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| PNW > SEC Filings for PNW > Form 8-K on 24-Nov-2008 | All Recent SEC Filings |
24-Nov-2008
Other Events
Liquidation Rights
Subject to any preferential rights of any series of preferred stock, holders
of shares of common stock are entitled to share ratably in our assets legally
available for distribution to our shareholders in the event of our liquidation,
dissolution or winding up.
Absence of Other Rights
Holders of common stock have no preferential, preemptive, conversion or
exchange rights. When issued in accordance with our articles of incorporation
and law, shares of our common stock are fully paid and not liable to further
calls or assessment by us.
Transfer Agent and Registrar
The Bank of New York Mellon is the principal transfer agent and registrar for
the common stock.
Preferred Stock
Our Board of Directors has the authority, without any further action by our
shareholders, to issue from time to time up to ten million shares of preferred
stock, in one or more series and to fix the designations, preferences, rights,
qualifications, limitations and restrictions thereof, including voting rights,
dividend rights, dividend rates, conversion rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting
any series. The issuance of preferred stock with voting rights could have an
adverse effect on the voting power of holders of common stock by increasing the
number of outstanding shares having voting rights. In addition, if our Board of
Directors authorizes preferred stock with conversion rights, the number of
shares of common stock outstanding could potentially be increased up to the
authorized amount. The issuance of preferred stock could decrease the amount of
earnings and assets available for distribution to holders of common stock. Any
such issuance could also have the effect of delaying, deterring or preventing a
change in control of us and may adversely affect the rights of holders of our
common stock.
Certain Anti-takeover Effects
General. Certain provisions of our articles of incorporation, bylaws, and the
Arizona Revised Statutes ("ARS"), as well as our shareholder rights plan, may
have an anti-takeover effect and may delay or prevent a tender offer or other
acquisition transaction that a shareholder might consider to be in his or her
best interest, including a transaction that results in a premium over the market
price of the common stock. The summary of the provisions of our articles,
bylaws, shareholder rights plan, and the ARS set forth below does not purport to
be complete and is qualified in its entirety by reference to our articles,
bylaws, shareholder rights plan, and the ARS.
Business Combinations. ARS § 10-2741 through 2743 and Article XII of our
bylaws restrict a wide range of transactions (collectively, "business
combinations") between us or, in certain cases, one of our subsidiaries, and an
interested shareholder (or any affiliate or associate of the interested
shareholder). An "interested shareholder" is, generally, any person who
beneficially owns, directly or indirectly, 10% or more of our outstanding voting
power or any of our affiliates or associates who at any time within the prior
three years was such a beneficial owner. The statute broadly defines "business
combinations" to include, among other things and with certain exceptions:
• mergers and consolidations with an interested shareholder or an affiliate or
associate of the interested shareholder;
• share exchanges with an interested shareholder or an affiliate or associate of the interested shareholder;
• any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets to an interested shareholder or an affiliate or associate of the interested shareholder, representing 10% or more of (i) the aggregate market value of all of our consolidated assets as of the end of the most recent fiscal quarter, (ii) the aggregate market value of all our outstanding shares, or (iii) our consolidated revenues or net income for the four most recent fiscal quarters;
• the issuance or transfer of shares of stock having an aggregate market value of 5% or more of the aggregate market value of all of our outstanding shares to an interested shareholder or an affiliate or associate of the interested shareholder;
• the adoption of a plan or proposal for our liquidation or dissolution or reincorporation in another state or jurisdiction pursuant to an agreement or arrangement with an interested shareholder or an affiliate or associate of the interested shareholder;
• corporate actions, such as stock splits and stock dividends, and other transactions resulting in an increase in the proportionate share of the outstanding shares of any series or class of stock of us or any of our subsidiaries owned by an interested shareholder or an affiliate or associate of the interested shareholder; and
• the receipt by an interested shareholder or an affiliate or associate of the interested shareholder of the benefit (other than proportionately as a shareholder) of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by or through us or any of our subsidiaries.
The ARS and our bylaws provide that, subject to certain exceptions, we may
not engage in a business combination with an interested shareholder (or any
affiliate or associate of the interested shareholder) or authorize one of our
subsidiaries to do so, for a period of three years after the date on which the
interested shareholder first acquired the shares that qualify such person as an
interested shareholder (the "share acquisition date"), unless either the
business combination or the interested shareholder's acquisition of shares on
the share acquisition date is approved by a committee of our Board of Directors
(comprised solely of disinterested directors or other disinterested persons)
prior to the interested shareholder's share acquisition date.
In addition, after such three-year period, the ARS and our bylaws prohibit us
from engaging in any business combination with an interested shareholder (or any
affiliate or associate of the interested shareholder), subject to certain
exceptions, unless:
• the business combination or acquisition of shares by the interested shareholder on the share acquisition date was approved by our Board of Directors prior to the share acquisition date;
• the business combination is approved by holders of a majority of our outstanding shares (excluding shares beneficially owned by the interested shareholder or any affiliate or associate of the interested shareholder) at a meeting called after such three-year period; or
• the business combination satisfies specified price and other requirements.
Anti-Greenmail Provisions. ARS § 10-2704 and Article XIII of our bylaws
prohibit us from purchasing any shares of our voting stock from any beneficial
owner (or group of beneficial owners acting together to acquire, own or vote our
shares) of more than 5% of the voting power of our outstanding shares at a price
per share in excess of the average closing sale price during the 30 trading days
preceding the purchase or if the person or persons have commenced a tender offer
or announced an intention to seek control of us, during the 30 trading days
prior to the commencement of the tender offer or the making of the announcement,
if the 5% beneficial owner has beneficially owned the shares to be purchased for
a period of less than three years, unless:
• holders of a majority of our voting power (excluding shares held by the 5%
beneficial owner or its affiliates or associates or by any of our officers
and directors) approve the purchase; or
• we make the repurchase offer available to all holders of the class or series of securities to be purchased and to all holders of other securities convertible into that class or series.
Control Share Acquisition Statute. Through a provision in our bylaws, we have
opted out of ARS § 10-2721 through 2727, the Arizona statutory provisions
regulating control share acquisitions. As a result, potential acquirors are not
subject to the limitations imposed by that statute.
Shareholder Rights Plan. We have adopted a shareholder rights plan under
which one preferred share purchase right is attached to each outstanding share
of our common stock. The rights become exercisable and will be separated from
the common stock on the Distribution Date, as such term is defined in the plan.
Generally, subject to specified exceptions, the Distribution Date will occur on
the earlier of:
• 10 days following a public announcement that a person or group of affiliated
or associated persons (an "acquiring person") has acquired beneficial
ownership of 15% or more of our outstanding common stock; or
• 10 business days following the commencement of, or announcement of an intention to make, a tender offer or exchange offer that would result in the beneficial ownership by a person or group of 15% or more of our outstanding common stock.
Each right entitles the registered holder to purchase from us one
one-hundredth of a share of Series A Participating Preferred Stock (the
"Series A Preferred Stock") at an exercise price of $130, subject to adjustment
under specified circumstances. However, after any person has become an acquiring
person (a "Flip-In Event"), upon exercise of the right, the holder will be
entitled to receive common stock valued at twice the exercise price of the
right. In other words, a rights holder may purchase common stock at a 50%
discount. In some circumstances, the holder will receive cash, property or other
securities instead of common stock. Upon the occurrence of a Flip-In Event, any
rights owned by an acquiring person, its affiliates and associates and certain
of its transferees will become null and void.
In the event that a person becomes an acquiring person, we are then merged,
and the common stock is exchanged or converted in the merger, then each right
(other than those formerly held by the acquiring person, which became void)
would "flip-over" and be exercisable for a number of shares of common stock of
the acquiring company having a market value of two times the exercise price of
the right. In other words, a rights holder may purchase the acquiring company's
common stock at a 50% discount.
After a Flip-In Event but before a "flip-over" event (as described above)
occurs and before an acquiring person becomes the owner of 50% or more of the
common stock, the Board may cause the rights (either in whole or in part) to be
exchanged for shares of common stock (or fractional interests in Series A
Preferred Stock, or equivalent securities, of equal value) at a one-to-one
exchange ratio. Rights held by the acquiring person, however, which became void
upon the Flip-In Event, would not be entitled to participate in such exchange.
We may redeem the rights for $0.01 per right at any time prior to the date on
which a person becomes an acquiring person. The shareholder rights plan and the
rights expire in March 2009, subject to extension.
For so long as the rights are redeemable, the terms of the rights may be
amended or supplemented by the Board of Directors at any time and from time to
time without the consent of the holders of the rights. At any time when the
rights are not redeemable, the Board of Directors may amend or supplement the
terms of the rights, provided that such amendment does not adversely affect the
interests of the holders of the rights. In no event may any amendment or
supplement be made which changes the redemption price.
Until a right is exercised, the holder thereof will have no rights as a
shareholder, including, without limitation, the right to vote or to receive
dividends, except as holder of the common stock to which the right is attached.
For information on the terms of the Series A Preferred Stock, see the
certificate of designation for the Series A Preferred Stock, the form of which
is attached as Exhibit A to the Amended and Restated Rights Agreement, dated as
of March 26, 1999, filed as an exhibit to our Current Report on Form 8-K filed
with the SEC on April 19, 1999, which is incorporated herein by reference.
Special Meetings of Shareholders. Pursuant to ARS § 10-702, except with
respect to certain business combinations, as required by Arizona law, a special
meeting of shareholders may be called by a corporation's Board of Directors or
any other person authorized to do so in its articles of incorporation or bylaws.
Our bylaws provide that, except as required by law, special meetings of
shareholders may only be called by a majority of our Board of Directors, the
Chairman of the Board, or the President.
Election and Removal of Directors. Each member of our Board of Directors is
elected annually to hold office until the next annual meeting of the
shareholders or until his or her earlier death, resignation or removal or until
his or her successor is duly elected and qualified. Arizona law provides for
cumulative voting in the election of directors, which may make it more difficult
for shareholders to elect a majority of the Board of Directors.
Our bylaws provide that any director may be removed with or without cause,
but 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.
However, if less than the entire Board of Directors is to be removed, no one
director 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 of
directors.
Shareholder Proposals and Director Nominations. A shareholder can submit
shareholder proposals and nominate candidates for election to our Board of
Directors if he or she follows the advance notice provisions set forth in our
bylaws.
With respect to shareholder proposals to bring business before the annual
meeting, shareholders must submit a written notice to the Secretary of the
Company not fewer than 90 nor more than 120 days prior to the first anniversary
of the date of our previous year's annual meeting of shareholders. However, if
we have changed the date of the annual meeting by more than 30 days from the
date of the previous year's annual meeting, the written notice must be submitted
no earlier than 120 days before the annual meeting and not later than 90 days
before the annual meeting or ten days after the day we make public the date of
the annual meeting. The written notice must briefly describe the business the
shareholder desires to bring before the meeting, the text of the proposal or
business, the reasons for conducting such business at the meeting, and any
material interest in the proposal of the shareholder and the beneficial owner,
if any, on whose behalf the proposal is made.
With respect to director nominations, shareholders must submit written notice
to the Secretary of the Company at least 180 days prior to the date of the
annual meeting. This requirement is also contained in our articles of
incorporation. Our bylaws require that the written notice must contain all
information relating to the director nominee that is required to be included in
a proxy statement pursuant to Regulation 14A under the Securities Exchange Act
of 1934, as well as the written consent of the proposed nominee to be named in
the proxy statement as a nominee and to serving as a director if elected.
All written notices delivered pursuant to the advance notice provisions of
our bylaws are required to state (i) the name and address as they appear on our
books of the sponsoring
shareholder and the beneficial owner, if any, on whose behalf the proposal or
nomination is made, (ii) the class and number of shares that are owned
beneficially and of record by the shareholder and such beneficial owner, (iii) a
representation that the shareholder is a holder of record entitled to vote at
the meeting and intends to appear in person or by proxy at the meeting to
propose such business or nomination, and (iv) whether the shareholder or
beneficial owner intends or is part of a group that intends to deliver a proxy
statement to holders of at least the number of shares required to adopt the
proposal or elect the nominee or otherwise solicit proxies in favor of the
proposal or nomination.
Shareholder proposals and director nominations that are late or that do not
include all required information may be rejected. This could prevent
shareholders from bringing certain matters before an annual meeting, including
proposing the election of non-incumbent directors.
A shareholder must also comply with all applicable laws in proposing business
to be conducted and in nominating directors. The notice provisions of the bylaws
do not affect rights of shareholders to request inclusion of proposals in our
proxy statement pursuant to Rule 14a-8 of the Securities Exchange Act of 1934.
Additional Authorized Shares of Capital Stock. The authorized but unissued
shares of common stock and preferred stock available for issuance under our
articles of incorporation could be issued at such times, under such
circumstances, and with such terms and conditions as to impede an acquisition
transaction.
Amendment to Articles of Incorporation and Bylaws. ARS § 10-1001 through 1003
generally provide that both the Board of Directors and the shareholders must
approve amendments to an Arizona corporation's articles of incorporation, except
that the Board of Directors may adopt specified ministerial amendments without
shareholder approval. Unless the articles of incorporation, Arizona law or the
Board of Directors would require a greater vote or unless the articles of
incorporation or Arizona law would require a different quorum, the vote required
by each voting group allowed or required to vote on the amendment would be:
• a majority of the votes entitled to be cast by the voting group, if the
amendment would create dissenters' rights for that voting group; and
• in any other case, if a quorum is present in person or by proxy consisting of a majority of the votes entitled to be cast on the matter by the voting group, the votes cast by the voting group in favor of the amendment must exceed the votes cast against the amendment by the voting group.
ARS § 10-1020 provides that the Board of Directors may amend the corporation's bylaws unless either: (i) the articles or applicable law reserves this power exclusively to shareholders in whole or in part or (ii) the shareholders in amending or repealing a particular bylaw provide expressly that the Board may not amend or repeal that bylaw. An Arizona corporation's shareholders may amend the corporation's bylaws even though they may also be amended by the Board of Directors. Our bylaws may not be amended or repealed without the vote of a majority of the Board of Directors or the affirmative vote of a majority of votes cast on the matter at a meeting of shareholders.
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