EXHIBIT 3.1
BYLAWS
OF
PINNACLE WEST CAPITAL CORPORATION
(AMENDED AS OF DECEMBER 14, 2005)
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
of capital stock 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 (a) pursuant to the Company's
notice of meeting (or any supplement thereto), (b) by
or at the direction of the Board of Directors or (c)
by any shareholder of the Company who was a
shareholder at the time the 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 (c) 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
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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 (90th)
day nor earlier than the close of business
on the one hundred twentieth (120th) 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 is changed by more than
thirty (30) days from such anniversary date,
notice by the shareholder must be so
delivered not earlier than the close of
business on the one hundred twentieth
(120th) day prior to such annual meeting and
not later than the close of business on the
later of the ninetieth (90th) day prior to
such annual meeting or the tenth (10th) day
following the day on which public
announcement of the date of such meeting is
first made by the Company), and (b) with
respect to nominations of persons to be
elected to the Board of Directors, the
one-hundred eightieth (180th) 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.
(3) In addition to meeting the timely notice
requirements of paragraph (a)(2) of this
Section 2.05, in order for nominations or
other business to be properly brought before
an annual meeting by a shareholder pursuant
to clause (c) of paragraph (a)(1) of this
Section 2.05, such shareholder's notice
shall set forth: (a) as to each person whom
the shareholder proposes to nominate for
election as a director, (i) 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 and in accordance with
Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange
Act"), and (ii) 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
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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 foregoing notice
requirements of clauses (b) and (c) of
paragraph (a)(3) of this Section 2.05 shall
be deemed satisfied by a shareholder if the
shareholder has notified the Company of his
or her intention to present a proposal at an
annual meeting in compliance with Rule 14a-8
(or any successor thereof) promulgated under
the Exchange Act and such shareholder's
proposal has been included in a proxy
statement that has been prepared by the
Company to solicit proxies for such annual
meeting. 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.
(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
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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.
Notwithstanding the foregoing provisions of this
Section 2.05, if the shareholder (or a qualified
representative of the shareholder) does not appear at
the annual meeting of shareholders of the Company to
present a nomination or business, such nomination
shall be disregarded and such business shall not be
transacted, notwithstanding that proxies in respect
of such vote may have been received by the Company.
For purposes of this Section 2.05, to be considered a
qualified representative of the shareholder, a person
must be authorized by a writing executed by such
shareholder or an electronic transmission delivered
by such shareholder to act for such shareholder as
proxy at the meeting of shareholders and such person
must produce such writing or electronic transmission,
or a reliable reproduction of the writing or
electronic transmission, at the meeting of
shareholders.
(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
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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
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
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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 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.
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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.
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
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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, 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
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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
(Section Section 3.01 and 3.02 above and Section 3.07 below), by law or by any
applicable Article. 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.
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.
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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 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, if the votes cast in favor of such removal exceed the votes
cast against such removal, 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
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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 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
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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.
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
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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 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
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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. Shares shall be issued in uncertificated form
pursuant to the customary arrangements for issuing shares in such form. This
requirement shall not apply to shares represented by a certificate until the
certificate is surrendered to the Company. Notwithstanding the foregoing, every
holder of stock represented by certificates and, upon request any holder of
uncertificated shares, shall be entitled to have a certificate in such form as
approved by the Board of Directors.
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 as follows: (i) with respect to certificated shares, 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;
and (ii) with respect to uncertificated shares, upon compliance with the
customary procedures for transferring shares in uncertificated form.
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
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.
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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 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.
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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
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amended, and is not then reportable under
that act on a Schedule 13D or comparable
report.
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,
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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 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
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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 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,
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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 who
at any time within the three (3) year period
immediately before the date in question was
the beneficial owner of ten percent (10%) or
more of the voting power of the then
outstanding shares entitled to vote of the
Company.
10. "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.
(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.
11. "Person" means any natural person, partnership,
corporation, group, association, venture, firm, or
other entity (other than the
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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 shares of the Company solely for purposes
of resale to the public that is not acting in concert
with an interested shareholder.
12. "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. 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 business
combination.
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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. 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 or of the interested shareholder or of any
affiliate or associate of the interested shareholder.
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.
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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 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
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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
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
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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
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;
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(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 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 either (i) 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 excluding shares beneficially owned by such
person, by any of such person's affiliates or associates, or by any officer or
director of the Company or (ii) 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.
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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 BYLAWS. These Bylaws may be altered, amended,
supplemented, repealed, or temporarily or permanently suspended, in whole or in
part, or replacement Bylaw provisions adopted by: (i) the affirmative vote of a
majority of the directors then in office; or (ii) the affirmative vote of a
majority of the votes cast on such matter(s) at a meeting of shareholders.
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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 14th day of December, 2005.
/s/ Nancy C. Loftin
------------------------------
NANCY C. LOFTIN
Vice President, General Counsel, and
Secretary
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