1
EXHIBIT 3.1
CALIFORNIA WATER SERVICE GROUP
BYLAW AMENDMENTS OF
JANUARY 26, 2000
1. New section 2.8:
2.8 DIRECTOR CONFLICT OF INTEREST.
(a) In order to protect the best interests of the stockholders
of the corporation, no person shall be qualified to be elected
as a director of the corporation or be qualified to continue
to serve as a director of the corporation if it is determined
in accordance with this Section 2.8 that such person is (i) an
owner, part owner, stockholder, partner, member, director,
officer, manager, employee of or consultant to, or otherwise
has a fiduciary duty to, any Strategic Competitor or (ii) an
owner, part owner, stockholder, partner, member, director,
officer, manager, employee of or consultant to, or otherwise
has a fiduciary duty to, any business organization that
beneficially owns five percent or more of the voting
securities or five percent or more of the equity securities of
a Strategic Competitor.
(b) For purposes of this Section 2.8, a "Strategic Competitor"
is any business organization (whether a corporation,
partnership, limited liability company, proprietorship or any
other form) whose activities, products or services are
competitive with those of the corporation or its subsidiaries
and which, in the opinion of a majority of the corporation's
Board of Directors, would obtain an unfair competitive
advantage over the corporation if it were to receive
disclosure of the substance of any nonpublic deliberations by
the corporation's Board of Directors.
(c) Notwithstanding the foregoing, a director or nominee for
director may make a passive investment in a Strategic
Competitor the shares of which are publicly traded if such
investment constitutes less than five percent of the voting
securities and less than five percent of the equity securities
of such enterprise and has a market value not greater than
$100,000. Such investment alone
2
shall not make a person ineligible to become or remain a
director of the corporation.
(d) In furtherance of the foregoing, each person elected as a
director of the corporation shall enter into a confidentiality
agreement with the corporation in the form provided by the
corporation.
(e) Any person who, at the time he or she is a nominee for a
position as a director of the corporation, fails to qualify
under the provisions of this Section 2.8 or to enter into or
comply with the terms of such confidentiality agreement, as
determined by a majority of the directors in office
immediately prior to any such election (exclusive of the
nominee under consideration), shall no longer qualify as a
nominee for director and shall not be elected as a director of
the corporation, irrespective of any vote of the stockholders
of the corporation. The chairman of the Board of Directors is
authorized to instruct the inspector of elections to disregard
any votes or proxies voted in favor of any person at any
meeting or otherwise, and the inspector of elections shall
comply with any such instruction.
(f) Any director of the corporation who, at any time during
his/her term of office, fails to qualify under the provisions
of this Section 2.8 or to enter into or comply with the terms
of such confidentiality agreement, in each case as determined
by a majority of the directors (exclusive of the director
under consideration), shall automatically be removed for cause
and shall cease to be a director of the corporation, without
any vote of the stockholders of the corporation. The chairman
of the Board of Directors is authorized to instruct the
secretary of the corporation to certify the removal for cause
of any person as a director if such person ceases to be
eligible to serve as a director under the terms of this
Section 2.8, and the secretary shall comply with any such
instruction.
(g) Subsection (f) of this Section 2.8 shall not apply to
directors in office on the date of the adoption of Section 2.8
with respect to relationships and conflicts in existence on
such date. Subsection (f) shall apply to existing directors
with respect to relationships and conflicts that arise after
the date of the adoption of this Section 2.8.
(h) This Section 2.8 is intended to prescribe certain
qualifications for directors as authorized by Section 141 of
the Delaware General Corporation Law.
2
3
2. New subsection Section 2.7(c):
(c) A director shall be deemed to be removed for cause if such
person ceases to be eligible to serve as a director under the
terms of Section 2.8.
3. New language to be added at the end of Section
11.17(a)(2)(A):
", and information confirming that such person is qualified
under Section 2.8 of these bylaws to be elected and serve as a
director."
3