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EX-3.1 — Articles of Incorporation/Organization or By-Laws
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EXHIBIT 3.1
BYLAWS
OF
PINNACLE WEST CAPITAL CORPORATION
(AMENDED AS OF JANUARY 21, 2004)
I. REFERENCES; SENIORITY
1.01. REFERENCES. Any reference herein made to law will be deemed
to refer to the law of the State of Arizona, including any applicable provision
or provisions of Chapters 1-17 and Chapter 23 of Title 10, Arizona Revised
Statutes (or its successor), as at any given time in effect. Any reference
herein made to the Articles will be deemed to refer to the applicable provision
or provisions of the Articles of Incorporation of the Company, and all
amendments thereto, as at any given time on file with the Arizona Corporation
Commission (this reference to that Commission being intended to include any
successor to the incorporating and related functions being performed by that
Commission at the date of the initial adoption of these Bylaws).
1.02. SENIORITY. Except as indicated in Part X of these Bylaws, the
law and the Articles (in that order of precedence) will in all respects be
considered senior and superior to these Bylaws, with any inconsistency to be
resolved in favor of the law and the Articles (in that order of precedence), and
with these Bylaws to be deemed automatically amended from time to time to
eliminate any such inconsistency which may then exist.
1.03. SHAREHOLDERS OF RECORD. Except as otherwise required by law and
subject to any procedure established by the Company pursuant to Arizona Revised
Statutes Section 10-723 (or any comparable successor provision), the word
"shareholder" as used herein shall mean one who is a holder of record of shares
in the Company.
II. SHAREHOLDERS MEETINGS
2.01. ANNUAL MEETINGS. An annual meeting of shareholders shall be held
for the election of directors at such date, time and place, either within or
without the State of Arizona, as may be designated by resolution of the Board of
Directors from time to time. Any other proper business may be transacted at the
annual meeting. A special meeting may be called and held in lieu of an annual
meeting pursuant to the provisions of Section 2.02 below, and the same
proceedings (including the election of directors) may be conducted thereat as at
a regular meeting. Any director elected at any annual meeting, or special
meeting in lieu of an annual meeting, will continue in office until the election
of his or her successor, subject to his or her (a) earlier resignation pursuant
to Section 6.01 below, (b) removal pursuant to Section 3.13 below, or (c) death
or disqualification.
2.02. SPECIAL MEETINGS. Except as otherwise required by law, special
meetings of the shareholders may be held whenever and wherever called by the
Chairman of the Board, the President, or a majority of the Board of Directors,
but such special meetings may not be called by any other person or persons.
Business transacted at any special meeting of shareholders shall be limited to
the purposes stated in the notice.
2.03. NOTICE. Notice of any meeting of the shareholders will be given
as provided by law to each shareholder entitled to vote at such meeting and, if
required by law, to each other shareholder of the Company. Any such notice may
be waived as provided by law.
2.04. RIGHT TO VOTE. For each meeting of the shareholders, the Board of
Directors will fix in advance a record date as contemplated by law, and the
shares of stock and the shareholders "entitled to vote" (as that or any similar
term is herein used) at any meeting of the shareholders will be determined as of
the applicable record date. The Secretary (or in his or her absence an Assistant
Secretary) will see to the making and production of any record of shareholders
entitled to vote or otherwise entitled to notice of shareholders meetings, in
either case which is required by law. Any voting entitlement may be exercised
through proxy, or in such other manner as specifically provided by law, in
accordance with the applicable law. In the event of contest, the burden of
proving the validity of any undated or irrevocable proxy will rest with the
person seeking to exercise the same. A telegram, cablegram, or facsimile
appearing to have been transmitted by a shareholder (or by his or her duly
authorized attorney-in-fact) or other means of voting by telephone or electronic
transmission may be accepted as a sufficiently written and executed proxy if
otherwise permitted by law.
2.05. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS.
(a) Annual Meetings of Shareholders. (1) Nominations of
persons for election to the Board of Directors of the
Company and the proposal of business to be considered
by the shareholders may be made at an annual meeting
of shareholders only (i) pursuant to the Company's
notice of meeting (or any supplement thereto), (ii)
by or at the direction of the Board of Directors or
(iii) by any shareholder of the Company who was a
shareholder at the time the respective notice
provided for in this Section 2.05 is delivered to the
Secretary of the Company, who is entitled to vote at
the meeting and who complies with the notice
procedures set forth in this Section 2.05.
(2) For nominations or other business to be properly
brought before an annual meeting by a shareholder
pursuant to clause (iii) of paragraph (a)(1) of this
Section 2.05, the shareholder must have given timely
notice thereof in writing to the Secretary of the
Company and any such proposed business other than the
nominations of persons for election to the Board of
Directors must constitute a proper matter for
shareholder action. To be timely, a shareholder
notice shall be delivered to the Secretary at the
principal executive offices of the Company not later
than the close of business (a) with respect to
business to be brought before the meeting, on the
ninetieth day or not earlier than the close of
business on the one hundred twentieth day prior to
the first anniversary of the preceding year's annual
meeting (provided, however, that in the event that
the date of the annual meeting has been changed by
more than thirty days from such anniversary date,
notice by the shareholder must be so delivered not
later than the close of business on the tenth day
following the day on which public announcement of the
date of such meeting was mailed or public
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disclosure of the annual meeting was made, whichever
first occurs), and (b) with respect to nominations of
persons to be elected to the Board of Directors, the
one-hundred and eightieth day prior to the date of
the meeting at which the election is to occur. In no
event shall the public announcement of an adjournment
or postponement of an annual meeting commence a new
time period (or extend any time period) for the
giving of a shareholder's notice as described above.
Such shareholder's notice shall set forth: (a) as to
each person whom the shareholder proposes to nominate
for election as a director, all information relating
to such person that is required to be disclosed in
solicitations of proxies for election of directors in
an election contest, or is otherwise required, in
each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Rule 14a-11 thereunder (and such
person's written consent to being named in the proxy
statement as a nominee and to serving as a director
if elected); (b) as to any other business that the
shareholder proposes to bring before the meeting, a
brief description of the business desired to be
brought before the meeting, the text of the proposal
or business (including the text of any resolutions
proposed for consideration and, in the event that
such business includes a proposal to amend the Bylaws
of the Company, the language for the proposed
amendment), the reasons for conducting such business
at the meeting, and any material interest in such
business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made;
and (c) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the
nomination or proposal is made, (i) the name and
address of such shareholder, as they appear on the
Company's books, and of such beneficial owner, (ii)
the class and number of shares of capital stock of
the Company that are owned beneficially and of record
by such shareholder and such beneficial owner, (iii)
a representation that the shareholder is a holder of
record of stock of the Company entitled to vote at
such meeting and intends to appear in person or by
proxy at the meeting to propose such business or
nomination, and (iv) a representation whether the
shareholder or the beneficial owner, if any, intends
or is part of a group that intends (a) to deliver a
proxy statement and/or form of proxy to holders of at
least the percentage of the Company's outstanding
capital stock required to approve or adopt the
proposal or elect the nominee and/or (b) otherwise to
solicit proxies from shareholders in support of such
proposal or nomination. The Company may require any
proposed nominee to furnish such other information as
it may reasonably require to determine the
eligibility of such proposed nominee to serve as a
director of the Company.
(b) Special Meetings of Shareholders. Only such business
shall be conducted at a special meeting of
shareholders as shall have been brought before the
meeting pursuant to the Company's notice of meeting.
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(c) General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this
Section 2.05 shall be eligible to be elected at an
annual or special meeting of shareholders of the
Company to serve as directors and only such business
shall be conducted at a meeting of shareholders as
shall have been brought before the meeting in
accordance with the procedures set forth in this
Section 2.05. Except as otherwise provided by law,
the Chairman of the meeting shall have the power and
duty (a) to determine whether a nomination or any
business proposed to be brought before the meeting
was made or proposed, as the case may be, in
accordance with the procedures set forth in this
Section 2.05 (including whether the shareholder or
beneficial owner, if any, on whose behalf the
nomination or proposal is made solicited (or is part
of a group that solicited) or did not so solicit, as
the case may be, proxies in support of such
shareholder's nominee or proposal in compliance with
such shareholder's representation as required by
clause (a)(2)(c)(iv) of this Section 2.05) and (b) if
any proposed nomination or business was not made or
proposed in compliance with this Section 2.05, to
declare that such nomination shall be disregarded or
that such proposed business shall not be transacted.
(2) For purposes of this Section 2.05, "public
announcement" shall mean disclosure in a press
release reported by the Dow Jones News Service,
Associated Press or comparable national news service
or in a document publicly filed by the Company with
the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
Section 2.05, a shareholder shall also comply with
all applicable requirements of the Exchange Act and
the rules and regulations thereunder with respect to
the matters set forth in this Section 2.05. Nothing
in this Section 2.05 shall be deemed to affect any
rights (a) of shareholders to request inclusion of
proposals in the Company's proxy statement pursuant
to Rule 14a-8 of the Exchange Act or (b) of the
holders of any series of Preferred Stock to elect
directors pursuant to any applicable provisions of
the Articles.
2.06. RIGHT TO ATTEND. Except only to the extent of persons designated
by the Board of Directors or the Chairman of the meeting to assist in the
conduct of the meeting (as referred to in Sections 2.08 and 2.09 below) and
except as otherwise permitted by the Board or such Chairman, the persons
entitled to attend any meeting of shareholders may be confined to (i)
shareholders entitled to vote thereat and other shareholders entitled to notice
of the meeting and (ii) the persons upon whom proxies valid for purposes of the
meeting have been conferred or their duly appointed substitutes (if the related
proxies confer a power of substitution); provided, however, that the Board of
Directors or the Chairman of the meeting may establish rules limiting the number
of persons referred to in clause (ii) as being entitled to attend on behalf of
any shareholder so as to preclude such an excessively large representation of
such shareholder at the meeting as, in the judgment of the Board or such
Chairman, would be unfair to other shareholders represented at the meeting or be
unduly disruptive of the orderly conduct of
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business at such meeting (whether such representation would result from
fragmentation of the aggregate number of shares held by such shareholder for the
purpose of conferring proxies, from the naming of an excessively large proxy
delegation by such shareholder or from employment of any other device). A person
otherwise entitled to attend any such meeting will cease to be so entitled if,
in the judgment of the Chairman of the meeting, such person engages thereat in
disorderly conduct impeding the proper conduct of the meeting in the interests
of all shareholders as a group.
2.07. QUORUM. Except as otherwise provided by law, the Articles or
these Bylaws, at each meeting of shareholders the presence in person or by proxy
of the holders of a majority in voting power of the outstanding shares of stock
entitled to vote at the meeting shall be necessary and sufficient to constitute
a quorum.
2.08. ELECTION INSPECTORS. The Board of Directors, in advance of any
shareholders meeting may appoint an election inspector or inspectors to act at
such meeting (and any adjournment thereof). If an election inspector or
inspectors are not so appointed, the Chairman of the meeting may or, upon the
request of any person entitled to vote at the meeting will, make such
appointment. If any person appointed as an inspector fails to appear or to act,
a substitute may be appointed by the Chairman of the meeting. If appointed, the
election inspector or inspectors (acting through a majority of them if there be
more than one) will determine the number of shares outstanding, the
authenticity, validity and effect of proxies, the credentials of persons
purporting to be shareholders or persons named or referred to in proxies, and
the number of shares represented at the meeting in person and by proxy; they
will receive and count votes, ballots and consents and announce the results
thereof; they will hear and determine all challenges and questions pertaining to
proxies and voting; and, in general, they will perform such acts as may be
proper to conduct elections and voting with complete fairness to all
shareholders. No such election inspector need be a shareholder of the Company.
2.09. ORGANIZATION AND CONDUCT OF MEETINGS. Each shareholders meeting
will be called to order and thereafter chaired by the Chairman of the Board if
there then is one; or, if not, or if the Chairman of the Board is absent or so
requests, then by the President; or if both the Chairman of the Board and the
President are unavailable, then by such other officer of the Company or such
shareholder as may be appointed by the Board of Directors. The Secretary (or in
his or her absence an Assistant Secretary) of the Company will act as secretary
of each shareholders meeting; if neither the Secretary nor an Assistant
Secretary is in attendance, the Chairman of the meeting may appoint any person
(whether a shareholder or not) to act as secretary thereat. After calling a
meeting to order, the Chairman thereof may require the registration of all
shareholders intending to vote in person, and the filing of all proxies, with
the election inspector or inspectors, if one or more have been appointed (or, if
not, with the secretary of the meeting). After the announced time for such
filing of proxies has ended, no further proxies or changes, substitutions or
revocations of proxies will be accepted. If directors are to be elected, a
tabulation of the proxies so filed will, if any person entitled to vote in such
election so requests, be announced at the meeting (or adjournment thereof) prior
to the closing of the election polls.
Absent a showing of bad faith on his or her part, the Chairman of a
meeting will, among other things, have absolute authority to determine the order
of business to be conducted at such
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meeting and to establish rules for, and appoint personnel to assist in,
preserving the orderly conduct of the business of the meeting (including any
informal, or question and answer, portions thereof). Rules, regulations or
procedures regarding the conduct of the business of a meeting, whether adopted
by the Board of Directors or prescribed by the Chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to shareholders of record of the
Company, their duly authorized and constituted proxies (subject to Section 2.06)
or such other persons as the Chairman of the meeting shall determine; (iv)
restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to questions or comments by
participants. Unless and to the extent determined by the Board of Directors or
the Chairman of the meeting, meetings of shareholders shall not be required to
be held in accordance with the rules of parliamentary procedure. Any
informational or other informal session of shareholders conducted under the
auspices of the Company after the conclusion of or otherwise in conjunction with
any formal business meeting of the shareholders will be chaired by the same
person who chairs the formal meeting, and the foregoing authority on his or her
part will extend to the conduct of such informal session.
2.10. VOTING. The number of shares voted on any matter submitted to the
shareholders which is required to constitute their action thereon or approval
thereof will be determined in accordance with applicable law, the Articles, and
these Bylaws, if applicable. No ballot or change of vote will be accepted after
the polls have been declared closed following the ending of the announced time
for voting.
2.11. SHAREHOLDER APPROVAL OR RATIFICATION. The Board of Directors may
submit any contract or act for approval or ratification at any duly constituted
meeting of the shareholders, the notice of which either includes mention of the
proposed submittal or is waived as provided in Section 2.03 above. Except as
otherwise required by law (e.g., Arizona Revised Statutes Section 10-863), if
any contract or act so submitted is approved or ratified by a majority of the
votes cast thereon at such meeting, the same will be valid and as binding upon
the Company and all of its shareholders as it would be if approved and ratified
by each and every shareholder of the Company.
2.12. CONTROL SHARE ACT. The provisions of Section 10-2721 through and
including Section 10-2727 of the Arizona Revised Statutes shall not apply to the
Company.
2.13. ADJOURNMENTS. Any meeting of shareholders, annual or special, may
adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Company may transact any business that might have been
transacted at the original meeting. If the adjournment is for more than one
hundred and twenty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each shareholder of record entitled to vote at the meeting.
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III. BOARD OF DIRECTORS
3.01. MEMBERSHIP. The Board of Directors of the corporation shall
consist of not less then nine (9) nor more than twenty-one (21) shareholders of
the Company or of any parent corporation thereof (except that it shall not be a
requirement that any member of the initial Board of Directors be a shareholder
of the Company or of any parent corporation thereof), and shall be divided into
three classes in the manner provided in the Articles (Art. Fifth). The Board
will have the exclusive power to increase or decrease its size within such
limits. Any vacancy occurring in the Board, whether by reason of death,
resignation, disqualification or otherwise, may be filled by the directors as
contemplated by law and as provided in the Articles (Art. Fifth). Any such
increase in the size of the Board, and the filling of any vacancy created
thereby, will require action by a majority of the whole membership of the Board
as comprised immediately before such increase.
3.02. QUALIFICATIONS. In order to qualify as a director, a person must
be the owner of one or more shares of the capital stock of the Company or of any
parent corporation thereof at the time of assuming office (except as may
otherwise be provided in these Bylaws or in the Articles) and for so long
thereafter as such person remains in office. A person will cease to qualify as a
director if he or she (i) is in good faith determined by a majority of the other
directors then in office to be physically or mentally incapable of competent
performance as a director for a period, starting with inception of the
incapacity, that has extended or is likely to extend for more than six months or
(ii) has failed to attend six successive regular meetings of the Board (as
determined in accordance with Section 3.03 below) unless and to the extent such
failure is waived by a majority of the other directors then in office; however,
disqualification pursuant to clause (i) or (ii) of this sentence will not
preclude the subsequent election or appointment of such person as a director by
the shareholders or the Board if a majority of the directors in office
immediately prior to the submission of such person for election or appointment
shall determine that his or her prior incapacity or principal reason for prior
non-attendance no longer exists. A person will not qualify for election or
appointment as a director, whether initially or on re-election and whether by
the shareholders at their annual meeting or by the Board of Directors as
contemplated in Section 3.01 above, if such person's 72nd birthday occurs on or
has occurred before the date of such election, appointment or re-election. A
person who has been a full-time employee of the Company within twelve months
prior to the date of any election will not qualify for election as a director on
that date unless he or she then remains a full-time employee of the Company or
unless the Board of Directors specifically authorizes the election of such
person (but it is not intended that any such authorization will extend a
person's service on the Board beyond the age limitation set out in the preceding
sentence). A person who has qualified by age or employment status for his or her
most recent election as a director may serve throughout the term for which such
person was elected, notwithstanding the occurrence of his or her 72nd birthday
or cessation of full-time employment by the Company between the date of such
election and the end of such term, subject, however, to his or her otherwise
remaining qualified for such office.
3.03. REGULAR MEETINGS. A regular annual meeting of the directors is to
be held as soon as practicable after the adjournment of each annual shareholders
meeting either at the place of the shareholders meeting or at such other place
as the directors elected at the shareholders meeting may have been informed of
at or before the time of their election. Regular meetings,
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other than the annual ones, may be held at such intervals at such places and at
such times as the Board of Directors may provide.
3.04. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be held whenever and wherever called for by the Chairman of the Board, the
President or the number of directors which would be required to constitute a
quorum.
3.05. NOTICE. No notice need be given of regular meetings of the Board
of Directors. Notice of the time and place (but not necessarily the purpose or
all of the purposes) of any special meeting will be given to each director in
person or by telephone, or via mail, telegram, facsimile, or other electronic
transmission addressed in the manner appearing on the Company's records. Notice
to any director of any such special meeting will be deemed given sufficiently in
advance when (i) if given by mail, the same is deposited in the United States
mail at least four days before the meeting date, with postage thereon prepaid,
(ii) if given by telegram, the same is delivered to the telegraph office for
fast transmittal at least 48 hours prior to the convening of the meeting, (iii)
if given by facsimile or other electronic transmission, the same is received by
the director or an adult member of his or her office staff or household, at
least 24 hours prior to the convening of the meeting, or (iv) if personally
delivered or given by telephone, the same is handed, or the substance thereof is
communicated over the telephone to the director or to an adult member of his or
her office staff or household, at least 24 hours prior to the convening of the
meeting. Any such notice may be waived as provided by law. No call or notice of
a meeting of directors will be necessary if each of them waives the same in
writing or by attendance. Any meeting, once properly called and noticed (or as
to which call and notice have been waived as aforesaid) and at which a quorum is
formed, may be adjourned to another time and place by a majority of those in
attendance.
3.06. QUORUM; VOTING. A quorum for the transaction of business at any
meeting or adjourned meeting of the directors will consist of a majority of
those then in office. Any matter submitted to a meeting of the directors will be
resolved by a majority of the votes cast thereon, except as otherwise required
by these Bylaws (Sections 3.01 and 3.02 above and Section 3.07 below), by law or
by any applicable Article. However, in case of an equality of votes, the
Chairman of the meeting will have a second or deciding vote. Where action by a
majority of the whole membership is required, such requirement will be deemed to
relate to a majority of the directors in office at the time the action is taken.
In computing any such majority, whether for purposes of determining the presence
of a quorum or the adequacy of the vote on any proposed action, any unfilled
vacancies at the time existing in the membership of the Board will be excluded
from the computation.
3.07. EXECUTIVE COMMITTEE. The Board of Directors may, by resolution
adopted by a majority of the whole Board, name three or more of its members as
an Executive Committee. Such Executive Committee will have and may exercise the
powers of the Board of Directors in the management of the business and affairs
of the Company while the Board is not in session, except only as precluded by
law or where action other than by a majority of the votes cast is required by
these Bylaws, or the law (all as referred to in Section 3.06 above), and subject
to such limitations as may be included in any applicable resolution passed by a
majority of the whole membership of the Board. A majority of those named to the
Executive Committee will constitute a quorum.
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3.08. OTHER COMMITTEES. The Board of Directors may designate one or
more additional committees, each committee to consist of one or more of the
directors of the Company. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such committee, to the
extent permitted by law and to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Company, and may authorize the seal of the Company to be affixed to all papers
that may require it.
3.09. COMMITTEE FUNCTIONING. Notice requirements and related waiver
provisions for meetings of the Executive Committee and other committees of the
Board will be the same as those set forth in Section 3.05 above for meetings of
the Board of Directors. Except as provided in the next two succeeding sentences,
a majority of those named to the Executive Committee or any other committee of
the Board will constitute a quorum at any meeting thereof (with the effect of
departure of committee members from a meeting and the computation of a majority
of committee members to be in accordance with the applicable policies of Section
3.06 above), and any matter submitted to a meeting of any such committee will be
resolved by a majority of the votes cast thereon. No distinction will be made
among ex-officio or other members of any such committee for quorum, voting or
other purposes, except that the membership of any committee (including the
Executive Committee), in performing any function vested in it as herein
contemplated, may be deemed to exclude any officer or employee of the Company,
in either case, or other person having a direct or indirect personal interest in
any proposed exercise of such function, whose exclusion for that purpose is
deemed appropriate by a majority of the other members of such committee
proposing to perform such function. All committees are to keep regular minutes
of the transactions of their meetings.
3.10. ACTION BY TELEPHONE OR CONSENT. Any meeting of the Board or any
committee thereof may be held by conference telephone or similar communications
equipment as permitted by law, in which case any required notice of such meeting
may generally describe the arrangements (rather than the place) for the holding
thereof, and all other provisions herein contained or referred to will apply to
such meeting as though it were physically held at a single place. Action may
also be taken by the Board or any committee thereof without a meeting if the
members thereof consent in writing thereto as contemplated by law.
3.11. PRESUMPTION OF ASSENT. A director of the Company who is present
at a meeting of the Board of Directors, or of any committee when corporate
action is taken is deemed to have assented to the action taken unless either (i)
the director objects at the beginning of the meeting or promptly on the
director's arrival to holding it or transacting business at the meeting; (ii)
the director's dissent or abstention from the action taken is entered in the
minutes of the meeting; or (iii) the director delivers written notice of the
director's dissent or abstention to the presiding officer of the meeting before
its adjournment or to the Company before 5:00 P.M. on the next business day
after the meeting. The right of dissent or abstention is not available to a
director who votes in favor of the action taken.
3.12. COMPENSATION. By resolution of the Board, the directors may be
paid their expenses, if any, of attendance at each meeting of the Board of
Directors, or of any committee, and may be paid a fixed sum for attendance at
each such meeting and/or a stated salary as a
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director or committee member. No such payment will preclude any director from
serving the Company in any other capacity and receiving compensation therefor.
3.13. REMOVAL. Any director or the entire Board of Directors may be
removed with or without cause, only at a special meeting of shareholders called
for that purpose, by the affirmative vote of sixty-six and two-thirds percent
(66 2/3%) of the issued and outstanding shares of stock then entitled to vote on
the election of directors, except that if less than the entire Board of
Directors is to be removed, no one of the directors may be removed if the votes
cast against the director's removal would be sufficient to elect the director if
then cumulatively voted at an election for the class of directors of which the
director is a part.
IV. OFFICERS - GENERAL
4.01. ELECTIONS AND APPOINTMENTS. The directors may elect or appoint
one or more of the officers of the Company contemplated in Part V below. Any
such election or appointment will regularly take place at the annual meeting of
the directors, but elections of officers may be held at any other meeting of the
Board. A person elected or appointed to any office will continue to hold that
office until the election or appointment of his or her successor, subject to
action earlier taken pursuant to Section 4.04 or 6.01 below. Any person may hold
more than one office.
4.02. ADDITIONAL APPOINTMENTS. In addition to the officers contemplated
in Part V below, the Board of Directors may create other corporate positions,
and appoint persons thereto, with such authority to perform such duties as may
be prescribed from time to time by the Board of Directors, by the President or
by the superior officer of any person so appointed. Notwithstanding such
additional appointments, only those persons whose offices are described in Part
V are to be considered an officer of the Company unless the resolution or other
Board action appointing such person expressly states that such person is to be
considered an officer of the Company. Each of such persons (in the order
designated by the Board or the superior officer of such person) will be vested
with all of the powers and charged with all of the duties of his or her superior
officer in the event of such superior officer's absence or disability.
4.03. BONDS AND OTHER REQUIREMENTS. The Board of Directors may require
any officer or other appointee to give bond to the Company (with sufficient
surety, and conditioned upon the faithful performance of the duties of his or
her office or position) and to comply with such other conditions as may from
time to time be required of him or her by the Board.
4.04. REMOVAL OR DELEGATION. Provided that a majority of the whole
membership thereof concurs therein, the Board of Directors may remove any
officer of the Company as provided by law and declare his or her office or
offices vacant or abolished or, in the case of the absence or disability of any
officer or for any other reason considered sufficient, may temporarily delegate
his or her powers and duties to any other officer or to any director. Similar
action may be taken by the Board of Directors in regard to appointees designated
pursuant to Section 4.02 above.
4.05. SALARIES. Officer salaries may from time to time be fixed by the
Board of Directors or (except as to his or her own) be left to the discretion of
the Chief Executive Officer
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or the President. No officer will be prevented from receiving a salary by reason
of the fact that he or she is also a director of the Company.
V. SPECIFIC OFFICERS, FUNCTIONS AND POWERS
5.01. CHAIRMAN OF THE BOARD. The Board of Directors may elect a
Chairman to serve as a general executive officer of the Company and, if
specifically designated as such by the Board, as the Chief Executive Officer of
the Company. If elected, the Chairman will preside at all meetings of the
directors and be vested with such other powers and duties as the Board may from
time to time delegate to him or her.
5.02. CHIEF EXECUTIVE OFFICER. Subject to the control of the Board of
Directors exercised as hereinafter provided, the Chief Executive Officer of the
Company will supervise its business and affairs and the performance of their
respective duties by all other officers, by appointees designated pursuant to
Section 4.02 above, and by such additional appointees to such additional
positions (corporate, divisional or otherwise) as the Chief Executive Officer
may designate, with authority on his or her part to delegate the foregoing duty
of supervision to such extent and to such person or persons as may be determined
by the Chief Executive Officer. Except as otherwise indicated from time to time
by resolution of the Board of Directors, its management of the business and
affairs of the Company will be implemented through the office of the Chief
Executive Officer.
5.03. PRESIDENT AND VICE PRESIDENTS. Unless specified to the contrary
by resolution of the Board of Directors, the President will be the Chief
Executive Officer of the Company. In addition to the supervisory functions above
set forth on the part of the Chief Executive Officer or in lieu thereof if a
contrary specification is made by the Board relative to the Chief Executive
Officer, the President will be vested with such powers and duties as the Board
may from time to time designate. Vice Presidents may be elected by the Board of
Directors to perform such duties as may be designated by the Board or be
assigned or delegated to them by their respective superior officers. The Board
may identify (i) one or more Vice Presidents as "Executive" or "Senior" Vice
Presidents and (ii) the President or any Vice President as "General Manager" of
the Company and the title of any Vice President may include words indicative of
his or her particular area of responsibility and authority. Vice Presidents will
succeed to the responsibilities and authority of the President, in the event of
his or her absence or disability, in the order consistent with their respective
titles or regular duties or as specifically designated by the Board of
Directors.
5.04. TREASURER AND SECRETARY. The Treasurer and Secretary each will
perform all such duties normally associated with his or her office (including,
in the case of the Secretary, the giving of notice and the preparation and
retention of minutes of corporate proceedings and the custody of corporate
records and the seal of the Company) as are not assigned to a Vice President of
the Company, along with such other duties as may be designated by the Board or
be assigned or delegated to them by their respective superior officers. The
Board may appoint one or more Assistant Treasurers or Assistant Secretaries,
each of whom (in the order designated by the Board or their respective superior
officers) will be vested with all of the powers and charged with all of the
duties of the Treasurer or the Secretary (as the case may be) in the event of
his or her absence or disability.
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5.05. SPECIFIC POWERS. Except as may otherwise be specifically provided
in a resolution of the Board of Directors, any of the officers referred to in
this Part V will be a proper officer to authenticate records of the Company and
to sign on behalf of the Company any deed, bill of sale, assignment, option,
mortgage, pledge, note, bond, debenture, evidence of indebtedness, application,
consent (to service of process or otherwise), agreement, indenture or other
instrument of importance to the Company. Any such officer may represent the
Company at any meeting of the shareholders or members of any corporation,
association, partnership, joint venture or other entity in which this Company
then has an interest, and may vote such interest in person or by proxy appointed
by him or her, provided that the Board of Directors may from time to time confer
the foregoing authority upon any other person or persons.
VI. RESIGNATIONS AND VACANCIES
6.01. RESIGNATIONS. Any director, committee member or officer may
resign from his or her office at any time by written notice as specified in
accordance with Arizona Revised Statutes Sections 10-807 and 10-843. The
acceptance of a resignation will not be required to make it effective.
6.02. VACANCIES. If the office of any director, committee member or
officer becomes vacant by reason of his or her death, resignation,
disqualification, removal or otherwise, the Board of Directors may choose a
successor to hold office for the unexpired term.
VII. INDEMNIFICATION AND RATIFICATION
7.01. INDEMNIFICATION. In order to induce qualified persons to serve
the Company (and any other corporation, joint venture, partnership, trust or
other enterprise at the request of the Company) as directors and officers, the
Company shall indemnify any and all of its directors and officers, or former
directors and officers to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended.
7.02. RATIFICATION; SPECIAL COMMITTEE. Any transaction involving the
Company, any of its subsidiary corporations or any of its directors, officers,
employees or agents which at any time is questioned in any manner or context
(including a shareholders derivative suit), on the ground of lack of authority,
conflict of interest, misleading or omitted statement of fact or law,
nondisclosure, miscomputation, improper principles or practices of accounting,
inadequate records, defective or irregular execution or any similar ground, may
be investigated and/or ratified (before or after judgment), or an election may
be made not to institute or pursue a claim or legal proceedings on account
thereof or to accept or approve a negotiated settlement with respect thereto
(before or after the institution of legal proceedings), by the Board of
Directors or by a special committee thereof comprised of one or more
disinterested directors (that is, a director or directors who did not
participate in the questioned transaction with actual knowledge of the
questioned aspect or aspects thereof). Such a special committee may be validly
formed and fully empowered to act, in accordance with the purposes and duties
assigned thereto, by resolution or resolutions of the Board of Directors,
notwithstanding (i) the inclusion of Board members who are not disinterested as
aforesaid among those who form a quorum at the meeting or meetings at which one
or more members of such special committee are elected or appointed to the Board
or to such special committee or at which such committee is formed or empowered,
or
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their inclusion among the directors who vote upon or otherwise participate in
taking any of the foregoing actions, or (ii) the taking of any of such actions
by the disinterested members of the Board (or a majority of such members) whose
number is not sufficient to constitute a quorum or a majority of the membership
of the full Board. Any such special committee so comprised will, to the full
extent consistent with its purposes and duties as expressed in such resolution
or resolutions, have all of the authority and powers of the full Board and its
Executive Committee (the same as though it were the full Board and/or its
Executive Committee in carrying out such purposes and duties) and will function
in accordance with Section 3.09 above. No other provisions of these Bylaws which
may at any time appear to conflict with any provisions of this Section 7.02, and
no defect or irregularity in the formation, empowering or functioning of any
such special committee, will serve to impede, impair or bring into question any
action taken or purported to be taken by such committee or the validity of any
such action. Any ratification of a transaction pursuant to this Section 7.02
will have the same force and effect as if the transaction has been duly
authorized originally. Any such ratification, and any election made pursuant to
this Section 7.02 with respect to claims, legal proceedings or settlements, will
be binding upon the Company and its shareholders and will constitute a bar to
any claim or the execution of any judgment in respect of the transaction
involved in such ratification or election.
VIII. SEAL
8.01. FORM THEREOF. The seal of the Company will have inscribed thereon
the name of the Company, the state and year of its incorporation and the words
"SEAL".
IX. STOCK CERTIFICATES
9.01. FORM THEREOF. Each certificate representing stock of the Company
will be in such form conforming to law as may from time to time be approved by
the Board of Directors, and will bear the manual facsimile signatures and seal
of the Company as required or permitted by law.
9.02. OWNERSHIP. The Company will be entitled to treat the registered
owner of any share as the absolute owner thereof and accordingly, will not be
bound to recognize any beneficial, equitable or other claim to, or interest in,
such share on the part of any other person, whether or not it has notice
thereof, except as may expressly be provided by Chapter 8 of Title 47, Arizona
Revised Statutes (or its successor), as at the time in effect, or other
applicable law.
9.03. TRANSFERS. Transfer of stock will be made on the books of the
Company only upon surrender of the certificate therefor, duly endorsed by an
appropriate person, with such assurance of the genuineness and effectiveness of
the endorsement as the Company may require, all as contemplated by Chapter 8 of
Title 47, Arizona Revised Statutes (or its successor), as at the time in effect,
and/or upon submission of any affidavit, other document or notice which the
Company considers necessary.
9.04. LOST CERTIFICATES. In the event of the loss, theft or destruction
of any certificate representing capital stock of this Company, the Company may
issue (or, in the case of any such stock as to which a transfer agent and/or
registrar have been appointed, may direct such transfer agent and/or registrar
to countersign, register and issue) a replacement certificate in lieu of that
- 13 -
alleged to be lost, stolen or destroyed, and cause the same to be delivered to
the owner of the stock represented thereby, provided that the owner shall have
submitted such evidence showing the circumstances of the alleged loss, theft or
destruction, and his or her ownership of the certificate as the Company
considers satisfactory, together with any other factors which the Company
considers pertinent, and further provided that an indemnity agreement and/or
indemnity bond shall have been provided in form and amount satisfactory to the
Company and to its transfer agent and/or registrar, if applicable.
X. EMERGENCY BYLAWS
10.01. EMERGENCY CONDITIONS. The emergency Bylaws provided in this Part
X will be as effective in the event of an emergency as prescribed in Arizona
Revised Statutes Section 10-207.D. To the extent not inconsistent with the
provisions of this Part X, these Bylaws will remain in effect during such
emergency and upon its termination these emergency Bylaws will cease to be
operative.
10.02. BOARD MEETINGS. During any such emergency, a meeting of the
Board of Directors or any of its committees may be called by any officer or
director of the Company. Notice of the time and place of the meeting will be
given by the person calling the same to those of the directors whom it may be
feasible to reach by any available means of communication. Such notice will be
given so much in advance of the meeting as circumstances permit in the judgment
of the person calling the same. At any Board or committee meeting held during
any such emergency, a quorum will consist of a majority of those who could
reasonably be expected to attend the meeting if they were willing to do so, but
in no event more than a majority of those to whom notice of such meeting is
required to have been given as above provided.
10.03. CERTAIN ACTIONS. The Board of Directors, either before or during
any such emergency, may provide and from time to time modify lines of succession
in the event that during such an emergency any or all officers, appointees,
employees or agents of the Company are for any reason rendered incapable of
discharging their duties. The Board, either before or during any such emergency,
may, effective in the emergency, change the head office or designate several
alternative head offices of the Company, or authorize the officers to do so.
10.04. LIABILITY. No director, officer, appointee, employee or agent
acting in accordance with these emergency Bylaws will be liable except for
willful misconduct.
10.05. MODIFICATIONS. These emergency Bylaws will be subject to repeal
or change by further action of the Board of Directors, but no such repeal or
change will modify the provisions of Section 10.04 with respect to action taken
prior to the time of such repeal or change. Any amendment of these emergency
Bylaws may make any further or different provisions that may be practical and
necessary for the circumstances of the emergency.
XI. DIVIDENDS
11.01. DECLARATION. Subject to such restrictions or requirements as may
be imposed by law or the Company's Articles or as may otherwise be binding upon
the Company, the Board of Directors may from time to time declare dividends on
stock of the Company outstanding on the
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dates of record fixed by the Board, to be paid in cash, in property or in shares
of the Company's stock on or as of such payment or distribution dates as the
Board may prescribe.
XII. BUSINESS COMBINATIONS
12.01. DEFINITIONS. In these Bylaws, the following definitions shall
apply:
1. "Affiliate" means a person that directly or
indirectly controls, is controlled by, or is under
common control with a specified person.
2. "Announcement date," when used in reference to any
business combination, means the date of the first
public announcement of the final, definitive proposal
for the business combination.
3. "Associate," when used to indicate a relationship
with any person, means any of the following:
(a) Any corporation or organization of which the
person is an officer, director, or
partnership or is, directly or indirectly,
the beneficial owner of ten percent (10%) or
more of any class or series of shares
entitled to vote or other equity interest;
(b) Any trust or estate in which the person has
a substantial beneficial interest or as to
which the person serves as trustee or
personal representative or in a similar
fiduciary capacity; or
(c) Any relative or spouse of the person, or any
relative of the spouse, residing in the home
of the person.
4. "Beneficial owner," when used with respect to shares
or other securities, includes any person who,
directly or indirectly through any agreement,
arrangement, relationship, understanding, or
otherwise, whether or not in writing, has or shares
the power to vote, or direct the voting of the shares
or securities or has or shares the power to dispose
of or direct the disposition of the shares or
securities, except that:
(a) A person is not deemed the beneficial owner
of shares or securities tendered pursuant to
a tender or exchange offer made by the
person or any of the person's affiliates or
associates until the tendered shares or
securities are accepted for purchase or
exchange; and
(b) A person is not deemed the beneficial owner
of shares or securities with respect to
which the person has the power to vote or
direct the voting arising solely from a
revocable proxy given in response to a proxy
solicitation required to be made and made in
accordance with the applicable rules and
regulations under the Securities Exchange
Act of 1934, as amended, and is not then
reportable under that act on a Schedule 13D
or comparable report.
- 15 -
5. "Beneficial ownership" includes the right to acquire
shares or securities through the exercise of options,
warrants, or rights, the conversion of convertible
securities, or otherwise. The shares or securities
subject to the options, warrants, rights, or
conversion privileges held by a person are deemed to
be outstanding for the purpose of computing the
percentage of outstanding shares or securities of the
class or series owned by the person but are not
deemed to be outstanding for the purpose of computing
the percentage of the class or series owned by any
other person. A person is deemed the beneficial owner
of shares and securities beneficially owned by the
spouse of the person or any relative of the spouse
residing in the home of the person, any trust or
estate in which the person owns ten percent (10%) or
more of the total beneficial interest or serves as
trustee or personal representative, any corporation
or entity in which the person owns ten percent (10%)
or more of the equity and any affiliate of the
person.
6. "Business combination," when used in reference to the
Company and any interested shareholder of the
Company, means any of the following:
(a) Any merger or consolidation of the Company
or any subsidiary of the Company with
either:
(i) The interested shareholder; or
(ii) Any other domestic or foreign
corporation, whether or not itself
an interested shareholder of the
Company, that is, or after the
merger would be, an affiliate or
associate of the interested
shareholder, except that the
foregoing does not include the
merger of a wholly-owned subsidiary
of the Company into the Company or
the merger of two or more
wholly-owned subsidiaries of the
Company.
(b) Any exchange, pursuant to a plan of exchange
under the laws of the State of Arizona or a
comparable statute of any other state or
jurisdiction, of shares of the Company or
any subsidiary of the Company for shares of
either:
(i) The interested shareholder; or
(ii) Any other domestic or foreign
corporation, whether or not itself
an interested shareholder of the
Company, that is, or after the
exchange would be, an affiliate or
associate of the interested
shareholder.
(c) Any sale, lease, exchange, mortgage, pledge,
transfer, or other disposition, in a single
transaction or a series of transactions, to
or with the interested shareholder or any
affiliate or associate of the
- 16 -
interested shareholder, of assets of the
Company or any subsidiary of the Company to
which any of the following applies:
(i) Has an aggregate market value equal
to ten percent (10%) or more of the
aggregate market value of all the
assets, determined on a
consolidated basis, of the Company.
(ii) Has an aggregate market value equal
to ten percent (10%) or more of the
aggregate market value of all the
outstanding shares of the Company.
(iii) Represents ten percent (10%) or
more of the earning power or net
income, determined on a
consolidated basis, of the Company.
(d) The issuance or transfer by the Company or
any subsidiary of the Company, in a single
transaction or a series of transactions, of
any shares of the Company or any subsidiary
of the Company that have an aggregate market
value equal to five percent (5%) or more of
the aggregate market value of all the
outstanding shares of the Company to the
interested shareholder or any affiliate or
associate of the interested shareholder,
except pursuant to the exercise of warrants
or rights to purchase shares offered or a
dividend or distribution paid or made pro
rata to all shareholders of the Company.
(e) The adoption of any plan or proposal for the
liquidation or dissolution of the Company,
or any reincorporation of the Company in
another state or jurisdiction, proposed by,
on behalf of, or pursuant to any agreement,
arrangement, or understanding, whether or
not in writing, with the interested
shareholder or any affiliate or associate of
the interested shareholder.
(f) Any reclassification of securities,
including any share dividend or split,
reverse share split, or other distribution
of shares in respect of shares,
recapitalization of the Company, merger or
consolidation of the Company with any
subsidiary of the Company exchange of shares
of the Company with any subsidiary of the
Company or other transaction, whether or not
with or into or otherwise involving the
interested shareholder, proposed by, on
behalf of, or pursuant to any agreement,
arrangement, or understanding, whether or
not in writing, with the interested
shareholder or any affiliate or associate of
the interested shareholder that has the
effect, directly or indirectly, of
increasing the proportionate share of the
outstanding shares of any class or series of
shares entitled to vote, or securities that
are exchangeable for or convertible into or
that carry a right to acquire shares
entitled to vote, of the Company
- 17 -
or any subsidiary of the Company that is,
directly or indirectly, owned by the
interested shareholder or any affiliate or
associate of the interested shareholder,
except as a result of immaterial changes due
to fractional share adjustments.
(g) Any receipt by the interested shareholder or
any affiliate or associate of the interested
shareholder of the benefit, directly or
indirectly, except proportionately as a
shareholder of the Company, of any loans,
advances, guarantees, pledges, or other
financial assistance or any tax credits or
other tax advantages provided by or through
the Company or any subsidiary of the Company
(other than expense account advances made in
the ordinary course of business).
7. "Consummation date," with respect to any business
combination, means the date of consummation of the
business combination or, in the case of a business
combination as to which a shareholder vote is taken,
the later of:
(i) The business day before the vote; or
(ii) Twenty (20) days before the date of
consummation of the business combination.
8. "Control," "controlling," "controlled by" or "under
common control with" means the possession, directly
or indirectly, of the power to direct or cause the
direction of the management and policies of a person,
whether through the ownership of voting securities,
by contract, or otherwise. A person's beneficial
ownership of ten percent (10%) or more of the voting
power of the Company's outstanding shares entitled to
vote in the election of directors creates a
presumption that the person has control of the
Company. A person is not considered to have control
of the Company if the person holds voting power, in
good faith and not for the purpose of avoiding any
provision of law as an agent, bank, broker, nominee,
custodian, or trustee for one or more beneficial
owners who do not individually or as a group have
control of the Company.
9. "Interested shareholder," when used in reference to
the Company means any person, other than the Company
or any subsidiary of the Company, that is either:
(a) The beneficial owner, directly or
indirectly, of ten percent (10%) or more of
the voting power of the outstanding shares
entitled to vote of the Company; or
(b) An affiliate or associate of the Company.
- 18 -
10. "Interested shares" means the shares of the Company
with respect to which any of the following persons
may exercise or direct the exercise of voting power
in the election of directors of the Company:
(a) An interested shareholder;
(b) Any officer of the Company; or
(c) Any director of the Company.
11. "Market value," when used in reference to shares or
property of the Company, means the following:
(a) In the case of shares, the highest closing
sale price during the thirty (30) day period
immediately preceding the date in question
of a share on the composite tape for New
York Stock Exchange listed shares or, if the
shares are not quoted on the composite tape
or not listed on the New York Stock
Exchange, on the principal United States
securities exchange registered under the
Securities Exchange Act of 1934, as amended,
on which the share are listed or, if the
shares are not listed on any such exchange,
on the National Association of Securities
Dealers, Inc. Automated Quotations National
Market System or, if the shares are not
quoted on the National Association of
Securities Dealers, Inc. Automated
Quotations National Market System, the
highest closing bid quotation during the
thirty (30) day period preceding the date in
question of a share on the National
Association of Securities Dealers, Inc.
Automated Quotations System or any system
then in use or, if no such quotation is
available, the fair market value on the date
in question of a share as determined in good
faith by the Board of the Company, subject
to arbitration.
(b) In the case of property other than cash or
shares, the fair market value of the
property on the date in question as
determined in good faith by the Board of the
Company, subject to arbitration.
12. "Person" means any natural person, partnership,
corporation, group, association, venture, firm, or
other entity (other than the Company, any subsidiary
of the Company, or a trustee or fiduciary holding
stock for the benefit of the employees of the Company
or its subsidiaries or any one of its subsidiaries,
pursuant to one or more employee benefit plans). If
two or more persons act as a partnership, limited
partnership, syndicate, or other group pursuant to
any agreement, arrangement, relationship,
understanding, or otherwise, whether or not in
writing, for the purposes of acquiring, owning, or
voting shares of the Company, all members of the
partnership, syndicate, or other group shall be
deemed a person. Person does not include a licensed
broker, dealer, or underwriter that purchases
- 19 -
shares of the Company solely for purposes of resale
to the public that is not acting in concert with an
interested shareholder.
13. "Share acquisition date," with respect to any person
and the Company, means the date that the person first
becomes an interested shareholder of the Company.
12.02. BUSINESS COMBINATION WITH INTERESTED SHAREHOLDERS; APPROVED BY
DIRECTORS.
1. Except as set forth in these Bylaws, the Company may
not engage in any business combination or vote,
consent or otherwise act to authorize a subsidiary of
the Company to engage in any business combination
with respect to, proposed by, or on behalf of, or
pursuant to any agreement, arrangement or
understanding, whether or not in writing, with any
interested shareholder of the Company or any
affiliate or associate of the interested shareholder
for a period of three (3) years after the interested
shareholder's share acquisition date, unless the
business combination or the acquisition of shares
made by the interested shareholder on the interested
shareholder's share acquisition date is approved by a
committee of the Board of Directors of the Company
before the interested shareholder's share acquisition
date. The committee shall be formed in accordance
with subsection 4 of this Section 12.02.
2. If a good faith definitive proposal regarding a
business combination is made in writing to the Board
of Directors of the Company, a committee of the Board
formed in accordance with subsection 4 of this
Section 12.02 shall consider and take action on the
proposal and respond in writing within forty-five
(45) days after receipt of the proposal by the
Company, setting forth its decision regarding the
proposal.
3. If a good faith definitive proposal to acquire shares
is made in writing to the Board of Directors of the
Company, a committee of the Board of Directors formed
in accordance with subsection 4 of this Section 12.02
shall consider and take action on the proposal.
Unless the committee responds affirmatively in
writing within forty-five (45) days after receipt of
the proposal by the Company, the committee shall be
considered to have disapproved the share acquisition.
4. When a business combination or acquisition of shares
is proposed pursuant to this Section 12.02, the Board
of Directors shall promptly form a committee composed
of all of the Board's disinterested Directors. The
committee shall take action on the proposal by the
affirmative vote of a simple majority of the
committee members. The committee is not subject to
any direction or control by the Board with respect to
the committee's consideration of or any action
concerning a business combination or acquisition of
shares pursuant to this Section 12.02. A committee
formed pursuant to this subsection shall be composed
of one or more members.
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Only disinterested Directors may be members of a
committee formed pursuant to this subsection.
However, if the Board of Directors has no
disinterested Directors, the Board shall select three
or more disinterested persons to be committee
members. For purposes of this subsection, a Director
or person is disinterested if the Director or person
is not an interested shareholder or an affiliate
thereof or a present or former officer or employee of
the Company or an affiliate or associate of the
Company.
12.03. Requirements after Three Years. Except for the provisions of
Sections 12.02 and 12.04, the Company may not engage at any time in any business
combination or vote, consent, or otherwise act to authorize a subsidiary of the
Company to engage in any business combination with respect to, proposed by, on
behalf of, or pursuant to any agreement, arrangement, or understanding, whether
or not in writing, with an interested shareholder of the Company or any
affiliate or associate of the interested shareholder other than a business
combination meeting all the requirements of this Article XII, the Articles, and
the requirements specified in any of the following:
1. A business combination with respect to which the
consummation date is no less than three years after
the share acquisition date, approved by the Board of
Directors of the Company before the interested
shareholder's share acquisition date, or as to which
the acquisition of shares made by the interested
shareholder on the interested shareholder's
acquisition date had been approved by the Board of
Directors before the interested shareholder's share
acquisition date.
2. A business combination approved by the affirmative
vote of the holders of a majority of the outstanding
shares entitled to vote not beneficially owned by the
interested shareholder proposing the business
combination or any affiliate or associate of the
interested shareholder proposing the business
combination at a meeting called for that purpose no
earlier than three years after the interested
shareholder's share acquisition date.
3. A business combination, with respect to which the
consummation date is no earlier than three years
after the interested shareholder's share acquisition
date, that meets all of the following conditions:
(a) The aggregate amount of the cash and the
market value as of the consummation date of
consideration other than cash to be received
per share by holders of outstanding common
shares of the Company in the business
combination is at least equal to the higher
of the following:
(i) The highest per share price paid by
the interested shareholder, at a
time when the interested
shareholder was the beneficial
owner, directly or indirectly, of
five percent (5%) or more of the
outstanding shares entitled to vote
of the Company, for any common
shares of the same class or
- 21 -
series acquired by it within the
three (3) year period immediately
before the announcement date with
respect to the business combination
or within the three (3) year period
immediately before, or in, the
transaction in which the interested
shareholder became an interested
shareholder, whichever is higher,
plus, in either case, interest
compounded annually from the
earliest date on which the highest
per share acquisition price was
paid through the consummation date
at the rate for one year United
States treasury obligations from
time to time in effect less the
aggregate amount of any cash
dividends paid, and the market
value of any dividends paid other
than in cash, per common share
since the earliest date, up to the
amount of the interest.
(ii) The market value per common share
on the announcement date with
respect to the business combination
or on the interested shareholder's
share acquisition date, whichever
is higher, plus interest compounded
annually from that date through the
consummation date at the rate for
one year United States treasury
obligations from time to time in
effect less the aggregate amount of
any cash dividends paid and the
market value of any dividends paid
other than in cash, per common
share since that date, up to the
amount of the interest.
(b) The aggregate amount of the cash and the
market value as of the consummation date of
consideration other than cash to be received
per share by holders of outstanding shares
of any class or series of shares, other than
common shares, of the Company in the
business combination is at least equal to
the highest of the following, whether or not
the interested shareholder has previously
acquired any shares of the class or series:
(i) The highest per share price paid by
the interested shareholder, at a
time when the interested
shareholder was the beneficial
owner, directly or indirectly, of
five percent (5%) or more of the
outstanding shares entitled to vote
of the Company, for any shares of
the class or series acquired by it
within the three (3) year period
immediately before the announcement
date with respect to the business
combination or within the three (3)
year period immediately before, or
in, the transaction in which the
interested shareholder became an
interested shareholder, whichever
is higher, plus, in either
- 22 -
case, interest compounded annually
from the earliest date on which the
highest per share acquisition price
was paid through the consummation
date at the rate for one year
United States treasury obligations
from time to time in effect less
the aggregate amount of any cash
dividends paid and the market value
of any dividends paid other than in
cash, per share of the class or
series since such earliest date, up
to the amount of the interest.
(ii) The highest preferential amount per
share to which the holders of
shares of the class or series are
entitled in the event of any
voluntary liquidation, dissolution,
or winding up of the Company, plus
the aggregate amount of any unpaid
dividends declared or due as to
which the holders are entitled
before payment of dividends on some
other class or series of shares,
unless the aggregate amount of the
dividends is included in the
preferential amount.
(iii) The market value per share of the
class or series on the announcement
date with respect to the business
combination or on the interested
shareholder's share acquisition
date, whichever is higher, plus
interest compounded annually from
that date through the consummation
date at the rate for one year
United States treasury obligations
from time to time in effect less
the aggregate amount of any cash
dividends paid and the market value
of any dividends paid other than in
cash, per share of the class or
series since that date, up to the
amount of the interest.
(c) The consideration to be received by holders
of a particular class or series of
outstanding shares, including common shares,
of the Company in the business combination
is in cash or in the same form as the
interested shareholder has used to acquire
the largest number of shares of the class or
series of shares previously acquired by it
and the consideration is distributed
promptly.
(d) The holders of all outstanding shares of the
Company not beneficially owned by the
interested shareholder immediately before
the consummation date with respect to the
business combination are entitled to receive
in the
- 23 -
business combination cash or other
consideration for the shares in compliance
with subdivisions (a), (b) and (c).
(e) After the interested shareholder's share
acquisition date and before the consummation
date with respect to the business
combination, the interested shareholder has
not become the beneficial owner of any
additional shares entitled to vote of the
Company except:
(i) As part of the transaction that
resulted in the interested
shareholder becoming an interested
shareholder;
(ii) By virtue of proportionate share
splits, share dividends, or other
distributions of shares in respect
of shares not constituting a
business combination;
(iii) Through a business combination
meeting all of the conditions of
Section 12.02 and this paragraph;
or
(iv) Through purchase by the interested
shareholder at any price that, if
the price had been paid in an
otherwise permissible business
combination the announcement date
and consummation date of which were
the date of the purchase, would
have satisfied the requirements of
subdivisions (a), (b) and (c) of
this Section.
12.04. APPLICATION. This Article XII does not apply to any business
combination of the Company with an interested shareholder of the Company who
became an interested shareholder inadvertently, if the interested shareholder
both:
1. As soon as practicable, divests itself of a
sufficient amount of the shares entitled to vote of
the Company so that it no longer is the beneficial
owner, directly or indirectly, of ten percent (10%)
or more of the outstanding shares entitled to vote of
the Company.
2. Would not at any time within the three (3) year
period preceding the announcement date with respect
to the business combination have been an interested
shareholder except for the inadvertent acquisition.
XIII. LIMITATION ON SHARE REPURCHASES
13.01. LIMITATION ON SHARE REPURCHASES. The Company shall not, directly
or indirectly, purchase or agree to purchase any shares entitled to vote from a
person, or two or more persons who act as a partnership, limited partnership,
syndicate or other group pursuant to any agreement, arrangement, relationship,
understanding or otherwise, whether or not in writing,
- 24 -
for the purpose of acquiring, owning or voting shares of the Company who
beneficially owns more than five per cent (5%) of the voting stock of the
Company for more than the "average market price" of the shares if the shares
have been beneficially owned by the person or persons for less than three (3)
years, unless the purchase or agreement to purchase is approved at a meeting of
shareholders by the affirmative vote of the holders of a majority of the voting
stock entitled to vote and not beneficially owned by such person or persons from
whom the proposed repurchase is to be made or the Company makes an offer, of at
least equal value per share, to all holders of shares of such class or series
and to all holders of any class or series into which the shares may be
converted.
13.02. DEFINITIONS. For the purposes of this Article, "average market
price" means the average closing sale price during the thirty trading days
immediately preceding the purchase of the shares in question, or if the person
or persons have commenced a tender offer or have announced an intention to seek
control of the Company, during the thirty trading days preceding the earlier of
the commencement of the tender offer or the making of the announcement, of a
share on the composite tape for New York Stock Exchange listed shares or, if the
shares are not quoted on the composite tape or not listed on the New York Stock
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which the shares are listed
or, if the shares are not listed on any such exchange, on the National
Association of Securities Dealers, Inc. Automated Quotations National Market
System or, if the shares are not quoted on the National Association of
Securities Dealers, Inc. Automated Quotations National Market System, the
average closing bid quotation, during the thirty trading days preceding the
purchase of the shares in questions of a share on the National Association of
Securities Dealers, Inc. Automated Quotations System or any system then in use,
or if the person or persons have commenced a tender offer or have announced an
intention to seek control of the issuing public corporation, during the thirty
trading days preceding the earlier of the commencement of the tender offer or
the making of the announcement, except that if no quotation is available the
average market price is the fair market value on the date of purchase of the
shares in question of a share as determined in good faith by the Board of
Directors of the Company.
XIV. AMENDMENTS
14.01. AMENDMENT OF ARTICLES AND BYLAWS. Notwithstanding any other
provision of these Bylaws, Article Fifth of the Articles (Restated As of July
29, 1988) and Sections 2.02, 3.01, and 3.13 and Articles XII, XIII, and XIV of
these Bylaws shall not be altered, amended, supplemented, repealed, or
temporarily or permanently suspended, in whole or in part, or replacement Bylaw
provisions adopted without: (I) the affirmative vote of a majority of the
directors then in office; or (ii) the affirmative vote of seventy-five percent
(75%) or more of the outstanding shares of the Company entitled to vote
generally.
- 25 -
CERTIFICATE
I, NANCY C. LOFTIN, Vice President, General Counsel and Secretary of
Pinnacle West Capital Corporation, an Arizona corporation, do HEREBY CERTIFY
that the foregoing is a true and correct copy of the Company's Bylaws, as
amended, and that they are in full force and effect as of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the corporation this 21st day of January, 2004.
Nancy C. Loftin
---------------------------------------------
NANCY C. LOFTIN
Vice President, General Counsel and Secretary
- 26 -
Dates Referenced Herein and Documents Incorporated by Reference
4 Subsequent Filings that Reference this Filing
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