<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, 1997 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 1, 1997 there were 22,459,656 shares outstanding of the
Registrant's Common Stock, par value $2.00 per share.
<PAGE>
TABLE OF CONTENTS
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . 1
Report of Independent Accountants. . . . . . . . . . . . 2
Consolidated Statements of Income. . . . . . . . . . . . 3
Consolidated Balance Sheets. . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows. . . . . . . . . . 6
Note to Consolidated Financial Statements. . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Disclosure Regarding Forward-Looking Statements. . . . . 8
Results of Operations. . . . . . . . . . . . . . . . . . 8
Financial Condition. . . . . . . . . . . . . . . . . . . 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters To A Vote of Security Holders . . . 12
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 14
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
<PAGE>
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
management's opinion, all adjustments, consisting only of normal recurring
adjustments, that are necessary for a fair presentation of the Company's
financial position and the results of its operations for the interim periods
presented. Because of the seasonal nature of the Company's business, the
results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the full fiscal
year. 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, 1996 (1996 Form
10-K).
The consolidated financial statements included herein have been subjected to a
limited review by Coopers & Lybrand L.L.P., independent accountants for the
Company, whose report is included herein.
1
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Coopers certified public accountants
& Lybrand L.L.P. a professional services firm
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, 1997, and the related consolidated
statements of income and cash flows for the three-month periods ended
March 31, 1997 and 1996, 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 consolidated 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, 1996 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 29, 1997, 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, 1996, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
COOPERS & LYBRAND, L.L.P.
New Orleans, Louisiana
April 25, 1997
2
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31
(Unaudited)
<CAPTION>
(In thousands, except share and
per share amounts)
1997 1996
---------- ----------
<S> <C> <C>
OPERATING REVENUES $ 97,668 $ 98,606
---------- ----------
OPERATING EXPENSES
Fuel used for electric generation 27,080 21,962
Power purchased 12,910 17,139
Other operation 13,282 14,022
Maintenance 5,795 4,905
Depreciation 11,338 10,827
Taxes other than income taxes 8,622 7,390
Federal and state income taxes 3,843 5,614
---------- ----------
82,870 81,859
---------- ----------
OPERATING INCOME 14,798 16,747
Allowance for other funds used during
construction 2 133
Other income and expenses, net 134 170
---------- ----------
INCOME BEFORE INTEREST CHARGES 14,934 17,050
Interest charges, including amortization of
debt expense, premium and discount 7,249 7,279
Allowance for borrowed funds used during
construction 159 (259)
---------- ----------
NET INCOME 7,526 10,030
Preferred dividend requirements, net 524 514
---------- ----------
NET INCOME APPLICABLE TO COMMON STOCK $ 7,002 $ 9,516
========== ==========
WEIGHTED AVERAGE COMMON SHARES
Primary 22,463,986 22,448,584
Fully diluted 23,863,533 23,856,480
EARNINGS PER SHARE
Primary $0.31 $0.42
Fully diluted $0.31 $0.41
CASH DIVIDENDS PAID PER SHARE $0.385 $0.375
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
(In thousands)
March 31, 1997 December 31, 1996
------------------ -----------------
ASSETS
<S> <C> <C>
Utility plant
Property, plant and equipment $ 1,386,568 $ 1,379,035
Accumulated depreciation (485,668) (475,212)
------------- ----------------
900,900 903,823
Construction work-in-progress 52,297 49,075
------------- ----------------
Total utility plant, net 953,197 952,898
------------- ----------------
Investments and other assets 8,476 8,488
------------- ----------------
Current assets
Cash and cash equivalents 17,537 20,307
Accounts receivable, net 42,763 43,912
Unbilled revenues 8,992 11,193
Fuel inventory, at average cost 8,421 9,366
Materials and supplies
inventory, at average cost 16,458 17,029
Prepayments and other current assets 2,484 2,505
------------- ----------------
Total current assets 96,655 104,312
------------- ----------------
Prepayments 8,827 8,683
Regulatory assets - deferred taxes 103,839 103,839
Other deferred charges 69,794 69,320
Accumulated deferred federal and
state income taxes 75,587 74,231
------------- ----------------
TOTAL ASSETS $ 1,316,375 $ 1,321,771
============= ================
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
(Continued on next page)
</TABLE>
4
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
<CAPTION>
(In thousands,
except share amounts)
March 31, 1997 December 31, 1996
------------------ -----------------
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Common shareholders' equity
Common stock, $2 par value, authorized
50,000,000 shares, issued 22,760,154
and 22,760,154 shares at March 31, 1997
and December 31, 1996, respectively $ 45,520 $ 45,520
Premium on capital stock 113,705 113,702
Retained earnings 238,769 240,414
Treasury stock at cost, 301,598 and
307,577 shares at March 31, 1997
and December 31, 1996, respectively (6,121) (6,242)
------------- ----------------
391,873 393,394
------------- ----------------
Preferred stock, cumulative, $100 par value
Not subject to mandatory redemption 30,155 30,280
Deferred compensation related to
preferred stock held by ESOP (19,649) (20,751)
------------- ----------------
10,506 9,529
Subject to mandatory redemption 6,300 6,372
------------- ----------------
16,806 15,901
------------- ----------------
Long-term debt, net 325,869 340,859
------------- ----------------
Total capitalization 734,548 750,154
------------- ----------------
Current liabilities
Short-term debt 80,190 65,161
Long-term debt due within one year 30,000 15,000
Accounts payable 23,014 50,022
Customer deposits 19,746 19,761
Taxes accrued 15,079 5,806
Interest accrued 2,214 7,521
Accumulated deferred fuel 4,956 2,168
Other current liabilities 2,810 3,252
------------- ----------------
Total current liabilities 178,009 168,691
------------- ----------------
Deferred credits
Accumulated deferred federal and state
income taxes 282,040 281,684
Accumulated deferred investment tax
credits 30,916 31,364
Regulatory liabilities - deferred taxes 60,058 60,058
Other deferred credits 30,804 29,820
------------- ----------------
Total deferred credits 403,818 402,926
------------- ----------------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,316,375 $ 1,321,771
============= ================
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31
(Unaudited)
<CAPTION>
(In thousands)
1997 1996
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 7,525 $ 10,030
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 11,783 11,131
Allowance for funds used during construction 161 (392)
Amortization of investment tax credits (448) (452)
Deferred income taxes (996) 1,526
Deferred fuel costs 2,788 (1,689)
Gain on disposition of utility plant, net (1) (2)
Changes in assets and liabilities
Accounts receivable, net 1,149 2,755
Unbilled revenues 2,201 409
Fuel inventory, materials and supplies 1,516 (2,320)
Accounts payable (27,008) (19,111)
Customer deposits (15) 161
Other deferred accounts (721) (143)
Taxes accrued 9,273 9,379
Interest accrued (5,307) (5,630)
Other, net 1,523 (1,011)
---------- ----------
Net cash provided by operating activities 3,423 4,641
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to utility plant (11,884) (10,761)
Allowance for funds used during construction (161) 392
Sale of utility plant 62 153
Purchase of investments (100)
Sale of investments 271
---------- ----------
Net cash used in investing activities (11,983) (10,045)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 3 66
Redemption of preferred stock (72)
Issuance of long-term debt 25,000
Increase (decrease) in short-term debt, net 15,029 (11,090)
Dividends paid on common and preferred stock, net (9,170) (8,929)
---------- ----------
Net cash provided by financing activities 5,790 5,047
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,770) (357)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 20,307 20,621
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 17,537 $ 20,264
========== ==========
Supplementary cash flow information
Interest paid (net of amount capitalized) $ 12,491 $ 12,697
========== ==========
Income taxes paid $ 1,500 $ 0
========== ==========
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
6
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note A. Contingencies
Teche Electric Cooperative, Inc.
- --------------------------------
In February 1995, Teche Electric Cooperative, Inc. (Teche) and the Company
executed a Purchase and Sale Agreement (Agreement). The Agreement calls for
the purchase of all the assets of Teche by the Company for a purchase price,
including the Company's assumption or other discharge of Teche's liabilities,
of approximately $22.4 million. On March 24, 1997, the board of directors of
Teche voted to extend the Agreement with the Company for an additional twelve
months until March 31, 1998, to allow for the Teche wholesale power contract
with Cajun Electric Power Cooperative, Inc. (Cajun) to be resolved through
Cajun's bankruptcy process. Consummation of the acquisition is subject to a
number of conditions, including approval by the Louisiana Public Service
Commission (LPSC), the Rural Utilities Service (RUS) and other governmental
agencies, successful resolution of Teche's wholesale power supply contract with
Cajun and certain other conditions. See Item 5 in Part II of this Report for
additional information relating to the proposed Teche acquisition and the Cajun
bankruptcy proceeding.
7
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in combination with
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 7 of the Company's 1996 Form 10-K, the financial statements
and notes contained in Item 8 of the Company's 1996 Form 10-K and the interim
financial statements and note thereto contained elsewhere in this Report.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact included in this Report, including, without
limitation, the statements under "-Financial Condition - Regulatory Matters"
and Note A to the Consolidated Financial Statements located elsewhere in this
Report regarding the Company's proposed Teche acquisition, the effect of
certain recently proposed legislation, the effect of certain recent Federal
Energy Regulatory Commission (FERC) regulations and other matters, are
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, such
forward-looking statements are based on numerous assumptions (some of which may
prove to be incorrect) and are subject to risks and uncertainties which could
cause the actual results to differ materially from the Company's expectations.
Such risks and uncertainties include, without limitation, the effects of
competition in the power industry, legislative and regulatory changes affecting
electric utilities, fluctuations in the weather and changes in general economic
and business conditions, as well as other factors discussed in this and the
Company's other filings with the Securities and Exchange Commission (Cautionary
Statements). All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Cautionary Statements.
RESULTS OF OPERATIONS
Net income applicable to common stock totaled $7.0 million for the
three-month period ended March 31, 1997, as compared to $9.5 million for the
corresponding period in 1996. Net income per primary average common share was
$0.31 for the three-month period ended March 31, 1997, as compared to $0.42 per
share for the same period in 1996. The following principal factors contributed
to these results:
Operating revenues for the three months ended March 31, 1997 decreased $0.9
million, or 1.0%, as compared to the same period in 1996, primarily due to a
decrease in base revenues, partially offset by an increase in fuel cost
recovery revenues. For the three months ended March 31, 1997, fuel cost
recovery revenues were $1.0 million, or 2.6%, higher than the same period in
1996. The increase in fuel cost recovery revenues is related to higher natural
gas prices in the first quarter of 1997, which resulted in higher generation
costs as compared to prices in effect and resulting generation costs during the
8
<PAGE>
first quarter of 1996. Changes in fuel cost have historically had no effect
on net income, as fuel costs are currently recovered through a fuel cost
adjustment clause that enables the Company to pass on to customers
substantially all changes in the cost of generating fuel and purchased power.
These adjustments are audited monthly and regulated by the LPSC (about 99% of
the total fuel cost adjustment) while the remaining portion, regulated by
the FERC, is audited periodically for several years at a time. Until approval
is received, the adjustments are subject to refund.
Base revenues decreased $1.9 million for the three months ended March 31, 1997,
as compared to the corresponding period in 1996. This decrease is attributable
to a decline in kilowatt-hour sales to residential and commercial customers
resulting partially from a warmer-than-normal winter in the first quarter of
1997 as compared to a colder-than-normal winter in 1996. Base revenues were
also affected by the $3.0 million annual reduction of the Company's annual base
rate tariff for electric service effective November 1, 1996, as part of the
October 1996 LPSC earnings review settlement. For the quarter ended
March 31, 1997, kilowatt-hour sales to regular customers decreased 0.4%,
compared with the same period in 1996. Residential kilowatt-hour sales
decreased 2.6%, commercial sales declined 4.0%, while sales to industrial
customers increased by 4.4%, compared with the first quarter of 1996.
Operating expenses increased $1.0 million, or 1.2%, for the three months ended
March 31, 1997, compared to the same period in 1996. This increase in
operating expenses is primarily attributable to an increase in fuel and
purchased power costs, maintenance expenses, and taxes other than income taxes,
partially offset by a decrease in federal and state income taxes. During
the three months ended March 31, 1997, the increase in fuel used for electric
generation is attributable to the higher cost of natural gas and an increase in
internal generation, compared to the same period in 1996. Internal generation
increased during the first quarter of 1997, compared to the first quarter of
1996, as a result of a shorter scheduled spring 1997 outage for the Company's
lignite unit. The Company purchases electric energy from other utilities when
the price of energy purchased is less than the cost to the Company to generate
such energy from its own facilities. For the quarter ended March 31, 1997, 31%
of the Company's energy requirements were met with purchased power, compared to
40% during the first quarter of 1996. The decrease in purchased power resulted
from a shorter spring 1997 maintenance outage of the Company's lignite
generating unit as compared to the spring 1996 maintenance outage on the same
unit. The $0.9 million increase in maintenance expenses resulted from an
increase in right-of-way reclearing activities by the Company during the three
months ended March 31, 1997, compared to the same period in 1996. Taxes other
than income taxes increased $1.2 million for the first quarter of 1997 compared
to the corresponding period in 1996, primarily as a result of an additional
property tax accrual for the expiration of a ten-year tax exemption on one of
the Company's generating stations. Federal and state income taxes decreased
$1.8 million for the first quarter of 1997 compared to the same period in 1996
as a result of lower taxable income in 1997.
9
<PAGE>
FINANCIAL CONDITION
Liquidity and Capital Resources
At March 31, 1997 and 1996, the Company had $80.2 million and $12.0 million,
respectively, of short-term debt outstanding in the form of commercial paper
borrowings and bank loans. Much of this increase was due to the utilization of
short-term debt to replace the sale of accounts receivable program described
below. Because of the termination of the receivables program during the
quarter ended March 31, 1997, the Company increased the amount of short-term
debt it could borrow by putting in place an additional $25 million revolving
credit facility with a scheduled termination date of March 19, 1998. An
existing $100 million revolving credit facility is scheduled to terminate on
June 15, 2000. Both facilities provide support for the issuance of commercial
paper and working capital needs. Uncommitted lines of credit with banks
totaling $20 million are also available to support working capital needs.
Additionally, at March 31, 1997, an unregulated consolidated subsidiary of
the Company had $13.8 million of cash and temporary cash investments in
securities with original maturities of 90 days or less.
At December 31, 1996, the Company had reduced to zero the amount of receivables
that had been sold under a program which allowed it to sell, on an ongoing
basis, up to $35 million of eligible accounts receivable. During the quarter
ended March 31, 1997, the Company terminated the accounts receivable program.
On April 8, 1997, the Company issued $15 million of unsecured, noncallable,
medium-term notes, which are due April 9, 2007, at an interest rate of 7.50%.
The notes were issued to refinance $15 million of medium-term notes with a
weighted average interest rate of 9.14%, which will mature on June 30, 1997.
In the interim, proceeds from the issuance of the notes were used to reduce
short-term debt. Subsequent to the issuance of these notes, the Company has
$165 million of debt issuance capability remaining under its medium-term note
shelf registration statement on file with the Securities and Exchange
Commission.
Regulatory Matters
Wholesale Electric Competition
- ------------------------------
On April 24, 1996, the FERC issued Order No. 888, a final rule requiring
open access transmission by all public utilities that own, operate or control
transmission lines. Each such utility was required to have on file, by
July 9, 1996, a nondiscriminatory open access tariff that offers transmission
customers the same transmission services such utilities provide themselves,
under comparable terms and conditions. The Company filed its open access
tariff and proposed rate schedule with the FERC on July 8, 1996. The FERC
accepted the Company's tariff and allowed its proposed rates to go into effect,
subject to refund, on July 9, 1996, but has set all rates for hearing under its
standard review procedures. Utilities must take transmission service for
their own wholesale transactions under the terms and conditions of their open
access tariffs: after July 9, 1996 for any new transactions, and after
January 1, 1997 for all short-term inter-utility transactions under bilateral
contracts entered into prior to July 9, 1996. Order No. 888 provides for the
full recovery from a utility's departing customers of wholesale stranded costs
10
<PAGE>
to the extent such costs were prudently incurred to serve wholesale customers
and would go unrecovered if those customers use open access transmission
service to move to another supplier. The Order also allows customers under
existing wholesale contracts to seek FERC approval to modify their
contracts on a case-by-case basis.
The FERC issued Order No. 888-A on March 4, 1997, which affirmed the basic
provisions of Order No. 888, but clarified several technical issues related to
the implementation of Order No. 888. Order No. 888-A specified that all
transmission owners were to revise their existing, pro forma, open access
transmission tariffs and standards of conduct thereunder by July 14, 1997 to
comply with the clarifications.
The Company has three wholesale customers, which represented 0.9% of its sales
to regular customers for the twelve months ended March 31, 1997. Management
cannot predict what, if any, effects Orders No. 888 and 888-A may have on
wholesale prices in the Company's service area.
Retail Electric Competition
- ---------------------------
The LPSC has set a general docket, number U-21453, to investigate whether
retail choice is in the best interests of Louisiana electric utility consumers.
In March 1997, the LPSC consolidated all pre-existing, separate company dockets
that involved issues of retail customer choice into the general docket. In
addition, the LPSC set a tentative schedule of events in the general docket,
which calls for conferences and public hearings during the summer of 1997, with
a LPSC staff report and recommendations on the desirability of retail choice to
be provided to the LPSC in the fall of 1997.
Various federal and state legislative and regulatory bodies are considering a
number of issues in addition to those discussed above that will shape the
future of the electric utility industry. Such issues include deregulation of
retail electricity sales; the ability of electric utilities to recover
stranded costs; the repeal or modification of the Public Utility Holding
Company Act of 1935; the unbundling of vertically integrated electric utility
companies into separate business segments or companies (i.e., generation,
transmission, distribution and retail energy services); the role of electric
utilities, independent power producers and competitive bidding in the
construction and operation of new generating capacity; and the pricing of
transmission service on an electric utility's transmission system. The Company
is unable to predict the outcome of such issues or their effect on the
Company's financial position, results of operations or cash flows at this time.
11
<PAGE>
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 25, 1997, 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 25, 1997:
(1) Election of Directors:
<TABLE>
<CAPTION>
Broker
Class III Directors For Withheld Non-Votes
------------------- ---------- ------------ -----------
<S> <C> <C> <C>
J. Patrick Garrett 20,147,271 130,415 0
F. Ben James, Jr. 20,140,102 128,404 0
A. DeLoach Martin, Jr. 20,138,015 138,771 0
</TABLE>
(2) Approval of the appointment of Coopers & Lybrand L.L.P. as the
Company's auditors for 1997:
Broker
For Against Abstain Non-Votes
----- --------- --------- -----------
20,077,242 106,989 93,455 0
Item 5. OTHER INFORMATION
New Accounting Standard
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards "SFAS No. 128 Earnings Per Share" effective
for financial statements issued for periods ending after December 15, 1997.
The Company does not believe the effect of adopting this statement will have a
material impact on the Company.
12
<PAGE>
New Director
At the April 25, 1997 board of directors' meeting, the board of directors
elected Richard B. Crowell of Alexandria, Louisiana as a Class I director of
the Company whose term expires at the Company's 1998 annual meeting of
shareholders. Mr. Crowell is a partner in the law firm of Crowell & Owens in
Alexandria. He is also a director of Whitney National Bank and Whitney
Holding Corporation, New Orleans.
Cajun Electric Power Cooperative, Inc. (Cajun)
The Company and Teche have entered into the Agreement whereby the Company
would purchase all of Teche's assets. See Note A to the Consolidated Financial
Statements included in Part I of this Report. Cajun, which provides power to
Louisiana's electric distribution cooperatives, including Teche, has been in
bankruptcy since December 1994. Three competing plans of reorganization have
been filed with the bankruptcy court, including a plan sponsored by the
court-appointed Cajun trustee. Each of the alternative plans includes a
provision for the assignment of Teche's wholesale power supply contract to the
Company or the substitution of a new wholesale power contract between Cajun and
the Company. This provision is subject to a number of approvals, including
confirmation by the bankruptcy court.
In April 1997, the RUS, Cajun, Teche and the Company filed a joint motion to
dismiss (Joint Motion to Dismiss) Motions for Enforcement of Automatic Stay
that had previously prevented the Company from consummating the acquisition of
Teche in the event all necessary approvals were received. As part of the
agreement to file the Joint Motion to Dismiss, the RUS, Teche and the
Company signed a Memorandum of Understanding (MOU) requiring, among other
things, that prior to the acquisition of Teche, the Company shall
have negotiated and entered into an interim power purchase agreement with
Cajun's bankruptcy trustee, reasonably acceptable to the RUS, that provides
Cajun's bankruptcy estate with an economic benefit equivalent to that of
Teche's current wholesale power supply contract with Cajun. Also, the Company
agreed in the MOU not to engage, subject to some limited exceptions, in
unsolicited or hostile attempts to acquire any other electric cooperative in
Louisiana, for a period of at least ten years. The dismissal of the Motions
for Enforcement of Automatic Stay allows the Company to proceed to satisfy the
conditions precedent to consummating the acquisition of Teche contained in the
Agreement. Such conditions include, among others, approval by the LPSC, the RUS
and certain other governmental agencies, and the expiration or termination of
the applicable periods under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
The Company will continue to work with the bankruptcy trustee for the
successful resolution of an interim power purchase agreement. At this time,
the Company is unable to predict whether and when it will ultimately be
successful in acquiring Teche.
13
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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 25, 1997
4 $25,000,000 Loan Agreement By and Between Whitney National
Bank and the Company, dated March 20, 1997
11 Computation of Net Income Per Common Share for the three
months ended March 31, 1997 and March 31, 1996
12 Computation of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends for the
twelve months ended March 31, 1997
15 Awareness letter, dated May 14, 1997, from Coopers & Lybrand
L.L.P. regarding review of the unaudited interim financial
statements
27 Financial Data Schedule
(b) Reports on Form 8-K
During the three-month period ended March 31, 1997, the Company
filed no Current Reports on Form 8-K.
14
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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
undersigned thereunto duly authorized.
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
(Registrant)
BY: /s/ John L. Baltes, Jr.
__________________________________
John L. Baltes, Jr.
Controller
(Chief Accounting Officer)
Date: May 15, 1997
15
AMENDED AND RESTATED BY-LAWS
AMENDED AND RESTATED BYLAWS
OF
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
(as amended to April 25, 1997)
<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. . . . . . . . . . . . . . . . . . . . . 2
Section 4 Special Meetings. . . . . . . . . . . . . . . . . . . . 3
Section 5 Conduct of Meetings . . . . . . . . . . . . . . . . . . 3
Section 6 Voting. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7 Notice. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 8 Amendment of Articles of Incorporation. . . . . . . . . 7
(a) Shareholder Proposals. . . . . . . . . . . . . . . 7
(b) Effectiveness. . . . . . . . . . . . . . . . . . . 7
Section 9 Effectiveness of Other Amendments to Articles
of Incorporation . . . . . . . . . . . . . . . . . 8
ARTICLE III - DIRECTORS. . . . . . . . . . . . . . . . . . . . . . 9
Section 1 Certain General Provisions. . . . . . . . . . . . . . . 9
(a) Number . . . . . . . . . . . . . . . . . . . . . . 9
(b) Classification . . . . . . . . . . . . . . . . . . 9
(c) Nominations. . . . . . . . . . . . . . . . . . . . 9
(d) Qualifications; Declaration of Vacancy . . . . . . 10
(e) Removal. . . . . . . . . . . . . . . . . . . . . . 12
(f) Powers . . . . . . . . . . . . . . . . . . . . . . 13
(g) Change in Number of Directors. . . . . . . . . . . 14
(h) Rights of Preferred Shareholders, etc. . . . . . . 14
Section 2 Filling of Vacancies. . . . . . . . . . . . . . . . . . 14
Section 3 Annual and Regular Meetings . . . . . . . . . . . . . . 14
Section 4 Special Meetings. . . . . . . . . . . . . . . . . . . . 15
Section 5 Place of Meetings; Telephone Meetings . . . . . . . . . 15
Section 6 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 7 Compensation. . . . . . . . . . . . . . . . . . . . . . 15
Section 8 Committees. . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 16
Section 1 Right to Indemnification - General. . . . . . . . . . . 16
Section 2 Certain Provisions Respecting Indemnification
for and Advancement of Expenses . . . . . . . . . . . 16
Section 3 Procedure for Determination of Entitlement
to Indemnification. . . . . . . . . . . . . . . . . . 17
Section 4 Presumptions and Effect of Certain Proceedings. . . . . 18
Section 5 Right of Claimant to Bring Suit . . . . . . . . . . . . 19
Section 6 Non-Exclusivity and Survival of Rights. . . . . . . . . 19
Section 7 Definitions . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V - EXECUTIVE COMMITTEE. . . . . . . . . . . . . . . . . . 21
Section l Election and Tenure . . . . . . . . . . . . . . . . . . 21
Section 2 Powers. . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3 Meetings. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4 Compensation. . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI - AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . 22
Section 1 Election and Tenure . . . . . . . . . . . . . . . . . . 22
Section 2 Audit Committee . . . . . . . . . . . . . . . . . . . . 22
Section 3 Meetings. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4 Compensation. . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII - COMPENSATION COMMITTEE . . . . . . . . . . . . . . . 23
Section l Election and Tenure . . . . . . . . . . . . . . . . . . 23
Section 2 Compensation Committee. . . . . . . . . . . . . . . . . 23
Section 3 Meetings. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4 Compensation. . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII - OFFICERS. . . . . . . . . . . . . . . . . . . . . . 24
Section 1 Election, Tenure, and Compensation. . . . . . . . . . . 24
Section 2 Powers and Duties of Chairman of Board of Directors . . 24
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Section 3 Powers and Duties of President. . . . . . . . . . . . . 24
Section 4 Powers and Duties of Vice President . . . . . . . . . . 24
Section 5 Powers and Duties of Secretary. . . . . . . . . . . . . 25
Section 6 Powers and Duties of Treasurer. . . . . . . . . . . . . 25
Section 7 Delegation of Duties. . . . . . . . . . . . . . . . . . 25
ARTICLE IX - CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . 26
Section l Stock Certificates. . . . . . . . . . . . . . . . . . . 26
Section 2 Lost or Destroyed Certificates. . . . . . . . . . . . . 26
Section 3 Transfer of Shares. . . . . . . . . . . . . . . . . . . 26
Section 4 Dividends . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5 Closing Transfer Books; Fixing Record Date. . . . . . . 27
ARTICLE X - FAIR-PRICE PROVISIONS. . . . . . . . . . . . . . . . . 27
Section 1 Definitions . . . . . . . . . . . . . . . . . . . . . . 27
Section 2 Vote Required in Business Combinations. . . . . . . . . 30
Section 3 When Voting Requirements Not Applicable . . . . . . . . 31
(a) Definitions. . . . . . . . . . . . . . . . . . . . 31
(b) Conditions . . . . . . . . . . . . . . . . . . . . 31
(c) Other Provisions . . . . . . . . . . . . . . . . . 34
ARTICLE XI - NOTICES . . . . . . . . . . . . . . . . . . . . . . . 34
Section 1 Manner of Giving Notice . . . . . . . . . . . . . . . . 34
Section 2 Waiver of Notice. . . . . . . . . . . . . . . . . . . . 35
ARTICLE XII - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 35
Section l Fiscal Year . . . . . . . . . . . . . . . . . . . . . . 35
Section 2 Checks and Drafts . . . . . . . . . . . . . . . . . . . 35
Section 3 Books and Records . . . . . . . . . . . . . . . . . . . 35
Section 4 Separability. . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE XIII - AMENDMENT OF BYLAWS . . . . . . . . . . . . . . . . 35
Section 1 Voting. . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2 Shareholder Proposals . . . . . . . . . . . . . . . . . 36
Section 3 Effective Date. . . . . . . . . . . . . . . . . . . . . 36
iii
<PAGE>
ARTICLE XIV - OTHER AMENDMENTS TO BYLAWS . . . . . . . . . . . . . 36
Section 1 Effective Date. . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XV - CONTROL SHARE ACQUISITION STATUTE . . . . . . . . . . 37
Section 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
iv
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
[as amended to April 25, 1997]
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.
1
<PAGE>
(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 shall attend, any business may be transacted which
might have been transacted if such meeting had been held 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.
2
<PAGE>
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
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
3
<PAGE>
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 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
<PAGE>
(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
ofincorporation, 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 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
5
<PAGE>
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 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.
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<PAGE>
(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:
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 year following the adoption by the shareholders of such
amendment or supplement or (ii) 10 days after the adjournment sine die of the
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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;
(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;
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(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 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
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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 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
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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. Section 230.405) under
the Securities Act of 1933, as amended) of any of the persons or
entities specified in clause (y) immediately preceding.
(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 (6)
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 (x)
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, (y) because
of termination of employment, as provided in paragraphs (1), (2),
and (4) of this subsection (d), or (z) or upon the determination of the
board of directors of the Corporation pursuant to paragraph (4) of
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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 vacancy as provided in section 2 of this
article III of these bylaws.
(6) 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 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
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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;
(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
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(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. Except to the extent required by
law or section 3(b) of article 6 of the articles of incorporation of
the Corporation, newly created directorships resulting from any
increase in the authorized number of directors and any vacancies in
the board of directors resulting from 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, or from death,
resignation, disqualification or removal of a director, or from
failure of the shareholders to elect the full number of authorized
directors, or from any other cause shall be filled by the affirmative
vote of at least a majority of the remaining directors (director) then
in office, even though less than a quorum of the whole board. Any
director elected in accordance with the preceding sentence shall hold
office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred.
Except to the extent required by law or section 3(b) of article 6 of
the articles of incorporation of the Corporation, the shareholders
shall have no right to fill any vacanies in 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.
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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.
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
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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.
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 hereinafter 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 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
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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 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.
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(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.
(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
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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) 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
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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 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.
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
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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 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
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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 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)
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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 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
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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 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 and deliver 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,
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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,
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.
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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 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 directors shall
think conducive to the interests of the Corporation.
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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 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.
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(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 disposition, 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
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
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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 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.
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(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 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 the Corporation 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
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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:
(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:
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(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
(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
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(C) The market value per share of such class of stock on the
announcement date or on the determination date, whichever is
higher; or
(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 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
33
<PAGE>
(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 dividends.
(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 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
34
<PAGE>
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 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.
35
<PAGE>
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 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
36
<PAGE>
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.
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.
37
$25,000,000 LOAN AGREEMENT
LOAN AGREEMENT
BY AND BETWEEN
WHITNEY NATIONAL BANK
AND
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
This Loan Agreement (the "Agreement"), made on this 20th day of March,
1997, by and between Whitney National Bank ("Bank") and Central Louisiana
Electric Company, Inc. ("Borrower").
I. Definitions
-----------
1.01 For all purposes of this Agreement, unless otherwise expressly
provided or unless the context otherwise requires, the following terms shall
have the following meanings:
"Advance" shall mean a disbursement of a loan in accordance herewith.
"Available Commitment" shall have the meaning ascribed to such term in
Section 2.01.
"Base Rate" shall mean that rate of interest as published or recorded by
Bank from time to time as its prime lending rate with the rate of interest to
change when and as said prime lending rate changes, which prime lending rate is
not necessarily the lowest interest rate charged by Bank.
"Base Rate Loan" shall mean any Loan to Borrower which accrues interest
at the Base Rate at the time of the occurrence thereof or conversion thereto.
"Borrower's Agent" shall mean any one of the individuals whose names are
set forth in Schedule I to this Agreement or any other person subsequently
authorized by a corporate resolution, duly authorized and adopted by the
Borrower's board of directors in form acceptable to Bank. Until Borrower
notifies Bank in writing of the withdrawal of Borrower's Agent's rights and
powers, Bank shall be able to rely conclusively upon the Borrower's Agent's
right to borrow and incur Loans and to make conversions thereof on behalf of
Borrower.
"Business Day" shall mean any day on which banks are required to be open
to carry on normal business in the State of Louisiana.
"Capital Lease Obligations" shall mean, with respect to any Person,
obligations of such Person with respect to leases which, in accordance with
GAAP, are required to be capitalized on the financial statements of such Person.
"Common Equity" shall mean, as of any date of determination, an amount
equal to the sum of (i) common Stock of Borrower, (ii) premium on capital Stock
of Borrower (as such term is used in the Financial Statements) and (iii)
retained earnings of the Borrower, determined on a Consolidated basis in
accordance with GAAP.
"Consolidated" shall mean the Borrower and its Subsidiaries which are
consolidated for financial reporting purposes in accordance with GAAP.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any return on any investment
made by another Person or any Indebtedness, lease, dividend or other obligation
of any other Person in any manner, whether contingent or whether directly or
indirectly, including, without limitation, any obligation in respect of the
liabilities of any partnership in which such other Person is a general partner,
except to the extent that such liabilities of such partnership are nonrecourse
to such other Person and its separate Property. The amount of any Contingent
<PAGE>
Obligation of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such
Person in good faith.
"Financial Statements" shall have the meaning ascribed to such term in
Section 4.01(i).
"Indebtedness" shall mean, as to any Person, at a particular time, all
items which constitute, without duplication, (i) indebtedness for borrowed
money or the deferred purchase price of property (other than trade payables
incurred in the ordinary course of business), (ii) indebtedness evidenced by
notes, bonds, debentures or similar instruments, (iii) obligations with respect
to any conditional sale or title retention agreement, (iv) indebtedness arising
under acceptance facilities and the amount available to be drawn under all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder to the extent that such Person shall
not have reimbursed the issuer in respect of the issuer's payment of such
drafts, (v) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof (other than carrier's, warehousemen's, mechanics',
repairmen's or other like non-consensual statutory Liens arising in the
ordinary course of business), (vi) obligations under Capital Lease Obligations
and (vii) Contingent Obligations.
"Interest Period" shall mean with respect to each Libor Rate Loan:
(i) initially, the period commencing on the date of such Loan and
ending 1, 2 or 3 months thereafter (or such other period agreed upon in writing
by Borrower and Bank), as Borrower may elect in the applicable Advance request;
and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending 1, 2 or 3 months
thereafter (or such other period agreed upon in writing by Borrower and Bank),
as Borrower may elect pursuant to Section 2.03(b);
provided that:
(iii) subject to clause (iv) below, if any Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period shall end on the
immediately next preceding Business Day; and
(iv) no Interest Period for a LIBOR Loan shall extend beyond the
last day of the Line of Credit Period.
"Libor Base Rate" shall mean, for an Interest Period, (a) the Libor Index
Rate for such Interest Period, if such rate is available, and (b) if the Libor
Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits in U.S. dollars in immediately available funds are offered
to Bank as of the opening of business of Bank or as soon thereafter as
practicable on the first day of such Interest Period by two (2) or more major
banks in the London interbank market selected by Bank for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Libor Rate Loan requested by Borrower to be made available by
Bank. As used herein, "Libor Index Rate" means, for any Interest Period, the
London interbank offered rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3875 as of 9:00 a.m.
(New Orleans time) on the first day of such Interest Period.
Page 2
<PAGE>
"Libor Rate" shall mean the Libor Base Rate plus 15 basis points (.15%).
"Libor Rate Loan" shall mean any Loan to Borrower which accrues interest
at the Libor Rate at the time of the occurrence thereof or conversion thereto.
"Lien" shall mean any mortgage, pledge, hypothecation, security interest,
encumbrance, lien, judgment, garnishment, seizure, tax lien or levy (statutory
or otherwise) or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, or any
capitalized lease, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction).
"Line of Credit" shall mean the credit facility made available by Bank to
Borrower pursuant to Section 2.01.
"Line of Credit Period" shall mean the period commencing on the date
hereof and ending on March 19, 1998.
"Loans" shall mean the loans to Borrower described in Section 2.01, with
each being a Loan, as applicable and shall include all principal, interest,
attorney's fees and costs owed thereon.
"Loan Documents" shall mean this Agreement and the promissory note
evidencing the Loans.
"Material Adverse Effect" shall mean a material adverse effect on the
properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole.
"Permitted Liens" shall mean (i) pledges or deposits by the Borrower or
any of its Subsidiaries under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness of
the Borrower or any of its Subsidiaries) or leases (other than capitalized
leases) to which the Borrower or any of its Subsidiaries is a party, or
deposits to secure statutory obligations of the Borrower or any of its
Subsidiaries or deposits of cash or U.S. Government Bonds to secure surety or
appeal bonds to which the Borrower or any of its Subsidiaries is a party, or
deposits as security for contested taxes or import duties or for the payment of
rent; (ii) Liens imposed by law, such as carriers', warehousemen's,
materialmen's and mechanics' liens, incurred in the ordinary course of business
for sums not overdue or being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
books of Borrower or any Subsidiary of Borrower; (iii) judgment Liens in
existence less than 30 days after the entry thereof or with respect to which
execution has been stayed or the payment of which is covered in full (subject
to a customary deductible) by insurance; (iv) Liens for property taxes not yet
delinquent and Liens for property taxes the payment of which is being actively
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the books of Borrower or any Subsidiary
of Borrower; (v) the Indenture of Mortgage dated as of July 1, 1950 between
Borrower and First National Bank of Commerce in New Orleans, as amended and
supplemented, and (vi) survey exceptions, issues with regard to merchantability
of title, easements or reservations of, or rights of others for rights-of-way,
highways and railroad crossings, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real property incidental to the conduct of the business of the
Borrower or any of its Subsidiaries or to the ownership of its property which
were not incurred in connection with Indebtedness of the Borrower or any
Subsidiary of Borrower, which Liens do not in the aggregate materially detract
from the value of said properties or materially impair their use in the
operation of the business taken as a whole of the Borrower and its Subsidiaries.
Page 3
<PAGE>
"Person" shall mean any individual, firm, partnership, joint venture,
corporation, association, business enterprise, limited liability company, joint
stock company, unincorporated association, trust, governmental authority or any
other entity, whether acting in an individual, fiduciary, or other capacity.
"Plan" shall mean any employee benefit plan which is covered by the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and in
respect of which Borrower is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employee" as defined in
Section 3(5) of ERISA, including, without limitation, The Central Louisiana
Electric Company, Inc. 401(k) Savings and Investment Plan ESOP Trust, as the
same may be amended, supplemented or otherwise modified from time to time.
"Stock" shall mean, any and all shares, rights, interests,
participations, warrants or other equivalents (however designated) of corporate
stock.
"Subsidiary" shall mean, as to any Person, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (ii) in respect of an association, partnership, joint venture
or other business entity, is entitled to share in more than 50% of the profits
and losses, however determined.
"Total Capitalization" shall mean the difference between (a) the sum of
(i) preferred Stock of the Borrower (less deferred compensation relating to
unallocated convertible preferred Stock of the Borrower held by any Plan), plus
(ii) common Stock of the Borrower and any premium on capital Stock thereon (as
such term is used in the Financial Statements), plus (iii) retained earnings
of the Borrower, plus (iv) all Indebtedness of the Borrower (net of unamortized
premium and discount (as such term is used in the Financial Statements)), and
(b) treasury Stock of the Borrower.
"Type" shall mean, as to any Loan, its nature as either a Base Rate Loan
or a Libor Rate Loan.
1.02 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificates or other document made or delivered pursuant
hereto unless the context shall otherwise require.
(b) Words used herein in the singular, where the context so permits,
shall be deemed to include the plural and vice versa. Likewise, the
definitions of words used in the singular herein shall also apply to such words
when used in the plural and vice versa, unless the context shall otherwise
require.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(d) Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
1.03. Accounting Terms. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted accounting principles
applied on a consistent basis.
Page 4
<PAGE>
II. The Loan
--------
2.01 Loans. Subject to the due and faithful performance of the terms and
conditions of this Agreement and in any instrument or agreement executed
contemporaneous herewith or as a consequence hereof and in accordance with the
terms and conditions of this Agreement, Bank agrees to make Advances to
Borrower from time to time during the Line of Credit Period in an aggregate
outstanding principal amount not to exceed the sum of Twenty-Five Million and
No/100 ($25,000,000.00) Dollars (the "Available Commitment"); provided however
any Advance shall be in increments of $100,000.00 or greater and any Advance
shall accrue interest of the same Type and Interest Period. The obligation of
the Borrower to repay the loans shall be evidenced by a promissory note made
payable to the order of Bank in the principal sum of $25,000,000.00, a copy of
which is attached hereto as Exhibit A. The outstanding principal balance of
the Loans shall accrue interest in accordance with Section 2.03 from date of
each Advance until paid. Notwithstanding any provisions of this Agreement, all
Loans hereunder shall mature and become due and payable at the end of the Line
of Credit Period.
2.02 (a) Advance Request. Upon the terms and subject to the conditions
hereof and subject to the amount of such Advance not exceeding the Available
Commitment, the Borrower may request an Advance under the Line of Credit during
a Business Day between the hours of 9:00 a.m. and 4:00 p.m. (New Orleans time).
If Bank receives the Borrower's proper request for an Advance by no later than
1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance
herewith. If Bank receives the Borrower's request for an Advance later than
1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance
herewith on the next Business Day. Each request for an Advance shall be made
either by telephone calls to Bank or in writing, by delivering to Bank by mail,
hand-delivery, or facsimile a request (i) specifying the amount to be borrowed
(ii) specifying the date the funds will be advanced, (iii) specifying the
Type of Loan to be made and its Interest Period, and (iv) complying with the
requirements of this Section. Bank shall have the right to verify the
telephone requests by calling the person who made the request at the telephone
number identified by the Borrower. If the Advance request is by telephone, the
Borrower will confirm said request in writing within two (2) Business Days.
All such Advance requests shall be made by the Borrower's Agent. Borrower
agrees that only its duly authorized Borrower's Agent shall make an Advance
request.
(b) Credit Advice. After the borrowing of any Advance under the Line of
Credit in accordance with this Agreement, Bank will mail to the Borrower an
advice showing the amount of the Advance and the amount of funds credited into
the Borrower's account. All Advances shall either (1) be credited to a demand
deposit account (the "Account") maintained by the Borrower with Bank or (2)
transferred by the Bank to an account of the Borrower at another financial
institution in accordance with the wire transfer instructions set forth in
Schedule II to this Agreement. Any request to transfer funds from the Account
by wire transfer shall be governed by Bank's standard Funds Transfer Agreement
properly completed and executed by the Borrower. Bank's failure to mail the
credit advice shall not alter the Borrower's obligation to repay the Loans or
make the Bank liable to the Borrower for failure to mail the credit advice.
(c) Internal Records Shall Control. The principal amount shown on the
face of the note evidencing the Loans evidences the maximum aggregate principal
amount that may be outstanding from time to time under the Loans. The Borrower
agrees that the internal records of Bank shall constitute for all purposes
prima facie evidence of (i) the amount of principal and interest owing on the
Loans from time to time, (ii) the amount of each Advance or Loan made to the
Borrower and (iii) the amount of each principal and/or interest payment
received by Bank on the Loans.
Page 5
<PAGE>
2.03 (a) Interest Rates; Interest Payments. The unpaid principal
balance of the Loans shall accrue interest, at the Borrower's option, either
at: (i) the Base Rate or (ii) the Libor Rate; provided that if any LIBOR Rate
Loan or any portion thereof shall, as a result of clause (iv) of the definition
of Interest Period, have an Interest Period of less than 30 days, such portion
shall bear interest during such Interest Period at the rate applicable to Base
Rate Loans during such period. Interest on the outstanding principal owed on
the Loans shall be computed and assessed on the basis of the actual number of
days elapsed over a year composed of 360 days. Interest shall be payable on
all Base Rate Loans quarterly in arrears on the last day of each quarter (or the
immediate subsequent Business Day if any such last day is not a Business Day)
and at maturity. Interest shall be payable on each Libor Rate Loan for each
Interest Period on the last day thereof.
(b) Duration of Interest Periods and Selection of Interest Rates. The
commencement date and duration of the initial Interest Period for each Libor
Rate Loan shall be as specified in the applicable Advance request. Borrower
shall elect the duration of each subsequent Interest Period applicable to such
Libor Rate Loan or elect to convert to a Base Rate Loan (and Borrower shall
have the option (x) in the case of any Base Rate Loan, to elect that such Loan
become a Libor Rate Loan and the Interest Period to be applicable thereto or
(y) in the case of any Libor Rate Loan, to elect that such Loan become a Base
Rate Loan), by giving notice of such election to Bank by 1:00 p.m. (New Orleans
time) on the last day of the then expiring Interest Period (in the case of an
existing Libor Rate Loan) or on the date of the requested conversion of a Base
Rate Loan to a Libor Rate Loan, as applicable; provided, however, that
notwithstanding the foregoing, in addition to and without limiting the rights
and remedies of Bank under Section VI hereof, so long as any Default under this
Agreement has occurred and is continuing, Borrower shall not be permitted to
renew any Libor Rate Loan or to convert any Base Rate Loan into a Libor Loan.
All Libor Rate Loans, whether by conversion or by an Advance, shall be in
increments of $100,000.00 or greater. All Loans which bear interest at a
particular Libor Rate for a particular Interest Period shall constitute a
single Libor Loan. Notwithstanding the foregoing, the duration of each
Interest Period shall be subject to the provisions of the definition of
Interest Period.
(c) Failure to Elect. If Bank does not receive a notice of election for
the continuation of a Libor Rate Loan for a subsequent Interest Period pursuant
to subsection (b) above within the applicable time limits specified therein,
Borrower shall be deemed to have elected to convert such Libor Loan on the last
day of the current Interest Period with respect thereto to a Base Rate Loan
in the principal amount of such expiring Libor Rate Loan on such date.
(d) Reliance on Communications. Borrower hereby authorizes Bank to rely
on telephonic, telegraphic, telecopy, telex or written or oral instructions
believed by Bank in good faith to have been sent, delivered or given by
Borrower's Agent with respect to any request to make a Loan or a repayment
hereunder, to continue a Loan, or to convert any Base Rate Loan or Libor Rate
Loan to any other type of Loan available hereunder, and on any signature which
Bank in good faith believes to be genuine.
2.04 Facility Fee. Borrower shall pay to Bank, in arrears, on the last
Business Day of each calendar quarter during the Line of Credit Period and on
the last day of the Line of Credit Period, an annual facility fee of .05% of
the Available Commitment calculated on the basis of the actual number of days
elapsed over a year of 365/366 days as the case may be.
2.05 Prepayment. Borrower shall have the right at any time and from time
to time to prepay the Loans in whole or in part in amounts aggregating
$100,000.00 or any larger multiple thereof, without penalty by paying all or a
portion of the unpaid principal balance of the Loans, as applicable, plus
accrued interest through the date of prepayment; provided that, Borrower shall
not have the right to prepay a Libor Rate Loan through the making of a Libor
Rate Loan.
Page 6
<PAGE>
2.06 Increased Costs. Illegality. etc. In the event that Bank shall have
determined in good faith (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) at the time the Borrower gives a request with respect to the
making or continuance of, or conversion into, any Libor Rate Loan
(in the case of the initial Interest Period applicable thereto) or
on the last Business Day prior to the expiration of an Interest
Period applicable to such Libor Rate Loan (in the case of any
subsequent Interest Period), that, by reason of any changes arising
after the date of this Agreement affecting the London interbank
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition
of Libor Rate; or
(ii) at any time, that Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Libor Rate Loan because of any change since the date
of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request or in the interpretation or
administration thereof and including the introduction of any new law
or governmental rule, regulation, order, guideline or request, such
as, for example, but not limited to: (A) a change in the basis of
taxation of payment to Bank of the principal or interest on such
Libor Rate Loan (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of Bank) or
(B) a change in official reserve requirements; or
(iii) at any time, that the making or continuance of any Libor Rate
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by Bank in good
faith with any governmental request (whether or not having force of
law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely
affects the London interbank market;
then, and in any such event, Bank shall promptly give notice (by telephone
confirmed in writing) to the Borrower. Thereafter (x) in the case of clause (i)
above, Libor Rate Loans shall no longer be available until such time as Bank
notifies the Borrower that the circumstances giving rise to such notice no
longer exist, and any Advance request or request to continue or convert given
by the Borrower with respect to Libor Rate Loans which have not yet been
incurred, continued or converted shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower agrees to pay to Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as agreed
to by Bank and the Borrower) as shall be required to compensate Bank for such
increased costs or reductions in amounts received or receivable hereunder (a
written notice as to the additional amounts owed to Bank, showing the basis for
the calculation thereof, submitted to the Borrower by Bank in good faith shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto) and (z) in the case of clause (iii) above, the Borrower agrees that if
the affected Libor Rate Loan is then being requested initially such Loan will
be made as a Base Rate Loan or if the affected Libor Rate Loan is then
outstanding, such Loan shall be converted into a Base Rate Loan. Bank agrees
that if it gives notice to the Borrower of any of the events described in
clause (i) or (iii) above, it shall promptly notify the Borrower if such event
ceases to exist. If any such event described in clause (iii) above ceases to
exist as to Bank, Bank's obligations to make Libor Rate Loans and to convert
Loans into Libor Rate Loans on the terms and conditions contained herein shall
be reinstated.
2.07. Use of Proceeds. The Borrower shall use the proceeds of the Loans
for general corporate purposes.
Page 7
<PAGE>
III. Loan Documents
--------------
3.01 Opinion of Borrower's Counsel. At Closing or at such other time
satisfactory to Bank, Borrower shall have counsel satisfactory to Bank provide
an opinion to Bank in form satisfactory to Bank relating to the Loan Documents.
3.02 Closing Costs. Borrower agrees to pay all reasonable costs and fees
incurred by the Bank and counsel for the Bank in the preparation of or in
connection with the Loan Documents or in connection with the Loans subject to
the limitation contained in the commitment letter dated February 7, 1997
between the Bank and the Borrower.
IV. Warranties, Representations and Covenants of Borrower
-----------------------------------------------------
4.01 Representations and Warranties. In order to induce Bank to enter
into this Agreement and make the Loans, Borrower hereby represents, warrants
and covenants to Bank, the following:
(a) Borrower is a validly organized corporation duly existing and in
good standing under the laws of the State of Louisiana and is duly qualified as
a foreign corporation in all jurisdictions wherein the property owned or the
business transacted by it make such qualifications necessary.
(b) The making and performance by Borrower of this Agreement, the
borrowing by Borrower and the execution of the Loan Documents by Borrower, all
as provided herein, has not resulted and will not result in a breach of, or
constitute a default under any agreement, indenture or other instrument to
which Borrower is a party or by which Borrower is bound which could have a
Material Adverse Effect.
(c) No further consent or approval of any governmental agency or
authority required in connection with the execution, delivery and performance
by Borrower of the Loan Documents is required.
(d) All Loan Documents are legal, valid and binding obligations of
Borrower enforceable according to their terms and conditions, and all
statements made in this Agreement are true and correct as of the date hereof.
(e) To the extent applicable, Borrower and each of its Subsidiaries has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code, and has not incurred any liability to the Pension
Benefit Guaranty Corporation or to a Plan under Title IV of ERISA which the
failure to comply with could have a Material Adverse Effect.
(f) Neither Borrower nor any Subsidiary of Borrower is in default in the
performance, observance or fulfillment of (i) any of the obligations, covenants
or conditions contained in any indenture, agreement or other instrument to
which it is a party or (ii) with respect to any judgment, order, writ,
injunction, decree or decision of any government agency or authority, and
which could have a Material Adverse Effect. It shall not be considered that
Borrower is in default under clause (i) of this subsection (f) by virtue of the
provisions of any indenture, agreement or other instrument to which it is a
party solely because the holder of any obligation of Borrower shall have the
right to declare or has declared such obligation due and payable prior to
a stated maturity date by virtue of a right of redemption or has the right to
declare but has not declared such obligation due and payable because of a
material adverse change in the financial condition of Borrower.
(g) Neither Borrower nor any Subsidiary of Borrower has any material
(individually or in the aggregate) liabilities, direct or contingent, except as
disclosed or referred to in the Financial Statements. There is no litigation,
Page 8
<PAGE>
legal or administrative proceeding, investigation or other action of any
nature pending or, to the knowledge of Borrower, threatened against or
affecting Borrower or any of its Subsidiaries which involves the possibility of
any judgment, order, ruling, or liability not fully covered by insurance or
fully reserved for by the Borrower or any of its Subsidiaries, and which could
have a Material Adverse Effect.
(h) Borrower and each of its Subsidiaries has filed all tax returns and
reports required to be filed and has paid all taxes, assessments, fees and
other governmental charges levied upon Borrower or any of its Subsidiaries or
upon any property owned by Borrower or any of its Subsidiaries, or upon
Borrower's or its Subsidiary's income, which are due and payable, including
interest and penalties, or has provided adequate reserves for the payment
thereof.
(i) Each of the Borrower and its Subsidiaries has good and marketable
title to all of its property, title to which is material to the Borrower or
such Subsidiary, subject to no Liens, except Permitted Liens.
(j) Each of Borrower and its Subsidiaries has complied in all material
respects with all laws that are applicable to all or any part of the operation
of its business activities, including, without limitation, (i) all laws
regarding the collection, payment, and deposit of employees' income,
unemployment, social security, sales, and excise taxes, all laws with respect
to pension liabilities, and (ii) all laws pertaining to environmental
protection and occupational safety and health which the failure to comply with
could have a Material Adverse Effect.
(i) Borrower has heretofore delivered to Bank copies of its Form 10-K
for the fiscal year ending December 31, 1995, containing the audited
Consolidated Balance Sheets of the Borrower and its Subsidiaries and the
related Consolidated Statements of Operations, Stockholder's Equity and Cash
Flows for the period then ended, and its Form 10-Q for the fiscal quarter ended
September 30, 1996, containing the unaudited Consolidated Balance Sheet of the
Borrower and its Subsidiaries as of the end of such fiscal quarter, together
with the related Consolidated Statements of Operations and Cash Flows through
such fiscal quarter then ended (with the applicable related notes and
schedules, the "Financial Statements"). The Financial Statements submitted by
Borrower to Bank have been prepared in accordance with GAAP and fairly present
the Consolidated financial condition and results of the operations of the
Borrower and its Subsidiaries as of the dates and for the periods indicated
therein and since the date of such statements, the Borrower and each of its
Subsidiaries has conducted its business only in the ordinary course and there
has been no Material Adverse Change.
4.02 Affirmative Covenants. From the date of this Agreement and so long
as any Loan shall be outstanding, unless compliance shall have been waived in
writing by Bank, Borrower shall:
(a) Maintain, as of the last day of each fiscal quarter, Common Equity
equal to at least 30% of Total Capitalization.
(b) Furnish to Bank:
(i) As soon as available, but in any event within 120 days after
the end of each fiscal year, a copy of Borrower's annual report
on Form 10-K in respect of such fiscal year required to be
filed by Borrower with the SEC, together with the financial
statements attached thereto;
(ii) As soon as available, but in any event within 60 days after the
end of each fiscal quarter, a copy of the Borrower's quarterly
report on Form 10-Q in respect of such fiscal quarter required
to be filed by the Borrower with the SEC, together with the
financial statements attached thereto;
Page 9
<PAGE>
(iii) Within 60 days after the end of each of the first three fiscal
quarters (120 days after the end of the last fiscal quarter), a
certificate of the chief financial officer of the Borrower (or
such other officer as shall be acceptable to Bank) as to
Borrower's compliance, as of such fiscal quarter ending date,
with Section 4.02(a), and as to the occurrence or continuance of
no Default as of such fiscal quarter ending date and the date of
such certificate; and
(iv) immediately upon becoming aware of the occurrence of any event
which constitutes a Default (as hereinafter defined) or which
could constitute a Default with the passage of time or the
giving of notice, or both, provide written notice of such
occurrence together with a detailed statement by Borrower of the
steps being taken by Borrower to cure the effect of such event.
(c) Comply, and cause each of its Subsidiary's so to do, in all material
respects with all laws that are applicable to all or any part of the operation
of its business activities, including, without limitation, (i) all laws
regarding the collection, payment, and deposit of employees' income,
unemployment, social security, sales, and excise taxes, all laws with respect
to pension liabilities, and (ii) all laws pertaining to environmental
protection and occupational safety and health which the failure to comply with
could have a Material Adverse Effect.
(d) Pay and discharge, and cause each of its Subsidiary's so to do, all
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income and profits prior to the date on which penalties might attach
thereto and all lawful claims which, if unpaid, might become a lien or charge
upon the assets of Borrower or any of its Subsidiaries (other than a Permitted
Lien); provided, however, that Borrower and its Subsidiaries shall not be
required to pay and discharge any such tax, assessment, charge, levy or claim
so long as the legality thereof shall be contested in good faith and by
appropriate proceedings and for which the Borrower and its Subsidiaries have
provided adequate reserves.
(e) Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability and business interruption coverage)
as are usually insured against in the same general area by companies engaged
in the same or a similar business; and furnish to Bank, upon written request of
Bank, full information as to the insurance carried.
(f) At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all property necessary to the operation of the
Borrower's or such Subsidiary's material businesses.
(g) Obtain or maintain, as applicable, and cause each of its
Subsidiaries to obtain or maintain, as applicable, in full force and effect,
all licenses, franchises, intellectual property, permits, authorizations and
other rights as are necessary for the conduct of its business and the failure
of which to obtain or maintain could, individually or collectively, have a
Material Adverse Effect.
(h) Observe and comply, and cause each of its Subsidiaries to observe
and comply, (to the extent necessary so that any failure will not have a
Material Adverse Effect) with all valid laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations, directions and
requirements of all federal, state, county, municipal and other governments,
agencies, departments, divisions, commissions, boards, courts, authorities,
officials and officers, domestic or foreign.
Page 10
<PAGE>
(i) Promptly notify Bank of (i) the arising of any litigation or
dispute, threatened against or affecting assets of Borrower or any Subsidiary
of Borrower, which, if adversely determined, could have a Material Adverse
Effect; or (ii) any act of Default under this Agreement, or any material
default under any other contract to which Borrower or any of its Subsidiaries
is a party which could have a Material Adverse Effect.
(g) Provide Bank with information that the Bank deems reasonably
necessary to monitor the Loans.
(h) Cure, within a reasonable period of time, any defects in the
creation, execution and delivery of the Loan Documents. Borrower at its
expense will promptly execute and deliver to Bank upon request all such other
and further documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements of Borrower in the Loan
Documents.
4.03 Negative Covenants. From the date of this Agreement and so long as
any Loan shall be outstanding, Borrower shall not without the prior written
consent of Bank:
(a) sell or lease all, or substantially all, of its assets or permit any
of its Subsidiaries so to do;
(b) at any time, make any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to, any Person other
than a Subsidiary, or permit any of its Subsidiaries so to do, other than
loans, advances or arrangements the total amount of which, when added to
the total consideration paid by the Borrower and its Subsidiaries in connection
with all mergers, consolidations and acquisitions of or by the Borrower and its
Subsidiaries during the Line of Credit Period, shall not exceed the greater of
(i) $110,000,000 or (ii) 10% of total assets as of the most recently completed
fiscal quarter;
(c) mortgage or encumber any of its assets or suffer any Liens to exist
on any of its assets other than Permitted Liens or permit any of its
Subsidiaries so to do;
(d) assign this Agreement or any interest herein; or
(e) merge or consolidate with any other Person, or permit any of its
Subsidiaries so to do, except that the Borrower or any of its Subsidiaries may
merge or consolidate with another corporation, if (i) permitted under the terms
and conditions of that certain Revolving Credit Agreement by and among
Borrower, the Lenders Party thereby and The Bank of New York, as Agent dated as
of June 15, 1995, (ii) the merger or consolidation would not have a Material
Adverse Effect and (iii) in the case of a merger or consolidation involving
Borrower, the "surviving corporation" expressly assumes the Loan Documents.
V. Each Extension of Credit
------------------------
The Bank will not be obligated to make any Loan if:
(a) The representations and warranties of Borrower contained in this
Agreement are not true and correct on and as of the date of the Loan;
(b) Borrower has failed to observe or perform promptly when due any
covenant, agreement, or obligation under this Agreement or under any of the
other Loan Documents;
(c) A material adverse change in the properties, assets, liabilities,
business, operations, prospects, income or condition (financial or otherwise)
of Borrower and its Subsidiaries taken as a whole shall have occured; or
Page 11
<PAGE>
(d) A Default shall have occurred and be continuing, or there shall have
occurred any condition, event or act which constitutes, or with notice or lapse
of time (or both) would constitute a Default.
VI. Defaults
--------
6.01 Default. The occurrence of any of the following events shall be
considered a "Default" as that term is used herein:
(a) the failure of Borrower to pay promptly when due any interest or
principal on any of the Loans;
(b) the failure of Borrower to observe or perform promptly when due any
covenant, agreement, or obligation under this Agreement or under any of the
other Loan Documents;
(c) the material inaccuracy at any time of any warranty, representation,
or statement made to Bank by Borrower, whether such warranty, representation,
or statement is made (i) in this Agreement, or (ii) in any other agreement,
document, or writing;
(d) the occurrence of an "Event of Default" under that certain Revolving
Credit Agreement by and among Borrower, the Lenders Party thereby and The Bank
of New York, as Agent dated as of June 15, 1995;
(e) any obligation(s) of the Borrower (other than the Loans) or any of
its Subsidiaries, whether as principal, guarantor, surety or other obligor,
for the payment of any Indebtedness or operating leases in excess of
$10,000,000 in the aggregate (i) shall become or shall be declared to be due
and payable prior to the expressed maturity thereof, (ii) shall not be paid
when due or within any grace period (as such grace period may be extended from
time to time pursuant to and in accordance with the documentation evidencing
such obligation) for the payment thereof, or (iii) any holder of any such
obligation shall have the right to declare such obligation due and payable
prior to the expressed maturity thereof; provided, however, that it shall not
be considered that a Default has occurred by virtue of subsections (d) and (e)
of Section 6.01 solely because the holder of any obligation of Borrower shall
have the right to declare or has declared such obligation due and payable prior
to a stated maturity date by virtue of a right of redemption or has the right
to declare but has not declared such obligation due and payable because of a
material adverse change in the financial condition of Borrower;
(f) The Borrower or any of its Subsidiaries shall (i) suspend or
discontinue its business, (ii) make an assignment for the benefit of creditors,
(iii) generally not pay its debts as such debts become due, (iv) admit in
writing its inability to pay its debts as they become due, (v) file a
voluntary petition in bankruptcy, (vi) become insolvent (however such
insolvency shall be evidenced), (vii) file any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment of debt,
liquidation or dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, (viii) petition or apply to any
tribunal for any receiver, custodian or any trustee for any substantial part of
its property, (ix) be the subject of any such proceeding filed against it which
remains undismissed for a period of 45 days, (x) file any answer admitting
or not contesting the material allegations of any such petition filed against
it or admitting or not contesting the material allegations of any such
petition filed against it or any order, judgment or decree approving such
petition in any such proceeding, (xi) seek, approve, consent to, or acquiesce
in any such proceeding, or in the appointment of any trustee, receiver,
sequestrator, custodian, liquidator, or fiscal agent for it, or any substantial
part of its property, or an order is entered appointing any such trustee,
receiver, custodian, liquidator or fiscal agent and such order remains in
effect for 45 days, or (xii) take any formal action for the purpose of
effecting any of the foregoing or looking to the liquidation or dissolution of
the Borrower or such Subsidiary;
Page 12
<PAGE>
(g) An order for relief is entered under the United States bankruptcy
laws or any other decree or order is entered by a court having jurisdiction (i)
adjudging the Borrower or any of its Subsidiaries bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization, liquidation,
arrangement, adjustment or composition of or in respect of the Borrower or any
of its Subsidiaries under the United states bankruptcy laws or any other
applicable Federal or state law, (iii) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of the
Borrower or any of its Subsidiaries or of any substantial part of the property
thereof, or (iv) ordering the winding up or liquidation of the affairs of the
Borrower or any of its Subsidiaries, and any such decree or order continues
unstayed and in effect for a period of 45 days;
(h) Judgments or decrees against the Borrower or any of its Subsidiaries
aggregating in excess of $10,000,000 shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of at least 30 days;
(i) Any Loan Documents shall cease, for any reason, to be in full force
and effect or the Borrower shall so assert in writing or shall disavow any of
its obligations thereunder; or
(j) Any authorization or approval or other action by any governmental
agency or authority required for the execution, delivery or performance of the
Loan Documents shall be terminated, revoked or rescinded or shall otherwise no
longer be in full force and effect.
6.02 Notice of Default and Remedies. In the event of a Default and such
Default continues for a period of thirty (30) days (five (5) days for the
failure to make a payment of principal or interest under the Loans) after Bank
has given written notice of such Default to Borrower or after Borrower shall
have obtained knowledge of such Default, Bank, at its option, shall have the
right to exercise any and all of Bank's rights under the Loan Documents.
6.03 No Obligation to Lend. In the event of a Default, Bank shall have
no obligation to make any Loan.
VII. Miscellaneous
--------------
7.01 Amendments and Waivers. Neither this Agreement, nor any provisions
hereof, may be changed, waived, discharged or terminated orally, or in any
manner other than by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
7.02 No Third Party Beneficiary. This Agreement is solely for the
benefit of the parties and is not a stipulation for the benefit of any other
person or entity except for any approved assignee of Borrower and any assignee
of Bank.
7.03 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Louisiana.
7.04 No Effect on Other Obligations. Nothing in this Agreement shall
affect, modify or release any other obligations of Borrower to Bank; provided
that this Agreement will supersede and replace the commitment letter dated
February 7, 1997 between the Bank and the Borrower.
7.05 Conflict. In the event any of the provisions of this Agreement
conflict with any provisions contained in any other Loan Documents, the
provisions of this Agreement shall govern.
Page 13
<PAGE>
7.06 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect.
7.07 Notices. Except as provided for in Sections 2.02(a), 2.03(b) and
2.06, all communications under or in connection with this Agreement shall be in
writing and shall be mailed by first class mail or express delivery, postage
prepaid, or otherwise sent by telex, telegram, telecopy or other similar form
of rapid transmission, or personally delivered to an officer of the receiving
party. All such communications shall be mailed, sent or delivered:
To Bank: Whitney National Bank
228 St. Charles Avenue
New Orleans, Louisiana 70130
Attn: John J. Zollinger, IV
Assistant Vice President
Telecopier: (504) 552-4622
Telephone: (504) 552-4586
With a copy to: Roy E. Blossman
Carver, Darden, Koretzky, Tessier,
Finn, Blossman & Areaux, L.L.C.
Energy Centre
Suite 2700, 1100 Poydras Street
New Orleans, Louisiana 70163
To Borrower: Mr. Todd J. Marye
Director, Financing and Cash Management
Central Louisiana Electric Company, Inc.
2030 Donahue Ferry Road
Pineville, LA 71360
Telecopier: (318) 484-7697
Telephone: (318) 484-7541
With a copy to: Mr. William O. Bonin
P.O. Box 10030
New Iberia, LA 70562-0030
Telecopier: (318) 369-6572
Telephone: (318) 364-5762
7.08 Counterparts. This Agreement may be executed in several
counterparts and if executed shall constitute the agreement, binding upon all
the parties hereto, notwithstanding all the parties are not signatories to the
original and same counterparts.
Page 14
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day, month and year hereinabove first written.
BANK:
WHITNEY NATIONAL BANK
By: /s/ John J. Zollinger IV
------------------------
Its: Assistant Vice-President
------------------------
BORROWER:
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: /s/ Michael P. Prudhomme
------------------------
Its: Secretary-Treasurer
-------------------
Page 15
<PAGE>
SCHEDULE I
The individuals whose names, positions, and signatures appear below are
hereby designated as Borrower's Agent(s):
NAME TITLE SIGNATURE
K. Michael Sawrie Administrator, Cash /s/ K. Michael Sawrie
Management Services ------------------------
Mary N. Covington Cash Management /s/ Mary N. Covington
Specailist ------------------------
Todd J. Marye Director, Financing and /s/ Todd J. Marye
Cash Management ------------------------
Michael P. Prudhomme Secretary - Treasurer /s/ Michael P. Prudhomme
------------------------
Any replacement of or modification to this Schedule I shall not be valid
unless signed by the President or a Vice President or Secretary - Treasurer
of the Borrower.
<PAGE>
SCHEDULE II
If specified by a Borrower's Agent at the time of an Advance request,
proceeds from an Advance shall be transferred by the Bank in immediately
available funds for credit to the Borrower in accordance with the following
instructions:
Name of Financial Institution: The First National Bank of Chicago
ABA # of Financial Institution: 071000013
Beneficiary: Central Louisiana Electric Company,Inc.
Beneficiary's Account Number: 5737400
The above wire transfer instructions shall remain in full force and effect
unless revised in writing by a notice to the Bank signed by the President and a
Vice President or the Secretary - Treasurer of the Borrower.
NET INCOME PER COMMON SHARE
[TEXT]
<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)
1997 1996
---------- ----------
<S> <C> <C>
PRIMARY
Net income applicable to common stock $ 7,002 $ 9,516
========== ==========
Weighted average number of shares of
common stock outstanding during the
period 22,457,061 22,437,134
Common stock under stock option grants 6,925 11,450
---------- ----------
Average shares 22,463,986 22,448,584
========== ==========
Primary net income per common share $ 0.31 $ 0.42
========== ==========
FULLY DILUTED
Net income applicable to common stock $ 7,002 $ 9,516
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 364 366
Deduct additional cash contribution required
which is equal to dividends on preferred
stock less dividends paid at the common
dividend rate, net of tax (33) (42)
Add tax benefit associated with dividends
paid on allocated common shares 67 53
---------- ----------
Adjusted income applicable to common stock $ 7,400 $ 9,893
========== ==========
Weighted average number of shares of
common stock outstanding during the
period 22,457,061 22,437,134
Number of equivalent common shares
attributable to ESOP 1,399,547 1,407,852
Common stock under stock option grants 6,925 11,494
---------- ----------
Average shares 23,863,533 23,856,480
========== ==========
Fully Diluted net income per common share $ 0.31 $ 0.41
========== ==========
</TABLE>
<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, 1997
(Unaudited)
<CAPTION>
(In thousands,
except ratios)
------------------
<S> <C>
Earnings $ 49,630
Income taxes 24,382
------------------
Earnings from continuing operations before income taxes $ 74,012
------------------
Fixed charges
Interest, long-term debt 24,315
Interest, other (including interest on short-term debt) 3,154
Amortization of debt expense, premium, net 1,100
Portion of rentals representative of an interest factor 433
------------------
Total fixed charges $ 29,002
------------------
Earnings from continuing operations before
income taxes and fixed charges $ 103,014
==================
Ratio of earnings to fixed charges 3.55x
==================
Fixed charges from above $ 29,002
Preferred stock dividends* 2,897
------------------
Total fixed charges and preferred stock dividends $ 31,899
==================
Ratio of earnings to combined fixed charges and
preferred stock dividends 3.23x
==================
* Preferred stock dividends multiplied by the ratio of pretax
income to net income.
</TABLE>
Coopers Coopers & Lybrand L.L.P. 639 Loyola Avenue telephone (504) 529-2700
a professional services firm Suite 1800 facsmile (504) 529-1439
& Lybrand New Orleans, LA 70113
May 14, 1997
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, 33-38362 and 33-44663)
and Form S-3 (Nos. 33-24895, 33-62950 and 333-02895)
We are aware that our report dated April 25, 1997 on our review of the
interim financial information of Central Louisiana Electric Company, Inc. as of
March 31, 1997 and for the three-month periods ended March 31, 1997 and 1996
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 that Act.
Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P., a registered limited liability partnership, is member
of Coopers & Lybrand international.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
PERIOD-TYPE 3-MOS
FISCAL-YEAR-END Dec-31-1997
PERIOD-START Jan-01-1997
PERIOD-END Mar-31-1997
BOOK-VALUE PER-BOOK
TOTAL-NET-UTILTIY-PLANT $ 953,197
OTHER-PROPERTY-AND-INVEST $ 8,584
TOTAL-CURRENT-ASSETS $ 96,547
TOTAL-DEFERRED-CHARGES $ 249,220
OTHER-ASSETS $ 8,827
TOTAL-ASSETS $ 1,316,375
COMMON $ 45,520
CAPITAL-SURPLUS-PAID-IN $ 107,584
RETAINED-EARNINGS $ 238,769
TOTAL-COMMON-STOCKHOLDERS-EQ $ 391,873
PREFERRED-MANDATORY $ 6,300
PREFERRED $ 10,506
LONG-TERM-DEBT-NET $ 120,869
SHORT-TERM-NOTES $ 1,150
LONG-TERM-NOTES-PAYABLE $ 205,000
COMMERCIAL-PAPER-OBLIGATIONS $ 79,040
LONG-TERM-DEBT-CURRENT-PORT $ 30,000
PREFERRED-STOCK-CURRENT $ 0
CAPITAL-LEASE-OBLIGATIONS $ 0
LEASES-CURRENT $ 0
OTHER-ITEMS-CAPITAL-AND-LIAB $ 471,637
TOT-CAPITALIZATION-AND-LIAB $ 1,316,375
GROSS-OPERATING-REVENUE $ 97,668
INCOME-TAX-EXPENSE $ 3,843
OTHER-OPERATING-EXPENSES $ 79,027
TOTAL-OPERATING-EXPENSES $ 82,870
OPERATING-INCOME-LOSS $ 14,798
OTHER-INCOME-NET $ 136
INCOME-BEFORE-INTEREST-EXPEN $ 14,934
TOTAL-INTEREST-EXPENSE $ 7,408
NET-INCOME $ 7,526
PREFERRED-STOCK-DIVIDENDS $ 524
EARNINGS-AVAILABLE-FOR-COMM $ 7,002
COMMON-STOCK-DIVIDENDS $ 8,647
TOTAL-INTEREST-ON-BONDS $ 2,199
CASH-FLOW-OPERATIONS $ 3,530
EPS-PRIMARY $ 0.31
EPS-DILUTED $ 0.31
</TABLE>
