BYLAWS
OF
ELECTRIC LIGHTWAVE, INC.
As amended October 16, 1997; May 21, 1998, July 18, 2000
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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.
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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 nine 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.
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.
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.
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.
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.
(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.
<PAGE>
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 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.
(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.
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.
