only as a
committee, and the individual members shall have no power as such.
Section 4.5. Removal. Any member of any committee may be
removed, either with or without cause, at any time, by resolution
adopted by a majority of the whole Board.
Section 4.6. Vacancies. Any vacancy in any committee shall
be filled in the manner prescribed for the regular election of the
members of that committee.
ARTICLE 5.
Officers
Section 5.1. Election, Term of Office and Qualifications.
The Board shall elect annually from its membership a Chairman of the
Board. It shall also elect annually a President, a Controller, a
Secretary and a Treasurer, and may elect one or more Vice Presidents
(including an Executive Vice President) and any other officers whose
appointment shall not be delegated as provided in Section 5.2. Each
officer shall, subject to Sections 5.3 and 5.4, hold office until
the next annual election and until his successor is chosen and
qualified. One person may hold any two or more offices, except
those of President and Vice President. No instrument shall be
executed, acknowledged or verified by the same individual in more
than one such capacity if such instrument is required by law, the
Charter, or these By-laws to be executed, acknowledged or verified
by two or more officers. The executive officers of the Corporation
shall be the Chairman of the Board, the President, the Vice
Presidents, the Controller, the Secretary and the Treasurer.
Section 5.2. Other Officers. The Board may authorize any
executive officer or committee to appoint such other officers or
agents as the Board or the appointing officer or committee may deem
advisable, including one or more Assistant Treasurers and one or
more Assistant Secretaries, each of whom shall hold office for such
period, have such powers and perform such duties as are provided
herein or as the Board or his appointing officer or committee may
from time to time determine. Any such officer, if required by the
Board or by his appointing officer or committee, shall give bond for
the faithful discharge of his duty in such sum and with such surety
as the Board or his appointing officer or committee shall require.
Section 5.3. Removal. Any officer may be removed, either
with or without cause, at any time, by resolution adopted by a
majority of the whole Board or by the officer or committee by whom
he shall have been appointed, or by any officer or committee upon
whom the power of removal has been conferred by resolution adopted
by a majority of the whole Board.
Section 5.4. Resignations. Any officer may resign at any
time by giving written notice to the President or to the Secretary
or to the Board. A resignation shall take effect at the time
specified therein and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
Section 5.5. Vacancies. A vacancy in any office may be
filled in the manner prescribed for regular election or appointment
to that office.
Section 5.6. Chairman of the Board. The Chairman of the
Board shall be the chief executive officer of the Corporation and
shall have general supervision of the business of the Corporation
and over its officers, subject, however, to the control of the
Board. He may execute, in the name of the Corporation, deeds,
mortgages, bonds, contracts and other instruments authorized by the
Board; and, in general, shall have all powers and duties incident to
the office and such others as from time to time may be given him by
the Board or by any committee thereunto authorized.
He shall, unless otherwise directed by the Board or by any
committee thereunto authorized, attend in person or by substitute or
proxy appointed by him, and act and vote in behalf of the
Corporation, at all meetings of the stockholders of any corporation
in which the Corporation holds stock.
Section 5.7. President and Vice Presidents. At the request
of the Chairman of the Board, or in his absence or disability, the
President or any Vice President may perform all the duties of the
Chairman of the Board, and, when so acting, shall have all the
powers of the Chairman of the Board. He may sign and execute, in
the name of the Corporation, deeds, mortgages, bonds, contracts or
other instruments authorized by the Board; may, unless otherwise
directed by the Board or any committee thereunto authorized, attend
in person or by substitute or proxy appointed by him, and act and
vote in behalf of the Corporation, at all meetings of the
stockholders of any corporation in which the Corporation holds
stock; and shall have such other powers and duties as from time to
time may be assigned to him by the Chairman of the Board or by the
Board or by any committee thereunto authorized.
Section 5.8. Controller. The Controller shall have general
charge, supervision and control of the accounts of the Corporation.
He shall supervise and direct the preparation of the construction
and operating budgets of the Corporation; shall cause to be
maintained internal control procedures adequate to safeguard the
assets of the Corporation; shall supervise the preparation of all
official reports made to State or other governmental authorities;
shall, as and when required, furnish to the Board of Directors, or
the Executive Committee thereof, or such executive officer as either
may designate, full and complete statements of account showing the
financial position of the Corporation; shall measure performance
against approved operating plans, and report and interpret results
of operations to all levels of management; and shall have such other
duties incident to his office as may be assigned to him by the
President or by the Board or by any committee thereunto authorized.
Section 5.9. Secretary. The Secretary shall record or cause
to be recorded in books provided for the purpose all the proceedings
of the meetings of the Corporation, including those of the
stockholders, the Board and all committees for which a secretary
shall not have been appointed; shall see that all notices are duly
given in accordance with these By-laws or as required by law; shall
be custodian of the records (other than financial) and of the seal
of the Corporation; and, in general, shall have all powers and
duties incident to the office of Secretary and such others as from
time to time may be assigned to him by the President or by the Board
or by any committee thereunto authorized.
Section 5.10. Assistant Secretaries. At the request of the
Secretary, or in his absence or disability, any Assistant Secretary
may perform all the duties of the Secretary and, when so acting,
shall have all the powers of the Secretary. Each Assistant
Secretary shall perform such other duties as from time to time may
be assigned to him by the President or the Secretary or by the Board
or by any committee thereunto authorized.
Section 5.11. Treasurer. The Treasurer, if required by the
Board, shall give a bond for the faithful discharge of his duty, in
such sum and with such surety as the Board shall require. The
Treasurer shall prepare or cause to be prepared annually a full and
correct statement of the affairs of the Corporation, including a
balance sheet and a financial statement of operations for the
preceding fiscal year, which shall be submitted at the annual
meeting of the stockholders and filed within 20 days thereafter at
the principal office of the Corporation in the State of Maryland.
The Treasurer shall have charge and custody of, and be responsible
for, all funds and securities of the Corporation and shall deposit
or cause to be deposited all such funds and securities in the name
of the Corporation in such depositaries as shall be selected by the
Board, or any committee, officer, or agent authorized by the Board
to make such selection; may receive, and give receipt for, moneys
paid to the Corporation and, subject to the direction of the Board,
or of any committee thereunto authorized, or of the President, pay
out and supervise the disbursement of moneys of the Corporation; and
in general, shall have all powers and duties incident to the office
of Treasurer and such others as from time to time may be assigned to
him by the President or by the Board or by any committee thereunto
authorized.
Section 5.12. Assistant Treasurers. Each Assistant
Treasurer, if required by the Board, shall give bond for the
faithful discharge of his duty, in such sum and with such surety as
the Board shall require. At the request of the Treasurer, or in his
absence or disability, any Assistant Treasurer may perform all the
duties of the Treasurer, and, when so acting, shall have all the
powers of the Treasurer. Each Assistant Treasurer shall perform
such other duties as from time to time may be assigned to him by the
President or the Treasurer or by the Board or by any committee
thereunto authorized.
Section 5.13. Salaries. The compensation of each officer
shall be fixed from time to time by the Board or the Executive
Committee. No officer shall be precluded from receiving such
compensation by reason of the fact that he is also a director of the
Corporation.
ARTICLE 6.
Indemnification of Directors and Officers
Section 6.1. The Corporation shall indemnify any person who
was or is a party or is threatened with being made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, including all
appeals (other than an action, suit or proceeding by or in the right
of the Corporation) by reason of the fact that he is or was a
director, officer or employee of the Corporation, or is or was
serving at the request of the Corporation as a director, officer or
employee of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees),
judgments, decrees, fines, penalties and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not of itself create a
presumption that the person did not act in good faith or in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Corporation or, with respect to any criminal
action, suit or proceeding, that he had reasonable cause to believe
that his conduct was unlawful.
Section 6.2. The Corporation shall indemnify any person who
was or is a party or is threatened with being made a party to any
threatened, pending or completed action, suit or proceeding,
including all appeals, by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer or employee of the Corporation, or is or was
serving at the request of the Corporation as a director, officer or
employee of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the
defense or settlement of such action, suit or proceeding. The
Corporation shall also indemnify any such person against amounts
paid in settlement of such action, suit or proceeding up to the
amount that would reasonably have been expended in his defense
(determined in the manner provided for in Section 6.4) if such
action, suit or proceeding had been prosecuted to a conclusion.
However, indemnification under this Section shall be made only if
the person to be indemnified acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Corporation; and no such indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
have been finally adjudged to be liable for negligence or misconduct
in the performance of his duty to the Corporation unless, and only
to the extent that, the court or body in or before which such
action, suit or proceeding was finally determined, or any court of
competent jurisdiction, shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses or other amounts paid as
such court or body shall deem proper.
Section 6.3. Without limiting the right of any director,
officer or employee of the Corporation to indemnification under any
other Section hereof, if such person has been substantially and
finally successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 6.1 and 6.2 or in
defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
Section 6.4. Any indemnification under Sections 6.1 and 6.2
(unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer or employee is proper in
the circumstances because he has met the applicable standard of
conduct set forth in Sections 6.1 and 6.2. Such determination shall
be made (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who are or were not parties to or threatened
with such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable, if a majority of a quorum of
disinterested directors so directs, by independent legal counsel
(compensated by the Corporation) in a written opinion, or (3) if
there be no disinterested directors, or if a majority of the
disinterested directors, whether or not a quorum, so directs, by the
holders of a majority of the shares entitled to vote in the election
of directors without reference to default or continency which would
permit the holders of one or more classes of shares to vote for the
election of one or more directors.
Section 6.5. Expenses of each person indemnified hereunder
incurred in defending a civil, criminal, administrative or
investigative action, suit, or proceeding (including all appeals) or
threat thereof, may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized
by the Board of Directors, whether a disinterested quorum exists or
not, upon receipt of an undertaking by or on behalf of the director,
officer or employee to repay such expenses unless it shall
ultimately be determined that he is entitled to be indemnified by
the Corporation.
Section 6.6. The indemnification provided by this Article
shall not be deemed exclusive of or in any way to limit any other
rights to which any person indemnified may be or may become entitled
as a matter of law, by the articles, regulations, agreements,
insurance, vote of shareholders or otherwise, with respect to action
in his official capacity and with respect to action in another
capacity while holding such office and shall continue as to a person
who has ceased to be a director, officer or employee and shall inure
to the benefit of the heirs, executors, administrators and other
legal representatives of such person.
Section 6.7. Sections 6.1 through 6.6 of this Article shall
also apply to such other agents of the Corporation as are designated
for such purpose at any time by the Board of Directors.
Section 6.8. If any part of this Article shall be found, in
any action, suit or proceeding, to be invalid or ineffective, the
validity and the effect of the remaining parts shall not be
affected.
Section 6.9. The provisions of this Article shall be
applicable to claims, actions, suits or proceedings made or
commenced after the adoption hereof, whether arising from acts or
omissions to act occurring before or after the adoption hereof.
ARTICLE 7.
Contracts, Checks, Drafts, Bank Accounts, etc.
Section 7.1. Contracts, etc., How Executed. The Board or any
committee thereunto authorized may authorize any officer or officers
or agent or agents of the Corporation to enter into any contract or
execute and deliver any contract or other instrument in the name and
on behalf of the Corporation, and such authority may be general or
confined to specific instances. Unless authorized so to do by the
Board or any committee thereunto authorized, no officer, agent or
employee shall have any power or authority to bind the Corporation
by any contract or engagement or to pledge its credit or to render
it liable pecuniarily for any purpose or to any amount.
Section 7.2. Loans. No loan shall be contracted on behalf of
the Corporation, and no negotiable paper shall be issued in its
name, unless authorized by the Board or any committee thereunto
authorized. Such authority may be general or confined to specific
instances. When so authorized, the officer or officers thereunto
authorized may effect loans and advances at any time for the
Corporation from any bank, trust company or other institution or
from any firm, corporation or individual, and for such loans and
advances may make, execute and delivery promissory notes or other
evidences of indebtedness of the Corporation and, when authorized as
aforesaid, as security for the payment of any and all loans,
advances, indebtedness and liabilities of the Corporation, may
mortgage, pledge, hypothecate or transfer any real or personal
property at any time held by the Corporation and to that end execute
instruments of mortgage or pledge or otherwise transfer such
property.
Section 7.3. Checks, Drafts, etc. All checks, drafts, bills
of exchange or other orders for the payment of money, obligations,
notes, acceptances, or other evidences of indebtedness, bills of
lading, warehouse receipts and insurance certificates issued in the
name of the Corporation, shall be signed or endorsed by such officer
or officers, agent or agents, of the Corporation, and in such
manner, as shall from time to time be determined by resolution of
the Board or any committee thereunto authorized.
Section 7.4. Deposits. Unless otherwise provided by
resolution of the Board or such committee, endorsements for deposit
to the credit of the Corporation in any of its duly authorized
depositaries may be made, without countersignature, by the President
or any Vice President or the Treasurer, or by any other officer or
agent of the Corporation to whom such power shall have been
delegated by the Board or such committee, or may be made by stamped
impression in the name of the Corporation.
Section 7.5. Proxies. Unless otherwise provided by
resolution of the Board or any committee thereunto authorized, the
President or any Vice President may from time to time appoint an
attorney or attorneys or agent or agents, of the Corporation, in the
name and on behalf of the Corporation, to cast the votes which the
Corporation may be entitled to cast as the holder of stock or other
securities in any other corporation, any of whose stock or other
securities may be held by the Corporation, at meetings of the
holders of the stock or other securities of such other corporation,
or to consent in writing, in the name of the Corporation as such
holder, to any action by such other corporation, and may instruct
the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be
executed in the name and on behalf of the Corporation and under its
corporate seal, or other wise, all such written proxies or other
instruments as he may deem necessary or proper in the premises.
ARTICLE 8.
Books and Records
Section 8.1. Place, etc. The Board of Directors may keep the
books and records of the Corporation at such places within or
without the State of Maryland, as it may from time to time
determine. The stock record books and the blank stock certificate
books shall be kept by the Secretary or by a transfer agent or by
any other officer or agent designated by the Board of Directors or
any committee thereunto authorized. The original or a duplicate
stock ledger containing the names and addresses of the stockholders
and the number of shares held by them, respectively, shall be kept
at the principal office or place of business of the Corporation in
the State of Maryland. The original or a certified copy of these
By-laws, as amended from time to time, shall be kept at the
principal office of the Corporation in the State of Maryland.
Section 8.2. Addresses of Stockholders. Each stockholder
shall designate to the Secretary or transfer agent of the
Corporation an address at which notices of meetings and all other
corporate notices may be served upon or mailed to him, and if any
stockholder shall fail to designate such address, corporate notices
may be served upon him by mail directed to him at his last known
post office address.
Section 8.3. Closing of Transfer Books. The Board may, by
resolution, direct that the stock transfer books of the Corporation
be closed for a period not exceeding 20 days preceding the date of
any meeting of the stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when
any change or conversion or exchange of capital stock of the
Corporation shall go into effect, or for a period of not exceeding
20 days in connection with obtaining the consent of stockholders for
any purpose. If the stock transfer books are closed for the purpose
of determining stock holders entitled to notice of or to vote at a
meeting of stockholders, such books shall be closed for at least 10
days immediately preceding such meeting. In lieu of closing the
stock transfer books as aforesaid, the Board may fix in advance a
date as the record date for the determination of the stockholders
entitled to notice of, and to vote at, any such meeting of
stockholders and any adjournment thereof, or entitled to receive
payment of any such dividend, or entitled to any such allotment of
rights, or entitled to exercise the rights in respect of any such
change, conversion or exchange of capital stock of the Corporation,
or entitled to give any such consent, and in each such case such
stockholders and only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting and any adjournment thereof, or to receive
payment of such dividend, or to receive such allotment of rights, or
to exercise such rights, or to give such consent, as the case may
be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid. Such
record date in any case shall be not more than 40 days, and in case
of a meeting of stockholders not less than 10 days, prior to the
date on which the particular action, requiring such determination of
stockholders, is to be taken.
Section 8.4. Examination of Books by Stockholders. The Board
shall have power to determine, from time to time, whether and to
what extent and at what times and places and under what conditions
and regulations the accounts, corporate records, books and documents
of the Corporation, or any of them, shall be open to the inspection
of the stockholders; and no stockholder shall have any right to
inspect any account, corporate record, book or document of the
Corporation, except as conferred by the laws of the State of
Maryland, unless and until authorized so to do by resolution of the
Board or of the stockholders of the Corporation.
ARTICLE 9.
Shares and Their Transfer
Section 9.1. Certificates of Stock. The stock of the
Corporation shall be represented by certificates signed by the
Chairman of the Board or the President or a Vice President and
countersigned by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer and sealed with the seal of the
Corporation, any or all of which may be facsimile, engraved or
printed. When any such certificate is signed by a transfer agent
and by a registrar, the signatures of the officers and the seal upon
such certificate may be facsimiles, engraved or printed. In case
any officer who shall have signed, or whose facsimile signature
shall have been used on, any such certificates shall cease to be
such officer of the Corporation before such certificate is issued,
such certificate may nevertheless be issued by the Corporation with
the same effect as if the person who signed such certificate or
whose facsimile signature shall have been used thereon had not
ceased to be such officer of the Corporation.
Section 9.2. Record, etc. A record shall be kept in the
Stock Book of the name of the person, firm or corporation owning the
stock represented by each certificate for stock of the Corporation
issued, the number and class of shares represented by each such
certificate, and the date thereof, and, in the case of cancellation,
the date of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be cancelled, and no new
certificate or certificates shall be issued in exchange for any
existing certificate until such existing certificate shall have been
so cancelled except in cases provided for in Section 9.6 of this
Article 9. The person in whose name shares of stock stand in the
Stock Book shall be deemed the owner thereof for all purposes as
regards the Corporation.
Section 9.3. Transfer of Shares. Transfers of shares of the
stock of the Corporation shall be made on the books of the
Corporation by the holder of record, or by his attorney thereunto
duly authorized, upon surrender of the certificates for such shares,
but no share shall be transferred until all previous calls thereon
shall have been fully paid.
Section 9.4. Transfer Agents and Registrars. The Board may
appoint one or more transfer agents and registrars for stock of the
Corporation of any class and may require stock certificates to be
countersigned or registered by one or more of such transfer agents
or registrars.
Section 9.5. Lost and Destroyed Certificates. The holder of
record of any certificate of stock who shall claim that such
certificate is lost or destroyed may make an affidavit or
affirmation of that fact in such manner as the Board may require and
give a bond, if required by the Board, in such form and sum and with
such surety as the Board shall require, to indemnify the Corporation
against any claim that may be made against it on account of such
certificate, whereupon one or more new certificates may be issued of
the same tenor and for the same aggregate number of shares as the
certificate alleged to be lost or destroyed. The Board may delegate
authority to administer the provisions of this Section.
ARTICLE 10.
Notice
Section 10.1. Waiver of Notice. No notice of the time, place
or purpose of any meeting of stockholders or directors, or of any
committee, or any publication thereof, whether prescribed by law, by
the Charter or by these By- laws, need be given to any person who
attends the meeting, or who, in writing, executed either before or
after the meeting and filed with the records of the meeting, waives
such notice, and such attendance or waiver shall be deemed
equivalent to notice.
ARTICLE 11.
Miscellaneous
Section 11.1. Fiscal Year. The fiscal year of the
Corporation shall be determined by the Board. In the absence of any
such determination the fiscal year of the Corporation shall be the
calendar year.
Section 11.2. Seal. The seal of the Corporation shall be a
device containing the name of the Corporation, the year of its
organization and the word "Maryland." The corporate seal may be
used by printing, engraving, lithographing, stamping or otherwise
making, placing or affixing, or causing to be printed, engraved,
lithographed, stamped or otherwise made, placed or affixed, upon any
paper or document, by any process whatsoever, an impression,
facsimile, or other reproduction or the Corporation seal.
ARTICLE 12.
Amendments
Section 12.1. These By-laws may be amended or repealed by the
stockholders at any annual meeting, or at any special meeting if
notice of the proposed amendment or new By-laws is included in the
notice of such meeting. Except as otherwise provided by law, these
By-laws may be amended or repealed by the affirmative vote of a
majority of the whole Board given at any meeting if notice of the
proposed amendment or repeal is contained in the notice or waiver of
notice of such meeting. By-laws made, altered or amended by the
Board shall be subject to alteration, amendment or repeal by the
stockholders.
Dated: Amended September 7, 1995.
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