<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994 Commission file number 1-5663
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Central Louisiana Electric Company, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-0244480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (318) 484-7400
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X . No .
As of May 2, 1994 there were 22,398,341 shares outstanding of the
Registrant's Common Stock, par value $2.00 per share.
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TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements............................ 1
Report of Independent Accountants.............. 2
Consolidated Balance Sheet..................... 3
Consolidated Statement of Income............... 5
Consolidated Statement of Cash Flows........... 6
Notes to Consolidated Financial Statements..... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Condition............................ 8
Results of Operations.......................... 8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders.............................. 10
Item 5. Other Information............................... 10
Item 6. Exhibits and Reports on Form 8-K................ 11
SIGNATURE.................................................. 12
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PART I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The consolidated financial statements for Central Louisiana Electric Company,
Inc. (the Company) included herein are unaudited but reflect, in the Company's
opinion, all adjustments, consisting only of normal recurring adjustments, that
are necessary for a fair presentation of its financial position and the results
of its operations for the interim periods presented. The financial statements
included herein should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1993.
The consolidated financial statements included herein have been subjected to a
limited review by Coopers & Lybrand, independent accountants for the Company,
whose report is included herein.
1
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Coopers certified public accountants
& Lybrand
Report of Independent Accountants
Board of Directors
Central Louisiana Electric Company, Inc.:
We have made a review of the consolidated balance sheet of Central Louisiana
Electric Company, Inc. as of March 31, 1994, and the related consolidated
statements of income and cash flows for the three-month periods ended March 31,
1994 and 1993, in accordance with standards established by the American
Institute of Certified Public Accountants. These financial statements are the
responsibility of the Company's management.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993 and the
related consolidated statements of income, cash flows and changes in common
shareholders' equity for the year then ended (not present herein); and in our
report dated January 21, 1994, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1993, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
Coopers & Lybrand
New Orleans, Louisiana
April 22, 1994
2
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<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION> (In thousands)
March 31, 1994 December 31, 1993
------------------ -----------------
ASSETS
<S> <C> <C>
Utility plant
Property, plant and equipment $1,245,008 $1,241,147
Accumulated depreciation (388,924) (379,753)
---------- ----------
856,084 861,394
Construction work-in-progress 37,684 33,642
---------- ----------
Total utility plant, net 893,768 895,036
---------- ----------
Investments and other assets 19,747 20,197
---------- ----------
Current assets
Cash and cash equivalents 8,162 5,802
Accounts receivable, net 7,481 10,701
Unbilled revenues 1,220 1,506
Inventory, at average cost 10,619 11,898
Materials and supplies, at average cost 14,365 14,007
Prepayments and other 2,709 2,218
---------- ----------
Total current assets 44,556 46,132
---------- ----------
Prepayments and deferred charges 203,387 200,270
---------- ----------
TOTAL ASSETS $1,161,458 $1,161,635
---------- ----------
<FN>
(Continued on next page)
</TABLE>
3
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<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEET (Continued)
(Unaudited)
<CAPTION>
(In thousands,
except share amounts)
March 31, 1994 December 31, 1993
------------------- -----------------
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Common shareholders' equity
Common stock, $2 par value, authorized
50,000,000 shares, issued 22,713,474
and 22,708,874 shares at March 31, 1994
and December 31, 1993, respectively $ 45,427 $ 45,418
Premium on capital stock 112,937 112,829
Retained earnings 200,231 200,908
Treasury stock at cost, 316,133 and
326,380 shares at March 31, 1994
and December 31, 1993, respectively (6,394) (6,600)
---------- ----------
352,201 352,555
---------- ----------
Preferred stock, cumulative, $100 par value
Not subject to mandatory redemption 30,748 30,982
Deferred compensation related to
preferred stock held by ESOP (25,452) (26,118)
---------- ----------
5,296 4,864
Subject to mandatory redemption 7,230 7,242
---------- ----------
12,526 12,106
---------- ----------
Long-term debt, net 350,575 351,087
---------- ----------
Total capitalization 715,302 715,748
---------- ----------
Current liabilities
Short-term debt 38,944 28,373
Long-term debt due within one year 810 790
Accounts payable 26,842 40,653
Customer deposits 18,870 18,638
Taxes accrued 10,923 5,069
Interest accrued 3,008 8,329
Accumulated deferred fuel 5,392 5,315
Other 2,803 2,355
---------- ----------
Total current liabilities 107,592 109,522
---------- ----------
Deferred credits
Accumulated deferred federal and state
income taxes 225,751 224,151
Accumulated deferred investment tax
credits 36,351 36,806
Other deferred credits 76,462 75,408
---------- ----------
Total deferred credits 338,564 336,365
---------- ----------
TOTAL CAPITALIZATION AND LIABILITIES $1,161,458 $1,161,635
---------- ----------
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
4
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<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
For the three months ended March 31
(Unaudited)
(In thousands, except share and
per share amounts)
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
OPERATING REVENUES $ 84,147 $ 75,448
---------- ----------
OPERATING EXPENSES
Fuel used for electric generation 27,939 20,448
Power purchased 3,282 5,915
Other operation 12,827 11,761
Maintenance 4,971 5,829
Depreciation 9,795 9,200
Other taxes 7,104 6,738
Federal and state income taxes 3,450 2,796
---------- ----------
69,368 62,687
---------- ----------
OPERATING INCOME 14,779 12,761
Allowance for other funds used during
construction 265 933
Other income and expenses, net 119 83
---------- ----------
INCOME BEFORE INTEREST CHARGES 15,163 13,777
Interest charges, including amortization of
debt expense, premium and discount 6,722 6,450
Allowance for borrowed funds used during
construction (138) (194)
---------- ----------
NET INCOME 8,579 7,521
Preferred dividend requirements, net 498 497
---------- ----------
NET INCOME APPLICABLE TO COMMON STOCK $ 8,081 $ 7,024
---------- ----------
WEIGHTED AVERAGE SHARES OUTSTANDING
Primary 22,415,338 22,367,226
Fully diluted 23,844,652 23,808,227
EARNINGS PER SHARE
Primary $ 0.36 $ 0.31
Fully diluted $ 0.35 $ 0.31
CASH DIVIDENDS PAID PER SHARE $ 0.355 $ 0.345
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
5
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<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended March 31
(Unaudited)
(In thousands)
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 8,579 $ 7,521
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 9,895 9,587
Allowance for funds used during construction (403) (1,127)
Amortization of investment tax credits (455) (456)
Deferred income taxes 839 1,193
Deferred fuel costs 77 498
Changes in assets and liabilities
Accounts receivable 3,220 3,112
Unbilled revenues 286 966
Inventory, materials and supplies 921 (1,008)
Accounts payable (13,811) (13,070)
Customer deposits 232 311
Other deferred accounts (2,162) (1,363)
Taxes accrued 5,854 6,727
Interest accrued (5,321) (3,898)
Other, net 1,396 2,445
---------- ----------
Net cash provided by operating activities 9,147 11,438
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to utility plant (8,246) (13,152)
Allowance for funds used during construction 403 1,127
Sale of utility plant 57 86
Purchase of investments (39,167) (56,085)
Sale of investments 38,469 55,010
---------- ----------
Net cash used in investing activities (8,484) (13,014)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 116 333
Repurchase of common stock (21) -
Retirement of long-term debt (502) (486)
Increase in short-term debt 10,571 9,858
Redemption of preferred stock (11) -
Issuance of preferred stock (8) -
Dividends paid on common and preferred stock, net (8,448) (8,804)
---------- ----------
Net cash provided by financing activities 1,697 901
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,360 (675)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,802 1,798
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,162 $ 1,123
---------- ----------
Supplementary cash flow information
Interest paid (net of amount capitalized) $11,817 $10,032
Income taxes paid $ 1,500 -
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
6
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A. Reclassification
Certain prior-period amounts have been reclassified to conform
with the presentation shown in the current period financial statements.
These reclassifications had no effect on net income applicable to
common stock or common shareholders' equity.
Note B. Earnings Per Share
For 1994, fully diluted earnings per share are being reported
for the first time, as a result of the accounting effects of the
Employee Stock Ownership Plan (ESOP) convertible preferred stock.
Primary earnings per share are computed based on the weighted average
number of common shares outstanding and common stock equivalents
arising from an Incentive Stock Option Plan. Fully diluted earnings
per share are computed using average common shares and equivalents.
Common stock equivalents are increased by the assumed conversion of
convertible preferred stock into common stock as if converted at the
beginning of the period.
Note C. Investments in Debt and Equity Securities
The Company implemented Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115), on January 1, 1994. The Company has classified
the various debt and equity securities it owns as "available-for-sale"
in accordance with the criteria set forth in SFAS 115. These funds
are invested through an outside investment manager pending final
determination by the Company as to their ultimate utilization.
Currently, the Company does not intend to trade these securities
actively or to hold these investments to their final maturity.
Securities may be sold in order to adjust the amounts invested within
the various types of securities, to limit the potential loss exposure
associated with a specific security or to obtain funds needed for
other investment opportunities.
For the first quarter ended March 31, 1994, the Company recorded a
valuation allowance of $0.8 million on debt and equity security
investments as an adjustment to common shareholders' equity.
7
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<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
On January 1, 1994 the Company implemented SFAS 115. The Company has
classified the various debt and equity securities it owns as "available-for-
sale" in accordance with the criteria set forth in SFAS 115. These funds are
invested through an outside investment manager pending final determination by
the Company as to their ultimate utilization. Currently, the Company does not
intend to trade these securities actively or to hold these investments to their
final maturity. Securities may be sold in order to adjust the amounts invested
within the various types of securities, to limit the potential loss exposure
associated with a specific security or to obtain funds needed for other
investment opportunities.
As of March 31, 1994 the fair market value of the Company's investments in debt
and equity securities was $14.4 million. For the first quarter ended March 31,
1994, the Company recorded a valuation allowance of $0.8 million on debt and
equity security investments as an adjustment to common shareholders' equity.
Earnings Per Share
For 1994, fully diluted earnings per share are being reported for the first
time as a result of the accounting effects of the ESOP convertible preferred
stock. For more information see "Note B. Earnings Per Share" in Item 1 above.
Regulatory Matters
The Company has finalized the renewal of a nonexclusive municipal franchise
affecting about 6,000 customers, or about 2.8% of the Company's customers,
which has been in effect since 1969 and expires in July 1994. The city's
administration had indicated the possibility of establishing a city-owned
electric utility system rather than renewing its franchise with the Company.
On May 10, 1994 the Company successfully executed a 20-year franchise agreement
with the city.
RESULTS OF OPERATIONS
Net income applicable to common stock totaled $8.1 million for the quarter
ended March 31, 1994, as compared to $7.0 million for the corresponding period
in 1993. Primary earnings per average common share were $.36 for the quarter
ended March 31, 1994, as compared to $.31 for the same period in 1993. The
following principal factors contributed to these results:
Operating revenues increased $8.7 million, or 11.5%, for the first quarter
1994. Changes in the makeup of total operating revenues and their effects on
income from operations, and thus on net income, are best analyzed by
examining the changes in fuel cost recovery revenues and non-fuel cost
recovery revenues as follows:
8
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(a) Fuel cost recovery revenues increased $4.8 million, or 18.8%, for the
quarter primarily due to a 24.6% increase in the cost of natural gas.
Changes in fuel cost recovery revenues have historically had no effect
on net income, as fuel costs are generally recovered in revenues through
a fuel adjustment clause which enables the Company to pass on to
customers substantially all changes in the cost of generating fuel. The
adjustments regulated by the Louisiana Public Service Commission (LPSC)
(about 99% of the total fuel cost adjustment) are audited by the LPSC
staff monthly and the remaining portion, regulated by the Federal Energy
Regulatory Commission, is audited periodically for several years at a
time. Until approval is received, the adjustments are subject to
refund.
(b) Non-fuel cost recovery revenues increased $3.9 million, or 7.8%, for the
three-month period compared to the same period in 1993 due to a return
to more normal weather in the first quarter of 1994.
Other operation expenses increased $1.1 million, or 9.1%, for the quarter
ended March 31, 1994 compared to the same period in 1993. General and
administrative expenses increased primarily due to an increase in the
provision for injury and damage reserves. Higher first quarter 1994 power
production expenditures, due to timing differences of actual expenditures,
also contributed to the increase in other operation expenses.
Maintenance expenses decreased $.9 million, or 14.7%, for the three-month
period ended March 31, 1994 compared to the corresponding prior-year period,
due mainly to two major inspection outages which occurred at the Dolet Hills
and Coughlin power stations in the first quarter of 1993.
Provision for depreciation expenses increased $.6 million, or 6.5%, for the
quarter ended March 31, 1994 compared to the same period in 1993 due to
higher plant balances resulting from increased additions during the third and
fourth quarters of 1993 including completion of the Cocodrie transmission
line and installation of the Customer Information System.
Taxes other than income taxes increased $.4 million, or 5.4%, for the three-
month period ended March 31, 1994 compared to the corresponding prior-year
period as a result of higher millage rates and increased ad valorem taxes
resulting from higher assessed property values due primarily to property
additions.
Interest expense increased $.3 million, or 5.2%, during the first quarter
of 1994 compared to the same period in 1993, primarily due to the issuance of
long-term debt during the second and third quarters of 1993 to reduce short-
term debt levels.
Allowance for funds used during construction (AFUDC), including borrowed and
other funds on a combined basis, decreased $.7 million, or 64.2%, for the
first quarter of 1994 compared to the corresponding period in 1993 primarily
due to higher first quarter 1993 construction work-in-progress balances
resulting from Hurricane Andrew.
9
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PART II
OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Shareholders of the Company was held on April 22,
1994 in Pineville, Louisiana.
(b) Proxies for the election of directors were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
There was no solicitation in opposition to management's nominees, and
all nominees listed in the Proxy Statement were elected.
(c) The following is a tabulation of the votes cast upon each of the
proposals presented at the Annual Meeting of Shareholders of the
Company on April 22, 1994.
(1) Election of Directors:
<TABLE>
<CAPTION> Class III Directors For Withheld
------------------- ------------ ------------
<S> <C> <C>
J. Patrick Garrett 19,978,914 153,013
F. Ben James, Jr. 19,981,658 150,269
William A. Lockwood 19,964,676 167,251
A. DeLoach Martin, Jr. 19,973,838 158,089
</TABLE>
<TABLE>
<CAPTION>(2) Approval of the appointment of Coopers and Lybrand as the
Company's auditors for 1994:
For Against Abstain
------------- ------------ -------------
<S> <C> <C>
19,920,813 99,439 120,018
</TABLE>
Item 5. OTHER INFORMATION
In February 1994 the Company announced its interest in purchasing Teche
Electric Cooperative, Inc. (Teche). Teche serves about 8,800 customers and its
service area, which is in Iberia, St. Martin and St. Mary parishes (counties),
is adjacent to and similar to the Company's. Teche officials rejected the offer
as insufficiently detailed and not properly made. Certain of the Company's
officers and employees met with Teche member-owners and discussed the terms of
the Company's offer. On April 12, 1994 at the Teche annual membership meeting,
about 60% of the members voted for the four board candidates eligible for
election out of the eleven members of the Teche board. The four newly elected
directors are supportive of negotiations with the Company. Any subsequent
purchase of Teche will require approvals by the LPSC, the Rural Electric
Administration and other governmental agencies and will be subject to a due
diligence review and certain other conditions. At this time, the Company is
unable to predict whether it will ultimately be successful in purchasing Teche.
10
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3 Amended and Restated Bylaws of the Company as amended to April
22, 1994
11 Computation of Net Income Per Common Share for the three months
ended March 31, 1994 and March 31, 1993
12 Computation of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends for the
twelve months ended March 31, 1994
15 Awareness letter, dated May 12, 1994, from Coopers & Lybrand
regarding review of the unaudited interim financial statements
(b) Reports on Form 8-K
The Company filed a Report on Form 8-K dated as of February 22,
1994 to announce its interest in purchasing Teche Electric
Cooperative, Inc. For more information see "Item 5. Other
Information" above.
11
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the under-
signed thereunto duly authorized.
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
(REGISTRANT)
BY: David M. Eppler
Vice President - Finance
(Principal Financial Officer)
Date: May 13, 1994
12
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<PAGE>
AMENDED AND RESTATED BYLAWS
OF
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
(as amended to April 22, 1994)
<PAGE>
<PAGE>
TABLE OF CONTENTS
ARTICLE I - REGISTERED OFFICE; REGISTERED AGENTS;
CORPORATE SEAL ............................ 1
Section l Registered Office and Registered Agents .... 1
Section 2 Corporate Seal ............................. 1
ARTICLE II - SHAREHOLDERS ............................. 1
Section l Place of Holding Meetings .................. 1
Section 2 Quorum; Adjournment of Meetings ............ 1
(a) General Rule .......................... 1
(b) Special Rule .......................... 2
(c) Adjournments .......................... 2
Section 3 Annual Meeting ............................. 3
Section 4 Special Meetings ........................... 3
Section 5 Conduct of Meetings ........................ 4
Section 6 Voting ..................................... 5
Section 7 Notice ..................................... 6
Section 8 Amendment of Articles of Incorporation ..... 8
(a) Shareholder Proposals ................. 8
(b) Effectiveness ......................... 8
Section 9 Effectiveness of Other Amendments to
Articles of Incorporation .................. 9
ARTICLE III - DIRECTORS ............................... 10
Section 1 Certain General Provisions ................. 10
(a) Number ................................ 10
(b) Classification ........................ 10
(c) Nominations ........................... 11
(d) Qualifications; Declaration of Vacancy. 12
(e) Removal ............................... 14
(f) Powers ................................ 15
(g) Change in Number of Directors ......... 16
(h) Rights of Preferred Shareholders, etc.. 16
Section 2 Filling of Vacancies ....................... 16
Section 3 Annual and Regular Meetings ................ 17
Section 4 Special Meetings ........................... 17
Section 5 Place of Meetings; Telephone Meetings ...... 18
Section 6 Quorum ..................................... 18
Section 7 Compensation ............................... 18
Section 8 Committees ................................. 18
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ARTICLE IV - INDEMNIFICATION ............................ 19
Section 1 Right to Indemnification - General ........... 19
Section 2 Certain Provisions Respecting Indemnifi-
cation for and Advancement of Expenses ....... 19
Section 3 Procedure for Determination of Entitlement
to Indemnification............................ 20
Section 4 Presumptions and Effect of Certain
Proceedings................................... 22
Section 5 Right of Claimant to Bring Suit............... 22
Section 6 Nonexclusivity and Survival of Rights......... 23
Section 7 Definitions................................... 24
ARTICLE V - EXECUTIVE COMMITTEE ......................... 26
Section l Election and Tenure .......................... 26
Section 2 Powers ....................................... 26
Section 3 Meetings ..................................... 26
Section 4 Compensation ................................. 26
ARTICLE VI - AUDIT COMMITTEE ............................ 26
Section 1 Election and Tenure .......................... 26
Section 2 Audit Committee .............................. 26
Section 3 Meetings ..................................... 27
Section 4 Compensation ................................. 27
ARTICLE VII - COMPENSATION COMMITTEE .................... 27
Section l Election and Tenure .......................... 27
Section 2 Compensation Committee ....................... 28
Section 3 Meetings ..................................... 28
Section 4 Compensation ................................. 28
ARTICLE VIII - OFFICERS ................................. 28
Section 1 Election, Tenure, and Compensation ........... 28
Section 2 Powers and Duties of Chairman of
Board of Directors ........................... 28
Section 3 Powers and Duties of President ............... 29
Section 4 Powers and Duties of Vice President .......... 29
Section 5 Powers and Duties of Secretary ............... 29
Section 6 Powers and Duties of Treasurer ............... 30
Section 7 Delegation of Duties ......................... 30
ARTICLE IX - CAPITAL STOCK .............................. 30
Section l Stock Certificates ........................... 30
Section 2 Lost or Destroyed Certificates ............... 31
Section 3 Transfer of Shares ........................... 31
Section 4 Dividends .................................... 31
Section 5 Closing Transfer Books; Fixing
Record Date .................................. 31
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ARTICLE X - FAIR-PRICE PROVISIONS ....................... 32
Section 1 Definitions .................................. 32
Section 2 Vote Required in Business Combinations ....... 36
Section 3 When Voting Requirements Not Applicable ...... 36
(a) Definitions ............................. 36
(b) Conditions .............................. 37
(c) Other Provisions ........................ 40
ARTICLE XI - NOTICES .................................... 41
Section 1 Manner of Giving Notice ...................... 41
Section 2 Waiver of Notice ............................. 41
ARTICLE XII - MISCELLANEOUS ............................. 41
Section l Fiscal Year .................................. 41
Section 2 Checks and Drafts ............................ 41
Section 3 Books and Records ............................ 41
Section 4 Separability ................................. 41
ARTICLE XIII - AMENDMENT OF BYLAWS ...................... 42
Section 1 Voting ....................................... 42
Section 2 Shareholder Proposals ........................ 42
Section 3 Effective Date ............................... 43
ARTICLE XIV - OTHER AMENDMENTS TO BYLAWS ................ 43
Section 1 Effective Date ............................... 43
ARTICLE XV - CONTROL SHARE ACQUISITION STATUTE .......... 44
Section 1 .............................................. 44
-iii-
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<PAGE>
AMENDED AND RESTATED BYLAWS
OF
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
[as amended to April 22, 1994]
ARTICLE I
---------
Registered Office; Registered Agents; Corporate Seal
Section 1. Registered Office and Registered
Agents. The registered office of the Corporation is 2030
Donahue Ferry Road, Pineville, Louisiana 71360-5226, and its
registered agents are Gregory L. Nesbitt, post office address
2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226, and
David M. Eppler, post office address 2030 Donahue Ferry Road,
Pineville, Louisiana 71360-5226. The Corporation may also
have offices at such other places as the board of directors or
the president may from time to time designate.
Section 2. Corporate Seal. The corporate seal
of the Corporation shall be circular in form and have
inscribed on its periphery the words "Central Louisiana
Electric Company, Inc. 1934" and in its center the words
"Incorporated," "Seal," and "Louisiana."
ARTICLE II
----------
Shareholders
Section 1. Place of Holding Meetings. All
meetings of the shareholders shall be held at the principal
office of the Corporation in the City of Pineville, State of
Louisiana, except in cases in which the notices thereof
designate some other place, which may be within or without the
State of Louisiana.
Section 2. Quorum; Adjournment of Meetings.
(a) General Rule. Except as otherwise provided in
these bylaws, the presence in person or by proxy at a meeting
of shareholders of the holders of record of a number of the
shares of the capital stock of the Corporation issued and
outstanding and entitled to vote thereat that represents a
majority of the votes entitled to be cast thereat shall
constitute a quorum at such meeting.
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(b) Special Rule. At a meeting of shareholders at
least one purpose of which is to amend or repeal a provision
of or to supplement these bylaws or the articles of
incorporation of the Corporation or to act on a merger,
consolidation, reclassification, repurchase, or exchange of
securities, transfer of all or substantially all of the assets
of the Corporation, dissolution, "business combination" as
defined in article X of these bylaws, or similar transaction,
a quorum shall for all purposes consist of the presence in
person or by proxy at such meeting of the holders of the
number of the shares of the capital stock of the Corporation
issued and outstanding and entitled to vote thereat that
represents 80% of the votes entitled to be cast thereat. At
a meeting described in the preceding sentence, the quorum for
any class of shares entitled to vote as a class shall be the
holders of the number of shares of such class that represents
80% of the votes entitled to be cast by all holders of all
shares of such class. Notwithstanding the foregoing, if the
change in the articles of incorporation or bylaws, merger,
consolidation, reclassification, repurchase, or exchange of
securities, transfer of all or substantially all of the assets
of the Corporation, dissolution, "business combination" as
defined in article X of these bylaws, or similar transaction
in question shall have been approved, before submission of a
proposal relating thereto to a vote of shareholders, by at
least 80% of the "continuing directors" (hereinafter defined)
of the Corporation, then, instead of subsection (b),
subsection (a) of this section 2 shall determine the quorum at
the meeting of shareholders at which such proposal is
considered by shareholders. For purposes of the preceding, a
"continuing director" shall mean a director elected pursuant
to a solicitation of proxies by the board of directors of the
Corporation at an annual meeting of shareholders held at least
90 days before the date of determination and who has served
continuously since such election, or a director elected by
continuing directors to fill a vacancy.
(c) Adjournments. If less than a quorum shall be
in attendance at the time for which a meeting shall have been
called, such meeting may, without any notice other than by
announcement at such meeting, be adjourned from time to time
by the vote of the shareholders present in person or by proxy
representing a majority of the votes so present, for a period
not exceeding one month at any one time, without notice other
than by announcement at the meeting, until a quorum shall
attend; provided, however, that a meeting at which a director
or directors are to be elected shall be adjourned only from
day to day until such director or directors have been elected.
A meeting at which a quorum is present may also be adjourned
in like manner. At an adjourned meeting at which a quorum
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shall attend, any business may be transacted which might have
been transacted if such meeting had been as originally called.
Section 3. Annual Meeting. Except as otherwise
provided by resolution of the board of directors, the annual
meeting of shareholders for the election of directors shall be
held on the third Friday after the first Monday in April of
each year. At each annual meeting, the shareholders shall
elect directors to succeed those whose terms have expired as
of the date of such annual meeting. Such other matters as may
properly come before a meeting may be acted upon at an annual
meeting.
Section 4. Special Meetings.
(a) Special meetings of the shareholders for any
purpose or purposes may be called by the president, by a
majority of the board of directors, or by a majority of the
executive committee, if any, of the board of directors;
provided, however, that if and whenever dividends payable on
any series of the Corporation's preferred stock shall be in
default in an amount equal to the aggregate dividends payable
in any period of 12 consecutive calendar months, a special
meeting shall be called on the demand in writing of the
holders of record of a majority of the outstanding shares of
preferred stock; and, provided further, that a special meeting
of shareholders may be called by a shareholder or shareholders
as provided in the Corporation's articles of incorporation,
these bylaws, or otherwise by law.
(b) Any shareholder requesting that a special
meeting of shareholders be called (the "Requesting Person")
shall, at the time of making the request, submit written
evidence, reasonably satisfactory to the secretary of the
Corporation, that the Requesting Person is a shareholder of
the Corporation and shall identify in writing (i) the reason
or reasons for which the special meeting is to be called, (ii)
the number of shares of each class of capital stock of the
Corporation owned beneficially by the Requesting Person, (iii)
all other persons with whom the Requesting Person is acting in
concert, and (iv) the number of shares of capital stock
beneficially owned by each such person with whom the
Requesting Person is acting in concert. Within 15 days after
the Requesting Person has submitted the aforesaid items to the
secretary of the Corporation, the secretary of the Corporation
shall determine whether the evidence of the Requesting
Person's status as a shareholder submitted by the Requesting
Person is reasonably satisfactory and shall notify the
Requesting Person in writing of his determination. If the
Requesting Person fails to submit the requisite information in
the form or at the time indicated, or if the secretary of the
Corporation fails to find such evidence of shareholder status
reasonably satisfactory, then the request to call a special
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meeting of shareholders shall be deemed invalid (by reason of
failure to comply with these bylaws) and no special meeting of
shareholders shall be held pursuant to such request.
Beneficial ownership shall be determined in accordance with
section 1 of article X of these bylaws. Nothing in this
subsection (b) shall affect the rights of the Corporation's
shareholders as provided in section 3(b) of article 6 of the
Corporation's articles of incorporation or as provided in
subsection (a) immediately preceding with respect to the
rights of the Corporation's preferred shareholders.
Section 5. Conduct of Meetings. Meetings of
shareholders shall be presided over by the president of the
Corporation or, if he is not present at a meeting, by such
other person as the board of directors shall designate or, if
no such person is designated by the board of directors, the
most senior officer of the Corporation present at the meeting.
The secretary of the Corporation, if present, shall act as
secretary of each meeting of shareholders; if he is not
present at a meeting, then such person as may be designated by
the presiding officer shall act as secretary of the meeting.
Meetings of shareholders shall follow reasonable and fair
procedure. Subject to the foregoing, the conduct of any
meeting of shareholders and the determination of procedure and
rules shall be within the absolute discretion of the presiding
officer (the "Chairman of the Meeting"), and there shall be no
appeal from any ruling of the Chairman of the Meeting with
respect to procedure or rules. Accordingly, in any meeting of
shareholders or part thereof, the Chairman of the Meeting
shall have the sole power to determine appropriate rules or to
dispense with theretofore prevailing rules. Without limiting
the foregoing, the following rules shall apply:
(a) The Chairman of the Meeting may ask or require
that anyone not a bona fide shareholder or proxy leave the
meeting.
(b) A resolution or motion shall be considered for
vote only if proposed by a shareholder or duly authorized
proxy, and seconded by an individual, who is a shareholder or
a duly authorized proxy, other than the individual who
proposed the resolution or motion, subject to compliance with
any other requirements concerning such a proposed resolution
or motion contained in these bylaws. The Chairman of the
Meeting may propose any motion for vote. The order of
business at all meetings of shareholders shall be determined
by the Chairman of the Meeting.
(c) The Chairman of the Meeting may impose any
reasonable limits with respect to participation in the meeting
by shareholders, including, but not limited to, limits on the
amount of time at the meeting taken up by the remarks or
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questions of any shareholder, limits on the numbers of
questions per shareholder, and limits as to the subject matter
and timing of questions and remarks by shareholders.
(d) Before any meeting of shareholders, the board
of directors may appoint any persons other than nominees for
office to act as inspectors of election at the meeting or its
adjournment. If no inspectors of election are so appointed,
the Chairman of the Meeting may, and on the request of any
shareholder or a shareholder's proxy shall, appoint inspectors
of election at the meeting of shareholders. The number of
inspectors shall be three. If any person appointed as
inspector fails to appear or fails or refuses to act, the
Chairman of the Meeting may, and upon the request of any
shareholder or a shareholder's proxy shall, appoint a person
to fill such vacancy.
The duties of these inspectors shall be as follows:
(1) Determine the number of shares outstanding
and the voting power of each, the shares represented at
the meeting, the existence of a quorum, and the
authenticity, validity and effect of proxies;
(2) Receive votes or ballots;
(3) Hear and determine all challenges and
questions in any way arising in connection with the right
to vote;
(4) Count and tabulate all votes;
(5) Report to the board of directors the
results based on the information assembled by the
inspectors; and
(6) Do any other acts that may be proper to
conduct the election or vote with fairness to all
shareholders.
Notwithstanding the foregoing, the final certification of the
results of any election or other matter acted upon at a
meeting of shareholders shall be made by the board of
directors.
Section 6. Voting. Except as otherwise provided
by the articles of incorporation, each holder of shares of
capital stock of the Corporation shall be entitled, at each
meeting of shareholders, to one vote for each share of such
stock standing in his name on the books of the Corporation on
the date of such meeting or, if the board of directors,
pursuant to section 5 of article IX of these bylaws, shall
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have fixed a record date for the purpose of such meeting or
shall have fixed a date as of which the books of the
Corporation shall be temporarily closed against transfers of
shares, then as of such date; except that in the election of
directors of the Corporation, each holder of shares of common
stock of the Corporation shall have the right to multiply the
number of votes to which he may be entitled by the number of
directors to be elected, and he may cast all such votes for
one candidate or he may distribute them among any two or more
candidates. A shareholder may vote either in person or by
proxy appointed by an instrument in writing, subscribed by
such shareholder or by his duly authorized attorney. Except
as otherwise provided by law, the articles of incorporation,
or these bylaws, all elections shall be had and all questions
shall be decided by a majority of the votes cast at a duly
constituted meeting at which a quorum is present.
Section 7 Notice.
(a) Unless otherwise provided by the articles of
incorporation, written or printed notice, stating the place,
day, and hour of each meeting of shareholders, and, in the
case of a special meeting, the business proposed to be
transacted thereat, shall be given in the manner provided in
article XI of these bylaws to each shareholder entitled to
vote at such meeting, at least 15 days before an annual
meeting and at least five days before a special meeting.
(b) Except as provided in subsection (c) of this
section, to be properly brought before any meeting of the
shareholders, business must be either (i) specified in the
notice of meeting (or any supplement thereto) given by or at
the direction of the board of directors pursuant to subsection
(a) of this section 7, (ii) otherwise properly brought before
the meeting by or at the direction of the board of directors,
or (iii) otherwise properly brought before the meeting by a
shareholder. In addition to any other applicable
requirements, including (without limitation) requirements
imposed by federal securities laws pertaining to proxies, for
business to be properly brought before any meeting by a
shareholder, the shareholder must have given timely notice
thereof in writing to the secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the
Corporation at least 120 days prior to the meeting; provided,
however, that in the event that less than 135 days' notice or
prior public disclosure of the date of any meeting of
shareholders is given or made to shareholders by the
Corporation, notice by the shareholder to be timely must be so
received not later than the close of business on the 15th day
following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made,
whichever first occurs. A shareholder's notice to the
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secretary of the Corporation shall set forth in writing as to
each matter the shareholder proposes to bring before any
meeting of the shareholders (i) a brief description of the
business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (ii) the
name and record address of the shareholder proposing such
business, (iii) the name of all other persons with whom the
shareholder is acting in concert, (iv) the class and number of
shares of the Corporation which are beneficially owned by the
shareholder, (v) the class and number of shares of the
Corporation which are beneficially owned by each such person
with whom the shareholder is acting in concert, and (vi) any
material interest of the shareholder, or any such person with
whom the shareholder is acting in concert, in such business.
Beneficial ownership shall be determined in accordance with
section 1 of article X of these bylaws.
Except as provided in subsection (c) of this
section 7, notwithstanding anything in these bylaws to the
contrary, no business shall be conducted at any meeting of the
shareholders except in accordance with the procedures set
forth in this section 7 of article II, provided, however, that
nothing in this section 7 of article II shall be deemed to
preclude discussion by any shareholder as to any business
properly brought before any meeting of the shareholders.
The Chairman of the Meeting shall, if the facts
warrant, determine and declare at any meeting of the
shareholders that business was not properly brought before
the meeting of shareholders in accordance with the provisions
of this section 7 of article II, and if he should so
determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be
transacted. A determination whether a matter is or is not
properly before the meeting shall not depend on whether such
proposal has been or will be included in any proxy statement
delivered or to be delivered to the Corporation's
shareholders.
Nothing in this subsection (b) shall affect the
rights of the Corporation's shareholders as provided in
section 3(b) of article 6 of the Corporation's articles of
incorporation or as provided in subsection (a) of section 4
of article II of these bylaws with respect to the rights of
the Corporation's preferred shareholders.
(c) Nothing in subsection (b) of this section 7
shall apply to the following provisions of these bylaws or any
proposal by a shareholder or shareholders with respect to any
matter governed by any of the following provisions:
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Article II, section 8(a);
Article III, section 1(c);
Article III, section 1(e); and
Article XIII, section 2.
Section 8. Amendment of Articles of Incorporation.
(a) Shareholder Proposals. No proposal by a
shareholder to amend or supplement the articles of
incorporation of the Corporation shall be voted upon at a
meeting of shareholders unless, at least 180 days before such
meeting of shareholders, such shareholder shall have delivered
in writing to the secretary of the Corporation (i) notice of
such proposal and the text of such amendment or supplement,
(ii) evidence, reasonably satisfactory to the secretary of the
Corporation, of such shareholder's status as such and of the
number of shares of each class of the capital stock of the
Corporation beneficially owned by such shareholder, (iii) a
list of the names of other beneficial owners of shares of the
capital stock of the Corporation, if any, with whom such
shareholder is acting in concert, and of the number of shares
of each class of the capital stock of the Corporation
beneficially owned by each such beneficial owner, and (iv) an
opinion of counsel, which counsel and the form and substance
of which opinion shall be reasonably satisfactory to the board
of directors of the Corporation, to the effect that the
articles of incorporation of the Corporation, as proposed to
be so amended or supplemented, would not be in conflict with
the laws of the State of Louisiana. Within 30 days after such
shareholder shall have delivered the aforesaid items to the
secretary of the Corporation, the secretary and the board of
directors of the Corporation shall respectively determine
whether the items to be ruled upon by them are reasonably
satisfactory and shall notify such shareholder in writing of
their respective determinations. If such shareholder fails to
submit a required item in the form or within the time
indicated, or if the secretary or the board of directors of
the Corporation determines that the items to be ruled upon by
them are not reasonably satisfactory, then such proposal by
such shareholder may not be voted upon by the shareholders of
the Corporation at such meeting of shareholders. Beneficial
ownership shall be determined in accordance with section 1 of
article X of these bylaws.
(b) Effectiveness. No provision amending or
supplementing, or purporting to amend or supplement, the
articles of incorporation of the Corporation that would have
an effect, direct or indirect, on any of the following items
may be included in articles of amendment signed by any
officer, agent or representative of the Corporation on behalf
of the Corporation or delivered to the Secretary of State of
Louisiana for filing of record until the later of (i) one
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year following the adoption by the shareholders of such
amendment or supplement or (ii) 10 days after the adjournment
sine die of the annual meeting of shareholders next succeeding
the adoption by the shareholders of the Corporation of such
amendment or supplement:
(1) quorum at a regular or special meeting of
shareholders;
(2) procedures for amendment of the articles
of incorporation or bylaws of the Corporation upon a
proposal by a shareholder of the Corporation;
(3) the effective date of an amendment to the
articles of incorporation or bylaws of the Corporation,
or the time at which steps may be taken to effect an
amendment to the articles of incorporation or bylaws of
the Corporation; or
(4) votes of shareholders of the Corporation
required to approve (i) an amendment or supplement to or
repeal of the bylaws of the Corporation, (ii) an
amendment or supplement to the articles of incorporation
of the Corporation, or (iii) a merger, consolidation,
share exchange, reclassification of securities,
repurchase of shares, transfer of all or substantially
all of the assets of the Corporation, dissolution,
"business combination" as defined in article X of these
bylaws, or similar transaction.
Section 9. Effectiveness of Other Amendments to
Articles of Incorporation. No provision amending or
supplementing, or purporting to amend or supplement, the
articles of incorporation of the Corporation that would have
an effect, direct or indirect, on any of the following items
may be included in articles of amendment signed by any
officer, agent or representative of the Corporation on behalf
of the Corporation or delivered to the Secretary of State of
Louisiana for filing of record until the later of (i) one year
following the adoption by the shareholders of such amendment
or supplement or (ii) 10 days after the adjournment sine die
of the annual meeting of shareholders next succeeding the
adoption by the shareholders of the Corporation of such
amendment or supplement:
(1) the number of directors of the Corporation;
(2) the classification of the board of directors
of the Corporation into three classes of as nearly as
possible equal size;
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(3) the procedures for nomination by a
shareholder of persons to be elected as directors of the
Corporation;
(4) qualifications of directors of the
Corporation or the declaration by the board of directors
of a vacancy in the office of director;
(5) removal of directors or officers of the
Corporation;
(6) powers of directors of the Corporation;
(7) the filling of vacancies on the board of
directors of the Corporation and the election of
directors to fill newly created directorships;
(8) powers of committees of the board of
directors of the Corporation;
(9) the calling of special meetings of
shareholders;
(10) determinations of the presiding person at a
meeting of shareholders; or
(11) votes of shareholders of the Corporation
required to approve the removal of a director;
provided, however, that the foregoing shall apply to item (9)
above only with respect to a provision adopted by the
shareholders subsequent to the annual meeting of shareholders
in April 1991 or an adjournment thereof.
ARTICLE III
Directors
Section 1. Certain General Provisions.
(a) Number. The corporate powers of the
Corporation shall be vested in and exercised, and the business
and affairs of the Corporation shall be managed, by a board of
directors which shall consist of ten directors.
(b) Classification. The board of directors of the
Corporation shall be divided into three classes of as nearly
as possible equal size, with the term of office of directors
of one class expiring each year. At the annual meeting of
shareholders in 1991, (i) directors of the first class shall
be elected to hold office for a term expiring at the first
succeeding annual meeting, (ii) directors of the second class
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shall be elected to hold office for a term expiring at the
second succeeding annual meeting, and (iii) directors of the
third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. At each
annual meeting of shareholders beginning with the annual
meeting in 1992, the successors to the class of directors
whose terms shall have expired at such meeting shall be
elected to hold office for a term expiring at the third
annual meeting succeeding such meeting.
(c) Nominations. Nominations for election of
members of the board of directors may be made by the board of
directors or by a shareholder. The name of a person to be
nominated by a shareholder (a "Nominator") as a member of the
board of directors of the Corporation must be submitted in
writing to the secretary of the Corporation not fewer than 180
days before the date of the meeting of shareholders at which
such person is proposed to be nominated. The Nominator shall
also submit written evidence, reasonably satisfactory to the
secretary of the Corporation, that the Nominator is a
shareholder of the Corporation and shall identify in writing
(i) the number of shares of each class of capital stock of
the Corporation beneficially owned by the Nominator, (ii) all
other persons with whom the Nominator is acting in concert,
and (iii) the number of shares of capital stock of the
corporation beneficially owned by each such person with whom
the Nominator is acting in concert. At such time, the
Nominator shall also submit in writing (1) the information
with respect to each such proposed nominee which would be
required to be provided in a proxy statement prepared in
accordance with regulation 14A under the Securities Exchange
Act of 1934, as amended, (2) to the extent not provided in the
information submitted pursuant to (1) immediately preceding or
otherwise provided pursuant to this subsection (c), (w) a
description of all arrangements or understandings between the
Nominator and each such proposed nominee and any other person
or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the Nominator,
(x) the name, age, business address and residence address,
business experience or other qualifications of each such
proposed nominee, (y) the principal occupation or employment
of each such proposed nominee, and (z) the number of shares of
capital stock beneficially owned by each such proposed
nominee, and (3) a notarized affidavit executed by each such
proposed nominee to the effect (x) that, if elected as a
member of the board of directors, he will serve, (y) that he
has reviewed the provisions of section 1 of this article III
of these bylaws, and (z) that he is eligible for election as
a member of the board of directors. Within 30 days after the
Nominator has submitted the aforesaid items to the secretary
of the Corporation, the secretary of the Corporation shall
determine whether the evidence of the Nominator's status as a
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shareholder submitted by the Nominator is reasonably
satisfactory and shall notify the Nominator in writing of his
determination with respect thereto. The failure of the
secretary of the Corporation to find such evidence reasonably
satisfactory, or the failure of the Nominator to submit the
requisite information in the form or within the time
indicated, shall make the person to be nominated ineligible
for nomination at the meeting of shareholders at which such
person is proposed to be nominated. Beneficial ownership
shall be determined in accordance with section 1 of article X
of these bylaws.
(d) Qualifications; Declaration of Vacancy.
(1) No person shall be eligible for election
or reelection as a director after attaining age 72, and
no person who is or shall have been a full-time officer
or employee of the Corporation or any subsidiary thereof
shall be eligible for election or reelection as a
director after attaining age 65 or (even if under 65)
after such director's employment by the Corporation has
terminated.
(2) Upon attaining the age of 72 or 65, as
specified in paragraph (1) immediately preceding, a
director may continue to serve as a director of the
Corporation until no later than the next succeeding
annual meeting of shareholders, at which time, unless he
has previously ceased to be a member of the board of
directors of the Corporation, his position as a director
shall cease. Notwithstanding the foregoing, with regard
to a director of the Corporation who is also an officer
or employee of the Corporation or any subsidiary thereof,
such director's position as a director shall cease
immediately upon termination of such director's
employment by the Corporation.
(3) No person shall be eligible for election or
reelection or to continue to serve as a member of the
board of directors who is an officer, director, agent,
representative, partner, employee, or nominee of, or
otherwise acting at the direction of, or acting in
concert with, (y) a "public utility company" (except the
Corporation) or "holding company" as such terms are
defined in the Public Utility Holding Company Act of
1935, as amended, or "public utility" (except the
Corporation) as such term is defined in Section 201(e) of
the Federal Power Act of 1920, as amended, or (z) an
"affiliate" (as defined in rule 405 (17 C.F.R. { 230.405)
under the Securities Act of 1933, as amended) of any of
the persons or entities specified in clause (y)
immediately preceding.
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(4) Upon the occurrence of any of the events
described in paragraph (2) of this subsection (d), the
affected director shall cease to be a director of the
Corporation at the time specified in such paragraph.
Determination of the eligibility of a person for
election, reelection, or continued service on the board
of directors under other provisions of this subsection
(d) or otherwise as provided by applicable law including,
but not limited to, occurrence of an event specified in
section 81.C(2) of the Louisiana Business Corporation
Law, shall, subject to the provisions of paragraph (7)
below, be made by vote of a majority of the members of
the board of directors. If the board of directors,
pursuant to such a determination, determines that a
person is ineligible for election, reelection, or
continued service on the board of directors, such
ineligibility shall be effective immediately upon such
determination, and, if the affected person is a director
of the Corporation at the time of such determination, his
position as a director shall cease at such time.
Within 30 days after a Nominator has submitted
the name of a person to be nominated as a member of the
board of directors, the board of directors shall
determine whether the proposed nominee is eligible for
election under this subsection (d) and shall notify the
Nominator in writing of its determination. If the board
of directors shall determine that such proposed nominee
is not eligible for election, such person shall be
ineligible to be nominated at the meeting of shareholders
for which his nomination was proposed.
(5) If a director of the Corporation ceases to
be a director at the annual meeting of shareholders next
succeeding the day upon which he attained the age of 72
or 65, as specified in paragraphs (1), (2), and (4) of
this subsection (d), and if there is time remaining in
the regularly scheduled term of office of such director,
then the vacancy created by the cessation of such person
as a director shall be filled by the shareholders of the
Corporation at such meeting of shareholders as provided
in section 2 of this article III of these bylaws.
(6) If a director of the Corporation ceases to
be a director because of termination of employment, as
provided in paragraphs (1), (2), and (4) of this
subsection (d), or upon the determination of the board
of directors of the Corporation pursuant to paragraph (4)
of this subsection (d) that a director of the Corporation
is no longer qualified to continue serving as a director
of the Corporation, the board of directors shall declare
the office held by such director vacant and may fill such
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vacancy as provided in section 2 of this article III of
these bylaws.
(7) Without limiting the ability of the board of
directors as provided by applicable law to declare vacant
the position of a director on the board of directors, if
a member of the board of directors has been adjudged by
a court of competent jurisdiction to be guilty of fraud,
criminal conduct (other than minor traffic violations),
gross abuse of office amounting to a breach of trust, or
similar misconduct, and no appeal (or further appeal)
therefrom is permitted under applicable law, the other
directors then in office, by unanimous vote, may declare
the position occupied by such director vacant, and such
other directors may fill such vacancy as provided in
section 2 of this article III of these bylaws.
(e) Removal. In this subsection (e), the terms
"remove" and "removal" and their related grammatical forms
shall refer only to the process of dismissal provided for in
this subsection, and shall not be deemed to refer to
disqualification of a director, cessation of a director to be
such, or declaration of a vacancy in the office of director as
provided for in subsection (d) of this section 1 or otherwise
as permitted by law.
A member of the board of directors may be removed
by the shareholders of the Corporation only for cause. Any
such removal for cause shall be at a special meeting of
shareholders called for such purpose. The vote of the holders
of shares conferring 80% of the total votes of all shares of
capital stock of the Corporation voting as a single class
shall be necessary to remove a director; provided, however,
that if a director has been elected by the exercise of the
privilege of cumulative voting, such director may not be
removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an
election of the class of directors of which he is a part. For
purposes of this subsection (e), cause for removal shall exist
only if a director shall have been adjudged by a court of
competent jurisdiction to be guilty of fraud, criminal conduct
(other than minor traffic violations), gross abuse of office
amounting to a breach of trust, or similar misconduct, and no
appeal (or further appeal) therefrom shall be permitted under
applicable law.
No proposal by a shareholder to remove a director
of the Corporation shall be voted upon at a meeting of
shareholders unless, at least 180 days before such meeting,
such shareholder shall have delivered in writing to the
secretary of the Corporation (1) notice of such proposal, (2)
a statement of the grounds on which such director is proposed
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to be removed, (3) evidence, reasonably satisfactory to the
secretary of the Corporation, of such shareholder's status as
such and of the number of shares of each class of the capital
stock of the Corporation beneficially owned by such
shareholder, (4) a list of the names of other beneficial
owners of shares of the capital stock of the Corporation, if
any, with whom such shareholder is acting in concert, and of
the number of shares of each class of the capital stock of the
Corporation beneficially owned by each such beneficial owner,
and (5) an opinion of counsel, which counsel and the form and
substance of which opinion shall be reasonably satisfactory to
the board of directors of the Corporation (excluding the
director proposed to be removed), to the effect that, if
adopted at a duly called special meeting of the shareholders
of the Corporation by the vote of the holders of shares
conferring 80% of the total votes of all shares of the capital
stock of the Corporation voting as single class, such removal
would not be in conflict with the laws of the State of
Louisiana, the articles of incorporation of the Corporation,
or these bylaws. Within 30 days after such shareholder shall
have delivered the aforesaid items to the secretary of the
Corporation, the secretary and the board of directors of the
Corporation shall respectively determine whether the items to
be ruled upon by them are reasonably satisfactory and shall
notify such shareholder in writing of their respective
determinations. If such shareholder fails to submit a
required item in the form or within the time indicated, or if
the secretary or the board of directors of the Corporation
determines that the items to be ruled upon by them,
respectively, as provided above are not reasonably
satisfactory, then such proposal by such shareholder may not
be voted upon by the shareholders of the Corporation at such
meeting of shareholders. Beneficial ownership shall be
determined as specified in section 1 of article X of these
bylaws.
(f) Powers. Subject to the provisions of the laws
of the State of Louisiana, the articles of incorporation of
the Corporation, and these bylaws, the board of directors
shall have and exercise, in addition to such powers as are set
forth in the articles of incorporation, all of the powers
which may be exercised by the Corporation, including, but
without thereby limiting the generality of the above, the
power to create and to delegate, with power to subdelegate,
any of its powers to any committee, officer, or agent;
provided, however, that the board of directors shall not have
the power to delegate its authority to:
(1) amend, repeal, or supplement the bylaws of
the Corporation;
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(2) take definitive action on a merger,
consolidation, reclassification or exchange of
securities, repurchase by the Corporation of any of its
equity securities, transfer of all or substantially all
of the assets of the Corporation, dissolution, "business
combination" as defined in article X of these bylaws, or
similar action;
(3) elect or remove a director or officer of
the Corporation;
(4) submit a proposal to shareholders for
action by shareholders;
(5) appoint a director to or remove a director
from a committee of the board of directors; or
(6) declare a dividend on the capital stock of
the Corporation.
(g) Change in Number of Directors. No amendment or
supplement to or repeal of subsection (a) of section 1 of
article III of these bylaws that would have the effect of
increasing the number of authorized directors of the
Corporation by more than two during any 12-month period shall
be permitted unless at least 80% of the "continuing directors"
then in office (as defined in subsection (b) of section 2 of
article II of these bylaws) shall authorize such action. If
the number of directorships is changed for any reason, any
increase or decrease in the number of directorships shall be
apportioned among the classes so as to make all classes as
nearly equal in number as possible.
(h) Rights of Preferred Shareholders, etc.
Nothing in this section 1 of this article III of these bylaws
shall affect the rights of the Corporation's shareholders as
provided in section 3(b) of article 6 of the Corporation's
articles of incorporation.
Section 2. Filling of Vacancies. In the case of
a vacancy in the board of directors caused by the attainment
by a director of the age of 72 or 65, as specified in
paragraphs (1), (2), (4), and (5) of subsection (d) of section
1 of this article III, in which case such director shall have
continued to serve as a director until the annual meeting of
shareholders next succeeding his attainment of such age, and
in which case there shall be time remaining in the regularly
scheduled term of office of such director, such vacancy shall
be filled for the remaining regularly scheduled term of office
of such director by the shareholders of the Corporation at
such meeting of shareholders. Except to the extent required
by law or section 3(b) of article 6 of the articles of
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incorporation of the Corporation, in any other case in which
a vacancy shall occur in the board of directors (including
without limitation a vacancy resulting from an increase in the
authorized number of directors, disqualification or removal of
a director, or from failure of the shareholders to elect the
full number of authorized directors), the remaining director
or directors, although less than a quorum of the whole board,
may fill such vacancy in the board for the scheduled term of
the directorship thus filled. Except to the extent required
by law or section 3(b) of article 6 of the articles of
incorporation of the Corporation, and except as provided in
these bylaws, the shareholders shall have no right to fill
vacancies (including without limitation vacancies resulting
from an increase in the authorized number of directors,
disqualification or removal of a director, or from failure of
the shareholders to elect the full number of authorized
directors) on the board of directors.
Section 3. Annual and Regular Meetings. Within 45
days after each annual meeting of shareholders, and if
possible on the date of each annual meeting of shareholders
immediately following each such meeting, the board of
directors shall hold an annual meeting for the purpose of
electing officers and transacting other corporate business.
Such meeting shall be called in the manner for calling regular
or special meetings of the board of directors.
Other regular meetings of the board of directors
shall be held on the fourth Friday in January and on the third
Friday after the first Monday in the months of July and October
at such places as the president may direct in the notices of such
meetings. At least five days' notice by mail or written
telecommunication shall be given to each director of the time
and place of holding each regular meeting of the board of directors.
Section 4. Special Meetings. A special meeting of
the board of directors may be called by the president, to be
held at such place as he may direct in the notice of such
meeting, on four days' notice by mail or three days' notice by
written telecommunication, to each director. A special
meeting shall be called by the president in like manner on the
written request of at least 50% of the members of the board.
Section 5. Place of Meetings; Telephone Meetings.
A meeting of the board of directors may be held either within
or without the State of Louisiana. The time and place of
holding a regular or special meeting of the board of directors
may be changed and another place and time fixed for such
regular or special meeting by a majority of the members of the
board.
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The members of the board of directors, and a
committee thereof, may participate in and hold a meeting of
the board or of such committee by means of conference
telephone or similar communications equipment provided that
all persons participating in such meeting can hear and
communicate with one another. Participation in a meeting
pursuant to this provision shall constitute presence in person
at such meeting, except where a person participates in such
meeting for the express purpose of objecting to the
transaction of any business on the grounds that such meeting
was not lawfully called or convened.
Section 6. Quorum. A majority of the directors
shall constitute a quorum, but a smaller number may adjourn a
meeting from time to time without further notice until a
quorum is secured. If a quorum is present, the directors
present can continue to do business until adjournment
notwithstanding the subsequent withdrawal of enough directors
to leave less than a quorum or the refusal of any director
present to vote.
Section 7. Compensation. Each director shall be
entitled to receive from the Corporation reimbursement of his
expenses incurred in attending any regular or special meeting
of the board and, by resolution of the board, such other
compensation as it may approve. Such reimbursement and
compensation shall be payable whether or not an adjournment be
had because of the absence of a quorum. Nothing herein
contained shall be construed to preclude any director from
serving the Corporation in another capacity and receiving
compensation therefor.
Section 8. Committees. From time to time, the
board of directors may appoint, from its own number, in
addition to the committees provided for in these bylaws, such
other committee or committees for such purpose or purposes as
it shall determine. Subject to the limitations imposed by
these bylaws, the articles of incorporation, and the laws of
the State of Louisiana, each committee of the board of
directors shall have such powers as shall be specified in the
resolution of appointment.
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<PAGE>
ARTICLE IV
----------
Indemnification
Section 1. Right to Indemnification - General.
The Corporation shall indemnify any person who was or is, or
is threatened to be made, a party to or otherwise involved in
any pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative
hearing or other proceeding, whether civil, criminal,
administrative or investigative (any such threatened, pending
or completed proceeding being herein-
after called a "Proceeding") by reason of the fact that he is
or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of
another business, foreign or nonprofit corporation,
partnership, joint venture, trust, employee benefit plan or
other enterprise (whether the basis of his involvement in such
Proceeding is alleged action in an official capacity or in any
other capacity while serving as such), to the fullest extent
permitted by applicable law in effect on October 1, 1986, and
to such greater extent as applicable law may thereafter from
time to time permit, from and against expenses, including
attorney's fees, judgments, fines, amounts paid or to be paid
in settlement, liability and loss, ERISA excise taxes,
actually and reasonably incurred by him or on his behalf or
suffered in connection with such Proceeding or any claim,
issue or matter therein; provided, however, that, except as
provided in section 5 of this article, the Corporation shall
indemnify any such person claiming indemnity in connection
with a Proceeding initiated by such person only if such
Proceeding was authorized by the board of directors.
Section 2. Certain Provisions Respecting
Indemnification for and Advancement of Expenses.
(a) To the extent that a person referred to in
section 1 of this article is required to serve as a witness in
any Proceeding referred to therein, he shall be indemnified
against all Expenses (as hereinafter defined) actually and
reasonably incurred by him or on his behalf in connection with
serving as a witness.
(b) The Corporation shall from time to time pay,
in advance of final disposition, all Expenses incurred by or
on behalf of any person referred to in section 1 of this
article claiming indemnity thereunder in respect of any
Proceeding referred to therein. Each such advance shall be
made within ten days after the receipt by the Corporation of
a statement from the claimant requesting the advance, which
statement shall reasonably evidence the relevant Expenses and
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be accompanied or preceded by any such undertaking as may be
required by applicable law respecting the contingent repayment
of such Expenses. Whenever and to the extent applicable law
requires the board of directors to act in the specific case
with respect to the payment of Expenses in advance of the
final disposition of any Proceeding, the board of directors
shall act with respect thereto within the period specified in
the preceding sentence and shall withhold the payment of
Expenses in advance only if there is a reasonable and prompt
determination by the board of directors by a majority vote of
a quorum of Disinterested Directors (as hereinafter defined),
or (if such quorum is not obtainable or, even if obtainable,
a quorum of Disinterested Directors so directs) by
Independent Counsel (as hereinafter defined) in a written
opinion, that advancement of Expenses is inappropriate, even
taking into account any undertaking given with respect to the
repayment of such Expenses, because based on the facts then
known there is no reasonable likelihood that the claimant
would be able ultimately to demonstrate that he met the
standard of conduct necessary for indemnification with respect
to such Expenses.
Section 3. Procedure for Determination of
Entitlement to Indemnification.
(a) To obtain indemnification under this article,
a claimant shall submit to the Corporation a written
application. The secretary of the Corporation shall,
promptly upon receipt of such an application for
indemnification, advise the board of directors in writing
of the application. In connection with any such
application, the claimant shall provide such
documentation and information as is reasonably requested
by the Corporation and reasonably available to him and
relevant to a determination of entitlement to
indemnification.
(b) A person's entitlement to indemnification
under this article, unless ordered by a court, shall be
determined, as required or permitted by applicable law:
(i) by the board of directors by a majority vote of a
quorum consisting of Disinterested Directors, (ii) if a
quorum of the board of directors consisting of
Disinterested Directors is not obtainable or, even if
obtainable, a quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion, or
(iii) by the shareholders of the Corporation; provided,
however, that if a Change of Control (as hereafter
defined) shall have occurred, no determination of
entitlement to indemnification adverse to the claimant
shall be made other than one made or concurred in by
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Independent Counsel, selected as provided in paragraph
(d) of this section, in a written opinion.
(c) If the determination of entitlement to
indemnification is to be made by Independent Counsel in
the absence of a Change of Control, the Corporation shall
furnish notice to the claimant within ten days after
receipt of the application for indemnification specifying
the identity and address of Independent Counsel. The
claimant may, within fourteen days after receipt of such
written notice of selection, deliver to the Corporation
a written objection to such selection, subject to
paragraph (e) of this section. If such an objection is
made, either the Corporation or the claimant may petition
any court of competent jurisdiction for a determination
that the objection has no reasonable basis or for the
appointment as Independent Counsel of counsel selected by
the court.
(d) If there has been a Change of Control,
Independent Counsel to act as and to the extent required
by paragraph (b) of this section or paragraph (b) of
section 2 shall be selected by the claimant, who shall
give the Corporation written notice advising of the
identity and address of the Independent Counsel so
selected. The Corporation may, within seven days after
receipt of such written notice of selection, deliver to
the claimant a written objection to such selection,
subject to paragraph (e) of this section. The claimant
may, within five days after the receipt of such
objection, select other counsel to act as Independent
Counsel, and the Corporation may, within seven days after
receipt of such written notice of selection, deliver to
the claimant a written objection, as aforesaid, to such
second selection. In the case of any such objection the
claimant may petition any court of competent jurisdiction
for a determination that the objection has no reasonable
basis or for the appointment as Independent Counsel of
counsel selected by the court.
(e) Any objection to the selection of
Independent Counsel may be asserted only on the ground
that the counsel so selected does not qualify as
Independent Counsel under the definition contained in
section 7 of this article, and the objection shall set
forth with particularity the basis of such assertion.
No counsel selected by the Corporation or by the
claimant may serve as Independent Counsel if a timely
objection has been made to his selection unless a court
has determined that such objection has no reasonable
basis.
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<PAGE>
(f) The Corporation shall pay any and all
reasonable fees and expenses of Independent Counsel
acting pursuant to this article and in any proceeding in
which such counsel is a party or a witness in respect of
its investigation and report. The Corporation shall pay
all reasonable fees and expenses incident to the
procedures of this section regardless of the manner in
which Independent Counsel is selected or appointed.
Section 4. Presumptions and Effect of Certain
Proceedings.
(a) A person referred to in section 1 of this
article claiming a right to indemnification under this article
shall be presumed (except as may be otherwise expressly
provided in this article or required by applicable law) to be
entitled to such indemnification upon submission of an
application for indemnification in accordance with section 3,
and the Corporation shall have the burden of proof to overcome
the presumption in any determination contrary to the
presumption.
(b) Unless the determination is to be made by
Independent Counsel, if the person or persons empowered under
section 3 of this article to determine entitlement to
indemnification shall not have made and furnished the
determination in writing to the claimant within 60 days after
receipt by the Corporation of the application for
indemnification, the determination of entitlement to
indemnification shall be deemed to have been made in favor of
the claimant unless the claimant knowingly misrepresented a
material fact in connection with the application or such
indemnification is prohibited by law. 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 contender or its equivalent, shall not of itself
adversely affect the right of a claimant to indemnification or
create a presumption that a claimant did not act in a manner
which would deny him the right to indemnification.
Section 5. Right of Claimant to Bring Suit.
(a) If (i) a determination is made pursuant to the
procedures contemplated by section 3 of this article that a
claimant is not entitled to indemnification under this
article, (ii) advancement of Expenses is not timely made
pursuant to paragraph (b) of section 2 of this article, (iii)
Independent Counsel has not made and delivered a written
opinion as to entitlement to indemnification within 90 days
after the selection or appointment of counsel has become final
by virtue of the lapse of time for objection or the overruling
of objections or appointment of counsel by a court, or (iv)
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payment of a claim for indemnification is not made within five
days after a favorable determination of entitlement to
indemnification has been made or deemed to have been made
pursuant to section 3 or 4 of this article, the claimant shall
be entitled to bring suit against the Corporation to establish
his entitlement to such indemnification or advancement of
Expenses and to recover the unpaid amount of his claim. It
shall be a defense to any such action (other than an action
brought to enforce a claim for Expenses incurred in defending
any Proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to
the Corporation) that the claimant did not meet the applicable
standard of conduct which makes it permissible for the
Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be upon the
Corporation. Neither the failure of the Corporation
(including its board of directors, Independent Counsel or its
shareholders) to have made a determination before the
commencement of such action that indemnification of the
claimant is proper under the circumstances because he has met
such applicable standard of conduct, nor an actual
determination by the Corporation (including its board of
directors, Independent Counsel or its shareholders) that the
claimant has not met the applicable standard of conduct, shall
be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct, and
the claimant shall be entitled to a de novo trial on the
merits as to any such matter as to which no determination or
an adverse determination has been made.
(b) If a claimant is successful in whole or in part
in prosecuting any claim referred to in paragraph (a) of this
section, the claimant shall also be entitled to recover from
the Corporation, and shall be indemnified by the Corporation
against, any and all Expenses actually and reasonably incurred
by him in prosecuting such claim.
Section 6. Non-Exclusivity and Survival of Rights.
The rights of indemnification and to receive advancement of
Expenses contemplated by this article shall not be deemed
exclusive of any other rights to which any person may at any
time be entitled under any bylaw, agreement, authorization of
shareholders or directors (regardless of whether directors
authorizing such indemnification are beneficiaries thereof),
or otherwise, both as to action in his official capacity and
as to action in another capacity; provided that no other
indemnification measure shall permit indemnification of any
person for the results of such person's willful or
intentional misconduct.
The Corporation may procure or maintain insurance
or other similar arrangement, at its expense, to protect
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itself and any director, officer, employee or agent of the
Corporation or other corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or
loss asserted against or incurred by such person, whether or
not the Corporation would have the power to indemnify such
person against such expense or
liability.
In considering the cost and availability of such
insurance, the Corporation, in the exercise of its business
judgment, may purchase insurance which provides for any and
all of (i) deductibles, (ii) limits on payments required to be
made by the insurer, or (iii) coverage which may not be as
comprehensive as that previously included in insurance
purchased by the Corporation. The purchase of insurance with
deductibles, limits on payments and coverage exclusions will
be deemed to be in the best interest of the Corporation but
may not be in the best interest of certain of the persons
covered thereby. As to the Corporation, purchasing insurance
with deductibles, limits on payments, and coverage exclusions
is similar to the Corporation's practice of self-insurance in
other areas. In order to protect the officers and directors
of the Corporation, the Corporation shall indemnify and hold
each of them harmless as provided in section 1 of this
article IV, without regard to whether the Corporation would
otherwise be entitled to indemnify such officer or director
under the other provisions of this article IV, to the extent
(i) of such deductibles, (ii) of amounts exceeding payments
required to be made by an insurer or (iii) that prior
policies of officers and directors liability insurance held by
the Corporation would have provided for payment to such
officer or director. Notwithstanding the foregoing provisions
of this section 6, no person shall be entitled to
indemnification for the results of such person's willful or
intentional misconduct. This section 6 is authorized by
section 83(E) of the Louisiana Business Corporation Law as in
effect on October 1, 1986, and further is intended to
establish an arrangement
of self-insurance pursuant to section 83(F) of the Louisiana
Business Corporation Law as in effect on October 1, 1986.
The right to indemnification conferred in this
article shall be a contract right, and no amendment,
alteration or repeal of this article or any provision thereof
shall restrict the indemnification rights granted by this
article as to any person claiming indemnification with respect
to acts, events and circumstances that occurred, in whole or
in part, before such amendment, alteration or repeal. The
provisions of this article shall continue as to a person who
has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his heirs, executors and legal
representatives.
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Section 7. Definitions. For purposes of this
article:
(a) "Change of Control" means the occurrence after
October l, 1986 of any of the following events or
circumstances: (1) there shall have occurred an event required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"), whether or not
the Corporation is then subject to such reporting requirement;
(2) (i) any "person" (as such term is used in Section 13(d)
and 14(d) of the Act) shall have become the "beneficial owner"
(as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 30%
or more of the combined voting power of the Corporation's then
outstanding voting securities without the prior approval of at
least two-thirds of the members of the board of directors in
office immediately before such person's attaining such
percentage interest; (3) the Corporation is a party to a
merger, consolidation, sale of assets or other reorganization,
or the subject of a proxy contest, as a consequence of which
members of the board of directors in office immediately before
such transaction or event constitute less than a majority of
the board of directors thereafter; (4) 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 shareholders 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.
(b) "Disinterested Director" means a director of
the Corporation who is not and was not a party to the
proceeding in respect of which indemnification is sought as
provided in this article.
(c) "Expenses" shall include all reasonable
attorneys' fees, retainers, court costs, transcript costs,
fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses
of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a
Proceeding.
(d) "Independent Counsel" means a law firm, or a
member of a law firm, with substantial experience in matters
of corporation law that neither presently is, nor in the five
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years before his selection or appointment has been, retained
to represent: (i) the Corporation or person claiming
indemnification in any matter material to either, or (ii) any
other party to the Proceeding giving rise to a claim for
indemnification hereunder, and is not otherwise precluded
under applicable professional standards from acting in the
capacity herein contemplated.
ARTICLE V
---------
Executive Committee
Section 1. Election and Tenure. The board of
directors may appoint an executive committee consisting of
such number of directors as it may appoint, to serve at the
pleasure of the board of directors, but in any event not
beyond the next annual meeting of the board of directors. The
board may at any time, without notice, remove and replace any
member of the executive committee.
Section 2. Powers. Subject to the provisions of
subsection (f) of section 1 of article III of these bylaws,
the executive committee shall have and may exercise all powers
of the board of directors between meetings of the board.
Section 3. Meetings. The executive committee
shall meet at stated times or on notice to all by one of its
number, in which notice the time and place of the meeting
shall be set forth. The executive committee shall fix its own
rules of procedure, and a majority shall constitute a quorum;
but the affirmative vote of a majority of the whole committee
shall be necessary in every case. The executive committee
shall keep regular minutes of its proceedings and report the
same to the board of directors.
Section 4. Compensation. Members of the
executive committee, other than officers of the Corporation,
shall receive such compensation for their services as shall be
prescribed by the board of directors. Each member of the
executive committee shall be entitled to receive from the
Corporation reimbursement of his expenses incurred in
attending a meeting of such committee.
ARTICLE VI
----------
Audit Committee
Section 1. Election and Tenure. The board of
directors may appoint an audit committee, consisting of such
number of directors as it may appoint, to serve at the
pleasure of the board of directors, but in any event not
beyond the next annual meeting of the board of directors. The
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board may at any time, without notice, remove and replace any
member of the audit committee.
Section 2. Audit Committee. The audit committee
shall recommend to the board of directors the accounting firm
to be selected by the board or to be recommended by it for
shareholder approval, as independent auditors of the
Corporation and its subsidiaries, and to act on behalf of the
board in meeting and reviewing with the independent auditors,
the chief internal auditor, and the appropriate corporate
officers matters relating to corporate financial reporting and
accounting procedures and policies, adequacy of financial,
accounting, and operating controls, and the scope of the
respective audits of the independent auditors and the internal
auditor. The audit committee shall review the results of each
audit with the respective auditing agency and shall promptly
report thereon to the board of directors. The audit committee
shall additionally submit to the board of directors any
recommendations it may have from time to time with respect to
financial reporting and accounting practices and policies and
financial, accounting, and operational controls and safeguards
including establishment and implementation of standards of
proper employee and corporate conduct. Subject to the
provisions of subsection (f) of section 1 of article III of
these bylaws, the audit committee shall have such other
functions as may be authorized or directed from time to time
by the board of directors.
Section 3. Meetings. The audit committee shall
meet at stated times or on notice to all by one of its number,
in which notice the time and place of the meeting shall be set
forth. The audit committee shall fix its own rules of
procedure, and a majority shall constitute a
quorum; but the affirmative vote of a majority of the whole
committee shall be necessary in every case. The audit
committee shall keep regular minutes of its proceedings and
report the same to the board of directors.
Section 4. Compensation. Members of the audit
committee, other than officers of the Corporation, shall
receive such compensation for their services as shall be
prescribed by the board of directors. Each member of the
audit committee shall be entitled to receive from the
Corporation reimbursement of his expenses incurred in
attending a meeting of the audit committee.
ARTICLE VII
-----------
Compensation Committee
Section 1. Election and Tenure. The board of
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directors may appoint a compensation committee, consisting of
such number of directors as it may appoint, to serve at the
pleasure of the board of directors, but in any event not
beyond the next annual meeting of the board of directors. The
board may at any time, without notice, remove and replace any
member of the compensation committee.
Section 2. Compensation Committee. The
compensation committee shall make recommendations to the board
of directors concerning the compensation of the executives and
other employees of the Corporation and matters related to
benefits for employees. Subject to the provisions of
subsection (f) of section 1 of article III of these bylaws,
the compensation committee shall have such other functions as
may be authorized or directed from time to time by the board
of directors.
Section 3. Meetings. The compensation committee
shall meet at stated times or on notice to all by one of its
number, in which notice the time and place of the meeting
shall be set forth. The compensation committee shall fix its
own rules of procedure, and a majority shall constitute a
quorum; but the affirmative vote of the majority of the whole
committee shall be necessary in every case. The compensation
committee shall keep regular minutes of its proceedings and
report the same to the board of directors.
Section 4. Compensation. Members of the
compensation committee, other than officers of the
Corporation, shall receive such compensation for their
services as shall be prescribed by the board of directors.
Each member of the compensation committee shall be entitled to
receive from the Corporation reimbursement of his expenses
incurred in attending a meeting of the compensation committee.
ARTICLE VIII
------------
Officers
Section 1. Election, Tenure, and Compensation. The
officers of the Corporation shall consist of a president, one
or more vice presidents, a secretary, a treasurer, and such
other officers, including a chairman of the board of
directors, as may from time to time be elected or appointed by
the board of directors. Officers of the Corporation shall be
elected annually by the board of directors as provided in
section 3 of article III of these bylaws. If such annual
election is not held, the officers then in office shall remain
as such until their respective successors shall be elected and
qualify. No officer, except the chairman of the board of
directors, need be a director, and any two or more offices,
except the offices of president and vice president, may be
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held by one person. The powers of all officers of the
Corporation shall be subject to the provisions of subsection
(f) of section 1 of article III of these bylaws.
Section 2. Powers and Duties of Chairman of Board
of Directors. The chairman of the board of directors, if any,
shall, when present, preside at all meetings of the board of
directors. He shall be chief executive officer of the
Corporation and, as such, he shall (a) have general and active
management of the business of the Corporation, (b) have the
general supervision and direction of the other officers of the
Corporation and shall see that their duties are properly
performed, (c) see that all orders and resolutions of the
board of directors are carried into effect, (d) have the power
to execute contracts and conveyances on behalf of the
Corporation, and (e) perform such other functions normally
performed by a chief executive officer. The chairman of the
board of directors shall perform such other duties as from
time to time may be delegated to him by the board of
directors.
Section 3. Powers and Duties of President. The
president shall be the chief executive officer of the
Corporation when no chairman of the board has been elected
and, as such, shall perform the duties specified for the chief
executive officer in section 2 of this article VIII. The
president shall be chief operating officer of the Corporation
and, subject to the direction of the chairman of the board of
directors, if any, shall be responsible for the administration
and operation of the Corporation's business. He shall have
the power to execute contracts and conveyances (including
without limitation conveyances of real and personal property
to and by the Corporation) for and on behalf of the
Corporation.
Section 4. Powers and Duties of Vice President.
The board of directors may appoint one more vice presidents.
Each vice president shall have the power to execute contracts
and conveyances on behalf of the Corporation, and shall have
such other powers and shall perform such other duties as may
be assigned to him by the board of directors or by the
president.
Section 5. Powers and Duties of Secretary. The
secretary shall attend and record, in a book kept for such
purpose, the proceedings of all meetings of the shareholders
of the Corporation and of the board of directors. He shall
keep an account of stock registered and transferred in such
manner as the board of directors may prescribe. He shall keep
the seal of the Corporation and, when authorized by the board
of directors or the executive committee, he shall affix the
seal of the Corporation to any instrument requiring the same,
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and attest the same by his signature, or cause the same to be
attested by the signature of an assistant secretary. He shall
give proper notice of meetings of shareholders and directors
and shall perform such other duties as shall be assigned to
him. Assistant secretaries shall have such duties as the
board of directors may from time to time prescribe.
Section 6. Powers and Duties of Treasurer. The
treasurer shall have custody of the funds and securities of
the Corporation, shall keep full and accurate accounts of
receipts and disbursements in books belonging to the
Corporation, and shall deposit or cause to be deposited 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 shall disburse or
cause to be disbursed the funds of the Corporation as may be
ordered by the board of directors, executive committee, or
president, taking proper vouchers for such disbursements, and
shall render to the president, and the directors at the
regular meetings of the board of directors, or whenever they
require it, an account of all his transactions as treasurer
and of the financial condition of the Corporation, and at the
regular meeting of the board of directors next preceding the
annual shareholders' meeting, a like report for the preceding
fiscal year. 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 office and the
restoration to the Corporation, in case of his death,
resignation, or removal from office, of all books, papers,
vouchers, moneys, and other property of whatever kind in his
possession belonging to the Corporation. He shall perform
such other duties as the board of directors or executive
committee may from time to time prescribe. Assistant
treasurers shall have such duties as the board of directors
may from time to time prescribe.
Section 7. Delegation of Duties. In case of the
absence or disability of any officer of the Corporation, or
for any other reason deemed sufficient by the board of
directors, the board of directors may delegate such officer's
powers or duties for the time being to any other officer, to
any employee with management responsibility, or to any
director.
ARTICLE IX
----------
Capital Stock
Section 1. Stock Certificates. Certificates
representing shares of the capital stock of the Corporation
shall be signed by either the president or one of the vice
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presidents of the Corporation and also by the secretary or an
assistant secretary, or the treasurer or an assistant
treasurer. Such certificates shall have affixed an impression
of the seal of the Corporation. Where such certificates are
countersigned by a transfer agent and by a registrar, both of
which may be the same institution, the signatures of such
officers and the seal of the Corporation thereon may be
facsimiles, engraved or printed. If an officer of the
Corporation who shall have signed a certificate of capital
stock, or whose facsimile signature has been affixed for such
purpose, shall cease to be such officer of the Corporation
before the stock certificate so signed shall have been issued
by the Corporation, such stock certificate may nevertheless be
issued and delivered with the same force and effect as though
the person who signed such certificate or whose facsimile
signature has been affixed for such purpose had not ceased to
be such officer of the Corporation.
Section 2. Lost or Destroyed Certificates. The
board of directors may determine the conditions upon which a
new certificate for capital stock of the Corporation may be
issued in place of a certificate which is alleged to have been
lost, stolen, or destroyed and may, in its discretion, require
the owner of such certificate or his legal representative to
give bond with sufficient surety to the Corporation to
indemnify it against any loss or claim which may arise by
reason of the issue of a new certificate in the place of the
one so alleged to have been lost, stolen, or destroyed.
Section 3. Transfer of Shares. The shares of
capital stock of the Corporation shall be transferable only
upon its books by the holders thereof in person or by their
duly authorized attorneys or legal representatives, and upon
such transfer the old certificates shall be surrendered to the
Corporation by the delivery thereof to the person in charge of
the stock or transfer books and ledgers, or to such other
person as the board of directors may designate, by whom they
shall be cancelled. New certificates shall thereupon be
issued, representing the shares so transferred. A record shall
be made of each transfer.
Section 4. Dividends. Dividends upon the
capital stock may be declared by the board of directors at a
regular or special meeting out of the net profits or surplus
of the Corporation. Before paying a dividend or making a
distribution of profits, there may be set aside out of the
accumulated profits of the Corporation such sum or sums as the
directors from time to time, in their absolute discretion,
think proper as a reserve fund for meeting contingencies or
for equalizing dividends or for repairing or maintaining
property of the Corporation or for such other purpose as the
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directors shall think conducive to the interests of the
Corporation.
Section 5. Closing Transfer Books; Fixing Record
Date. The board of directors may fix the time, not exceeding
60 days preceding the date of a meeting of shareholders, a
dividend payment date, or a date for the allotment of rights,
during which the books of the Corporation shall be temporarily
closed against transfers of stock; or, in lieu thereof, the
board of directors may fix a date, not exceeding 60 days
preceding the date of a meeting of shareholders, a dividend
payment date, or a date for the allotment of rights, as a date
for the taking of a record of the shareholders entitled to
notice of and to vote at such meeting, or entitled to receive
such dividends or such rights, as the case may be; and only
shareholders of record on such date shall be entitled to
notice of and to vote at such meeting, or to receive such
dividends or rights, as the case may be.
ARTICLE X
---------
Fair-Price Provisions
Section 1. Definitions. As used in article X
of these bylaws, the following terms shall have the indicated
meanings:
(a) "Affiliate," including the term "affiliated
person," means a person that directly or indirectly through
one or more intermediaries controls, is controlled by, or is
under common control with, a specified person.
(b) "Associate," when used to indicate a
relationship with any person, means any of the following:
(1) A corporation or organization, other than
the Corporation or a subsidiary of the Corporation, of
which such person is an officer, director, or partner or
is, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities.
(2) A trust or other estate in which such person
has a substantial beneficial interest or as to which such
person serves as trustee or in a similar fiduciary
capacity.
(3) A relative or spouse of such person, or any
relative of such spouse, who has the same home as such
person or who is a director or officer of the Corporation
or any of its affiliates.
(c) "Beneficial owner," when used with
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respect to voting stock, means any of the following:
(1) A person who individually or with any of
his affiliates or associates beneficially owns voting
stock, directly or indirectly.
(2) A person who individually or with any of
his affiliates or associates has either of the following
rights:
(A) To acquire voting stock, whether such
right is exercisable immediately or only after the
passage of time, pursuant to any agreement,
arrangement, or understanding or upon the exercise
of conversion rights, exchange rights, warrants,
or options, or otherwise.
(B) To vote voting stock pursuant to any
agreement, arrangement, or understanding.
(3) A person who has any agreement,
arrangement, or understanding for the purpose of
acquiring, holding, voting, or disposing voting stock
with any other person who beneficially owns or whose
affiliates beneficially own, directly or indirectly, such
shares of voting stock.
(d) "Business combination" means any of the
following:
(1) Except for a merger, consolidation, or
share exchange that does not alter the contract rights of
the stock as expressly set forth in the articles of
incorporation of the Corporation or change or convert in
whole or in part the outstanding shares of the
Corporation, any merger, consolidation, or share exchange
of the Corporation or any subsidiary with:
(A) An interested shareholder; or
(B) Another corporation, whether or not
itself an interested shareholder, which is, or
after the merger, consolidation, or share exchange
would be, an affiliate of an interested
shareholder that was an interested shareholder
before the transaction.
(2) A sale, lease, transfer, or other disposi-
tion, other than in the ordinary course of business, in
one transaction or a series of transactions in any
twelve-month period, to an interested shareholder or any
affiliate of an interested shareholder, other than the
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Corporation or any of its subsidiaries, of any assets of
the Corporation or any subsidiary having, measured at the
time the transaction or transactions are approved by the
board of directors of the Corporation, an aggregate book
value as of the end of the Corporation's most recently
ended fiscal quarter of 10% or more of the total market
value of the outstanding stock of the Corporation or of
its net worth as of the end of its most recently ended
fiscal quarter.
(3) The issuance or transfer by the
Corporation or any subsidiary, in one transaction or a
series of transactions, of any equity securities of the
Corporation or any subsidiary which has an aggregate
market value of five percent or more of the total market
value of the outstanding stock of the Corporation, to any
interested shareholder or any affiliate of any interested
shareholder, other than the Corporation or any of its
subsidiaries, except pursuant to the exercise of warrants
or rights to purchase securities offered pro rata to all
holders of the Corporation's voting stock or any other
method affording substantially proportionate treatment of
the holders of voting stock.
(4) The adoption of a plan or proposal for the
liquidation or dissolution of the Corporation in which
anything other than cash will be received by an
interested shareholder or an affiliate of an interested
shareholder.
(5) A reclassification of securities, including
a reverse stock split or recapitalization of the
Corporation, or any merger, consolidation, or share
exchange of the Corporation with any of its subsidiaries
which has the effect, directly or indirectly, in one
transaction or a series of transactions, of increasing by
five percent or more of the total number of outstanding
shares the proportionate amount of the outstanding shares
of any class of equity securities of the Corporation or
any subsidiary which is directly or indirectly owned by
an interested shareholder or an affiliate of an
interested shareholder.
(e) "Common stock" means stock other than
preferred or preference stock.
(f) "Control," including the terms "controlling,"
"controlled by," and "under common control with," means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by
contract, or otherwise. The beneficial ownership of 10% or
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more of the votes entitled to be cast of a corporation's
voting stock creates a presumption of control.
(g) "Equity security" means any of the following:
(1) Stock or a similar security, certificate of
interest, or participation in any profit sharing
agreement, voting trust certificate, or certificate of
deposit for an equity security.
(2) A security convertible, with or without
consideration, into an equity security, or any warrant or
other security carrying any right to subscribe to or
purchase an equity security.
(3) Any put, call, straddle, or other option or
privilege of buying an equity security from or selling an
equity security to another without being bound to do so.
(h)(1) "Interested shareholder" means any person
other than the Corporation or any subsidiary that is
either of the following:
(A) The beneficial owner, directly or
indirectly, of 10% or more of the voting power
of the outstanding voting stock of the
Corporation.
(B) An affiliate of the Corporation who at
any time within the two-year period
immediately before the date in question was
the beneficial owner, directly or indirectly,
of 10% or more of the voting power of the then
outstanding voting stock of the Corporation.
(2) For the purpose of determining whether a
person is an interested shareholder, the number of shares
of voting stock deemed to be outstanding shall include
shares deemed owned by the person through application of
subsection (c) of this section, but may not include any
other shares of voting stock which may be issuable
pursuant to any agreement, arrangement, or understanding,
or upon exercise of conversion rights, warrants, or
options, or otherwise.
(i) "Market value" means the following:
(A) In the case of stock, the highest
closing sale price during the 30-day period
immediately preceding the date in question of
a share of such stock on the principal United
States securities exchange registered under
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the Securities Exchange Act of 1934 on which
such stock is listed, or if such stock is not
listed on any such exchange, the highest
closing bid quotation with respect to a share
of such stock during the 30-day period
preceding the date in question on the National
Association of Securities Dealers, Inc.,
Automated Quotations System or any system then
in use, or if no such quotations are
available, the fair market value on the date
in question of a share of such stock as
determined by the board of directors of
theCorporation in good faith.
(B) In the case of property other than cash
or stock, the fair market value of such property
on the date in question as determined by the board
of directors of the Corporation in good faith.
(j) "Subsidiary" means any corporation of which
voting stock having a majority of the votes entitled to be
cast is owned, directly or indirectly, by the Corporation.
(k) "Voting stock" means shares of capital stock
of a corporation entitled to vote generally in the election
of directors.
Section 2. Vote Required in Business
Combinations. In addition to any vote otherwise required by
law or the articles of incorporation of the Corporation, a
business combination shall be recommended by the board of
directors and approved by the affirmative vote of at least
each of the following:
(a) 80% of the votes entitled to be cast by
outstanding shares of voting stock of the Corporation voting
together as a single voting group.
(b) Two-thirds of the votes entitled to be cast by
holders of voting stock other than voting stock held by the
interested shareholder who is or whose affiliate is a party to
the business combination or an affiliate or associate of the
interested shareholder, voting together as a single voting
group.
Section 3. When Voting Requirements Not
Applicable.
(a) Definitions. For purposes of subsection (b)
of this section, the following terms shall have the indicated
meanings:
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(1) "Announcement date" means the first general
public announcement of a proposal or intention to make
a proposal of a business combination or its first
communication generally to shareholders of the
Corporation, whichever is earlier.
(2) "Determination date" means the date on which an
interested shareholder first became an interested shareholder.
(3) "Valuation date" means the following:
(A) For a business combination voted
upon by shareholders, the later of (i) the day
before the day of the shareholders' vote or (ii)
the day 20 days before the consummation of the
business combination.
(B) For a business combination not voted
upon by shareholders, the date of the consummation
of the business combination.
(b) Conditions. The vote required by section 2 of
this article X shall not apply to a business combination, as
defined in section 1 of this article X, if each of the
following conditions is met:
(1) The aggregate amount of the cash and the
market value as of the valuation date of consideration
other than cash to be received per share by holders of
common stock in such business combination is at least
equal to the highest of the following:
(A) The highest per share price, including
any brokerage commissions, transfer taxes, and
soliciting dealers' fees, paid by the interested
shareholder for any shares of common stock of the
same class or series that he acquired:
(i) within the two-year period
immediately before the announcement date of
the proposal of the business combination; or
(ii) in the transaction in which he
became an interested shareholder, whichever is
higher; or
(B) The market value per share of common
stock of the same class or series on the
announcement date or on the determination date,
whichever is higher; or
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(C) The price per share equal to the market
value per share of common stock of the same class
or series determined pursuant to subparagraph (B)
immediately preceding, multiplied by the fraction
of:
(i) The highest per share price,
including any brokerage commissions, transfer
taxes, and soliciting dealers' fees, paid by
the interested shareholder for shares of
common stock of the same class or series that
he acquired within the two-year period
immediately before the announcement date, over
(ii) The market value per share of
common stock of the same class or series on
the first day in such two-year period on which
the interested shareholder acquired shares of
common stock.
(2) The aggregate amount of the cash and the
market value as of the valuation date of consideration
other than cash to be received per share by holders of
shares of any class or series of outstanding stock other
than common stock is at least equal to the highest of the
following, whether or not the interested shareholder has
previously acquired shares of a particular class or
series of stock:
(A) The highest per share price, including
any brokerage commissions, transfer taxes, and
soliciting dealers' fees, paid by the interested
shareholder for any shares of such class of stock
that he acquired:
(i) within the two-year period
immediately before the announcement date of
the proposal of the business combination; or
(ii) in the transaction in which he
became an interested shareholder, whichever is
higher; or
(B) The highest preferential amount per
share to which the holders of shares of such class
of stock are entitled in the event of voluntary or
involuntary liquidation, dissolution, or winding
up of the Corporation; or
(C) The market value per share of such class
of stock on the announcement date or on the
determination date, whichever is higher; or
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(D) The price per share equal to the market
value per share of such class of stock determined
pursuant to subparagraph (C) immediately
preceding, multiplied by the fraction of:
(i) The highest per share price,
including any brokerage commissions, transfer
taxes, and soliciting dealers' fees, paid by
the interested shareholder for such shares of
voting stock acquired by him within the two-
year period immediately before the
announcement date, over
(ii) The market value per share of the
same class of voting stock on the first day in
such two-year period on which the
interested shareholder acquired shares of the
same class of voting stock.
(3) The consideration to be received by holders
of any class or series of outstanding stock is to be in
cash or in the same form as the interested shareholder
previously paid for shares of the same class or series of
stock. If the interested shareholder has paid for shares
of any class of stock with varying forms of
consideration, the form of consideration for such class
of stock shall be either cash or the form used to acquire
the largest number of shares of such class or series of
stock that he previously acquired.
(4) (A) After the interested shareholder has
become an interested shareholder and before the
consummation of such business combination:
(i) There shall have been no failure to
declare and pay at the regular date therefor
any full periodic dividends, cumulative or
not, on any outstanding preferred stock of the
Corporation;
(ii) There shall have been:
(aa) No reduction in the annual
rate of dividends paid on any class or
series of stock of the Corporation that
is not preferred stock except as
necessary to reflect any subdivision of
such stock; and
(bb) An increase in such
annual rate of dividends as shall have
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been necessary to reflect
reclassification, including reverse stock
split, recapitalization, reorganization,
or similar transaction, which shall have
the effect of reducing the number of
outstanding shares of such stock; and
(iii) The interested shareholder did not
become the beneficial owner of additional
shares of stock of the Corporation except as
part of the transaction which resulted in such
interested shareholder's becoming an
interested shareholder or by virtue of
proportionate stock splits or stock divi-
dends.
(B) The provisions of (i) and (ii) of
subparagraph (A) shall not apply if neither an
interested shareholder nor an affiliate or
associate of an interested shareholder voted as a
director of the Corporation in a manner
inconsistent with (i) and (ii), and the interested
shareholder, within 10 days after an act or
failure to act inconsistent with such
subparagraphs, shall have notified the board of
directors of the Corporation in writing that the
interested shareholder disapproves thereof and
requests in good faith that the board of directors
rectify such act or failure to act.
(5) After the interested shareholder has
become an interested shareholder, the interested
shareholder may not have received the benefit, directly
or indirectly, except proportionately as a shareholder,
of loans, advances, guarantees, pledges, or other
financial assistance, or tax credits or other tax
advantages, provided by the Corporation or any of its
subsidiaries, whether in anticipation of or in connection
with such business combination or otherwise.
(c) Other Provisions.
(1) Section 2 of this article X shall not apply
to a business combination with a particular interested
shareholder or his existing or future affiliates that has
been approved or exempted therefrom by resolution of the
board of directors of the Corporation; provided, however,
that any such resolution shall have been adopted before
the time that such interested shareholder first became an
interested shareholder.
(2) Unless by its terms a resolution adopted
under this subsection is made irrevocable, it may be
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altered or repealed by the board of directors, but this
shall not affect a business combination that has been
consummated or is the subject of an existing agreement
entered into before the alteration or repeal.
ARTICLE XI
----------
Notices
Section 1. Manner of Giving Notice. Notice
required to be given under the provisions of these bylaws to
a director, officer, or shareholder shall not be construed to
mean personal notice, but may be given by depositing written
or printed notice in a post office or letter box in a postpaid
wrapper addressed to such director, officer, or shareholder at
such address as appears on the books of the Corporation, such
notice to be deemed to have been given at the time when the
same shall have been thus mailed; or, if such person has
provided a telecommunications address to the Corporation, such
notice may be given by prepaid written telecommunication sent
to such address and in such event shall be deemed to have been
given at the time when the same shall have been transmitted.
Section 2. Waiver of Notice. Any shareholder,
officer, or director may waive, in writing or by written
telecommunication, whether before or after the time stated,
any notice required to be given under these bylaws.
ARTICLE XII
-----------
Miscellaneous
Section 1. Fiscal Year. The fiscal year of the
Corporation shall begin on the first day of January and end on
the last day of December in each year.
Section 2. Checks and Drafts. All checks,
drafts, and orders for the payment of money shall be signed by
the treasurer or by such other officer or officers or agents
as the board of directors may from time to time designate. No
check shall be signed in blank.
Section 3. Books and Records. The books,
accounts, and records of the Corporation shall, subject to the
limitations fixed by law, be open to inspection by the
shareholders at such times and subject to such regulations as
the board of directors may prescribe.
Section 4. Separability. If one or more of the
provisions of these bylaws shall be held to be invalid,
illegal, or unenforceable, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof
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and these bylaws shall be construed as if such invalid,
illegal, or unenforceable provision or provisions had never
been contained herein.
ARTICLE XIII
Amendment of Bylaws
Section 1. Voting. These bylaws may be amended,
repealed, or supplemented at any regular meeting of the board
of directors, or at any special meeting called for such
purpose, by the affirmative vote of a majority of the board of
directors; provided, however, that in each instance an
amendment, repeal, or supplement shall not be Inconsistent
with the law or the articles of incorporation of the
Corporation and shall be subject to the power of the
shareholders to amend, repeal, or supplement the bylaws so
made but only upon the affirmative vote of at least 80% of all
shares of capital stock entitled to vote thereon.
Section 2. Shareholder Proposals. No proposal by a
shareholder to amend, repeal, or supplement the bylaws of the
Corporation may be voted upon at a meeting of shareholders
unless, at least 180 days before such meeting of shareholders,
such shareholder shall have delivered in writing to the
secretary of the Corporation (a) notice of such proposal and
the text of the proposed amendment, repeal, or supplement, (b)
evidence, reasonably satisfactory to the secretary of the
Corporation, of such shareholder's status as such and of the
number of shares of each class of capital stock of the
Corporation of which such shareholder is the beneficial owner,
(c) a list of the names of other beneficial owners of shares
of the capital stock of the Corporation, if any, with whom
such shareholder is acting in concert, and the number of
shares of each class of capital stock of the Corporation
beneficially owned by each such beneficial owner, and (d) an
opinion of counsel, which counsel and the form and substance
of which opinion shall be reasonably satisfactory to the board
of directors of the Corporation, to the effect that the bylaws
(if any) resulting from the adoption of such proposal would
not be in conflict with the articles of incorporation of the
Corporation or the laws of the State of Louisiana. Within 30
days after such shareholder shall have submitted the aforesaid
items, the secretary and the board of directors of the
Corporation shall respectively determine whether the items to
be ruled upon by them are reasonably satisfactory and shall
notify such shareholder in writing of their respective
determinations. If such shareholder fails to submit a
required item in the form or within the time indicated, or if
the secretary or the board of directors of the Corporation
determine that the items to be ruled upon by them are not
reasonably satisfactory, then such proposal by such
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shareholder may not be voted upon by the shareholders of the
Corporation at such meeting of shareholders. Beneficial
ownership shall be determined in accordance with section 1 of
article X of these bylaws.
Section 3. Effective Date. No amendment or supplement
to or repeal of any of the following provisions of these
bylaws, whether resulting from action of the directors or the
shareholders, shall take effect until the later of (i) one
year following the adoption of such amendment, supplement, or
repeal, or (ii) 10 days after the adjournment sine die of the
annual meeting of shareholders next succeeding the adoption of
such amendment, supplement, or repeal:
Article II, section 2;
Article II, section 8;
Article X; and
Article XIII.
ARTICLE XIV
-----------
Other Amendments to Bylaws
Section 1. Effective Date. No amendment or supplement
to or repeal of any of the following provisions of these
bylaws, whether resulting from action of the directors or the
shareholders, shall take effect until the later of (i) one
year following the adoption of such amendment, supplement, or
repeal, or (ii) 10 days after the adjournment sine die of the
annual meeting of shareholders next succeeding the adoption of
such amendment, supplement, or repeal:
Article II, section 4;
Article II, section 5;
Article II, section 7;
Article II, section 9;
Article III, section 1;
Article III, section 2; and
Article XIV;
provided, however, that the board of directors shall have the
power at any time, free from the foregoing restrictions, but
subject to the provisions of subsection (g) of section 1 of
article III of these bylaws, to amend or otherwise change
subsections (a) and (d)(1) of section 1 of article III of
these bylaws, and, with respect to any amendments to or
changes in such subsection (d)(1), to make appropriate
conforming changes in such section 1.
-43-
<PAGE>
<PAGE>
ARTICLE XV
----------
Control Share Acquisition Statute
Section 1. Pursuant to section 136 of the Louisiana
Business Corporation Law as in effect on January 25, 1991, the
provisions of sections 135 through 140.2 of the Louisiana
Business Corporation Law, enacted as part of Title 12 of the
Louisiana Revised Statutes, shall not apply to "control share
acquisitions" (as defined therein) of this Corporation.
<PAGE>
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
For the three months ended March 31
(Unaudited)
<CAPTION>
(In thousands, except share
and per share amounts)
1994 1993
----------- -----------
<S> <C> <C>
PRIMARY
- - -------
Net income applicable to common stock $ 8,081 $ 7,024
----------- -----------
Weighted average number of shares of
common stock outstanding during the
period 22,393,229 22,320,164
Common stock under stock option grant 22,109 47,062
----------- -----------
Average shares 22,415,338 22,367,226
----------- -----------
Primary net income per common share $ .36 $ .31
----------- -----------
FULLY DILUTED
- - -------------
Net income applicable to common stock $ 8,081 $ 7,024
Adjustments to net income related to
Employee Stock Ownership Plan (ESOP)
under the "if-converted" method:
Add loss of deduction from net income
for actual dividends paid on
convertible preferred stock, net of tax 372 380
Deduct additional cash contribution required
which is equal to dividends on preferred
stock less dividends paid at the common
dividend rate, net of tax (60) (70)
Add tax benefit associated with dividends
paid on (1) allocated common shares in
1994 and (2) allocated and unallocated
shares in 1993, assuming ESOP was a
common stock plan 26 16
--------- -----------
Adjusted income applicable to common stock $ 8,419 $ 7,350
----------- -----------
Weighted average number of shares of
common stock outstanding during the
period 22,393,229 22,320,164
Number of equivalent common shares
attributable to ESOP 1,429,314 1,438,244
Common stock under stock option grant 22,109 49,819
----------- -----------
Average shares 23,844,652 23,808,227
----------- -----------
Fully diluted net income per common share $ .35 $ .31
----------- -----------
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
For the twelve months ended March 31, 1994
(Unaudited)
<CAPTION>
(In thousands,
except ratios)
-------------
<S> <C>
Earnings $ 42,871
Income taxes 20,219
---------
Earnings from continuing operations before income taxes 63,090
---------
Fixed charges
Interest, long-term debt 22,580
Interest, other (including interest on short-term debt) 2,595
Amortization of debt expense, premium, net 1,337
Portion of rentals representative of an interest factor 468
---------
Total fixed charges 26,980
---------
Earnings from continuing operations before income
taxes and fixed charges $ 90,070
---------
Ratio of earnings to fixed charges 3.34 x
---------
Fixed charges from above $ 26,980
Preferred stock dividends* 3,002
---------
Total fixed charges and preferred stock dividends $ 29,982
---------
Ratio of earnings to combined fixed charges and
preferred stock dividends 3.00 x
---------
* Preferred stock dividends multiplied by the ratio of
pretax income to net income
</TABLE>
<PAGE>
<PAGE>
Coopers certified public accountants 639 Loyola Avenue
& Lybrand Suite 1800
New Orleans, Louisiana 70113
telephone (504) 529-2700
facsimile (504) 529-1439
May 12, 1994
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Central Louisiana Electric Company, Inc. Registrations
on Form S-8 (Nos. 2-79671, 33-10169 and 33-44663) and
Form S-3 (Nos. 33-24895, 33-61068 and 33-62950)
We are aware that our report dated April 22, 1994 on our review of the interim
financial information of Central Louisiana Electric Company, Inc. as of March
31, 1994 and for the three-month periods ended March 31, 1994 and 1993 included
in this Form 10-Q is incorporated by reference in the above mentioned
registration statements. Pursuant to Rule 436(c) under the Securities Act of
1933, this report should not be considered a part of the registration statements
prepared or certified by us within the meaning of Sections 7 and 11 of the Act.
COOPERS & LYBRAND
