EXHIBIT 3.2
BYLAWS
OF
ELECTRIC LIGHTWAVE, INC.
As amended October 16, 1997; May 21, 1998
BYLAWS
OF
ELECTRIC LIGHTWAVE, INC.
TITLE
1. The title of this Corporation is ELECTRIC LIGHTWAVE, INC.
("Corporation").
LOCATION OF OFFICES
2. The principal office of the Corporation in Delaware shall be in
Wilmington and the resident agent in charge thereof shall be The Corporation
Trust Company, located in New Castle County at The Corporation Trust Center,
1209 Orange Street, Wilmington, DE 19801.
The Corporation may also have an office or offices at such other
places within or without the State of Delaware as the Board of Directors may
from time to time designate.
CORPORATE SEAL
3. The corporate seal shall be circular in form and have inscribed
thereon the name of the Corporation, the year of its incorporation (1990) and
the words "Incorporated Delaware".
MEETINGS OF STOCKHOLDERS
4. All meetings of stockholders shall be held at the offices of the
Corporation or such other place as shall be designated by the Board of Directors
of the Corporation.
Annual Meetings of stockholders shall be held on a date and at a
time designated by the Board of Directors of the Corporation. At each annual
meeting the stockholders shall elect a Board of Directors, such election to be
by majority of the stock present or represented by proxy, and entitled to vote
at the meeting.
Except as otherwise provided by law, the Certificate of
Incorporation or these Bylaws, each stockholder shall, at every meeting of the
stockholders, be entitled to one vote for each share of stock held by him or
her, in person or by written proxy signed by him or her, but no proxy shall be
voted on after one year from its date. Such right to vote shall be subject to
the right of the Board of Directors to close the transfer books or to fix a
record date for voting stockholders as hereinafter provided.
Special meetings of the stockholders may be called by the Chief
Executive Officer and shall be called on the request in writing or by vote of a
majority of the Board of Directors or on demand in writing of stockholders of
record owning twenty-five percent (25%) in amount of the capital stock
outstanding and entitled to vote.
Notice of each meeting of stockholders, whether annual or special,
shall be mailed by the secretary to each stockholder of record, at his or her
post office address as shown by the stock books of the Corporation, at least ten
days and not more than sixty days prior to the date of the meeting. If the
transfer books are closed or a record date is fixed in connection with an annual
meeting, as permitted by Bylaw 19, the notice of the meeting shall be given to
the stockholders of record as of the time said books are closed or record date
is fixed, but if the transfer books are not closed or a record date is not
fixed, said notice shall be given to the stockholders of record at the time the
notice is mailed.
The holders of a majority of the stock outstanding and entitled to
vote shall constitute a quorum, but the holders of a smaller amount may adjourn
any meeting from time to time without further notice until a quorum is secured.
At the annual meeting of stockholders, only such business shall be
conducted as shall have been brought before the meeting (a) pursuant to the
Corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any stockholder of the Corporation who is a stockholder of
record at the time of giving of the notice provided for below, who shall be
entitled to vote at such meeting and who complies with the procedures set forth
below; provided that any such business proposed by a stockholder is otherwise
proper for consideration under applicable law, the Corporation's certificate of
incorporation and these Bylaws.
For business to be brought before an annual meeting by a
stockholder, the stockholder must have given notice thereof in writing to the
Secretary of the Corporation, delivered to or mailed and received at the
principal office of the Corporation no earlier than the January 1 and no later
than the February 15 preceding the annual meeting. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the meeting (a) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
(b) the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business, and the name and address of the beneficial
owner, if any, on whose behalf the proposal is made, (c) the class and number of
shares of the Corporation which are owned beneficially and of record by such
stockholder of record and by the beneficial owner, if any, on whose behalf the
proposal is made, together with documentary support for any claim of beneficial
ownership, (d) any material interest of such stockholder of record and the
beneficial owner, if any, on whose behalf the proposal is made in such business
and (e) any information, in addition to that required above, which may be
required from time to time by Regulation 14A of the Securities Exchange Act of
1934 with respect to security holder proposals.
The Chairman of the meeting, in addition to making any other
determinations that may be appropriate to the conduct of the meeting, shall
determine whether such notice has been duly given and whether such business is
otherwise proper for consideration (using as a non-exclusive guideline the
provisions of Rule 14a-8(c) under the Securities Exchange Act of 1934), and
shall direct that any business not properly brought before the meeting shall not
be transacted.
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DIRECTORS
5. The property and business of the Corporation shall be managed and
controlled by its Board of Directors, which shall consist of not less than three
or more than seven members. The number of Directors shall be fixed from time to
time, within the limits prescribed, by resolution of the Board of Directors.
Vacancies in the Board of Directors (except vacancies resulting from the removal
of directors by stockholders), including vacancies in the Board of Directors
resulting from any increase in the number of Directors, may be filled by a
majority of the Directors then in office, though less than a quorum.
Directors shall otherwise be elected by the stockholders at
the annual meeting and shall hold office until the next annual election and
until their successors are elected and qualified. Except as otherwise provided
by law, the Certificate of Incorporation or these Bylaws, at all elections of
Directors of this Corporation each stockholder shall be entitled to one vote for
each share of stock owned by him or her, in person or by written proxy signed by
him or her, and election shall be by majority vote of the stock present or
represented by proxy and entitled to vote at the meeting. The stockholders of
this Corporation shall have no preemptive right to subscribe to any issue of
shares of stock of this Corporation now or hereafter made.
The Board of Directors shall have an Executive Committee. The
Executive Committee of the Board shall consist of (3 three) members, to be
appointed by and to serve at the pleasure of the Board. The Chairman of the
Board shall be the Chairman of the Executive Committee. During intervals between
meetings of the Board, the Committee shall have the power and authority of the
Board of Directors of the management of the business affairs and property of the
Corporation.
Nominations of persons for election to the Board of Directors of the
Corporation may be made by any stockholder of the Corporation who is a
stockholder of record at the time of giving of the notice provided for below,
who shall be entitled to vote for the election of Directors at the meeting and
who complies with the notice procedures set forth below.
Nominations by stockholders shall be made pursuant to notice in
writing to the Secretary of the Corporation, delivered to or mailed and received
at the principal office of the Corporation no earlier than the January 1 and no
later than the February 15 preceding the annual meeting. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder 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, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934 (including such person's written
consent to being named in the proxy statement as a nominee and to serve as a
Director if elected); (b) as to the stockholder giving the notice; (i) the name
and address, as they appear on the Corporation's books, of such stockholder and
(ii) the class and number of shares of the Corporation which are beneficially
owned by such stockholder and also which are owned of record by such stockholder
and (iii) documentary support for such claim of beneficial ownership; (c) as to
the beneficial owner, if any, on whose behalf the nomination is made, (i) the
name and address of such person, (ii) the class and number of shares of the
Corporation which are beneficially owned by such person and (iii) documentary
support for such claim of beneficial ownership; and (d), a description of all
arrangements or understandings between the stockholder giving notice, the
beneficial owner and each nominee and any other person or persons (naming such
person or persons) relating to the nomination to be made or resulting
directorship.
The Board of Directors or a Nominating Committee established by the
Board of Directors shall determine whether a stockholder nomination was made in
accordance with the procedures prescribed herein and whether the stockholder's
nominee should be recommended as a member of the slate of nominees to be
proposed at the annual meeting, and the Board of Directors or its Nominating
Committee may disregard any nomination not made in accordance with these Bylaws.
The Chairman of the meeting shall not nominate for election to the Board of
Directors any stockholder nominee who has been disregarded by the Board of
Directors or its Nominating Committee.
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POWERS OF DIRECTORS
6. The Board of Directors shall have all such powers as may be
exercised by the Corporation, subject to the provisions of the statutes, the
Certificate of Incorporation, and the Bylaws.
MEETINGS OF DIRECTORS
7. Meetings of the Board of Directors shall be held at such place
within or without the State of Delaware as may from time to time be fixed by
resolution of the Board of Directors, or as may be specified by the Chief
Executive Officer in the call of any meeting. Regular meetings of the Board of
Directors shall be held at such times as may from time to time be fixed by
resolution of the Board of Directors and special meetings may be held at any
time upon the call of two (2) Directors, the Chief Executive Officer or the
Chief Operating Officer, by oral, telegraphic or written notice duly served or
sent or mailed to each Director not less than five (5) days before such meeting.
A meeting of the Board may be held without notice immediately after the annual
meeting of stockholders at the same place at which such meeting is held. Notice
need not be given of regular meetings of the Board held at times fixed by
resolution of the Board. Meetings may be held at any time without notice if all
the Directors are present or if those not present waive notice of the meeting in
writing.
Members of the Board of Directors (or any committees thereof) may
participate in a meeting of the Board of Directors (or of such committees) by
means of conference telephone or other communications equipment via which all
persons participating can hear each other. Such participation in the substantive
discussion and determinations of a meeting shall constitute presence in person
at such meeting.
A majority of the Directors shall constitute a quorum, but a smaller
number may adjourn any meeting from time to time without further notice until a
quorum is secured.
OFFICERS OF THE CORPORATION
8. The officers of the Corporation shall be a Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, a President, one or more
vice presidents (with such duties and titles as may be assigned to them), a
secretary, a treasurer, one or more assistant vice presidents (with such duties
and titles as may be assigned to them), and such other officers as may from time
to time be chosen by the Board of Directors.
The officers of the Corporation shall hold office until their
successors are elected and qualified. If the office of any officer or officers
becomes vacant for any reason, the vacancy shall be filled by the affirmative
vote of a majority of the whole Board of Directors.
DUTIES OF THE CHAIRMAN
9. The Chairman presides at all meetings of the Board of Directors and
at all meetings of the shareholders. It shall be his or her prerogative to see
that all orders, resolutions, and policy determinations of the Board of
Directors are carried into effect. He or she acts in a general oversight and
advisory capacity with respect to the affairs of the Corporation. He or she
provides leadership to the Board in reviewing and deciding upon matters which
constitute major policies of the Corporation, what the Corporation does and the
manner in which the Corporation business is conducted. Any of such duties may be
delegated by the Chairman to the Vice-Chairman.
DUTIES OF THE CHIEF EXECUTIVE OFFICER
10. It shall be the duty of the Chief Executive Officer to carry into
effect all orders, resolutions, and policy determinations of the Board of
Directors; to execute all contracts and agreements; to keep the seal of the
Corporation; and to sign and to affix the seal of the Corporation to any
instrument requiring the same, which seal shall be attested by the signature of
the Secretary or Treasurer or Assistant Secretary or Assistant Treasurer. He or
she shall have the general supervision and direction of the other officers of
the Corporation.
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He shall submit a report of the operations of the Corporation for
the year to the Directors at their meeting next preceding the annual meeting of
the stockholders and to the stockholders at their annual meeting.
He shall have the general duties and powers of supervision and
management usually vested in the chief executive officer of a Corporation.
The Chief Executive may also hold another office with the
Corporation. Accordingly, the duties and responsibilities of the position may be
assigned by the Board of Directors to any Corporation officer.
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DUTIES OF THE PRESIDENT
11. Unless otherwise decided by the Board of Directors, the President
shall be the chief operating and administrative officer of the Corporation. It
shall be his or her duty to see that all orders and policy determination
conveyed by the Chairman are carried into effect. He or she shall have the
general supervision and direction of the operations and administration of the
affairs of the Corporation and general supervision and direction of the other
officers and employees of the Corporation and shall see that their duties are
properly performed.
VICE PRESIDENT
12. The vice president or vice presidents, in the order of their
seniority, shall be vested with all the powers and required to perform all the
duties of the President in his or her absence or disability and shall perform
such other duties as may be prescribed by the Board of Directors.
CHIEF EXECUTIVE PRO TEM
13. In the absence or disability of the Chairman, Vice-Chairman and
President, the Board may appoint a chief executive pro tem.
SECRETARY
14. The secretary shall attend all meetings of the Corporation and the
Board of Directors. He or she shall act as clerk thereof and shall record all of
the proceedings of such meetings in a book kept for that purpose. He or she
shall give proper notice of meetings of stockholders and Directors and shall
perform such other duties as shall be assigned to him or her by the Chairman,
Vice-Chairman, President or the Board of Directors.
TREASURER
15. The treasurer shall have custody of the funds and securities of the
Corporation and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He or she
shall disburse the funds of the Corporation as may be ordered by the Board, or
Chairman, Vice-Chairman or President, taking proper vouchers for such
disbursements and shall render to the Chairman, Vice Chairman, President and
Directors, whenever they may require it, an account of all his or her
transactions as treasurer and of the financial condition of the Corporation.
He shall keep an account of stock and income notes registered and
transferred in such manner and subject to such regulations as the Board of
Directors may prescribe.
He shall give the Corporation a bond, if required by the Board of
Directors, in such sum and in form and with security satisfactory to the Board
of Directors for the faithful performance of the duties of his or her office and
the restoration to the Corporation, in case of his or her death, resignation, or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession, belonging to the Corporation. He or she
shall perform such other duties as the Board of Directors may from time to time
prescribe or require.
DUTIES OF OFFICERS MAY BE DELEGATED
16. In case of the absence or disability of any officer of the
Corporation or for any other reason deemed sufficient by a majority of the
Board, the Board of Directors may delegate his or her powers or duties to any
other officer or to any Director for the time being. The duties relating to the
execution of contracts and agreements and the signing of instruments and
affixing the seal of the Corporation and other matters may be delegated to any
officer, from time to time, as the Board shall see fit.
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CERTIFICATES OF STOCK
17. Certificates of stock shall be signed by the Chairman,
Vice-Chairman, President or a vice president and either the treasurer, assistant
treasurer, secretary or assistant secretary. If a certificate of stock be lost
or destroyed, another may be issued in its stead upon proof of such loss or
destruction and the giving of a satisfactory bond of indemnity, in an amount
sufficient to indemnify the Corporation against any claim.
TRANSFER OF STOCK
18. All transfers of stock of the Corporation shall be made upon its
books upon presentation of the certificate or certificates therefor, properly
endorsed by the holder of the shares in person or by his or her lawfully
constituted representative, and upon surrender of such certificate or
certificates of stock for cancellation.
CLOSING OF TRANSFER BOOKS
19. The Board of Directors shall have the power to close the stock
transfer books of the Corporation for a period not exceeding sixty days
preceding the date for any meeting of stockholders or for payment of any
dividend or for the allotment of rights or when any change or conversion or
exchange of capital stock shall go into effect, or for a period of not exceeding
sixty days in connection with obtaining the consent of stockholders for any
purpose. In lieu of so closing the books, the Board of Directors may fix in
advance a date, not exceeding sixty days preceding the said above mentioned
dates, as a record date for the determination of the stockholders entitled to
notice of or to vote at any such meeting, and any adjournment thereof, or
entitled to dividends or other rights hereinbefore mentioned, or to give such
consent.
STOCKHOLDERS OF RECORD
20. The Corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and accordingly shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person whether or not it shall have express or
other notice thereof, save as expressly provided by the laws of Delaware.
FISCAL YEAR
21. The fiscal year of the Corporation shall begin on the first day in
January in each year.
DIVIDENDS
22. Dividends, to the extent not restricted by provisions of the
Corporation's Certificate of Incorporation or by subsisting agreements of the
Corporation, may be declared by the Board of Directors and paid in cash, in
property, or in shares of the capital stock of the Corporation to the extent
permitted by law, out of net assets in excess of its capital or out of its net
profits, provided there shall be no impairment of the capital of the Corporation
represented by its issued and outstanding stock of all classes having a
preference upon the distribution of assets.
BOOKS AND RECORDS
23. The books, accounts, and records of the Corporation may be kept
within or without the State of Delaware, at such place or places as may from
time to time be designated by the Bylaws or by resolution of the Directors.
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NOTICES
24. Notice required to be given under the provisions of these Bylaws to
any Director, officer or stockholder shall not be construed to mean personal
notice, but may be given in writing by depositing the same in a post office or
letter box, in a postpaid sealed or unsealed wrapper, addressed to such
stockholder, officer or Director at such address as appears on the books of the
Corporation, and such notice shall be deemed to be given at the time when the
same shall be thus mailed. In computing the number of days notice required for
any meeting, the day on which the notice shall be deposited in the mail or sent
by telegraph shall be excluded.
WAIVER OF NOTICE
25. Any stockholder, officer, or Director may waive in writing, or by
telegraph, any notice required to be given under these Bylaws, whether before or
after the time stated therein.
INDEMNIFICATION OF
DIRECTORS AND OFFICERS
26. (a) Right of Indemnification. The Corporation shall, to the fullest
extent permitted by applicable law as then in effect, indemnify any person (the
"indemnitee") who was or is involved in any manner (including, without
limitation, as a party or a witness) or was or is threatened to be made so
involved in any threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action or proceeding by or in the right of
the Corporation to procure a judgement in its favor) (a "Proceeding") by reason
of the fact that he or she is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director or officer
of another Corporation, or of a partnership, joint venture, trust or other
enterprise (including, without limitation, service with respect to any employee
benefit plan), whether the basis of any such Proceeding is alleged action in an
official capacity as director or officer or in any other capacity while serving
as a director or officer, against all expenses, liability and loss (including,
without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or
penalties, and amounts paid or to be paid in settlement) actually and reasonably
incurred by him or her in connection with such Proceeding. Such indemnification
shall continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of his or her heirs, executors, administrators and
legal representatives. The right to indemnification conferred in this Bylaw
shall include the right to receive payment of any expenses incurred by the
indemnitee in connection with such Proceeding in advance of the final
disposition of the Proceeding, consistent with applicable law as then in effect.
All rights to indemnification conferred in this Bylaw, including rights to the
advancement of expenses and the evidentiary, procedural and other provisions of
this Bylaw, shall be contract rights with the same effect as if embodied in a
separate written agreement for each indemnitee, executed and delivered by the
Corporation and such indemnitee. The Corporation may, by action of its Board of
Directors, provide indemnification for employees, agents, attorneys and
representatives of the Corporation with the same, or with more or less, scope
and extent as herein provided for officers and directors. No amendment to the
Restated Certificate of Incorporation or amendment or repeal of this Bylaw
purporting to have the effect of modifying or repealing any of the provisions of
this Bylaw in a manner adverse to the indemnitee shall abridge or adversely
affect any right to indemnification or other similar rights and benefits with
respect to any acts or omissions occurring prior to such amendment or repeal.
This Bylaw shall be applicable to all Proceedings, whether arising from acts or
omissions occurring before or after the adoption of this Bylaw. The phrase "this
Bylaw" shall refer to Bylaws 26 and 27. For all purposes, except the corporate
procedure required for amendment of Bylaws 26 and 27, Bylaws 26 and 27 shall be
considered as one Bylaw.
(b) ByLaw Not Exclusive. The right of indemnification, including the
right to receive payment in advance of expenses, conferred in this Bylaw shall
not be exclusive of any other rights to which any person seeking indemnification
may otherwise be entitled under any provision of the Restated Certificate of
Incorporation, Bylaw, agreement, applicable corporate law and statute, vote of
disinterested directors or stockholders or otherwise. The indemnitee is free to
proceed under any or all of the rights or procedures available to him or her.
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(c) Burden of Proof. In any determination, review of a determination,
action, arbitration, or other proceeding relating to the right to
indemnification conferred in this Bylaw, the Corporation shall have the burden
of proof that the indemnitee has not met any standard of conduct or belief which
may be required by applicable law to be applied in connection with a
determination that the indemnitee is not entitled to indemnity and also the
burden of proof on any of the issues which may be material to a determination
that the indemnitee is not entitled to indemnification. Neither a failure to
make such a determination of entitlement nor an adverse determination of
entitlement to indemnity shall be a defense of the Corporation in an action or
proceeding brought by the indemnitee or by or on behalf of the Corporation
relating to indemnification or create any presumption that the indemnitee has
not met any such standard of conduct or belief or is otherwise not entitled to
indemnity. If successful in whole or in part in such an action or proceeding,
the indemnitee shall be entitled to be further indemnified by the Corporation
for the expenses actually and reasonably incurred by him or her in connection
with such action or proceeding.
(d) Advancement of Expenses. All reasonable expenses incurred by or on
behalf of indemnitee in connection with any Proceeding shall be advanced from
time to time to the indemnitee by the Corporation promptly after the receipt by
the Corporation of a statement from the indemnitee requesting such advance,
whether prior to or after final disposition of such Proceeding.
(e) Insurance, Contracts and Funding. The Corporation may purchase and
maintain insurance to protect itself and any person who is, or may become an
officer, director, employee, agent, attorney, trustee or representative (any of
the foregoing being herein referred to as a "Representative") of the Corporation
or, at the request of the Corporation, a Representative of another corporation
or entity, against any expenses, liability or loss asserted against him or her
or incurred by him or her in connection with any Proceeding in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such expense,
liability or loss under the provisions of this Bylaw or otherwise. The
Corporation may enter into contracts with any Representative of the Corporation,
or any person serving as such at the request of the Corporation for another
corporation or entity, in furtherance of the provisions of this Bylaw. Such
contracts shall be deemed specifically approved and authorized by the
stockholders of the Corporation and not subject to invalidity by reason of any
interested directors. The Corporation may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification of any person entitled thereto.
(f) Severability; Statutory Alternative. If any provision or provisions
of this Bylaw shall be held to be invalid, illegal or unenforceable for any
reason whatsoever (i) the validity, legality and enforceability of all of the
remaining provisions of this Bylaw shall not in any way be affected or impaired
thereby; and (ii) to the fullest extent possible, the remaining provisions of
this Bylaw shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable. In the event that the
indemnitee elects, as an alternative to the procedures specified in this Bylaw,
to follow one of the procedures authorized by applicable corporate law or
statute to enforce his or her right to indemnification and notifies the
Corporation of his or her election, the Corporation agrees to follow the
procedure so elected by the indemnitee. If, in accordance with the preceding
sentence the procedure therefor contemplated herein or the procedure elected by
the indemnitee in any specific circumstances (or such election by the
indemnitee) shall be invalid or ineffective in bringing about a valid and
binding determination of the entitlement of the indemnitee to indemnification,
the most nearly comparable procedure authorized by applicable corporate law or
statute shall be followed by the Corporation and the indemnitee.
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INDEMNIFICATION PROCEDURES;
PRESUMPTIONS AND REMEDIES
27. In furtherance, but not in limitation, of the foregoing provisions
of this Bylaw, the following procedures, presumptions and remedies shall apply
with respect to advancement of expenses and the right to indemnification under
this Bylaw:
(a) Advancement of Expenses. The advancement or reimbursement of
expenses to an indemnitee provided in paragraph (d) of Bylaw 26 shall be made
within 20 days after the receipt by the Corporation of a request therefor from
the indemnitee. Such request shall reasonably evidence the expenses incurred or
about to be incurred by the indemnitee and, if required by law at the time of
such advance, shall include or be accompanied by an undertaking by or on behalf
of the indemnitee to repay the amounts advanced if it should ultimately be
determined that the indemnitee is not entitled to be indemnified against such
expenses.
(b) Procedure for Determination of Entitlement to Indemnification.
(i) To obtain indemnification (except with respect to the
advancement of expenses), an indemnitee shall submit to the Chief
Executive Officer or Secretary of the Corporation a written
request, including such documentation and information as is
reasonably available to the indemnitee and reasonably necessary
to determine whether and to what extent the indemnitee is
entitled to indemnification (the "Supporting Documentation"). The
Secretary of the Corporation shall promptly advise the Board of
Directors in writing that the indemnitee has requested
indemnification. The determination of the indemnitee's
entitlement to indemnification shall be made not later than 60
days after receipt by the Corporation of the written request and
Supporting Documentation.
(ii) The indemnitee's entitlement to indemnification shall be
determined in one of the following ways: (A) by a majority vote
of the Disinterested Directors (as hereinafter defined) (which
term shall mean the Disinterested Director, if there is only
one); (B) by a written opinion of the Independent Counsel (as
hereinafter defined) if (x) a majority of the Disinterested
Directors so directs; (y) there is no Disinterested Director, or
(z) a Change of Control (as hereinafter defined) shall have
occurred and the indemnitee so requests in which case the
Disinterested Directors shall be deemed to have so directed; (C)
by the stockholders of the Corporation (but only if a majority of
the Disinterested Directors determines that the issue of
entitlement to indemnification should be submitted to the
stockholders for their determination); or (D) as provided in
paragraph (c) of Bylaw 27.
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
clause (ii) of paragraph (b) of Bylaw 27, a majority of the
Disinterested Directors shall select the Independent Counsel, but
only an Independent Counsel to which the indemnitee does not
reasonably object; provided, however, that if a Change of Control
shall have occurred, the indemnitee shall select such Independent
Counsel, but only an Independent Counsel to which the Board of
Directors does not reasonably object.
(c) Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this Bylaw, the indemnitee shall be presumed to
be entitled to indemnification upon submission of a request for indemnification
together with the Supporting Documentation, and thereafter in any determination
or review of any determination, and in any arbitration, proceeding or
adjudication the Corporation shall have the burden of proof to overcome that
presumption in reaching a contrary determination. In any event, if the person or
persons empowered under clause (ii) of paragraph (b) of Bylaw 27 to determine
entitlement to indemnification shall not have been appointed or shall not have
made a determination within 60 days after receipt by the Corporation of the
request therefor together with the Supporting Documentation, the indemnitee
shall be deemed to be entitled to indemnification. In either case, the
indemnitee shall be entitled to such indemnification, unless (i) the indemnitee
misrepresented or failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (ii) such indemnification
is prohibited by law, as finally determined by adjudication. The termination of
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any Proceeding, or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendre or its equivalent,
shall not, of itself, adversely affect the right of the indemnitee to
indemnification or create any presumption with respect to any standard of
conduct or belief or any other matter which might form a basis for a
determination that the indemnitee is not entitled to indemnification. With
regard to the right to indemnification for expenses, (i) if and to the extent
that the indemnitee has been successful on the merits or otherwise in any
Proceeding, or (ii) if a Proceeding was terminated without a determination of
liability on the part of the indemnitee with respect to any claim, issue or
matter therein or without any payments in settlement or compromise being made by
the indemnitee with respect to a claim, issue or matter therein, or (iii) if and
to the extent that the indemnitee was not a party to the Proceeding, the
indemnitee shall be deemed to be entitled to indemnification, which entitlement
shall not be defeated or diminished by any determination which may be made
pursuant to clauses (A), (B) or (C) of clause (ii) of paragraph (b) of Bylaw 27.
The indemnitee shall be presumptively entitled to indemnification in all
respects for any act, omission or conduct taken or occurring which (whether by
condition or otherwise) is required, authorized or approved by any order issued
or other action by any commission or governmental body pursuant to any federal
statute or state statute regulating the Corporation or any of its subsidiaries
by reason of its status as a public utility or public utility holding
Corporation or by reason of its activities as such. To the extent permitted by
law, the presumption shall be conclusive on all parties with respect to acts,
omissions or conduct of the indemnitee if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation or its subsidiary. No presumption adverse to an
indemnitee shall be drawn with respect to any act, omission or conduct of the
indemnitee if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Corporation or its
subsidiary taken or occurring in the absence of, or inconsistent with, any order
issued or action by any commission or governmental body.
(d) Remedies of Indemnitee.
(i) In the event that a determination is made pursuant to
paragraph (b) of Bylaw 27 that the indemnitee is not entitled to
indemnification under this Bylaw, (A) the indemnitee shall be
entitled to seek an adjudication of his or her entitlement to such
indemnification in an appropriate court of the State of Delaware
or any other court of competent jurisdiction; (B) any such
judicial proceeding shall be de novo and the indemnitee shall not
be prejudiced by reason of such adverse determination; and (C) in
any such judicial proceeding the Corporation shall have the burden
of proof that the indemnitee is not entitled to indemnification
under this Bylaw.
(ii) If a determination shall have been made or deemed to have
been made, pursuant to paragraphs (b) or (c) of Bylaw 27, that the
indemnitee is entitled to indemnification, the Corporation shall
be obligated to pay the amounts constituting such indemnification
within five days after such determination has been made or deemed
to have been made and shall be conclusively bound by such
determination, unless (A) the indemnitee misrepresented or failed
to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B) such
indemnification is prohibited by law, in either case as finally
determined by adjudication. In the event that (x) advancement of
expenses is not timely made by the Corporation pursuant to this
Bylaw or (y) payment of indemnification is not made within five
days after a determination of entitlement to indemnification has
been made or deemed to have been made pursuant to paragraphs (b)
or (c) of Bylaw 27, the indemnitee shall be entitled to seek
judicial enforcement of the Corporation's obligations to pay to
the indemnitee such advancement of expense of indemnification.
Notwithstanding the foregoing, the Corporation may bring an
action, in an appropriate court in the State of Delaware or any
other court of competent jurisdiction, contesting the right of the
indemnitee to receive indemnification hereunder due to the
occurrence of a circumstance described in subclause (A) of this
clause (ii) of paragraph (d) of Bylaw 27 or a prohibition of law
(both of which are herein referred to as a "Disqualifying
Circumstance. In any such enforcement action or other proceeding
whether brought by the indemnitee or the Corporation, indemnitee
shall be entitled to indemnification unless the Corporation can
satisfy the burden or proof that indemnification is prohibited by
reason of a Disqualifying Circumstance.
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(iii) The Corporation shall be precluded from asserting in any
judicial proceeding commenced pursuant to this paragraph (d) that
the procedures and presumptions of this Bylaw are not valid,
binding and enforceable and shall stipulate in any such court or
before any such arbitrator or arbitrators that the Corporation is
bound by all the provisions of this Bylaw.
(iv) In the event that the indemnitee, pursuant to this Bylaw,
seeks a judicial adjudication of his or her rights under, or to
recover damages for breach of, this Bylaw, or is otherwise involved
in any adjudication with respect to his or her right to
indemnification, the indemnitee shall be entitled to recover from
the Corporation, and shall be indemnified by the Corporation
against, any expenses actually and reasonably incurred by him or
her if the indemnitee prevails in such judicial adjudication. If it
shall be determined in such judicial adjudication that the
indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses
incurred by the indemnitee in connection with such judicial
adjudication shall be prorated accordingly.
(e) Definitions. For purposes of indemnification under this Bylaw
or otherwise:
(i) "Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported in
response to Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (the "Act"), whether or not the
Corporation is then subject to such reporting requirement; provided
that, without limitation, such a change in control shall be deemed to
have occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Act) other than Citizens Utilities Corporation
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Corporation
representing 20 percent or more of the combined voting power of the
Corporation's then outstanding securities without the prior approval of
at least two-thirds of the members of the Board of Directors in office
immediately prior to such acquisition; (B) the Corporation is a party
to a merger, consolidation, sale of assets or other reorganization, or
a proxy contest, as a consequence of which, members of the Board of
Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter;
or (C) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors
(including for this purpose any new Director whose election or
nomination for election by the Corporation's stockholders was approved
by a vote of at least two-thirds of the Directors then still in office
who were Directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board of Directors.
(ii) "Disinterested Director" means a Director of the
Corporation who is not or was not a material party to the Proceeding in
respect of which indemnification is sought by the indemnitee.
(iii) "Independent Counsel" means a law firm or a member of a
law firm that neither presently is, nor in the past five years has
been, retained to represent (A) the Corporation or the indemnitee in
any manner or (B) any other party to the Proceeding giving rise to a
claim for indemnification under this Bylaw. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any person
who, under the applicable standards of professional conduct then
prevailing under the law of the State of Delaware, would have a
conflict of interest in representing either the Corporation or the
indemnitee in an action to determine the indemnitee's rights under this
Bylaw.
(f) Acts of Disinterested Directors. Disinterested Directors
considering or acting on any indemnification matter under this Bylaw or under
governing corporate law or otherwise may consider or take action as the Board of
Directors or may consider or take action as a committee or individually or
otherwise. In the event that Disinterested Directors consider or take action as
the Board of Directors, one-third of the total number of Directors in office
shall constitute a quorum.
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AMENDMENTS OF BYLAWS
28. These Bylaws may be amended or altered by the vote of a majority of
the whole Board of Directors at any meeting provided that notice of such
proposed amendment shall have been given in the notice given to the Directors of
such meeting. Such authority in the Board of Directors is subject to the power
of the stockholders to change or repeal any Bylaws by a majority vote of the
stockholders present and represented at any annual meeting or at any special
meeting called for such purpose, and Bylaws adopted by the stockholders (other
than Bylaw 27) shall not be repeated, altered or amended by the Board of
Directors.
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