PG&E Corporation
Extract: Charter Amended/Restated (Plain English Desc) from a 8-K on 06/24/2020   Download
SEC Document
SEC Filing
In connection with and as authorized by the Confirmation Order, on June 22, 2020, the Debtors each filed Amended and Restated Articles of Incorporation (the “Amended Articles”) with the Secretary of State of California (the “Secretary of State”) and adopted Amended and Restated Bylaws (the “Amended Bylaws”) substantially in the form filed with the Bankruptcy Court on June 8, 2020 in the Fifth Supplement to the Plan Supplement to the Plan [Docket No. 7841]. Pursuant to section 1400 of the California Corporations Code, as a result of the approval of the Amended Articles and Amended Bylaws by the Confirmation Order, the authority to file the Amended Articles and adopt the Amended Bylaws and to effect the amendments thereunder, and all actions taken pursuant thereto, are authorized and taken with like effect as if authorized and taken by unanimous action of the board of directors and the shareholders of each of the Debtors.

Amended Articles of the Corporation

The Amended Articles of the Corporation amend and restate the articles of incorporation of the Corporation in their entirety. The amendments effected by the Amended Articles of the Corporation include:


increasing the authorized number of shares of common stock to 3,600,000,000 and the authorized number of shares of preferred stock to 400,000,000;


increasing the size of the Corporation Board to consist of nine to fifteen directors until December 31, 2020 and twelve to fifteen directors thereafter;


prohibiting the issuance of any non-voting equity securities to the extent prohibited by section 1123(a)(6) of the Bankruptcy Code; and


establishing the Ownership Restrictions, as defined and described below.

The Amended Articles of the Corporation impose certain restrictions on the transferability and ownership of the Corporation’s capital stock and other interests designated as “stock” of the Corporation by the Corporation Board as disclosed in an SEC filing by the Corporation (such stock and other interest, the “Equity Securities,” and such restrictions on transferability and ownership, the “Ownership Restrictions”) in order to reduce the possibility of an equity ownership shift that could result in limitations on the Corporation’s ability to utilize net operating loss carryforwards and other tax attributes from prior taxable years for federal income tax purposes. Any acquisition of the Corporation’s capital stock that results in a shareholder being in violation of these restrictions may not be valid. The Amended Articles allow the Ownership Restrictions to be waived by the Corporation Board on a case by case basis.

Subject to certain exceptions, the Ownership Restrictions restrict (i) any person or entity (including certain groups of persons) from directly or indirectly acquiring or accumulating 4.75% or more of the Corporation’s outstanding Equity Securities and (ii) the ability of any person or entity (including certain groups of persons) already owning, directly or indirectly, 4.75% or more of the Corporation’s Equity Securities from increasing their proportionate interest in the Corporation’s Equity Securities. Any transferee receiving Equity Securities that would result in a violation of the Ownership Restrictions will not be recognized as a shareholder of the Corporation or entitled to any rights of shareholders, including, without limitation, the right to vote and to receive dividends or distributions, whether liquidating or otherwise, in each case, with respect to the Equity Securities causing the violation.

The Ownership Restrictions will remain in effect until the earliest of (i) the repeal, amendment or modification of section 382 (and any comparable successor provision) of the Internal Revenue Code, in such a way as to render the restrictions imposed by section 382 of the Internal Revenue Code no longer applicable to the Corporation, (ii) the beginning of a taxable year in which the Corporation Board determines that no tax benefits attributable to net operating losses or other tax attributes are available, (iii) the date selected by the Corporation Board if it determines that the limitation amount imposed by section 382 of the Internal Revenue Code as of such date in the event of an “ownership change” of the Corporation (as defined in section 382 of the Internal Revenue Code and Treasury Regulation sections 1.1502-91 et seq.) would not be materially less than the net operating loss carryforwards or “net unrealized built-in loss” (within the meaning of section 382 of the Internal Revenue Code and Treasury Regulation sections 1.1502-91 et seq.) of the Corporation and (iv) the date selected by the Corporation Board if it determines that it is in the best interests of its shareholders for the Ownership Restrictions to be removed or released.