File No. 33-
As filed with the Securities and Exchange Commission on June 27,1996
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CITIZENS UTILITIES COMPANY
(Exact name of registrant as specified in charter)
DELAWARE 06-0619596
(State or other jurisdiction of
incorporation or organization) (I.R.S. employer identification number)
High Ridge Park, Bldg. No. 3, Stamford, Connecticut 06905
(203) 329-8800
(Address,including,zip code, and telephone number, including area code,
of registrant's principal executive offices)
Robert J. DeSantis
Vice President and Treasurer
Citizens Utilities Company
High Ridge Park, Bldg. No. 3
P.O. Box 3801
Stamford, Connecticut 06905
Tel. No. (203) 329-8800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Jonathan H. Churchill, Esq. Vincent Pagano, Esq.
Winthrop, Stimson, Putnam & Roberts Simpson Thacher & Bartlett
One Battery Park Plaza 425 Lexington Avenue
New York, New York 10004-1490 New York, New York 10017-3909
Tel. No. (212) 858-1109 Tel. No. (212) 455-2000
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. __
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. X
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. __
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. __
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. __
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CALCULATION OF REGISTRATION FEE
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Title of Securities Debt and Equity*
to be Registered
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Amount to be $904,125,000
Registered
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Proposed Maximum
Aggregate Price Per Unit 100%**
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Proposed Maximum
Aggregate Offering Price $904,125,000**
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Amount of Registration Fee $311,767
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* Includes shares of Common Stock Series B issuable upon conversion of
Common Stock Series A.
** Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
herein also relates to the remaining $95,875,000 of securities of registrant
covered by Registration Statement No. 33-51529. The enclosed Prospectus
constitutes Post-effective Amendment No. 1 to said Registration Statement No.
33-51529 to cover up to $95,875,000 of debt and equity securities of registrant,
which registrant hereby requests be declared effective at the same time as this
registration statement.
An indeterminate principal amount of Debt Securities and an
indeterminate number of shares of Preferred Stock and Common Stock are being
registered. If any Debt Securities are issued at an original issue discount,
then the maximum nominal offering price shall be in such greater amount so that
the actual aggregate initial offering price of all securities will not exceed
$1,000,000,000 (including the securities registered pursuant to the Registration
Statement No. 33-51529).
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The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 27, 1996
PROSPECTUS
$1,000,000,000
SECURITIES
-----------------------------------
Citizens Utilities Company (the "Company" or "Citizens") may offer,
from time to time, debt securities consisting of unsecured debentures, in one or
more series (the "Debt Securities"); preferred stock, in one or more series (the
"Preferred Stock"); and its Common Stock, Series A and/or Series B (the "Common
Stock" and, together with the Debt Securities and Preferred Stock, the
"Securities") in amounts, at prices and on terms to be determined at the time of
sale. The aggregate initial public offering price of the Securities will not
exceed $1,000,000,000.
For each offering of Securities for which this Prospectus is being
delivered there will be an accompanying Prospectus Supplement (the "Prospectus
Supplement") that will set forth: (i) with respect to Debt Securities, the
designation, principal amount, interest rate, interest payment dates, maturity
(not less than nine months nor more than fifty years), public offering price,
any redemption or sinking fund provisions, and any other specific terms; (ii)
with respect to Preferred Stock, the specific number of shares, liquidation
value, dividend rate (or method of calculation thereof), public offering price,
any redemption and sinking fund terms and other specific terms; and (iii) with
respect to Common Stock, the specific number of shares, the designation, the
public offering price and other specific terms. The outstanding shares of Common
Stock are, and the new Common Stock will be, listed on the New York Stock
Exchange.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The Company may offer the Securities to or through one or more
underwriters and/or dealers, directly to one or more institutional or other
purchasers, to existing holders of securities, or through agents. See "Plan of
Distribution." The Prospectus Supplement will set forth the names of the
underwriters, dealers or agents, if any, any applicable commissions or discounts
and the gross and net proceeds to the Company from the sale of Securities.
The date of this Prospectus is _____________________, 1996
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus or any Prospectus Supplement in
connection with an offer made by this Prospectus or any Prospectus Supplement
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or by any other person,
underwriter, dealer or agent. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall under any circumstances
create an implication that there has been no change in the affairs of the
Company since the date hereof or thereof or that the information contained
herein is current as of any time subsequent to the date hereof. This Prospectus
or any Prospectus Supplement do not constitute an offer or solicitation by
anyone in any State in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to anyone to whom it is unlawful to make such offer or solicitation.
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION............................. 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE........................... 3
CITIZENS UTILITIES COMPANY........................ 3
FINANCIAL INFORMATION............................. 4
APPLICATION OF PROCEEDS........................... 6
CAPITAL REQUIREMENTS AND
FINANCING....................................... 6
DESCRIPTION OF THE DEBT
SECURITIES...................................... 6
DESCRIPTION OF THE PREFERRED
STOCK........................................... 12
DESCRIPTION OF THE COMMON STOCK
SERIES A AND SERIES B.......................... 13
DIVIDENDS ON COMMON STOCK
SERIES A AND SERIES B.......................... 13
STOCK DIVIDEND SALE PLAN AND
CONVERSION OF COMMON STOCK
SERIES A INTO SERIES B........................ 14
COMMON STOCK PRICE RANGE........................ 15
COMMON STOCK TRANSFER AGENT...................... 15
PRO FORMA STATEMENTS OF INCOME................... 16
LEGAL OPINIONS................................... 19
EXPERTS.......................................... 19
PLAN OF DISTRIBUTION............................. 19
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("1934 Act") and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "SEC"). Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by the SEC
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at its regional offices
at Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661
and Suite 1300, 7 World Trade Center, New York, New York 10048. Copies of such
material can also be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D. C. 20549, at prescribed rates. The SEC
also maintains a web site (htp://www.sec.gov) that contains reports, proxy and
information statements and other information regarding the Company. Certain
securities of the Company are listed on the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, and reports, proxy material and other
information concerning the Company may be inspected at the office of that
Exchange.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCEN OF CERTAIN DOCUMENTS BY
REFERENCE
The following documents filed by the Company with the SEC pursuant to the
1934 Act are incorporated into this Prospectus by reference:
The Company's Annual Report on Form 10-K for the year ended December 31,
1995.
The Company=s Quarterly Report on Form 10-Q for the quarter ended March 31,
1996.
The Company's Current Reports on Form 8-K filed on March 29, and May 28,
1996.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act prior to the termination of the offering of
the Securities shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
The Company hereby undertakes to provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request of such person, a copy of any or all of the
documents referred to above which have been or may be incorporated by reference
in this Prospectus, other than exhibits to such documents not specifically
incorporated by reference herein. Requests for such copies should be directed to
Office of the Secretary, Citizens Utilities Company, High Ridge Park, Bldg. No.
3, Stamford, Connecticut 06905 (telephone 203-329-8800).
CITIZENS UTILITIES COMPANY
Citizens Utilities Company is a diversified operating company which
provides, either directly or through subsidiaries, telecommunications, natural
gas transmission and distribution, electric distribution, water or wastewater
services to customers in areas of twenty states. Divisions of Citizens provide
electric distribution and natural gas transmission and distribution services,
purchasing most of the electric power needed and all gas supplies.
Telecommunications, water and wastewater services are provided either by
divisions of Citizens or by its subsidiaries. Citizens holds a significant
investment interest in Centennial Cellular Corp., a cellular telephone company,
and owns Electric Lightwave, Inc., an alternative telecommunications service
provider operating in five western states. Beginning with 1945, the Company has
increased its revenues, net income and earnings per share (as adjusted for
subsequent stock dividends and stock splits) every year without interruption.
The Company, with administrative offices at High Ridge Park, Bldg. No. 3,
Stamford, Connecticut 06905 (telephone 203-329-8800), was incorporated in
Delaware in 1935 to acquire the assets and business of a predecessor
corporation. Since then, the Company has grown as a result of investment in its
own operations and the acquisition of numerous additional operations.
<PAGE>
As a result of its diversification, the Company is not dependent upon any single
geographic area or any one type of service for its revenues. No single state
regulatory body regulates a utility service of the Company accounting for more
than 10% of the Company's revenues for the twelve months ended March 31, 1996,
pro forma for the acquisitions of the ALLTEL Telecommunications Properties. The
Federal Communications Commission will regulate interstate access services of
the Company under price cap regulation which allows the Company considerable
flexibility in its pricing. The Company is not aware of any other utility
company as fully diversified in both geographic areas served and variety of
services provided. The Company's operations are conducted principally in small
and medium-sized communities. No material part of the Company's business is
dependent upon a single customer or a small group of customers. The loss of any
single customer or a small group of customers would not have a materially
adverse effect upon the Company. The Company's consumer connections have
increased from 26,150 in 1945, to 225,389 in 1965, to 610,585 in 1985, and to
over 1,600,000 as of March 31, 1996.
The Company continually considers and is carrying out expansion through
acquisitions and joint ventures in the rapidly evolving telecommunications and
cable television industries and in traditional public utility and related
businesses.
FINANCIAL INFORMATION
On November 29, 1994, Citizens and ALLTEL Corporation ("ALLTEL") announced
the signing of definitive agreements pursuant to which Citizens agreed to
acquire from ALLTEL at a net purchase price of $282 million, approximately
110,000 local telephone access lines and 7,000 cable television subscribers in
eight states ("ALLTEL Telecommunications Properties"). In 1995, approximately
93,000 local telephone access lines and approximately 7,000 cable television
subscribers were transferred to the Company. On March 31, 1996, the remaining
local telephone access lines were transferred to the Company.
The following financial information, including pro forma financial
information reflecting the acquisitions of the ALLTEL Telecommunications
Properties (assuming the acquisitions of such Properties were effective on April
1, 1995), is qualified in its entirety by, and should be read in conjunction
with, the information appearing elsewhere herein and the documents and financial
statements incorporated by reference herein.
Revenues
Twelve Months Ended March 31, 1996
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(In thousands)
Business Sector Pro Forma Actual
- ---------------------- ------------ ----------------------------
Telecommunications $724,593 60% $658,051 58%
Natural Gas 212,598 18% 212,598 19%
Electric 178,581 15% 178,581 16%
Water/Wastewater 81,906 7% 81,906 7%
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Total $1,197,678 100% $1,131,136 100%
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<PAGE>
Consolidated Summary Financial Information
(In millions, except percentages, ratios and per-share amounts)
Twelve Months Ended
March 31, 1996 Year Ended December 31,
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Pro Forma(1) Actual 1995 1994 1993 1992 1991
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INCOME STATEMENT DATA
Revenues $1,198 $1,131 $1,069 $906 $613 $577 $545
Net Income $176 $164 $160 $144 $126 $115 $112
Earnings Per Share of
Common Stock Series A
and Series B(2) $.79 $.74 $.72 $.71 $.63 $.58 $.57
Ratio of Earnings to
Fixed Charges(3) 4.0 3.5 3.4 3.7 5.3 4.8 5.3
Ratio of Earnings to
Combined Fixed Charges
and Dividends on
Convertible Preferred
Securities(4) 3.7 3.5 3.4 3.7 5.3 4.8 5.3
As at As at December 31,
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March 31, 1996 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ---- ----
CAPITALIZATION DATA
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Long-Term Debt $1,194 $1,187 $994 $548 $523 $484
Equity(5) $1,785 $1,560 $1,157 $974 $837 $720
Long-Term Debt to Long-Term
Debt and Equity 40% 43% 46% 36% 38% 40%
Shareholders Equity Per Share
of Common Stock Series A and
Series B(2) $7.08 $7.01 $5.69 $4.86 $4.20 $3.66
(1) Combined Citizens financial results with the financial results of the ALLTEL
Telecommunications Properties assuming the acquisitions and related
permanent financings were effective on April 1, 1995. These amounts should
be read in conjunction with the Pro Forma Statements of Income beginning on
page 16 of this Prospectus. The Pro Forma Income Statement Data is not
necessarily indicative of what the actual financial results would have been
for the period had the transactions occurred on the date indicated and does
not purport to indicate the financial results of future periods.
(2) Common Stock Series A and Series B per share amounts have been adjusted
retroactively for subsequent stock dividends and stock splits through March
31, 1996. No adjustment has been made for Citizens= 1.6% 1996 second quarter
stock dividend, as this adjustment is immaterial.
(3) A Earnings@ consist of income before income taxes plus fixed charges.A Fixed
Charges@ consist of interest charges and an amount representing the
interestfactor included in rentals.
(4) On January 22, 1996, a subsidiary of the Company issued $201 million of
Company Obligated Mandatorily Redeemable Convertible Preferred Securities
(the AConvertible Preferred Securities@) to permanently fund a portion of
the purchase price of the ALLTEL Telecommunications Properties. It is
intended that the dividends on the Convertible Preferred Securities will be
paid in the form of the Company=s Common Stock Series A as opposed to cash.
Accordingly, the difference between the Ratio of Earnings to Fixed Charges
and the Ratio of Earnings to Combined Fixed Charges and Dividends on
Convertible Preferred Securities is attributable to the non-cash dividend.
(5) Includes Shareholders= Equity and Convertible Preferred Securities.
APPLICATION OF PROCEEDS
The proceeds to be received are expected to be used to reimburse
the Company's treasury for expenditures for the construction, extension,
completion and improvement of utility facilities, to acquire additional
public utility and related property and property in the rapidly evolving
telecommunications and cable television industries, to improve service, to
provide funds for the repayment of outstanding debt on such date or dates
as the Company may determine and for other corporate purposes.
CAPITAL REQUIREMENTS AND FINANCING
The Company carries out a continuous construction program to
maintain reliable and safe service and to meet future customer service
requirements. The Company estimates that expenditures for construction,
extension and improvement of service will require approximately $340
million in 1996. The Company's construction program is under continuous
review and may be revised depending on business and economic conditions,
regulatory action, governmental mandates, customer demand and other
factors. Capital requirements will be financed from internally generated
funds, the sale of Securities covered by this Prospectus, other offered
securities, the issuance of taxable and tax-exempt long-term debt,
short-term borrowings, customer advances, and contributions in aid of
construction.
The Company maintains $600 million of committed bank lines of
credit for general corporate purposes under which there were no amounts
outstanding as of June 26, 1996.
DESCRIPTION OF THE DEBT SECURITIES
General
Debt Securities may consist of any one or more of the following
types of securities: unsecured debentures, debentures convertible into
equity, medium term notes, and other unsecured notes, with a maturity of
not less than nine months nor more than fifty years from the date of
issuance.
For each offering of Debt Securities there will be an accompanying
Prospectus Supplement that will set forth the aggregate principal amount or
amounts, public offering price or prices, maturity or maturities, rate or
rates and times of payment of interest, any sinking fund provisions, any
redemption terms and any other special terms of such Debt Securities. If
the Debt Securities are to be convertible to shares of equity securities,
the accompanying Prospectus Supplement will set forth the terms of
conversion. The following statements, which are qualified in their entirety
by reference to the Indenture described below, are brief summaries of the
provisions of the Indenture.
<PAGE>
Debentures and other unsecured Debt Securities will be issued under
the Company's Indenture dated as of August 15, 1991, as supplemented for the
issuances of debentures and as may be further supplemented by one or more
supplemental indentures creating the respective series of debentures and other
unsecured Debt Securities. Chemical Bank, New York, is the trustee (the
"Trustee") under the Indenture. Copies of the Indenture and any supplemental
indentures (collectively hereinafter called the "Indenture") are or will be
filed as exhibits to the Registration Statement. The Indenture provides
generally for the issuance of Debt Securities in series. Securities issued under
the Indenture are herein called the "Indenture Securities".
Debt Securities will not be secured. Debt Securities will rank equally,
unless otherwise specified in the Prospectus Supplements, with any other
indebtedness which may be issued under the Indenture and other unsecured
obligations of the Company except as noted. As of March 31, 1996, there was
outstanding $1,118,704,000 principal amount of unsecured long-term indebtedness
of the Company, including obligations under loan agreements relating to
industrial development revenue bonds issued on behalf of the Company to finance
the construction of specified property, all of which ranks equally in right of
payment with the Indenture Securities, except for approximately $1,584,000
principal amount of such unsecured indebtedness which is subordinate to all
other unsecured indebtedness. On June 11, 1996, the Company issued $100,000,000
of additional Debt Securities which are outstanding under the Indenture. In the
future, the Company may incur additional unsecured indebtedness, including
obligations under industrial development revenue bond loan agreements, and
secured indebtedness under mortgages or other security arrangements.
Assets of subsidiaries of the Company in the states of Arizona and West
Virginia are subject to liens of mortgages securing $57,889,000 and $17,075,000,
respectively, of principal amount of indebtedness from federal agencies as of
March 31, 1996.
Unless otherwise stated in the accompanying Prospectus Supplement, it
is intended that Debt Securities will be held by the owners as book-entry
securities. See below under "- Book-Entry Debt Securities." Issuance of
Additional Debt Securities
Additional Debt Securities may be issued under the Indenture. The
Indenture does not contain any limitation on the issuance by the Company of
other debt securities, either secured or unsecured.
Merger, Consolidation, Transfer of Assets
In the event of a merger, consolidation or transfer of assets of the
Company with or to another corporation or entity, in which the Company is not
the surviving corporation, the surviving entity shall assume the obligations of
the Company for Indenture Securities under the Indenture by execution of a
supplemental indenture, and such merger, consolidation or transfer of assets is
conditioned upon the surviving entity having a consolidated net worth
immediately subsequent to such event at least equal to that of the Company
immediately prior to such event.
<PAGE>
Modification of Indenture; Defeasance
The Indenture provides that, with the consent of the holders of not
less than 66 2/3% in principal amount of all series of Indenture Securities
affected thereby which are at the time outstanding, the Company and the Trustee
may enter into supplemental indentures for the purpose of amending or modifying,
in any manner, provisions of the Indenture; provided, however, that no such
supplemental indenture, without the consent of the holder of each outstanding
Indenture Security affected thereby, shall, among other things, (i) change the
maturity of the principal of, or any installment of interest on, any Indenture
Security, or reduce the principal amount thereof or the interest thereon or any
premium payable upon the redemption thereof, or (ii) reduce the amount of the
principal of an original issue discount security that would be payable upon
acceleration, or (iii) impair the right to institute suit for the enforcement of
any such payment on or after the maturity or redemption date, or (iv) reduce the
aforesaid percentage of the Indenture Securities, the consent of the holders of
which is required for the execution of any such supplemental indenture or the
waiver of compliance with certain covenants (Indenture Section 902).
The Indenture provides for the defeasance of the Indenture with regard
to one or more series of Indenture Securities, or the defeasance of specified
covenants of the Indenture applicable to one or more series, upon the deposit in
trust of cash or U.S. government securities in an amount sufficient to pay
principal, premium, if any, and interest on such series of Indenture Securities
and upon satisfaction by the Company of other conditions (Indenture Sections
1302, 1303 and 1304).
A condition to defeasance with respect to the entire amount of any
series of Indenture Securities is an opinion of counsel to the effect that the
holders of such series will not realize income for federal income tax purposes
as a result of such defeasance.
Events of Default
The Indenture defines an Event of Default with respect to any series of
Indenture Securities as being: a default for 60 days in the payment of any
interest upon any Indenture Security of such series; a default in the payment of
any principal of or premium on any Indenture Security of such series when due; a
default in the deposit of any sinking fund payment with respect to such series;
a default in the performance of any other covenant in the Indenture applicable
to such series which goes unremedied for 90 days after notice of default given
by the Trustee or the holders of not less than a majority of principal amount of
such series; and includes certain events of bankruptcy, insolvency or
reorganization. The Company may add, delete or modify any Event of Default or
other similar event with respect to one or more series of Indenture Securities
at the time of establishing such series (Indenture Section 501). The Company is
required to file with the Trustee all reports required by the Trust Indenture
Act of 1939, which includes an annual officer's certificate as to compliance
with all conditions and covenants under the Indenture (Indenture Sections 704
and 1006).
<PAGE>
The Indenture provides that, if an Event of Default with respect to a
series of Indenture Securities occurs and is continuing, the Trustee or the
holders of not less than a majority of principal amount of the outstanding
Indenture Securities of such series may declare the principal of the Indenture
Securities of such series to be due and payable immediately. The holders of a
majority of principal amount of the outstanding Indenture Securities of such
series may rescind any such declaration if such Event of Default has been cured
or waived and all amounts then due on the Indenture Securities of such series
have been paid (Indenture Section 502).
The Indenture further provides that, if an Event of Default occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
the rights of the Trustee and the rights of the holders of Indenture Securities
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights (Indenture Section 503).
The Indenture provides that the Trustee shall give to the holders of
the Indenture Securities of any series notice of any default relating to such
series under the Indenture within 90 days of its occurrence, except that in the
case of a default by the Company in the performance of any covenant in the
Indenture other than those with respect to the payment of principal, premium or
interest or deposit of sinking fund payment, no such notice shall be given until
at least 30 days after the occurrence thereof, provided that the Trustee may
withhold notice to holders of the Indenture Securities of any series of any
default (except in payment of the principal of, or premium, if any, or interest
on, any Indenture Security or in the making of any sinking fund or similar
payment) if it considers it in the interest of the holders of Indenture
Securities to do so (Indenture Section 602; and Trust Indenture Act of 1939,
Section 315(b)).
The Indenture provides that the holders of a majority of principal
amount of the outstanding Indenture Securities of a series have the right,
subject to certain conditions, to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee and the right to waive past
defaults, other than defaults in, or relating to, the payment of principal,
premium or interest (Indenture Sections 512 and 513). The Trustee will not be
required to comply with any request or direction of the holders of Indenture
Securities pursuant to the Indenture unless offered indemnity against costs,
expenses and liabilities which might be incurred by the Trustee as a result of
such compliance (Indenture Section 603(d)).
Holders of Indenture Securities of a series have no right to enforce
any remedy under the Indenture unless the Trustee has failed to institute
proceedings in respect of an Event of Default relating to such series within 90
days after notice thereof and has received a written request by the holders of
not less than a majority of principal amount of the outstanding Indenture
Securities of such series with an offer of reasonable indemnity against costs,
expenses and liabilities that may be incurred in complying with such request
(Indenture Section 507).
<PAGE>
Concerning the Trustee
Chemical Bank, the Trustee under the Indenture, has periodically
engaged in transactions with, or performed services for, the Company in the
ordinary course of business. Chemical Bank is also the trustee under an
indenture dated January 15, 1996, as supplemented, pursuant to which
$211,756,050 of principal amount of debentures issued to a wholly owned
subsidiary of the Company are outstanding. Chemical Bank is also the agent and a
participant lender under the Company's committed bank lines of credit
arrangements.
Book-Entry Debt Securities
Unless otherwise stated in the accompanying Prospectus Supplement, it
is intended that the Debt Securities will be held by the owners as book-entry
securities and will be issued in the form of one or more fully registered global
securities. The global securities will be deposited with, or on behalf of, and
will be registered in the name of, The Depository Trust Company, New York, New
York, (the "Depositary") or its nominee (Indenture Section 311). Except as set
forth below, the global securities may be transferred only to a nominee of the
Depositary or to a name designated by an authorized representative of the
Depositary or its nominee.
The Depositary has advised as follows: it is a limited-purpose trust
company organized under the banking laws of the State of New York and a "banking
organization" within the meaning of that law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the 1934 Act. The Depositary holds securities deposited by its
participating organizations ("participants") and facilitates settlement of
securities transactions in such securities between participants through
electronic book-entry changes in accounts of its participants. Participants
include securities brokers and dealers, banks and trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly ("indirect participants"). Persons who are not
participants may beneficially own securities held by the Depositary only through
participants or indirect participants.
The Depositary has advised that pursuant to its procedures: (i) upon
issuance of the Indenture Securities by the Company, the Depositary will credit
the accounts of participants and indirect participants designated by any
underwriters, dealers or agents with the principal amount of the Debt Securities
purchased and (ii) ownership of beneficial interests in the global debt
securities will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary, the participants and the
indirect participants. The laws of some states require that certain persons take
physical delivery in definitive form of securities which they own. Consequently,
the ability to transfer beneficial interests in the global debentures is limited
to such extent.
<PAGE>
So long as the Depositary or a nominee of the Depositary is the
registered owner of the global debt securities, such Depositary or nominee for
all purposes will be considered the sole owner or holder of the Debt Securities
under the applicable indenture. Except as provided below, owners of beneficial
interest in the global debt securities will not be entitled to have Debt
Securities registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities, and will not be considered the owners or
holders thereof under the applicable indenture.
Neither the Company nor the Trustee will have any responsibility or
obligation for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global debt securities or for
maintaining any records relating to such beneficial ownership interests.
Principal and interest payments on Debt Securities registered in the
name of the Depositary (or its successor or nominee) will be made by the paying
agent for the related series under the applicable indenture to the Depositary
(or its successor or nominee) as the registered owner of the global debt
securities. Under the terms of the Indenture and, unless otherwise stated in the
Prospectus Supplement, under the terms of any other applicable indenture the
Company and the Trustee will treat the persons in whose names the Debt
Securities are registered as the owners of such Debt Securities for the purpose
of payment of principal and interest on such Debt Securities, giving any notice
permitted or required to be given to holders of Debt Securities, registering the
transfer of the global debt securities, and for all other purposes whatsoever.
Therefore, neither the Company, the Trustee nor any paying agent has any direct
responsibility or liability for the payment of principal or interest on the Debt
Securities, or the giving of any such notice, to owners of beneficial interests
in the global debt securities, as the case may be, or, in the event of any
sinking fund payment or redemption, the selection of the owners of beneficial
interests to receive payment. The Depositary has advised that its present
practice is, upon receipt of any payment of principal or interest, to credit
immediately the accounts of the participants and indirect participants with such
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interests in the global debt securities as shown on the
records of the Depositary. Payments by participants and indirect participants to
owners of beneficial interests in the global debt securities will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of the participants or indirect
participants.
Global debt securities are exchangeable for definitive Debt Securities
in registered form only if (i) the Depositary notifies the Company that it will
not continue its services as Depositary for the global debt securities, (ii) the
Depositary ceases to be clearing agency registered under the 1934 Act, (iii) the
Company in its sole discretion determines that all such global debt securities
shall be exchangeable for definitive Debt Securities in registered form, or (iv)
an Event of Default (as hereinabove described) with respect to the Debt
Securities represented by such global debt securities has occurred and is
continuing. Any global debt securities that are exchangeable pursuant to the
preceding sentence shall be exchangeable for definitive Debt Securities in
registered form in denominations of $1,000 and integral multiples thereof. Such
definitive Debt Securities shall be registered in the names of the owners of the
beneficial interests in such global debt securities as provided by the
Depositary's participants (as identified by the Depositary holding such global
debt securities).
<PAGE>
In the event that Debt Securities which are held as book-entry debt
securities cease to be book-entry debt securities, such Debt Securities will be
delivered as registered debt securities without coupons in denominations of
$1,000 or any authorized multiple of $1,000. No service charge will be made for
any exchange or registration of transfer of any Debt Securities, except that the
Company may require payment sufficient to cover any tax or governmental charge
in connection therewith (Indenture Sections 302 and 305).
DESCRIPTION OF THE PREFERRED STOCK
The Company is authorized to issue up to 50,000,000 shares of Preferred
Stock, par value $.01 per share. Under the Company's Restated Certificate of
Incorporation, as amended, the Board of Directors is empowered to fix, by
resolution, or resolutions, the designations, powers, preferences and relative,
participating, optional, conversion and other rights and the qualifications,
limitations and restrictions of such Preferred Stock, including dividend rates
and payment dates, liquidation preferences, conversion prices, voting rights,
redemption and sinking fund terms, and other specific terms. Preferred Stock may
be issued in one or more classes and in one or more series. In the event that
the Board of Directors shall create a class or series of Preferred Stock, the
terms shall be as set forth in the resolution of the Board of Directors creating
such stock. None of the Company's authorized Preferred Stock has been issued.
The statements with respect to the Company's Preferred Stock contained
in this Prospectus and in any Prospectus Supplement, are summaries of the
Company's Restated Certificate of Incorporation and the aforesaid resolutions.
Such statements are in all respects subject to and qualified in their entirety
by reference to the Restated Certificate and the resolutions fixing the terms of
the Preferred Stock.
Dividend Rights
The holders of the Preferred Stock in respect of which an accompanying
Prospectus Supplement is being delivered will be entitled to receive dividends
when and as declared by the Board of Directors of Citizens, as specified in such
accompanying Prospectus Supplement. The date that the initial dividend on such
Preferred Stock is expected to be payable will be as set forth in such
accompanying Prospectus Supplement. There are no limitations in any existing
indentures or any other agreements on the payments of dividends on Preferred
Stock.
Voting Rights
Any rights of the holders of the shares of any series or class of
Preferred Stock will be as set forth in an accompanying Prospectus Supplement.
<PAGE>
Redemption and Liquidation Rights
Redemption provisions and liquidation rights and preferences for the
Preferred Stock in respect of which an accompanying Prospectus Supplement is
being delivered will be set forth in such accompanying Prospectus Supplement.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Preferred Stock will be as set
forth in an accompanying Prospectus Supplement.
DESCRIPTION OF THE COMMON STOCK SERIES A AND SERIES B
Citizens' common stock consists of two series: Common Stock Series A
and Common Stock Series B. Currently, the Company has authorized 250,000,000
shares of Common Stock Series A and 350,000,000 shares of Common Stock Series B.
As of June 26, 1996, the Company had outstanding 152,561,900 shares of Common
Stock Series A and 78,388,600 shares of Common Stock Series B. As of June 26,
1996, there were 26,665 record holders of Common Stock Series A and 22,153
record holders of Common Stock Series B. The holders of Common Stock Series A
and Common Stock Series B are entitled to one vote for each share on all matters
voted on by shareholders. Pursuant to Citizens' Restated Certificate of
Incorporation, the holders of Common Stock Series A and the holders of Common
Stock Series B vote together as a single class on all matters to be voted on by
shareholders, unless otherwise expressly required by applicable law. Common
Stock Series A is convertible, on a share-for-share tax-free basis and at no
cost to shareholders, into Common Stock Series B at all times. Common Stock
Series B is not convertible into Common Stock Series A. The Board of Directors
of Citizens may, in its sole discretion and at any time, require all of the
holders of Common Stock Series A to exchange all of their shares of Common Stock
Series A for shares of Common Stock Series B on a share-for-share basis. The
holders of Common Stock Series A and Common Stock Series B participate ratably
in liquidation. The holders of Common Stock Series A and Common Stock Series B
have no preemptive rights.
<PAGE>
DIVIDENDS ON COMMON STOCK SERIES A AND SERIES B
The holders of Common Stock Series A and Common Stock Series B are
entitled to receive dividends when and as declared by the Board of Directors of
Citizens out of funds legally available therefor. Dividends have been paid to
holders of common stock every year without interruption beginning in 1939 and,
although there can be no assurances as to the amount of any future dividends,
the Company has increased cash dividends and/or cash value equivalents every
year without interruption beginning in 1946. Beginning in 1956, when the
two-series common stock capitalization of Citizens was initiated, through 1989,
only stock dividends were paid on Common Stock Series A and only cash dividends
were paid on Common Stock Series B. Commencing in 1990, Citizens has declared
and paid quarterly stock dividends at the same rate on shares of both Common
Stock Series A and Common Stock Series B. The stock dividend rate is based on an
underlying cash equivalent. The Company expects that under present United States
federal tax law, stock dividends on Common Stock Series A and Common Stock
Series B, if paid and received pro-rata and otherwise in the same manner as they
have been since 1990, will be free of current federal income taxation on
receipt. Such stock dividends are generally treated as capital transactions when
and if sold. Gain or loss is based on the difference between sales price and
adjusted basis per share.
To the extent that stock dividends are declared on the Common Stock
Series B, the same stock dividend must be declared on the Common Stock Series A.
To the extent that cash dividends are paid out of funds that are legally
available on the Common Stock Series B, stock dividends with an equivalent fair
value must be paid during the same calendar year on the Common Stock Series A,
unless cash dividends are declared on the Common Stock Series A at the same time
and in an equal amount as on the Common Stock Series B.
STOCK DIVIDEND SALE PLAN AND CONVERSION OF
COMMON STOCK SERIES A INTO SERIES B COMMON STOCK SERIES
A INTO SERIES B
The Company has a Stock Dividend Sale Plan (the "Plan") which enables
Common Stock Series B shareholders to elect to have their future stock dividends
sold and the cash proceeds of the sale (minus a per share commission, currently
2 cents) distributed to them quarterly. If a Common Stock Series B shareholder's
account is held by a broker or custodial institution participating in the Plan,
the cash proceeds are sent to the broker or custodial institution. Generally,
for United States federal income tax purposes, the differences between the
proceeds from the sale of the stock dividends (the net cash received) and the
adjusted basis of the shares sold are treated as a capital transaction. Holders
of Common Stock Series A may at any time convert, at no cost, on a
share-for-share and tax-free basis their Common Stock Series A shares into
Common Stock Series B shares. A Registered Shareholder may give instructions to
the Company's Common Stock Transfer Agent and street name holders may give
instructions to their brokers to accomplish such conversion from Common Stock
Series A into Common Stock Series B, and in conjunction with said conversion, or
after such conversion, may enroll in the Plan.
Common Stock Series B shareholders may enroll throughout the year in
the Plan. After a Common Stock Series B shareholder=s account has been enrolled
in the Plan, future stock dividends in that account will be sold quarterly,
unless the Company's Common Stock Transfer Agent receives written notification
from a Series B shareholder to withdraw that account from the Plan. Shareholders
who withdraw an account from the Plan will then receive quarterly stock
dividends and are not eligible to re-enroll that account in the Plan for 12
months.
<PAGE>
COMMON STOCK PRICE RANGE
Citizens trades on the New York Stock Exchange under the symbols CZNA
and CZNB for Common Stock Series A and Common Stock Series B, respectively. The
table below indicates the high and low prices per share for the periods shown.
The high and low prices per share from January 3, 1994 through June 26, 1996
were taken from the daily quotations published in The Wall Street Journal during
the periods indicated. Prices have been adjusted retroactively for subsequent
stock dividends including the stock dividend payable to shareholders of record
on June 3, 1996, rounded to the nearest 1/8th.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
----------- ----------- ----------- -----------
High Low High Low High Low High Low
---- --- ---- --- ---- --- ---- ---
1996
Series A $12 1/2 10 1/2
Series B $12 1/2 10 5/8
1995
Series A $13 1/4 11 3/8 12 10 11 1/8 10 1/4 12 7/8 10 1/4
Series B $13 1/4 11 1/4 12 10 11 1/8 10 3/8 13 10 1/4
1994
Series A $15 5/8 12 3/4 14 1/2 12 1/8 13 1/4 12 12 5/8 11 3/8
Series B $15 3/4 12 5/8 14 1/2 12 1/8 13 1/4 12 12 5/8 11 1/2
The reported high and low prices from April 1 through June 26,1996 were $12 1/8
and $10 5/8 per share of Common Stock Series A and $12 1/4 and $10 5/8 per share
of Common Stock Series B, respectively. The reported last sale prices on the New
York Stock Exchange on June 26, 1996 were $11 5/8 per share of Common Stock
Series A and $11 5/8 per share of Common Stock Series B.
COMMON STOCK TRANSFER AGENT
The transfer agent for the Company's Common Stock Series A and Common
Stock Series B is Illinois Stock Transfer Company.
<PAGE>
PRO FORMA STATEMENTS OF INCOME
Citizens Utilities Company and ALLTEL Telecommunications Properties
Pro Forma Condensed Combined Statement of Income
(In thousands, except for per-share amounts)
The following Pro Forma Condensed Combined Statement of Income for the twelve
months ended March 31, 1996 combines the historical statements of income of
Citizens and the ALLTEL Telecommunications Properties giving effect to the
acquisitions as if the acquisitions and the related permanent financings had
been effective on April 1, 1995. The Pro Forma Condensed Combined Statement of
Income should be read in conjunction with the historical financial statements
and related notes thereto of Citizens. The Pro Forma Condensed Combined
Statement of Income is not necessarily indicative of what the actual results of
operations would have been for the period had the transactions occurred at the
date indicated and do not purport to indicate the results of future operations.
Twelve Months Ended March 31, 1996
----------------------------------
Pro Forma
---------
Citizens ALLTEL(*)(1) Adjustments Combined
-------- ------------ ----------- --------
Revenues $1,131,136 $ 66,542 $1,197,678
Expenses:
Operating Expenses 698,302 27,540 725,842
Depreciation and
Amortization 166,571 13,836 $ 400(2) 180,807
--------- --------- --------- ---------
Total Operating
Expenses 864,873 41,376 400 906,649
Income from Operations 266,263 25,166 (400) 291,029
Other Income, net 58,147 925 (3,900)(3) 55,172
Interest Expense 87,081 3,285 (8,400)(4) 81,966
-------- -------- ----------- ---------
Income before Income
Taxes 237,329 22,806 4,100 264,235
Income Taxes 71,588 8,408 3,200(5) 83,196
-------- -------- ----------- ---------
Income before Dividends
on Company Obligated
Mandatorily Redeemable
Convertible Preferred
Securities 165,741 14,398 900 181,039
Dividends on Company
Obligated Mandatorily
Redeemable Convertible
Preferred Securities 1,253 - 4,047(6) 5,300
-------- -------- ------------ --------
Net Income $ 164,488 $ 14,398 $ (3,147) $ 175,739
========= ========= ============= =========
Earnings Per Share of
Common Stock Series A
and Series B(**) $ .74 $ .79
Weighted Average
Common Shares(**) 223,577 223,577
* Represents the financial results from April 1, 1995 to the dates of
acquisition for the ALLTEL Telecommunications Properties, net of the financial
results for a property transferred to ALLTEL as part of the transactions.
Financial results for the ALLTEL Telecommunications Properties from their dates
of acquisition through March 31, 1996, are included in Citizens= financial
results for the twelve months ended March 31, 1996.
** No adjustment has been made for Citizens= 1.6% 1996 second quarter
stock dividend, as this adjustment is immaterial.
See Notes to Pro Forma Statements of Income on page 18.
PRO FORMA STATEMENTS OF INCOME
(continued)
Citizens Utilities Company and ALLTEL Telecommunications Properties
Pro Forma Condensed Combined Statement of Income
(In thousands, except for per-share amounts)
The following Pro Forma Condensed Combined Statement of Income for the
year ended December 31, 1995 combines the historical statements of income of
Citizens and the ALLTEL Telecommunications Properties giving effect to the
acquisitions as if the acquisitions and the related permanent financings had
been effective on January 1, 1995. The Pro Forma Condensed Combined Statement of
Income should be read in conjunction with the historical financial statements
and related notes thereto of Citizens. The Pro Forma Condensed Combined
Statement of Income is not necessarily indicative of what the actual results of
operations would have been for the period had the transactions occurred at the
date indicated and do not purport to indicate the results of future operations.
Year Ended December 31, 1995
----------------------------
Pro Forma
---------
Citizens ALLTEL(*)(1) Adjustments Combined
-------- ------------ ----------- --------
Revenues $1,069,032 $ 90,039 $1,159,071
Expenses:
Operating Expenses 655,924 38,654 694,578
Depreciation and
Amortization 158,935 18,680 $ 500 (2) 178,115
Total Operating --------- ----------- ------------ ----------
Expenses 814,859 57,334 500 872,693
Income from Operations 254,173 32,705 (500) 286,378
Other Income, net 59,955 1,087 (5,200) (3) 55,842
Interest Expense 87,775 4,467 (12,300) (4) 79,942
--------- ----------- ------------ ---------
Income before Income
Taxes 226,353 29,325 6,600 262,278
Income Taxes 66,817 10,851 4,600 (5) 82,268
--------- ----------- ----------- ---------
Income before Dividends
on Company Obligated
Mandatorily Redeemable
Convertible Preferred
Securities 159,536 18,474 2,000 180,010
Dividends on Company
Obligated Mandatorily
Redeemable Convertible
Preferred Securities - - 5,300 (6) 5,300
--------- ----------- ----------- ---------
Net Income $159,536 $ 18,474 $(3,300) $174,710
======== =========== =========== ========
Common Stock Series A
and Series B(**) $ .72 $ .78(7)
Common Shares(**) 222,373 224,867(7)
* Represents the financial results from January 1, 1995 to the dates of
acquisition for all the ALLTEL Telecommunications Properties acquired from
January 1, 1995 through December 31, 1995 and the financial results for the
entire twelve month period for the ALLTEL Telecommunications Property acquired
after December 31, 1995, net of the financial results for a property transferred
to ALLTEL as part of the transactions. Financial results for the ALLTEL
Telecommunications Properties acquired during 1995 are included in Citizens'
financial results from their dates of acquisition.
** No adjustment has been made for Citizens' 1.6% 1996 second quarter stock
See Notes to Pro Forma Statements of Income on page 18.
PRO FORMA STATEMENTS OF INCOME (continued)
Citizens Utilities Company and ALLTEL Telecommunications Properties
Notes to Pro Forma Condensed Combined Statements of Income
(1) On November 29, 1994, Citizens and ALLTEL Corporation ("ALLTEL") announced
the signing of definitive agreements pursuant to which Citizens agreed to
acquire from ALLTEL at a net purchase price of $282 million, approximately
110,000 local telephone access lines and 7,000 cable television subscribers in
eight states ("ALLTEL Telecommunications Properties"). From June 30, 1995 to
December 31, 1995, approximately 93,000 local telephone access lines and
approximately 7,000 cable television subscribers were transferred to the
Company. On March 31, 1996, the remaining local telephone access lines were
transferred to the Company.
(2) Represents an adjustment to reflect the amortization associated with the $17
million of excess purchase price over net book value of assets acquired or to
be acquired. Pursuant to Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation", the amortization
of the remaining $55 million of excess of purchase price over net book value
of assets acquired will be deferred. The Company intends to seek from the
public utilities commissions maximum recovery of the excess of purchase price
over net book value in future rate proceedings.
(3) Represents an adjustment to reflect the elimination from Other Income of
tax-exempt investment income associated with the cash and investments used to
partially fund the acquisitions of the ALLTEL Telecommunications Properties
and other properties previously acquired.
(4) Represents an adjustment to reflect the inclusion in Interest Expense of the
interest expense on debt securities issued or assumed to partially finance the
acquisitions of the ALLTEL Telecommunications Properties and other properties
previously acquired, net of the elimination of interest expense on borrowings
used to temporarily finance the acquisitions and the elimination of interest
expense on debt not assumed by the Company.
(5) Represents an adjustment to Income Taxes based on Income before Income Taxes
using the applicable incremental income tax rate.
(6) Represents an adjustment to reflect the annual Dividends on Company
Obligated Mandatorily Redeemable Convertible Preferred Securities, net of
income taxes, issued in January 1996 to partially finance the acquisitions of
the ALLTEL Telecommunications Properties and other properties previously
acquired.
(7) The Pro Forma Earnings Per Share calculation and Pro Forma Weighted Average
Common Shares are based on the weighted average number of common shares
outstanding for the period including the number of additional shares issued to
partially finance the acquisitions of the ALLTEL Telecommunications Properties
and other properties previously acquired, assuming such additional shares were
outstanding for the entire twelve month period. Fully diluted earnings per
share are not presented because the difference is immaterial.
<PAGE>
LEGAL OPINIONS
The validity of the Securities will be passed upon by Winthrop, Stimson, Putnam
& Roberts, One Battery Park Plaza, New York, New York, counsel for the Company,
and by Simpson Thacher & Bartlett (a partnership which includes professional
corporations), 425 Lexington Avenue, New York, New York, counsel for the
Underwriters. Legal matters relating to required authorization, if any, of the
Securities by the public utilities commissions in the various states will be
passed upon by local counsel to the Company in the states of Arizona, Colorado,
Hawaii, Louisiana, and Vermont. Winthrop, Stimson, Putnam & Roberts and Simpson
Thacher & Bartlett may rely upon such counsel as to certain matters governed by
the laws of such states.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1995,
1994 and 1993, and for each of the years then ended, incorporated by reference
in this Prospectus from the Company's Annual Report on Form 10-K, have been so
incorporated by reference in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) to or through one or more underwriters;
(ii) to or through dealers; (iii) directly to one or more institutional or other
purchasers; (iv) to existing holders of securities; or (v) through agents.
Securities may be sold outside the United States. An accompanying Prospectus
Supplement will set forth the terms of the offering of Securities, including the
name or names of any underwriters, dealers, purchasers or agents, the purchase
price of such Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which such
Securities may be listed. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time. Only firms named in the Prospectus Supplement are deemed to be
underwriters, dealers or agents in connection with the Securities offered
thereby.
If underwriters are used in the sale, Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Unless otherwise set
forth in the Prospectus Supplement, the obligations of the underwriters to
purchase the Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all such Securities if any are
purchased.
Securities may be sold directly by the Company or through any firm designated
by the Company from time to time, acting as principal or as agent. The
Prospectus Supplement will set forth the name of any dealer or agent involved in
the offer or sale of the Securities in respect of which the Prospectus
<PAGE>
Supplement is delivered and the price payable to the Company by such dealer or
any commissions payable by the Company to such agent. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Underwriters, dealers and agents may be entitled under agreements entered into
with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution with respect to payments for such liabilities which underwriters,
dealers or agents may be required to make. Underwriters, dealers and agents may
engage in transactions with or perform services for the Company in the ordinary
course of business.
The anticipated date of delivery of Securities will be as set forth in the
Prospectus Supplement relating to such offering.
- --------
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Description Amount(1)
Securities and Exchange Commission filing fee..................... $311,767
Printing and engraving.......................................... 150,000
Rating Agency Fees.............................................. 180,000
Legal Services................................................. 90,000
Accounting Services............................................ 80,000
Blue Sky Fees................................................... 16,000
New York Stock Exchange listing fee ........................... 84,000
Miscellaneous................................................... 47,000
----------
Total(1)..................................................... $958,767
==========
(1) All fees are estimated except for the Securities and Exchange Commission
filing fee.
Item 15. Indemnification of Directors and Officers.
Citizens Utilities Company (the "Company"), being incorporated under the
Delaware General Corporation Law, is empowered by Section 145 of such law to
indemnify officers and directors against certain expenses, liabilities and
payments, including liabilities arising under the Securities Act of 1933, (the
AAct@), as therein provided. In addition, By-Laws 24 and 24A of the Company and
a resolution adopted by the Board of Directors in connection with the issuance
of the Securities provide for indemnification of specified persons, including
officers and directors of the Company for liabilities, including those arising
under said Act, as provided in said By-Laws and resolution. Generally, By-Laws
24 and 24A of the Company provide that, to the fullest extent permitted by
applicable law, the Company shall indemnify and hold harmless, among others, any
officer or director of the Company or any other entity for which he is acting at
the request of the Company, from and against any loss, damage or claim incurred
by such person by reason of any act or omission performed or omitted by such
person in good faith on behalf of the Company and in a manner such person
reasonably believed to be in the best interests of the Company. Such By-Laws,
generally speaking, also provides that, to the fullest extent permitted by
applicable law, expenses (including legal fees) incurred by a person in
defending against any such liability shall, be advanced by the Company subject
to specified conditions. The Certificate of Incorporation further provides that
no director shall be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, with stated exceptions.
<PAGE>
The Company also maintains insurance providing coverage for the Company
and its subsidiaries against obligations incurred as a result of indemnification
of officers and directors. The coverage also insures the officers and directors
for a liability against which they may not be indemnified by the Company or its
subsidiaries but excludes specified dishonest acts.
Item 16. Exhibits.
An Exhibit Index, containing a list of all exhibits to this registration
statement, commences on page II-7.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement; notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of a prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that clauses (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Stamford and State of Connecticut on the 27th
day of June, 1996.
CITIZENS UTILITIES COMPANY
By /s/Robert J. DeSantis
----------------------
Robert J. DeSantis
Vice President and Treasurer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert J. DeSantis, as such person=s true and
lawful attorney-in-fact and agent, with full power of substitution and
revocation, for such person and in such person=s name, place and stead, in any
and all capacities to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and the other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and things
requisite and necessary to be done, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute, may lawfully do or cause to
be done by virtue hereof.
Signature Title Date
/s/Leonard Tow Chairman of the Board, June 27, 1996
- --------------------------- Chief Executive, Officer,
(Leonard Tow) Chief Financial Officer
and Director
/s/Robert J. DeSantis Vice President and Treasurer June 27, 1996
- ---------------------------
(Robert J. DeSantis)
/s/Norman I. Botwinik Director June 27, 1996
- ---------------------------
(Norman I. Botwinik)
/s/James C. Goodale Director June 27, 1996
- ---------------------------
(James C. Goodale)
/s/Aaron I. Fleischman Director June 27, 1996
- ---------------------------
(Aaron I. Fleischman)
/s/Stanley Harfenist Director June 27, 1996
- ---------------------------
(Stanley Harfenist)
/s/Andrew N. Heine Director June 27, 1996
- ---------------------------
(Andrew N. Heine)
/s/Elwood A. Rickless Director June 27, 1996
- ---------------------------
(Elwood A. Rickless)
Director June 27, 1996
- ---------------------------
(John L. Schroeder)
/s/Robert D. Siff Director June 27, 1996
- ---------------------------
(Robert D. Siff)
/s/Robert A. Stanger Director
- ---------------------------
Robert A. Stanger) June 27, 1996
/s/Charles H. Symington, Jr. Director June 27, 1996
- ---------------------------
(Charles H. Symington, Jr.)
/s/Edwin Tornberg Director June 27, 1996
- ---------------------------
(Edwin Tornberg)
/s/Claire Tow Director June 27, 1996
- ---------------------------
(Claire Tow)
EXHIBIT INDEX
Exhibit
No. Description
1.1 Form of Underwriting Agreement relating to the Debt
Securities.
1.2 Form of Underwriting Agreement relating to the Common
Stock.
3.200.1 Restated Certificate of Incorporation of Citizens Utilities
Company.
3.200.2 Bylaws, as amended, of Citizens Utilities Company, with all
amendments to June 27, 1996.
4.100.1* Indenture dated as of August 15, 1991, between Citizens
Utilities Company and Chemical Bank, as trustee.
4.100.10 Form of Supplemental Indenture dated as of ______________,
199_, between Citizens Utilities Company and Chemical Bank,
as trustee.
5.1 Opinion of Winthrop, Stimson, Putnam & Roberts.
12.1 Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges
and Dividends on Convertible Preferred Securities.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Winthrop, Stimson, Putnam & Roberts (to be
contained in Exhibit No. 5.1).
24 Powers of Attorney (Included on Page II-5).
25.1 Form T-1, Statement of Eligibility Under the Trust
Indenture Act of 1939, as amended, of Chemical Bank, under
the Indenture.
-------------------------
* Exhibit No. 4.100.1 is incorporated by reference to such document
bearing the same exhibit designation filed with the Company's
Quarterly Report on Form 10-Q for the nine months ended
September 30, 1991.
CITIZENS UTILITIES COMPANY
Debt Securities
UNDERWRITING AGREEMENT
To Representatives named in New York, New York
Schedule I, of the several Underwriters (Date)
named in Schedule II hereto
Dear Sirs:
Citizens Utilities Company, a Delaware corporation
(the "Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule II hereto (the
"Underwriters") for whom you are acting as Representatives (the
"Representatives") the Company's debt securities of the designation, with the
terms and in the aggregate principal amount specified in Schedule I hereto (the
"Debt Securities"), to be issued under the Indenture, dated as of August 15,
1991, between the Company and Chemical Bank, as Trustee (the "Trustee"), as
supplemented and amended by the First, Second, Third, Fourth, Fifth and Sixth
Supplemental Indentures dated as of August 15, 1991, January 15, 1992, April 15,
1994, October 1, 1994, June 15, 1995, and October 15, 1995 respectively, and as
to be supplemented and amended by a supplemental indenture relating to the Debt
Securities (such Indenture as may be further supplemented and amended being
hereinafter referred to as the "Indenture").
I. Representations and Warranties by the Company. The Company
represents and warrants to each
Underwriter that:
<PAGE>
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form, including a prospectus, for the registration
under the Act of the Debt Securities, which registration statement has
become effective. Such registration statement and prospectus may have
been amended or supplemented from time to time prior to the date of
this Agreement. Any such amendment or supplement was filed with the
Commission and any such amendment has become effective. Promptly upon
execution of this Agreement, the Company will file with the Commission
a prospectus supplement (the "Prospectus Supplement") relating to the
Debt Securities pursuant to Rule 424 under the Act. Copies of such
registration statement and prospectus, any such amendment or
supplement, the Prospectus Supplement and all documents incorporated by
reference therein which were filed with the Commission on or prior to
the date of this Agreement have been delivered to you. The registration
statement and prospectus, as amended or supplemented prior to the date
of this Agreement, and as supplemented by the Prospectus Supplement are
hereinafter called the "Registration Statement" and the "Prospectus",
respectively. Any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934 (the "Exchange
Act") on or before the date of this Agreement, and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to include the
filing of any document under the Exchange Act deemed to be incorporated
by reference therein after the date of this Agreement.
(b) (i) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Prospectus, at the date of this Agreement and at the
Closing Date (as hereinafter defined), any amendments thereof and
supplements thereto and the Indenture complied or will comply in all
material respects with the Act, the Trust Indenture Act of 1939 (the
"Trust Indenture Act") and the Exchange Act and the respective rules
thereunder and (ii) the Registration Statement did not contain and, as
amended by any amendment thereto, will not contain any untrue statement
of a material fact or omitted or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading and the Prospectus and any amendment
thereof or supplement thereto does not contain and will not contain any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to (A) that part of
the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (B) the information contained in or omitted from the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for use in connection with the
preparation of the Prospectus.
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Act or the Exchange Act and the
rules and regulations of the Commission thereunder, and any documents
so filed and incorporated by reference subsequent to the date of this
Agreement will, when they are filed with the Commission, conform in all
material respects to the requirements of the Act and the Exchange Act,
and the rules and regulations of the Commission thereunder; and none of
such documents include or will include any untrue statement of a
material fact or omit or will omit to state any material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has
not been any material adverse change in the business, properties or
financial condition of the Company and its subsidiaries, considered as
a whole, and there have not been any transactions entered into by the
Company or any of its subsidiaries which is material to the Company and
its subsidiaries, considered as a whole, other than transactions in the
ordinary course of business and transactions contemplated by the
Registration Statement or Prospectus.
(e) Neither the issuance or sale of the Debt Securities, nor
the performance of the terms and provisions thereof and of the
Indenture, will conflict with, result in a breach of or constitute a
default under the terms of the Certificate of Incorporation or By-Laws
of the Company or any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which it
is bound or any order or regulation applicable to the Company of any
Court, regulatory body, administrative agency or governmental body
having jurisdiction over the Company.
(f) The Indenture, except for the supplemental indenture
relating to the Debt Securities, has been duly authorized and
delivered, and, when the supplemental indenture relating to the Debt
Securities has been executed and delivered by the Company and the
Trustee, the Indenture, including such supplemental indenture, will
have been duly authorized and delivered and will constitute a valid and
legally binding instrument enforceable against the Company in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other laws from time to time
in effect affecting the enforcement of creditors' rights or of the
security provided by the Indenture, or by the application of general
principles of equity, and the Indenture has been qualified under the
Trust Indenture Act; the Debt Securities have been duly authorized,
and, when issued and delivered pursuant to this Agreement, will have
been duly executed, authenticated, issued and delivered, will
constitute valid and legally binding obligations of the Company
entitled to the benefits and security of the Indenture in accordance
with their and its terms, subject to the qualification in the preceding
clause with respect to the enforceability of the Indenture; and the
Debt Securities and the Indenture conform to the descriptions thereof
in the Prospectus.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to you and each other Underwriter, and you and each other
Underwriter agree, severally and not jointly, to purchase from the Company, at
the purchase price set forth in Schedule I hereto, the respective principal
amounts of the Debt Securities set forth opposite your respective names in
Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for the Debt
Securities shall be made at the place, date and time specified in Schedule I
hereto (or such other place, date and time not later than ten full business days
thereafter as the Representatives and the Company shall designate), which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time being herein
called the "Closing" or "Closing Date"). Delivery of the Debt Securities shall
be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company payable by official bank check or checks payable in federal (same day)
funds. The Debt Securities shall be in definitive form and shall be registered
in such names and in such authorized denominations as the Representatives may
request not less than 48 hours in advance of the Closing Date, provided,
however, that if the Debt Securities are to be sold in book-entry form, a global
Debenture shall be delivered in definitive form registered in the name of Cede &
Co.
The Company agrees to have the Debt Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than noon, New York City time, on the last business day prior to the
Closing Date.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) With your consent, the Company will cause the Prospectus
Supplement to be filed pursuant to Rule 424 under the Act and will
notify the Representatives promptly of such filing. During the period
for which a prospectus relating to the Debt Securities is required to
be delivered under the Act, the Company will promptly advise the
Representatives (i) when any amendment to the Registration Statement
shall have become effective, (ii) when any subsequent supplement to the
Prospectus has been filed or mailed for filing, (iii) of any request by
the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceedings for that purpose, and (v) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Debt Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.
The Company will use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof. The Company will not file any amendment of the
Registration Statement or supplement to the Prospectus (other than any
prospectus supplement relating to the offering of the Debt Securities
or a prospectus or prospectus supplement relating to an offering of
equity securities registered under the Registration Statement, or of
debt securities registered under the Registration Statement and
permitted by Section 4(f) hereof, and other than any document required
to be filed under the Exchange Act which upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus)
unless the Company has furnished to the Representatives a copy for
their review prior to filing and will not file any such proposed
amendment or supplement to which they reasonably object. The Company
will furnish to the Representatives prior to the filing thereof a copy
of any such prospectus supplement and any document which upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus.
(b) If, at any time when a prospectus relating to the Debt
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it shall be necessary at any time to amend or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will prepare and file with the
Commission, subject to paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or an
amendment or supplement which will effect such compliance.
(c) The Company will furnish to each of the Representatives a
signed copy of the Registration Statement as originally filed and of
each amendment thereto, including statement on Form T-1 of the Trustee
and all powers of attorney, consents and exhibits filed therewith
(other than exhibits incorporated by reference), and will deliver to
the Representatives conformed copies of the Registration Statement, the
Prospectus (including all documents incorporated by reference therein)
and, so long as delivery of a prospectus by an Underwriter or dealer
may be required by the Act, all amendments of and supplements to such
documents, in each case as soon as available and in such quantities as
the Representatives may reasonably request.
(d) The Company will furnish such information, execute such
instruments and take such action as may be required to qualify the Debt
Securities for sale under the laws of those states specified in a
writing heretofore delivered by you and countersigned by the Company
and such other jurisdictions as the Representatives may designate in
which there is a change of law or regulation after the date hereof
affecting the status of the Debt Securities as exempt Debt Securities
under such laws and will maintain such qualifications in effect so long
as required for the distribution of the Debt Securities; provided,
however, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service
of process in any jurisdiction where it is not now so subject.
(e) So long as the Debt Securities are outstanding, the
Company will furnish (or cause to be furnished) to each of the
Representatives, upon request, copies of (i) all reports to
stockholders of the Company and (ii) all reports and financial
statements filed with the Commission.
(f) During the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
termination of trading restrictions on the Debt Securities, as notified
to the Company by the Representatives, or (ii) the tenth day after the
Closing Date for the Debt Securities, the Company will not offer, sell,
or otherwise dispose of any debentures or similar debt securities of
the Company (except debt securities which are subordinated to the Debt
Securities, bank debt, commercial paper or under prior contractual
commitments which have been disclosed to you), without the prior
written consent of the Representatives, which consent shall not be
unreasonably withheld.
(g) The Company will make generally available to its security
holders and to the Representatives, as soon as practicable, but not
later than sixteen months after the "effective date" of the
Registration Statement (as such term is defined in Rule 158(c) under
the Act), a consolidated earning statement (which need not be audited)
of the Company, covering a period of twelve-months beginning after such
effective date which will satisfy the provisions of Section 11(a) of
the Act.
5. Expenses. The Company will pay or cause to be paid the
following:
(i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Debt
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the furnishing of copies
thereof and of any preliminary Prospectus to the Underwriters and dealers;
(ii) the cost of printing this Agreement, the
Supplemental Indenture under which the Debt Securities are issued and the Blue
Sky Survey;
(iii) all expenses including fees and disbursements of counsel
(up to a maximum of $_________) in connection with the qualification of the Debt
Securities under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and the preparation of a Blue Sky
Survey;
(iv) any fees charged by the rating services for rating
the Debt Securities;
(v) the cost of preparing the Debt Securities;
(vi) the fees and expenses of the Trustee and any agent
of the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Debt Securities; and
(vii) all other costs and expenses incident to the performance
of the Company's obligations hereunder which are not otherwise specifically
provided for in this Section 5. Except as provided in Section 5 and Section 11
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, transfer taxes on resale of any of the Debt
Securities by them, and any advertising expenses connected with any offers they
may make. The Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits.
6. Conditions to the Obligations of the Under-writers. The
obligations of the Underwriters to purchase the Debt Securities shall be subject
to the accuracy in all material respects of the representations and warranties
on the part of the Company contained herein (except insofar as such
representations and warranties have already been qualified as to materiality
therein) as of the date hereof and the Closing Date, to the accuracy of the
statements of Company officers made in any certificates given pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission;
(b) There shall be in full force and effect, on the date of
this Agreement and on the Closing Date, an order or orders, if
necessary, of the Federal Energy Regulatory Commission ("FERC")
authorizing the issue and sale of the Debt Securities on the terms set
forth or contemplated in this Agreement, and no additional order of
FERC shall be necessary for such issuance and sale;
(c) At the Closing Date, the Company shall have received all
authorizations from any state regulatory commission (other than
pursuant to any state "Blue Sky" laws) necessary for the issuance and
sale of the Debt Securities and related transactions on the terms set
forth or contemplated in this Agreement and containing no provision
unacceptable to the Representatives, which such authorizations shall be
in full force and effect and no order or additional order of any such
Commission shall be necessary for such issuance and sale which has not
been obtained;
(d) At the Closing Date, the Representatives shall have been
furnished with the following opinions, addressed to the Underwriters
(with conformed copies thereof for each of the other Underwriters), in
form and substance satisfactory to the Representatives, dated the
Closing Date or a date not more than three days prior thereto:
(i) Opinion of Boulanger, Hicks & Churchill,
P.C., New York, New York, counsel to the Company;
(ii) Opinions of Brown & Bain, P.A., Phoenix,
Arizona; LeBoeuf, Lamb, Greene & MacRae, Denver, Colorado; Cades
Schutte Fleming & Wright, Honolulu, Hawaii; Marshall Ordemann, counsel
to the Louisiana Gas Division of the Company, Harvey, Louisiana; Stokes
& Bartholomew, Nashville, Tennessee; Miller, Eggleston and Rosenberg,
Ltd., Burlington, Vermont; and Jackson & Kelly, Charleston, West
Virginia (or other local counsel to the Company), counsel to the
Company; and
(iii) Opinion of Simpson Thacher & Bartlett,
New York, New York, counsel to the Underwriters;
(e) At the Closing Date, the Representatives shall have been
furnished a letter dated the Closing Date, in form and substance
satisfactory to the Representatives, from KPMG Peat Marwick, the
Company's independent public accountants, containing statements and
information heretofore agreed upon with respect to the financial
statements and certain financial information contained in or
incorporated by reference into the Prospectus;
(f) At the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date, signed by an officer of
the Company, to the effect that, (A) since the respective dates as of
which information is given in the Registration Statement and
Prospectus, there has not been any material adverse change in the
business, properties or financial condition of the Company and its
subsidiaries, considered as a whole; provided that a downgrading of the
rating of the Company's publicly-held securities by itself shall not be
deemed to be a "material adverse change", and (B) since such dates,
there has not been any transaction entered into by the Company or any
of its subsidiaries other than transactions referred to in, or
contemplated by, the Registration Statement and Prospectus and
transactions which are not material to the Company and its subsidiaries
considered as a whole;
(g) At the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date signed by an officer of
the Company, to the effect that, since the respective dates as of which
information is given in the Registration Statement and Prospectus,
neither the Company nor any of its subsidiaries shall have sustained a
loss by fire, flood, accident or other calamity which is substantial
with respect to the property of the Company and its subsidiaries,
considered as a whole. At the Closing the Representatives shall have
been furnished with certificates satisfactory to the Representatives as
to the accuracy of its representations and warranties herein at and as
of the Closing and as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Closing, and
the Company also shall have furnished to you a certificate satisfactory
to you as to the matters set forth in subsections (a) and (b) of this
Section 6.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, this Agreement and
all obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph confirmed
in writing.
7. Conditions of Company's Obligations. The
obligations of the Company to sell and deliver the Debt Securities are subject
to the following conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The conditions referred to in subsections (b) and (c) of
Section 6 shall have been met and no order or authorization referred to
therein shall contain any provision unacceptable to the Company.
If any of the conditions specified in this Section 7 shall not
have been fulfilled, this Agreement and all obligations of the Company hereunder
may be canceled on or at any time prior to the Closing Date by the Company.
Notice of such cancellation shall be given to the Representatives in writing or
by telephone or telegraph confirmed in writing.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Debt Securities
as originally filed or in any amendment thereof or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Prospectus or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company as herein
stated by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation thereof; and
provided further that such indemnity with respect to a prospectus
included in the registration statement or any amendment thereto prior
to the supplementing thereof with the Prospectus Supplement shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim,
damage or liability purchased the Debt Securities which are the subject
thereof if such person did not receive a copy of the Prospectus as
amended or supplemented (but without the documents incorporated by
reference therein) at or prior to the confirmation of the sale of such
Debt Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material
fact contained in the Prospectus was corrected in the Prospectus as
amended or supplemented. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
has signed the Registration Statement and each person, if any, who
controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters but only in relation to written information
furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for use in the preparation of the
Prospectus, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the omission to so notify
the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Section 8.
In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party, or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of subsection (a), representing the
indemnified parties under subsection (a) or (b), as the case may be,
who are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the
counsel referred to in such claims (i) or (iii). It is understood that
all such fees and expenses shall be reimbursed as they are incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in
subparagraphs (a) and (b) is due in accordance with its terms but is
for any reason unavailable from the Company or the Underwriters or
insufficient to hold the Underwriters, the Company or any party covered
by the foregoing indemnification harmless in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred
to therein, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (or actions in
respect thereof) to which the Company and one or more of the
Underwriters may be subject, as a result of such losses, claims,
damages or liabilities (or actions in respect thereof), in such
proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other equitable considerations, including relative benefit. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Debt
Securities (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters with respect to the offering of the Debt Securities, in
each case as set forth in the table on the cover page of the Prospectus
Supplement. Notwithstanding the foregoing, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was
guilty of such fraudulent misrepresentation. The Company and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by a party entitled to
contribution as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably
incurred by such party in connection with investigating or defending
any such action or claim. The Underwriters' obligation under this
subsection (d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this subsection
(d), each person, if any, who controls an Underwriter within the
meaning of either the Act or the Exchange Act, and each officer,
director and employee of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls
the Company within the meaning of either the Act or the Exchange Act,
each officer, director and employee of the Company shall have the same
rights to contribution as the Company, subject to the fourth sentence
of this subsection (d).
9. Default by an Underwriter. If any one or more of the
Underwriters shall fail to purchase and pay for all of the Debt Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in respective proportions which the
amount of Debt Securities set forth opposite their names in Schedule II hereto
bears to the aggregate amount of Debt Securities set forth opposite the names of
all the remaining Underwriters) the Debt Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Debt Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Debt Securities set forth in Schedule II
hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligations to purchase any of, the Debt Securities , and
if such nondefaulting Underwriters do not purchase all of the Debt Securities,
this Agreement will terminate without liability on the part of any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter, as set
forth in this Section, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Representatives shall determine in order that the
required changes in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Nothing herein contained shall
relieve any defaulting Underwriter of its liability, if any, to the Company or
any nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of their respective officers, directors or employees or
any controlling person within the meaning of the Act, and will survive delivery
of and payment for the Debt Securities.
11. Termination. This Agreement shall be subject to
termination by the Underwriters by notice given by the Representatives to the
Company prior to delivery of and payment for all Debt Securities that the
Representatives elect to terminate this Agreement on the grounds that trading in
debt securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum price shall have been established on such
Exchange, a banking moratorium shall have been declared either by Federal or New
York State authorities, or there shall have occurred any new outbreak or
material escalation of major hostilities or other calamity or crisis the effect
of which on the financial markets in the United States is such as to make it, in
the judgment of the Representatives, impracticable to sell the Debt Securities
or enforce contracts for the sale of the Debt Securities.
If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 5, 8 and 10 hereof; but if for any other reason
the Debt Securities are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters, through you, for all
out-of-pocket expenses approved in writing by you, (up to a maximum of
$__________) including fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparation for the purchase, sale and delivery of
the Debt Securities, but the Company shall then be under no further liability to
any Underwriter except as provided in Sections 5, 8 and 10 hereof.
12. Representation of the Underwriters. The Representatives
represent and warrant to the Company that they are authorized to act as the
representatives of the Underwriters in connection with this financing and that
the Representatives' execution and delivery of this Agreement and any action
under this Agreement taken by such Representatives will be binding upon all
Underwriters.
13. Notices. All communications hereunder will be in writing
and, if sent to the Representatives, shall be mailed, delivered or telegraphed
and confirmed to them at their address set forth for that purpose in Schedule I
hereto or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at High Ridge Park, P.O. Box 3801, Stamford, Connecticut 06905,
attention of Robert J. DeSantis, Vice President and Treasurer.
14. Parties in Interest. This Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 9 and Section 10 hereof, the officers and directors
and controlling persons referred to in Section 8 hereof, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right or by virtue of this Agreement. No purchaser of
any of the Debt Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
15. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in
counterparts, all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
17. Interpretation When No Representatives. In the event no
Underwriters are named in Schedule II hereto, the term "Underwriters" shall be
deemed for all purposes of this Agreement to be the Underwriter or Underwriters
named as such in Schedule I hereto, the principal amount of the Debt Securities
to be purchased by any such Underwriter shall refer to that set opposite its
name in Schedule I hereto and all references to the "Representatives" shall be
deemed to refer to the Underwriters named in Schedule I.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
CITIZENS UTILITIES COMPANY
By__________________________________
Name: Robert J. DeSantis
Title: Vice President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
For themselves and as Representatives
for each of the several Underwriters
named in Schuedule II to the foregoing
Agreement.
- --------------------------------------
- --------------------------------------
By: _________________________________
By:_________________________________
Name:
Title:
<PAGE>
SCHEDULE I
Underwriting Agreement dated _______________________
Registration Statement No. _____________
Representatives and Address:
Principal Amount of Debt Securities
to be purchased by Underwriters: $_____________
Debt Securities:
Designation: _% Debentures Due ____
Principal Amount: $_________________
Supplemental Indenture dated as of ___________________.
Date of Maturity: _____________________
Interest Rate: __% per annum, payable each
______ and __________ of each
year, commencing ______________.
Form: Book Entry
Purchase Price: __________% of the principal amount
thereof, plus accrued interest from
______________, to the date of payment
and delivery.
Sinking Fund Provisions: None
Redemption Provisions: None
Closing Date, Time and Location: ________________________
at the offices of ______________________________
______________________________
______________________________
<PAGE>
SCHEDULE II
Principal
Amount
of Debt
Name of Underwriter Securities
$ 00,000,000
00,000,000
____________
Total................................................$000,000,000
============
Exhibit 1.2
Draft
5/3/96
CITIZENS UTILITIES COMPANY
Common Stock
UNDERWRITING AGREEMENT
New York, New York
[Date]
To the Representatives named in Schedule I of each of the several Underwriters
named in Schedule II hereto
Dear Sirs:
Citizens Utilities Company, a Delaware corporation
(the "Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell severally and not jointly to the Underwriters named in
Schedule II hereto (the "Underwriters") for whom you are acting as
representatives (the "Representatives") (i) that number of shares of Common
Stock Series A and Series B (par value $.25 per share) of the Company ("Common
Stock") specified in Schedule I hereto and (ii) an option described in Section 2
hereof to purchase all or any part of the number of additional shares of Common
Stock to cover overallotments as is specified in Schedule I hereto. The shares
of Common Stock to be purchased initially by the Underwriters (the "Initial
Shares"), together with all or any part of the shares of Common Stock subject to
the option described in Section 2 hereof (the "Option Shares"), are collectively
hereinafter called the "Shares".
I. Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter that:
<PAGE>
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form, including a prospectus, for the registration
under the Act of the Shares, which registration statement has become
effective. Such registration statement and prospectus may have been
amended or supplemented from time to time prior to the date of this
Agreement. Any such amendment or supplement was filed with the
Commission and any such amendment has become effective. Promptly upon
execution of this Agreement, the Company will file with the Commission
a prospectus supplement (the "Prospectus Supplement") relating to the
Shares pursuant to Rule 424 under the Act. Copies of such registration
statement and prospectus, any such amendment or supplement, the
Prospectus Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior to the date of
this Agreement have been delivered to you. The registration statement
and prospectus as amended or supplemented prior to the date of this
Agreement, and as supplemented by the Prospectus Supplement are
hereinafter called the "Registration Statement" and the "Prospectus",
respectively. Any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934 (the "Exchange
Act") on or before the date of this Agreement, and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to include the
filing of any document under the Exchange Act deemed to be incorporated
by reference therein after the date of this Agreement.
(b) (i) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Prospectus, at the date of this Agreement and at the
Closing Date (as hereinafter defined), any amendments thereof and
supplements thereto complied or will comply in all material respects
with the Act and the Exchange Act and the respective rules thereunder
and (ii) the Registration Statement did not contain and, as amended by
any amendment thereto, will not contain any untrue statement of a
material fact or omitted or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading and the Prospectus and any amendment
thereof or supplement thereto does not contain and will not contain any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation of the
Prospectus.
(c) The documents incorporated by reference in the Prospectus
conformed in all material respects to the requirements of the Act or
the Exchange Act and the rules and regulations of the Commission
thereunder, and any documents so filed and incorporated by reference
subsequent to the date of this Agreement will, when they are filed with
the Commission, conform in all material respects to the requirements of
the Act and the Exchange Act, and the rules and regulations of the
Commission thereunder; and none of such documents include or will
include any untrue statement of a material fact or omit or will omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has
not been any material adverse change in the business, properties or
financial condition of the Company and its subsidiaries, considered as
a whole, and there have not been any transactions entered into by the
Company or any of its subsidiaries which is material to the Company and
its subsidiaries, considered as a whole, other than transactions in the
ordinary course of business and transactions contemplated by the
Registration Statement or Prospectus.
(e) Neither the issuance or sale of the Initial Shares nor the
Option Shares, nor the performance of the terms and provisions thereof
and of this Agreement, will conflict with, result in a breach of or
constitute a default under the terms of the Certificate of
Incorporation or By-Laws of the Company or any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company is
a party or by which it is bound or any order or regulation applicable
to the Company of any Court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company.
(f) The Shares conform to the description thereof contained in
the Prospectus and are duly and validly authorized, and, when delivered
to the Underwriters as provided herein against payment of the
consideration set forth in the Pricing Agreement, will be validly
issued and outstanding, fully paid and non-assessable with no personal
liability attaching to the ownership thereof, and listed on the New
York Stock Exchange.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to you and each other Underwriter, severally and not
jointly, and you and each other Underwriter agree, severally and not jointly, to
purchase from the Company, at the purchase price set forth in Schedule I hereto,
the number of Initial Shares set forth opposite such Underwriter's name in
Schedule II hereto plus any additional number of Option Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof.
In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to the number of additional shares of Common Stock
set forth on Schedule I hereto at the price set forth on Schedule I hereto. The
option hereby granted will expire 30 days after the date of this Underwriting
Agreement, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Shares upon notice by the
Representatives to the Company setting forth the number of Option Shares as to
which the Underwriters are then exercising the option and the time, date and
place of payment and delivery for such Option Shares. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Date, as hereinafter defined,
unless otherwise agreed upon by the Representatives and the Company. If the
option is exercised as to all or any portion of the option Shares, the Option
Shares shall be sold by the Company and shall be purchased by the Underwriters,
severally and not jointly, in proportion to their respective Initial Share
underwriting obligations as set forth in Schedule II.
3. Delivery, Payment and Offering. Delivery of and payment for
the Initial Shares shall be made at the place, date and time specified in
Schedule I hereto (or such other place, date and time not later than ten full
business days thereafter as the Representatives and the Company shall
designate), which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time being herein called the "Closing" or "Closing Date"). Delivery of the
Initial Shares shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company by official bank check or checks payable in clearing house funds. The
Initial Shares shall be in definitive form and shall be registered in such names
and in such authorized denominations as the Representatives may request not less
than three full business days in advance of the Closing Date. The Company agrees
to have the Initial Shares available for inspection, checking and packaging by
the Representatives in New York, New York, not later than 10:00 A.M., New York
City Time, on the last business day prior to the Closing Date.
In addition, in the event that any or all of the Option Shares
are purchased by the Underwriters, delivery of and payment for the Option Shares
shall be made on the Date of Delivery at the offices designated on Schedule I at
10:00 A.M. New York City Time (or such other time and place as the
Representatives and the Company shall designate), which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof and which date may also be the Closing Date.
Delivery of the Option Shares shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by or on behalf
of the Underwriters through the Representatives of the purchase price thereof to
or upon the order of the Company by official bank check or checks payable in
clearing house funds. The Option Shares shall be in definitive form and shall be
registered in such names and in such authorized denominations as the
Representatives may request not less than three full business days in advance of
the Date of Delivery.
The Company agrees to have the Option Shares available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 10:00 a.m., New York City time, on the last business day prior to
the Date of Delivery.
It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Shares which it has agreed to purchase.
______________ ____________, individually and not as Representatives of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Shares to be purchased by any Underwriter whose check has not been
received by the Closing Date, but such payment shall not relieve such
Underwriter from its obligations hereunder.
Subject to the terms and conditions of this Agreement, the
Underwriters agree to make a bona fide public offering of the Shares as soon as
the Representatives deem advisable after this Agreement has been executed and
delivered.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) With your consent, the Company will file the Prospectus
Supplement pursuant to Rule 424 under the Act and will notify the
Representatives promptly of such filing. During the period for which a
prospectus relating to the Shares is required to be delivered under the
Act, the Company will promptly advise the Representatives (i) when any
amendment to the Registration Statement shall have become effective,
(ii) when any subsequent supplement to the Prospectus has been filed or
mailed for filing, (iii) of any request by the Commission for any
amendment of or supplement to the Registration Statement or the
Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceedings for that purpose, and (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof. The
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus (other than any prospectus supplement
relating to the offering of Shares registered under the Registration
Statement or a prospectus or prospectus supplement relating to an
offering of debt or additional equity securities which offering is
permitted by Section 4(f) hereof, and other than any document required
to be filed under the Exchange Act which upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus)
unless the Company has furnished to the Representatives a copy for
their review prior to filing and will not file any such proposed
amendment or supplement to which they reasonably object. The Company
will furnish to the Representatives prior to the filing thereof a copy
of any such prospectus supplement and any document which upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus.
(b) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
shall be necessary at any time to amend or supplement the Prospectus to
comply with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will prepare and file with the
Commission, subject to paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or an
amendment or supplement which will effect such compliance.
(c) The Company will furnish such information, execute such
instruments and take such action as may be required to qualify the
Shares for sale under the laws of those states specified in a writing
heretofore delivered by you and countersigned by the Company and such
other jurisdictions as the Representatives may designate in which there
is a change of law or regulation after the date hereof affecting the
status of the Shares as exempt Shares under such laws and will maintain
such qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company shall not be
required to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction where it is
not now so subject.
(d) The Company will furnish to the Representatives a signed
copy of the registration statement as originally filed and of each
amendment thereto, including copies of all documents incorporated by
reference in the Prospectus, all powers of attorney, consents and
exhibits filed therewith (other than exhibits incorporated by
reference), and will deliver to the Representatives conformed copies of
the Registration Statement, the Prospectus, including any documents
incorporated by reference therein at or after the date thereof and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, all amendments of and supplements to such
documents, in each case as soon as available and in such quantities as
the Representatives may reasonably request.
(e) For a period of five calendar years from the date of this
Agreement, the Company will furnish (or cause to be furnished) to each
of the Representatives, upon request, copies of (i) all reports to
stockholders of the Company and (ii) all reports and financial
statements filed with the Commission or with the New York Stock
Exchange.
(f) During the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
termination of trading restrictions on the Initial Shares, as notified
to the Company by the Representatives, and (ii) the _________ day after
the Closing Date for the Initial Shares, the Company will not offer,
sell, or otherwise dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for any such
shares of Common Stock (except for stock dividends paid in the normal
course, stock splits or stock splits carried out in the form of stock
dividends, shares sold under the Company's stock dividend sale plan,
shares issued under employee or director stock option or other employee
or director benefit or stock ownership plans and shares issued under
stockholder ownership plans, shares issued as consideration in
connection with acquisitions which have been disclosed to you and
securities under prior contractual commitments, if any, which have been
disclosed to you), without the prior written consent of the
Representatives, which consent shall not be unreasonably withheld.
(g) The Company will make generally available to its security
holders and to the Representatives, as soon as practicable, but not
later than sixteen months after the "effective date" of the
Registration Statement (as such term is defined in Rule 158(c) under
the Act), a consolidated earning statement (which need not be audited)
of the Company, covering a period of twelve-months beginning after such
effective date which will satisfy the provisions of Section 11(a) of
the Act.
5. Expenses. The Company will pay or cause to be paid the
following:
(i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the furnishing
of copies thereof and of any preliminary Prospectus to the Underwriters
and dealers, all fees, if any, payable to the National Association of
Securities Dealers, Inc. or New York Stock Exchange;
(ii) the cost of printing this Agreement and the Blue Sky
Survey;
(iii) all expenses including fees and disbursements of counsel
(up to a maximum of $________) in connection with the qualification of
the Shares under the securities or Blue Sky laws of such jurisdictions
as the Representatives shall reasonably request and the preparation of
a Blue Sky Survey;
(iv) the cost of preparing certificates for the Shares;
and
(v) all other costs and expenses incident to the performance
of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section 5. Except as provided in
Section 5 and Section 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Initial Shares by them, and any
advertising expenses connected with any offers they may make. The
Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits.
6. (a) Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Initial Shares shall be subject
to the accuracy in all material respects of the representations and warranties
on the part of the Company contained herein (except insofar as such
representations and warranties have already been qualified as to materiality
therein) as of the date hereof and the Closing Date, to the accuracy of the
statements of Company officers made in any certificates given pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission;
(ii) There shall be in full force and effect, on the date of
this Agreement and on the Closing Date, an order or orders, if
necessary, of the Federal Energy Regulatory Commission ("FERC")
authorizing the issue and sale of the Initial Shares on the terms set
forth or contemplated in this Agreement and no additional order of FERC
shall be necessary for such issuance and sale;
(iii) At the Closing Date, the Company shall have received all
authorizations from any state regulatory commission (other than
pursuant to any state "Blue Sky" laws), necessary for the issuance and
sale of the Initial Shares and related transactions on the terms set
forth or contemplated in this Agreement and containing no provision
unacceptable to the Representatives, which such authorizations shall be
in full force and effect and no order or additional order of any such
Commission shall be necessary for such issuance and sale which has not
been obtained;
(iv) The Shares shall have been approved for listing on
the New York Stock Exchange;
(v) At the Closing Date, the Representatives shall have been
furnished with the following opinions, addressed to the Underwriters
(with conformed copies thereof for each of the other Underwriters), in
form and substance satisfactory to the Representatives, dated the
Closing Date or a date not more than three days prior thereto:
(A) Opinion of Boulanger, Hicks & Churchill, P.C.,
New York, New York, counsel to the Company;
(B) Opinions of Brown & Bain, P.A., Phoenix, Arizona;
LeBouef, Lamb, Greene & MacRae, Denver, Colorado; Cades
Schutte Fleming & Wright, Honolulu, Hawaii; Marshall Ordemann,
counsel to the Louisiana Gas Division of the Company, Harvey,
Louisiana; Miller, Eggleston and Rosenberg, Ltd., Burlington,
Vermont; Stokes & Bartholomew, Nashville, Tennessee; and
Jackson & Kelly, Charleston, West Virginia (or other local
counsel to the Company), counsel to the Company; and
(C) Opinion of Simpson Thacher & Bartlett, New York,
New York, counsel to the Underwriters with respect to the
validity of the Shares, the Registration Statement, the
Prospectus, and other related matters as the Representatives
may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters;
(vi) On the Closing Date, the Representatives shall have been
furnished a letter dated the Closing Date, in form and substance
satisfactory to the Representatives, from KPMG Peat Marwick, the
Company's independent public accountants, containing statements and
information heretofore agreed upon with respect to the financial
statements and certain financial information contained in or
incorporated by reference into the Prospectus;
(vii) At the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date, signed by an officer of
the Company, to the effect that, (A) since the respective dates as of
which information is given in the Registration Statement and
Prospectus, there has not been any material adverse change in the
business, properties or financial condition of the Company and its
subsidiaries, considered as a whole, and (B) since such dates, there
has not been any transaction entered into by the Company or any of its
subsidiaries other than transactions referred to in, or contemplated
by, the Registration Statement and Prospectus and transactions which
are not material to the Company and its subsidiaries considered as a
whole; and
(viii) At the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date signed by an officer of
the Company, to the effect that, since the respective dates as of which
information is given in the Registration Statement and Prospectus,
neither the Company nor any of its subsidiaries shall have sustained a
loss by fire, flood, accident or other calamity which is substantial
with respect to the property of the Company and its subsidiaries,
considered as a whole. At the Closing the Representatives shall have
been furnished with certificates satisfactory to the Representatives as
to the accuracy of its representations and warranties herein at and as
of the Closing and as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Closing, and
the Company also shall have furnished to you a certificate satisfactory
to you as to the matters set forth in subsections (i) and (ii) of this
Section 6.
(b) Option Share Closing: In the event the Underwriters
exercise their option granted in Section 2 hereof to purchase all or any portion
of the Option Shares, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery, and the
Representatives shall have received:
(i) A certificate of the Chairman or the President or any Vice
President and of the Treasurer or Assistant Treasurer of the Company,
dated such Date of Delivery, confirming that the certificate delivered
on the Closing Date pursuant to Section 6(a)(viii) hereof remains true
as of such Date of Delivery.
(ii) A certificate of an officer of the Company dated such
Date of Delivery confirming that the certificate delivered on the
Closing Date pursuant to Section 6(a)(vii) hereof remains true as of
such Date of Delivery.
(iii) The opinion of Boulanger, Hicks & Churchill, P.C.,
counsel for the Company, dated such Date of Delivery relating to the
Option Shares and otherwise to the same effect as the opinion required
by Section 6(a)(v)(A) hereof.
(iv) The opinion of Simpson Thacher & Bartlett, counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Shares and otherwise to the same effect as the opinion required by
Section 6(a)(v)(C) hereof.
(v) A letter from KPMG Peat Marwick, dated such Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the Representatives pursuant to Section 6(a)(vi) hereof,
except that the "specified date" in the letter furnished pursuant to
this Section 6(b) shall be a date not more than six days prior to such
Date of Delivery.
(vi) Prior to the Date of Delivery the Company shall have
furnished to the Representatives such further information, certificates
and documents confirming as of such date the Company's representations
and warranties contained herein as they may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, this Agreement and
all obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph confirmed
in writing.
7. Conditions of Company's Obligations. The obligations
of the Company to sell and deliver the Shares are subject to the following
conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The conditions referred to in subsections (ii) and (iii)
of Section 6(a) shall have been met and no order or authorization
referred to therein shall contain any provision unacceptable to the
Company.
If any of the conditions specified in this Section 7 shall not
have been fulfilled, this Agreement and all obligations of the Company
hereunder, except as stated in Section 11, may be canceled on or at any time
prior to the Closing Date by the Company. Notice of such cancellation shall be
given to the Representatives in writing or by telephone or telegraph confirmed
in writing.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Initial Shares
as originally filed or in any amendment thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Prospectus or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company as herein
stated by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation thereof and
provided further that such indemnity with respect to a prospectus
included in the registration statement or any amendment thereto prior
to the supplementing thereof with the Prospectus Supplement shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim,
damage or liability purchased the Shares which are the subject thereof
if such person was not sent or given by or on behalf of such
Underwriter a copy of the Prospectus as amended or supplemented (but
without the documents incorporated by reference therein) at or prior to
the confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in the Prospectus was corrected
in the Prospectus as amended or supplemented. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
has signed the Registration Statement and each person, if any, who
controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters but only in relation to written information
furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for use in the preparation of the
Prospectus, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the omission to so notify
the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Section 8.
In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party, or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of subsection (a), representing the
indemnified parties under subsection (a) or (b), as the case may be,
who are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the
counsel referred to in such claims (i) or (iii). It is understood that
all such fees and expenses shall be reimbursed as they are incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in
subparagraphs (a) and (b) is due in accordance with its terms but is
for any reason unavailable from the Company or the Underwriters or
insufficient to hold the Underwriters, the Company or any party covered
by the foregoing indemnification harmless in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred
to therein, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (or actions in
respect thereof) to which the Company and one or more of the
Underwriters may be subject, as a result of such losses, claims,
damages or liabilities (or actions in respect thereof), in such
proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other equitable considerations, including relative benefit. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the offering of the Shares, in each case as set forth
in the table on the cover page of the Prospectus Supplement.
Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was guilty of
such fraudulent misrepresentation. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by a party entitled to contribution as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such party in connection
with investigating or defending any such action or claim. The
Underwriters' obligations under this subsection (d) are several in
proportion to their respective underwriting obligations and not joint.
Notwithstanding the provisions of this Section 8, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed
to the public exceeds the amount of any damages of the kind described
in Section 8(a) which such Underwriter has otherwise paid in respect of
such losses, liabilities, claims and damages. For purposes of this
subsection (d), each person, if any, who controls an Underwriter within
the meaning of either the Act or the Exchange Act, and each officer,
director and employee of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls
the Company within the meaning of either the Act or the Exchange Act,
each officer, director and employee of the Company shall have the same
rights to contribution as the Company, subject to the fourth sentence
of this subsection (d).
9. Default by an Underwriter. If any one or more of the
Underwriters shall fail to purchase and pay for all of the Shares agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in respective proportions which the amount of
Shares set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Shares set forth opposite the names of all the remaining
Underwriters) the Shares which the defaulting Underwriter or Underwriters agreed
but failed to purchase; provided, however, that in the event that the aggregate
amount of Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Shares set forth
in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any of, the
Shares, and if such nondefaulting Underwriters do not purchase all of the
Shares, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter, as set forth in this Section, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be effected.
Nothing herein contained shall relieve any defaulting Underwriter of its
liability, if any, to the Company or any nondefaulting Underwriter for damages
occasioned by its default hereunder.
In the event of a default by an Underwriter as set forth in
this section, either the Representatives or the Company shall have the right to
postpone the Closing Date or the Date of Delivery for a period of not exceeding
7 days in order that any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements may be effected.
10. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of their respective officers, directors or employees or
any controlling person within the meaning of the Act, and will survive delivery
of and payment for the Shares.
11. Termination. This Agreement shall be subject to
termination by the Underwriters by notice given by the Representatives, to the
Company prior to the Closing Date or Date of Delivery that the Representatives
elect to terminate this Agreement on the grounds that trading in any of the
Company's securities on the New York Stock Exchange shall have been suspended or
limited or minimum price shall have been established on such Exchange, a banking
moratorium shall have been declared either by Federal or New York State
authorities, or there shall have occurred any new outbreak or material
escalation of major hostilities or other calamity or crisis the effect of which
on the financial markets in the United States is such as to make it, in the
judgment of the Representatives, impracticable to sell the Shares or enforce
contracts for the sale of the Shares.
If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 5, 8 and 10 hereof; but if for any other reason
the Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters, through you for all out-of-pocket
expenses approved in writing by you (up to a maximum of $_______), including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparation for the purchase, sale and delivery of the Shares, but the
Company shall then be under no further liability to any Underwriter except as
provided in Sections 5, 8 and 10 hereof.
12. Representation of the Underwriters. The Representatives
represent and warrant to the Company that they are authorized to act as the
representatives of the Underwriters in connection with this financing and that
the Representatives' execution and delivery of this Agreement and any action
under this Agreement taken by such Representatives will be binding upon all
Underwriters.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Representatives, shall be mailed, delivered or telegraphed
and confirmed to them at their address set forth for that purpose in Schedule I
hereto or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at High Ridge Park, P.O. Box 3801, Stamford, Connecticut 06905,
attention of Robert J. DeSantis, Vice President and Treasurer.
14. Parties in Interest. This Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 9 and Section 10 hereof, the officers and directors
and controlling persons referred to in Section 8 hereof, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right or by virtue of this Agreement. No purchase of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in
counterparts, all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
17. Interpretation When No Representatives. In the event no
Underwriters are named in Schedule II hereto, the term "Underwriters" shall be
deemed for all purposes of this Agreement to be the Underwriter or Underwriters
named as such in Schedule I hereto, the number of the Shares to be purchased by
any such Underwriter shall refer to that set opposite its name in Schedule I
hereto and all references to the "Representatives" shall be deemed to refer to
the Underwriter or Underwriters named in Schedule I.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
CITIZENS UTILITIES COMPANY
By__________________________________
Name: Robert J. DeSantis
Title: Vice President and Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
[Name(s) of Representative(s) of Underwriters]
By:
Name:
Title:
For themselves and as Representatives
of the several Underwriters named in
Schedule II to the foregoing Agreement.
<PAGE>
CITIZENS UTILITIES COMPANY
SCHEDULE I
Underwriting Agreement dated _________ 199_
Registration Statement No. ________
Representatives and Address:
Security:
Designation: Common Stock Series A
Common Stock Series B
Number of Initial Shares to be purchased by Underwriters:
-----------------.
Number of Option Shares to be purchased by Underwriters:
-----------------.
Initial Public Offering Price: $______________.
Purchase Price: $________ per share being an amount equal to the
initial public offering price set forth above less $________ per share.
Closing Date, Time and Location: ________, 199_
at the offices of
<PAGE>
SCHEDULE II
Number of Shares
Names of Underwriters to be Purchased
Total......................................______________________
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CITIZENS UTILITIES COMPANY
* * * * * * * * * * * * * *
CITIZENS UTILITIES COMPANY, a corporation organized and existing under
the laws of the State of Delaware (the "Company"), hereby certifies as follows:
1. The name of the corporation is
CITIZENS UTILITIES COMPANY
The date of filing its original Certificate of Incorporation with the
Secretary of State was November 12, 1935.
2. The provisions of the Amended and Restated Certificate of
Incorporation of the Company as heretofore amended, are hereby amended and
restated and integrated into the single instrument which is hereinafter set
forth, and which is entitled Amended and Restated Certificate of Incorporation
of Citizens Utilities Company without any further amendments and without any
further discrepancy between the provisions of the Amended and Restated
Certificate of Incorporation as heretofore amended and the provisions of the
said single instrument hereinafter set forth.
3. The amendments and the restatement of the Amended and Restated
Certificate of Incorporation herein certified have been duly adopted by the
stockholders and the Board of Directors, respectively, of the Company in
accordance with the provisions of Section 242 and of Section 245 of the General
Corporation Law of the State of Delaware.
4. The capital of the Company will not be reduced under or by
reason of any amendment in this Amended and Restated Certificate of
Incorporation hereinafter set forth.
5. The text of the Amended and Restated Certificate of Incorporation
shall upon the effective date of this Amended and Restated Certificate of
Incorporation read as follows:
<PAGE>
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CITIZENS UTILITIES COMPANY
FIRST: The name of this corporation is
CITIZENS UTILITIES COMPANY.
SECOND: Its principal office in the State of Delaware is to be located
at 1013 Centre Road, in the City of Wilmington, County of New Castle, and its
resident agent is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the objects and
purposes to be transacted, promoted, and carried on are to do any or all of the
things herein mentioned as fully and to the same extent as natural persons
might or could do, and in any part of the world, viz.:
(a) To purchase or otherwise acquire, own, operate and dispose of all
or any part of the business and properties of persons, partnerships,
associations, and other corporations engaged in any business, including that of
operating public utilities, and to make payment therefor by the issuance of
securities of this corporation or in any other manner permitted by law, and in
connection therewith to assume any or all of the bonds, mortgages, franchises,
leases, contracts, indebtedness, liabilities, and obligations of such
corporations, and to do any things necessary or expedient in connection
therewith or with the carrying out of any plan of reorganization of predecessor
company or any modification therefor.
(b) To generate, produce, buy, or in any manner acquire, and to sell,
dispose of, and distribute electricity for light, heat, power, and other
purposes and to carry on the business of furnishing, supplying, manufacturing,
and vending light, heat, power, gas, water, steam heat, ice, refrigeration, and
any and all businesses incident thereto, and to build, construct, develop,
improve, acquire, hold, own, lease, maintain, and operate plants, facilities,
and works for the manufacture, generation, production, accumulation,
transmission, and distribution of electric energy, gas and steam, for light,
power, heat and other purposes, and to acquire, construct, maintain, and operate
systems of water works, gas works, steam heating plants, for the supply of
water, gas, and steam heat, and to exercise rights of condemnation and eminent
domain in connection with the doing of its business objects and purposes as
herein set forth so far as may be permissible by law; to acquire, maintain,
operate, and exercise all the rights of ownership of any telephone, telegraph,
and/or other communication system or systems.
(c) To build, construct, develop, improve, acquire, hold, own, lease,
maintain and operate, by electricity or other power, street railways and
interurban railways for the transportation of passengers, mail, express,
merchandise, or other freight in any part of the world.
(d) To produce, mine, buy, sell, store, market, deal in, and prospect
for coal and minerals of all kinds and the products and by-products thereof.
(e) To organize, incorporate, reorganize, finance, and to aid and
assist financially or otherwise, companies, corporations, joint stock companies,
syndicates, partnerships, and associations of all kinds, and to underwrite,
subscribe for, and endorse the bonds, stocks, securities, debentures, notes, or
undertakings of any such company, corporation, joint stock company, syndicate
partnership or association, and to make any guarantee in connection therewith or
otherwise for the payment of money or for the performance of any obligation or
undertaking, and to do any and all things necessary or convenient to carry any
of such purposes into effect.
(f) To carry on the business of engineering and contracting in all of
its branches; to appraise, value, design, build, construct, enlarge, develop,
improve, extend, and repair works, plants, systems, lines, stations, buildings,
structures, mines, shafts, tunnels, wells, canals, viaducts, highways,
facilities, apparatus, machinery, equipment, appliances and appurtenances, of
any and every nature and kind whatsoever.
(g) To purchase and acquire securities, assets, and property of every
kind and description at judicial, judiciary, trustee's, pledgee's, mortgagee's
or liquidating or public or private sales, either pursuant to a plan of
reorganization or otherwise, and to carry on a general salvage, liquidation, and
realization business; and also to do a general commission and brokerage
business.
(h) To hold in trust, issue on commission, make advances upon or sell,
lease, license, transfer, organize, reorganize, incorporate, or dispose of any
of the undertakings or resulting investments aforesaid, or the stock or
securities thereof; to act as agent or depositary for any of the above or like
purposes or any purpose herein mentioned, and to act as fiscal agent of any
other person, firm or corporation.
(i) To obtain the grant of, purchase, lease, or otherwise acquire any
concessions, rights, options, patents, privileges, lands, rights of way, sites,
properties, undertakings or businesses, or any right, option or contract in
relation thereto, and to perform, carry out, and fulfill the terms and
conditions thereof and to carry the same into effect, and to develop, maintain,
lease, sell, transfer, dispose of, and otherwise deal with the same.
(j) From time to time to apply for, obtain the grant of, purchase or
acquire by assignment, transfer or otherwise, and to exercise, carry out and
enjoy any license, power, authority, franchise, ordinance, order, right or
privilege, which any government or authority, supreme, municipal or local, or
any corporation or other public body shall enact, make, or grant.
(k) To issue shares of the capital, stock, bonds, debentures, debenture
stock, notes, and other obligations of this corporation for cash, for labor
done, for property, real or personal, or leases thereof, or for any combination
of any of the foregoing, or for services rendered or in exchange for the stock
debentures, debenture stock, bonds, securities, or obligations of any person,
firm, association, corporation, or other organization.
(l) To purchase, acquire, and lease, and to sell, lease, and dispose of
water, water rights, water records, power privileges, and appropriations for
power, light, heat, mining, milling, irrigation, agricultural, domestic or any
other use or purpose.
(m) To acquire by purchase, lease, own, hold, sell, mortgage, and
encumber both improved and unimproved real estate wherever situate; to survey,
subdivide, plat, colonize, and improve the same for the purposes of sale or
otherwise; and to construct and erect thereon factories, works, plants, shops,
stores, mills, hotels, houses, buildings, and other structures, and to own, use,
maintain, manage, and operate the same or any thereof.
(n) To own and control and acquire, by lease, purchase, construction,
or otherwise, steamships, boats, barges, hydroplanes, and vessels of all kinds
or interests therein and to operate the same either on Alaska Waters and on the
Waters of Puget Sound and on all navigable rivers and waters connected therewith
and elsewhere, or both, for the transportation of passengers and freight of all
kinds, with power to purchase, build, construct, repair, lease, sell, convey,
and operate vessels of all kinds, and all machinery, appliances and apparatus
incident, necessary or convenient thereto, or in any way connected therewith;
with power also to do a towing business, and also to purchase, own, lease,
construct, control, and operate and sell docks, wharves, landings floats,
warehouses, dry docks and dock machinery, appliances and apparatus of all kinds;
and with the power also to do a general shipbuilding, stevedore, dockage,
warehouse, and commission business; to conduct a general cold storage and
refrigeration business.
(o) To subscribe for, or cause to be subscribed for, buy, own, hold,
purchase, receive, or acquire, and/or to sell, negotiate, guarantee, assign,
deal in, exchange, transfer, mortgage, pledge and/or otherwise dispose of shares
of the capital stock, scrip, bonds, coupons, mortgages, debentures, debenture
stock, securities, notes, acceptances, drafts, and/or evidences of indebtedness
issued and/or created by any government or by any political subdivision thereof
or by any other corporations, joint stock companies, or associations, whether
public, private, or municipal, or any corporate body, and while the owner
thereof, to possess and to exercise in respect thereof all the rights, powers,
and privileges of ownership, including the right to vote thereon; to guarantee
the payment of dividends on any shares of the capital stock of any of the
corporations, joint stock companies, or associations in which this corporation
has or may at any time have an interest, and to become surety in respect of,
endorse, or otherwise guarantee the payment of the principal of or interest on
any scrip, bonds, coupons, mortgages, debentures, debenture stock, securities,
notes, drafts, bills of exchange, or evidences of indebtedness, issued or
created by any such corporations, joint stock companies, or associations; to
assume and agree to pay all or part of the indebtedness, evidenced by bonds or
otherwise, of any corporation, and to assume and agree to perform any covenants,
conditions, or agreements contained in any mortgage or trust indenture, and to
assume any other obligation, or liability of any corporation; to become surety
for or guarantee the carrying out and performance of any and all contracts,
leases, and obligations of every kind of any corporations, joint stock
companies, or associations, and in particular of any corporation, joint stock
company, or association any of whose shares, scrip, bonds, coupons, mortgages,
debentures, debenture stock, securities, notes, drafts, bills of exchange, or
evidences of indebtedness, are at any time held by or for this corporation, and
to do any acts or things designed to protect, preserve, improve or enhance the
value of any such shares, scrip, bonds, coupons, mortgages, debentures,
debenture stock, securities, notes, drafts, bills of exchange, or evidences of
indebtedness, provided, however, that this Subdivision (o) shall not be
construed to authorize this corporation to engage in the business of banking.
(p) To manufacture, buy, sell, and generally deal in, goods, wares,
merchandise, property, and commodities of any and every class and description,
and all articles used or useful in connection therewith; to engage in any
business whether manufacturing or otherwise which -this corporation may deem
advantageous or useful in connection with any or all of the foregoing, and to
purchase, acquire, manufacture, market, or prepare for market, sell or otherwise
dispose of any article, commodity, or thing which this corporation may use in
connection with its business.
(q) To manage, operate, conduct and supervise the business, properties,
and affairs, in whole or in part, of any companies, corporations, joint stock
companies, syndicates, partnerships, and associations of all kinds whether it
owns any or all of the securities and/or obligations of such companies,
corporations, joint stock companies, syndicates, partnerships, and associations
or not.
(r) To secure, purchase, acquire, apply for, register, own, hold, sell,
or dispose of any and all copyrights, trademarks and other trade rights.
<PAGE>
(s) To organize, or cause to be organized, under the laws of the State
of Delaware, or of any other state, territory, or country, or the District of
Columbia, a corporation or corporations for the purpose of accomplishing any or
all of the objects for which this corporation is organized, and to dissolve,
wind up, liquidate, merge or consolidate any such corporation, or corporations,
or to cause the same to be dissolved, wound up, liquidated, merged, or
consolidated.
(t) To purchase, apply for, obtain, or otherwise acquire any and all
letters patent, licenses, patent rights, patented processes, and similar rights
granted by the United States or any other government or country, or any interest
therein, or any inventions which may seem capable of being used for or in
connection with any of the objects or purposes of this corporation, and to use,
exercise, develop, sell, dispose of, lease, grant licenses in respect to, or
other interests in the same, and otherwise turn the same to account, and to
carry on any business, manufacturing or otherwise, which may be deemed to
directly or indirectly aid, effectuate, or develop, the objects or any of them
of this corporation.
(u) To lend money, to borrow money for any of the purposes of this
corporation, and to issue bonds, debentures, debenture stock, notes, and other
obligations, and to secure the same by pledge or mortgage of the whole or any
part of the property, of this corporation, either real or personal, or to issue
bonds, debentures, debenture stock, notes, or other obligations without any such
security.
(v) To enter into, make, perform, and carry out contracts of every kind
for any lawful purpose, without limit as to amount, with any person, firm,
association, or corporation.
(w) In connection with its business, to draw, make, accept, endorse,
discount, guarantee, execute, and issue promissory notes, bills of exchange,
drafts, warrants and all kinds of obligations and certificates and negotiable or
transferable instruments.
(x) To purchase, hold, sell, and transfer shares of its own capital
stock, bonds, notes, and other obligations of this corporation from time to time
to such extent and in such manner and upon such terms as its Board of Directors
shall determine; provided that any purchase of any of the shares of the capital
stock of the corporation shall not be made when such purchase would cause any
impairment of the capital of the corporation; and provided further that shares
of its own capital stock belonging to this corporation shall not be voted upon
directly or indirectly.
(y) To have one or more offices, to carry on any or all of its
operations and business and without restriction or limit as to amount, to
purchase, lease, or otherwise acquire, hold, and own, and to mortgage, sell,
convey, lease or otherwise dispose of, real and personal property of every class
and description in any of the states or territories of the United States and in
the District of Columbia, and in any and all foreign countries, subject to the
laws of such state, district, territory, or country.
<PAGE>
(z) To do any and all things herein set forth, and in addition such
other acts and things as are necessary or convenient to the attainment of the
purposes of this corporation, or any of them, to the same extent as natural
persons lawfully might or could do in any part of the world.
The foregoing clauses shall be construed both as objects
and powers and it is hereby expressly provided that the foregoing enumeration of
specific power shall not be held to limit or restrict in any manner the powers
of this corporation, and are in furtherance of, and in addition to, and not in
limitation of the general powers conferred by the laws of the State of Delaware.
It is the intention that the purposes, objects and powers
specified in this Article Third and all subdivisions thereof shall, except as
otherwise expressly provided, in nowise be limited or restricted by reference to
or inference from the terms of any other clause or paragraph of this Article,
and that each of the purposes, objects, and powers specified in this Article
Third shall be regarded as independent purposes, objects, and powers.
FOURTH: (a) The total number of shares of stock which this corporation
shall have authority to issue is six hundred and fifty million (650,000,000)
shares of which fifty million (50,000,000) shares shall be shares of Preferred
Stock with a par value of one cent ($.01) each, amounting in aggregate to five
hundred thousand dollars ($500,000), two hundred fifty million (250,000,000)
shares shall be shares of Common Stock Series A of the par value of twenty-five
cents ($.25) each, amounting in the aggregate to sixty two million five hundred
thousand dollars ($62,500,000), and three fifty hundred million (350,000,000)
shares shall be of common Stock Series B of the par value of twenty-five cents
($.25) each, amounting in the aggregate to eighty-seven million five hundred
thousand dollars ($87,500,000).
(b) The Preferred Stock may be issued from
time to time in one or more series, and in such amounts as may be determined by
the Board of Directors. The designations, powers, preferences and relative,
participating optional, conversion and other rights, and the qualifications,
limitations and restrictions thereof, of the Preferred Stock of each series,
which shall not be fixed by the Certificate of Incorporation, shall be such as
may be fixed or altered by resolution or resolutions by the Board of Directors
(authority so to do being hereby expressly granted to, and vested in, the Board
of Directors) to the full extent now or hereafter permitted by the laws of
Delaware.
(c) The designations, powers, preferences
and relative, participating, optional, conversion and other special rights, and
the qualifications, limitations and restrictions thereof, of the Common Stock
Series A and the Common Stock Series B shall be as follows:
(1) Whenever full dividends have been paid or
declared and funds set apart for the payment of dividends
on each series of Preferred-Stock which may be issued and
outstanding, for the current dividend period and for all
past dividend periods in respect of which dividends are
cumulative and remain unpaid, and a cash dividend upon the
Common Stock Series B shall at any time and from time to
time be declared and paid, there shall at that time or at
any time thereafter but within the time limits hereinafter
in this paragraph set forth, be declared and paid a stock
dividend or dividends on the Common Stock Series A payable
in shares of Common Stock Series A, the fair value as of
the respective dates of declaration (as hereinafter
defined) of such stock dividend or dividends paid or
payable on each share of Common Stock Series A during any
calendar year to be equivalent to the cash dividend or
dividends paid or payable on each share of Common Stock
Series B during such calendar year pursuant to this
paragraph. For the purpose of the foregoing sentence the
determination of the fair value of the Common Stock Series
A shall be made as of the respective dates of declaration
of such dividend or dividends by the Board of Directors of
the corporation in its sole discretion and such
determination shall be final and conclusive. Without
limiting the generality of the foregoing, the Board of
Directors may, in making such determination of fair value,
consider the bid and asked price of the Common Stock
Series A on the business day next preceding the date of
the declaration of such dividend (or if not available for
such date on the next preceding date on which such
quotation is available) as quoted by the National
Quotation Bureau, Inc. or an organization performing
functions similar thereto and such other factors as the
Board of Directors may deem to be relevant, including
without limitation, that the value of such stock after the
record date may be reduced by the declaration of the
dividend and any factors which would affect the market
value of such stock dividend shares. The Board of
Directors of the corporation may in its sole discretion
declare a dividend or dividends on the Common Stock.
Series A on dates different from the date on which a cash
dividend or dividends are declared on the Common Stock
Series B and may fix separate record dates and/or separate
payment dates different from the record dates or payment
dates of the cash dividend or dividends declared on the
Common Stock Series B, provided however, that the record
date and the payment date of any dividend on the Common
Stock Series A shall be within one year from the date of
declaration thereof, and provided further that the fair
value as of the respective dates of declaration (as herein
defined) of all stock dividends paid on each share of
Common Stock Series A during any calendar year pursuant to
this Paragraph shall be equivalent to the total cash
dividends paid only on each share of Common Stock Series B
during such calendar year pursuant to this paragraph. This
paragraph shall be applicable only where a dividend is
declared on the Common Stock Series B payable only in cash
and the Board of Directors does not at the same time
declare a dividend in an equal amount only in cash on the
Common Stock Series A, which the Board of Directors shall
have the right to do. The provisions of this paragraph are
not intended to cover, or apply to, any case where a
dividend is declared on the Common Stock Series B payable
in stock or any other property in which event the same
dividend shall be declared at the same time on the Common
Stock Series A as provided in paragraph (4) of subdivision
(c) of this Article FOURTH. The corporation shall not
issue fractional shares in satisfaction of any stock
dividend but in lieu of fractional shares it shall issue
scrip certificates (exchangeable, together with other
scrip certificates aggregating one or more full shares,
for stock certificates representing such full share or
shares of stock), for any fraction of a share of stock.
The terms and form of which are to be approved by the
Board of Directors of the corporation. Until the exchange
thereof for certificates for full shares of stock, the
holders of such scrip certificates shall not be entitled
to receive dividends or to vote or to any other rights
and/or privileges as stockholders of the corporation. The
Board of Directors of the corporation shall, in any
instance, have the full power and authority to prescribe
other methods by which settlement for fractional shares
shall be made, in lieu of delivering such scrip
certificates for fractional shares, and may, without
limiting the generality of the foregoing, make a cash
settlement in respect thereof in such amount as shall be
determined by the Board of Directors or provide for the
combination of such fractions into a number of whole
shares of stock equal to the aggregate of the fractional
shares which the holders of the shares of Common Stock of
the corporation would otherwise be entitled to receive and
the delivery thereof to the corporation or its designee as
agent for said stockholders to sell the said whole shares
of stock and to pay the net proceeds of the sale to those
stockholders who would otherwise have been entitled to
fractional shares pro rata in accordance with their
respective fractional share interests and upon such other
terms as may be provided by the Board of Directors of the
corporation.
(2) The Common Stock Series A, at the option of
the respective holders thereof, shall be exchangeable for
Common Stock Series B of the corporation, from time to
time, subject to the provisions hereinafter set forth in
the ratio of one (1) share of Common Stock Series B for
one (1) share of Common Stock Series A (whether or not any
dividend shall have been declared on the Common Stock
Series A and remain unpaid but this shall not prevent a
stockholder who shall exchange his shares after a record
date from receiving any dividend payable to Series A
stockholders of record on that date), upon surrender to
the corporation or to its transfer agent of the
certificates of Common Stock Series A, so to be exchanged,
duly endorsed in blank for transfer; provided however that
if any such shares of Common Stock Series A are
surrendered for exchange on or between the date on which a
cash dividend is declared on the Common Stock Series B and
the date fixed by the Board of Directors of the
corporation for determining the holders of the Common
Stock Series B entitled to receive such cash dividend, the
said shares of Common Stock Series A shall be exchanged
for shares of Common Stock Series B on and as of the
business day next following the record date for
determining the holders of the Common Stock Series B
entitled to receive such cash dividend and until such
exchange is so made any such stockholder shall be treated
for all purposes as the holder of the shares of Common
Stock Series A so surrendered for exchange. So long as any
of the Common Stock Series A remains outstanding, there
shall be reserved such number of shares of Common Stock
Series B for exchange as shall be required pursuant to the
provisions herein contained.
(3) The Board of Directors of the corporation
shall have the right, in its solo discretion, to require
all of the holders of the Common Stock Series A to
exchange all of their Common Stock Series A for Common
Stock Series B of the corporation in the ratio of one (1)
share of Common Stock Series B for one (1) share of Common
Stock Series A (whether or not any dividend shall have
been declared on the Common Stock Series A and remain
unpaid but this shall not prevent a stockholder who shall
exchange his shares after a record date from receiving any
dividend payable to Series A stockholders of record on
that date). Notice of the requirement for such exchange
shall be given by the corporation at least thirty days
prior to the date fixed for such exchange to the holders
of record of all the outstanding Common Stock Series A and
an affidavit of mailing of such notice by an employee of
the corporation or any employee of the transfer agent
shall be conclusive evidence of the mailing of such
notice. If notice of such exchange shall have been duly
given as herein provided, and any holder of Common Stock
Series A shall not have surrendered all his certificates
of Common Stock Series A to the corporation or its
transfer agent for exchange, duly endorsed in blank for
transfer, then from and after the exchange date so
specified in the notice, any and all rights and privileges
of such holders of Common Stock Series A, as holders of
Common Stock Series A, shall cease and terminate, except
the right to receive shares of Common Stock Series B in
exchange for his shares of Common Stock Series A as
hereinabove provided, and from and after the exchange date
so specified in the notice all Common Stock Series A
outstanding shall be and become Common Stock Series B with
the effect that each holder of the outstanding shares of
Common Stock Series A shall thereupon be and become the
holder of one share of Common Stock Series B for every
share of Common Stock Series A then held by him.
(4) In all other respects the designations,
powers, preferences and relative, participating, optional,
conversion and other special rights, and the
qualifications, limitations and restrictions thereof, of
the Common Stock Series A and the Common Stock Series B
shall be the same, and without limiting the generality of
the foregoing, in the event any dividends payable in any
class of stock of the corporation, or in any property, are
declared upon the shares of Common Stock Series B of the
corporation (which the corporation by action of its Board
of Directors shall have the full power and authority to
do) the same dividend shall be declared upon the Common
Stock Series A of the corporation and in the event any
dividends payable in any class of stock of the
corporation, or in any property, (except stock dividends
which are paid to equalize cash dividends as hereinabove
set forth) are declared upon the shares of Common Stock
Series A of the corporation, (which the corporation by
action of its Board of Directors shall have the full power
and authority to do) the same dividend shall be declared
upon the Common Stock Series B of the corporation and in
the event a cash dividend shall be declared on the shares
of Common Stock Series A of the corporation (which the
corporation by action of its Board of Directors shall have
the full power and authority to do, whenever full
dividends have been paid or declared and funds set apart
for the payment of dividends on each series of Preferred
Stock which may be issued and outstanding, for the current
dividend period and for all past dividend periods in
respect of which dividends are cumulative and remain
unpaid) an equal cash dividend shall be declared on the
shares of Common Stock Series B of the corporation.
(d) Unless otherwise expressly required by applicable law,
each holder of Common Stock Series A and Common Stock Series B shall at
every meeting of the stockholders be entitled to one vote in person or
by written proxy signed by him for each share of Common Stock Series A
and Common Stock Series B owned by him and shall be entitled and
required to vote as part of a single class, i.e., Common Stock (without
distinction as to Series A or Series B) upon all such matters as may
come before the stockholders including without limitation the election
of directors, which shall be decided by majority vote of the Common
Stock present or represented by proxy and entitled to vote at the
meeting. The stockholders of this corporation shall have no preemptive
right to subscribe to any issue of shares of stock of this corporation
now or hereafter made.
FIFTH: The minimum amount of capital with which it will commence business is
One Thousand Dollars ($1,000.00).
<PAGE>
SIXTH: The name and place of residence of each of the incorporators are as
follows:
NAME RESIDENCE
L.H. HERMAN Wilmington, Delaware
WALTER LENZ Wilmington, Delaware
W.T. HOBSON Wilmington, Delaware
SEVENTH: This corporation is to have perpetual existence.
EIGHTH: The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatever.
NINTH: In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly authorized:
To make, alter, and repeal the by-laws subject to the
power of the stockholders to change or repeal such bylaws; provided, however,
that prior to the second Tuesday in March, 1937, no by-laws shall be adopted or
amended by the directors so as to authorize or provide (a) for the holding of
any meeting of stockholders for the election of directors at any place other
than Minneapolis, Minnesota or at any time prior to the holding of the first
annual meeting of stockholders for election of directors on the second Tuesday
in March, 1937; or (b) for the holding of meetings of directors, prior to such
first meeting of stockholders for the election of directors, at any place other
than as provided in the original by-laws;
To set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper purpose and to
alter or abolish any such reserve;
To fix, determine, and vary from time to time the
amount to be maintained as surplus and the amount or amounts to be set apart for
working capital.
All of the powers of this corporation, insofar as the
same lawfully may be vested by this Certificate in the Board of Directors,
are hereby conferred upon the Board of Directors of this corporation.
Directors need not be elected by ballot, unless voting
by ballot shall be requested by the holders of ten percent (10%) or more of the
shares of stock represented at the meeting of stockholders at which the
directors are to be elected.
TENTH: This corporation may in its by-laws make any other provisions or
requirements for the management or conduct of the business of this corporation
provided the same be not inconsistent with the provisions of this Certificate or
contrary to the laws of the State of Delaware, and subject to the limitations
upon amendment of by-laws contained in this Certificate of Incorporation.
ELEVENTH: This corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by law and all rights conferred on officers, directors,
and stockholders herein are granted subject to this reservation.
TWELFTH: A. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law is amended after
approval by the stockholders of this Article to authorize corporation action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
B. No modification or repeal of the provisions of
this Article shall adversely affect any right or protection of any director of
the corporation existing at the date of such modification or repeal or create
any liablity or adversely affect any such right or protection for any acts or
omissions of such director occurring prior to such modification or repeal.
IN WITNESS WHEREOF, said CITIZENS UTILITIES COMPANY has caused this Certificate
to be signed by L. Russell Mitten, its Vice President, and attested by Charles
J. Weiss, its Secretary, on this _______ day of June, 1996.
CITIZENS UTILITIES COMPANY
By:_______________________________
Livingston E. Ross
Vice President
ATTEST:
By:___________________________
Charles J. Weiss
Secretary
BYLAWS*
OF
CITIZENS UTILITIES COMPANY
* As amended March 9, 1937; May 12, 1942; June 15, 1946; October 1, 1946; May
23, 1947; January 7, 1948; April 1, 1948; March 31, 1949; January 26, 1951;
April 11, 1952; July 28, 1954; February 24, 1960; November 18, 1963; May 10,
1966; February 3, 1967; April 10, 1968; April 17, 1970; June 11, 1970; June 7,
1974; August 8, 1975; November 7, 1980; January 16, 1981; March 3, 1981;
February 20, 1986; June 5, 1987; August 8, 1988; May 5, 1989; May 31, 1989;
June 23, 1989; September 11, 1989 (clerical correction); May 1, 1990; April
14, 1992; and February 17, 1993, February 8, 1994 (clerical correction);
October 24, 1995.
<PAGE>
BYLAWS
OF
CITIZENS UTILITIES COMPANY
TITLE
1. The title of this corporation is CITIZENS UTILITIES COMPANY.
LOCATION OF OFFICES
2. The principal office of the corporation in Delaware shall be in
Wilmington and the resident agent in charge thereof shall be PRENTICE HALL
CORPORATION SYSTEM, INC., 32 Loockerman Square.
The corporation may also have an office or offices at such other places
within or without the State of Delaware as the Board of Directors may from time
to time designate.
CORPORATE SEAL
3. The corporate seal shall be circular in form and have inscribed
thereon the name of the corporation, the year of its incorporation (1935) and
the words "Incorporated Delaware".
MEETINGS OF STOCKHOLDERS
4. All meetings of stockholders shall be held at the offices
of the corporation or such other place as shall be designated by the Board of
Directors of the corporation.
Annual Meetings of stockholders shall be held on a date and at a time
designated by the Board of Directors of the corporation. At each annual meeting
the stockholders shall elect a Board of Directors, such election to be by
majority of the stock present or represented by proxy, and entitled to vote at
the meeting.
Each stockholder shall, at every meeting of the stockholders, be
entitled to one vote in person or by written proxy signed by him, for each share
of stock held by him, but no proxy shall be voted on after one year from its
date. Such right to vote shall be subject to the right of the Board of Directors
to close the transfer books or to fix a record date for voting stockholders as
hereinafter provided.
Special meetings of the stockholders may be called by the Chief
Executive Officer and shall be called on the request in writing or by vote of a
majority of the Board of Directors or on demand in writing of stockholders of
record owning thirty-three percent (33%) in amount of the capital stock
outstanding and entitled to vote.
Notice of each meeting of stockholders, whether annual or special,
shall be mailed by the secretary to each stockholder of record, at his or her
post office address as shown by the stock books of the Company, at least ten
days and not more than sixty days prior to the date of the meeting. If the
transfer books are closed or a record date is fixed in connection with an annual
meeting, as permitted by By-Law 17, the notice of the meeting shall be given to
the stockholders of record as of the time said books are closed or record date
is fixed, but if the transfer books are not closed or a record date is not
fixed, said notice shall be given to the stockholders of record at the time the
notice is mailed.
The holders of a majority of the stock outstanding and entitled to vote
shall constitute a quorum, but the holders of a smaller amount may adjourn any
meeting from time to time without further notice until a quorum is secured.
Except as otherwise required by law or the Certificate of Incorporation or these
Bylaws, the votes of stockholders representing a majority of the stock voted on
any question shall prevail.
<PAGE>
DIRECTORS
5. The property and business of the corporation shall be managed and
controlled by its Board of Directors, which shall consist of not less than seven
nor more than thirteen members. The number of Directors shall be fixed from time
to time, within the limits prescribed, by resolution of the Board of Directors.
As of October 24, 1995, the Board of Directors shall consist of thirteen
members, unless a different number shall thereafter be fixed by resolution of
the Board of Directors. Vacancies in the Board of Directors (except vacancies
resulting from the removal of directors by stockholders), including vacancies in
the Board of Directors resulting from any increase in the number of Directors,
may be filled by a majority of the Directors then in office, though less than a
quorum.
Directors shall otherwise be elected by the stockholders at the annual
meeting and shall hold office until the next annual election and until their
successors are elected and qualified. At all elections of Directors of this
corporation each stockholder shall be entitled to one vote in person or by
written proxy signed by him, for each share of stock owned by him, and election
shall be by majority vote of the stock present or represented by proxy and
entitled to vote at the meeting. The stockholders of this corporation shall have
no preemptive right to subscribe to any issue of shares of stock of this
corporation now or hereafter made.
A Director may be designated a "Director Emeritus" of the Company by
the vote of the Board of Directors. A Director Emeritus shall be invited to
attend all meetings of the Board of Directors but shall not have the right to
vote. A Director Emeritus shall receive such compensation as the Board shall
determine.
A Director Emeritus shall be designated by the Board of Directors for a
one-year term (and may be reappointed) at the Annual Meeting of the Board of
Directors following the Company's Annual Meeting of Shareholders.
The Board of Directors shall have an Executive Committee. The Executive
Committee of the Board shall consist of four (4) members, to be appointed by and
to serve at the pleasure of the Board. The Chairman of the Board shall be the
Chairman of the Executive Committee. During intervals between meetings of the
Board, the Committee shall have the power and authority of the Board of
Directors of the management of the business affairs and property of the Company.
A majority of the Directors in office shall be independent directors as
hereinafter defined. At the time that the nominees for the Board of Directors
are selected for proposal for election at the Annual Meeting of Shareholders,
the Board of Directors will review the circumstances of each nominee and
determine whether he or she is an independent director. If it should be
determined that a majority of the nominees are not independent directors, the
Nominating Committee shall take steps to select and recommend the nomination of
a sufficient number of individuals who are independent directors so that a
majority of members of the Board of Directors shall be independent directors.
The Board of Directors shall have a Nominating Committee. The
Nominating Committee shall consist of not less than two directors and not more
than four directors, to be appointed by and to serve at the pleasure of the
Board. Each member of the Nominating Committee shall be an independent director
as hereinafter defined. The Nominating Committee shall consider recommendations
of individuals who may be expected to make contributions to the Company or
members of the Board of Directors. The Nominating Committee shall establish
procedures for the nominating process and make recommendations to the Board of
Directors annually for the slate of nominees for the Board of Directors to be
proposed at the Annual Meeting of Shareholders.
The Board of Directors shall have a Compensation Committee. The
Compensation Committee shall consist of not less than two directors and not more
than four directors, to be appointed by and to serve at the pleasure of the
Board. Each member of the Compensation Committee shall be an independent
director as hereafter defined. The Compensation Committee shall consider matters
related to compensation of officers, directors and employees of the Company and
to make recommendations with respect thereto to the Board of Directors. The
Compensation Committee shall have the authority to retain independent legal
counsel and compensation advisors.
For purposes of this Article 5 of the Bylaws, "independent director"
shall mean a director who is:
(a) an individual who is not and has not been employed
as an executive officer by the Company (or any corporation, the
majority of the voting stock of which is owned, directly or
indirectly through one or more other subsidiaries, by the
Company) within three (3) fiscal years immediately prior to his or her
most recent election or appointment as a member of the Board of
Directors; or
(b) an individual who is not a regular paid advisor or
consultant to the Company and who is not an affiliate (within the
meaning of Exchange Act Rule 12b-2 of the Securities and Exchange
Commission) of any entity that is a regular paid advisor or consultant
to the Company; or
(c) an individual who is not an employee or owner of five
percent (5%) or more of the voting stock of any business or
professional entity that has made, during the Company' s last full
fiscal year, payments to the Company or its subsidiaries for property,
goods or services in excess of five percent (5%) of the lesser of (i)
the Company's consolidated gross revenues for its last full fiscal
year, or (ii) such other entity's consolidated gross revenues for its
last full fiscal year; or
(d) an individual who is not an employee or
owner of five percent (5%) or more of the voting stock of any business
or professional entity to which the Company or its subsidiaries have
made, during the Company's last full fiscal year, payments for
property, goods or services in excess of five percent (5%) of the
lesser of (i) the Company's consolidated gross revenues for its last
full fiscal year, or (ii) such other entity's consolidated gross
revenues for its last full fiscal year; or
(e) an individual who is not a party to a personal service
contract with the Company pursuant to which fees or other
compensation received by the individual from the
Company during his or her last full fiscal year (other than fees
received as a member of the Company's Board of Directors or a committee
thereof) so as to require description of such contract under Item
404(a) of Regulation S-K promulgated by the Securities and Exchange
Commission, as in effect on January 1, 1994; or
(f) an individual who is not employed by a tax-exempt
organization that received, during its last full fiscal year,
contributions from the Company in excess of five percent (5%) of the
lesser of (i) the consolidated gross revenues of the Company during its
last full fiscal year, or (ii) the contributions received by the
tax-exempt organization during its last full fiscal year; or
(g) an individual who has not carried out a transaction or did
not have a relationship, during the Company's last full fiscal year,
such that the specifics of a transaction would be required to be
described under Item 404 of Regulation S-K promulgated by the
Securities and Exchange Commission, as in effect on January 1, 1994; or
(h) an individual who is not employed by a public
company at which an executive officer of the Company serves as a
member of the board of directors; or
(i) an individual who has not had any relationship described
in paragraphs (a) - (h) with any corporation, the majority of the
voting stock of which is owned directly or indirectly, through one or
more subsidiaries, by the Company; or
(j) an individual who is not a member of the immediate family
of any person described in paragraphs (a) - (i). For these purposes, an
individual's immediate family shall include such individual's spouse,
parents, children, siblings, mothers- and fathers-in-law, sons- and
daughters-in-laws, and brothers- and sisters-in-law. The term
"independent director" shall have no legal significance under
applicable corporate or
securities law or in any respect other than for the purposes of this Bylaw. No
inference shall be drawn that a director is "not independent," "interested," or
"a party to a contract or transaction" or has a "financial interest" in any
contract or transaction within the meaning of any applicable corporate or
securities law, and no director shall be disqualified from taking action or
refraining from acting on any matter coming before the Board of Directors by
reason of his or her status as an independent director under this Bylaw.
POWERS OF DIRECTORS
6. The Board of Directors shall have all such powers as may
be exercised by the Corporation, subject to the provisions of the statutes,
the Certificate of Incorporation, and the Bylaws.
MEETINGS OF DIRECTORS
7. Meetings of the Board of Directors shall be held at such place
within or without the State of Delaware as may from time to time be fixed by
resolution of the Board of Directors, or as may be specified by the Chief
Executive Officer in the call of any meeting. Regular meetings of the Board of
Directors shall be held at such times as may from time to time be fixed by
resolution of the Board of Directors and special meetings may be held at any
time upon the call of two (2) Directors or of the Chief Executive Officer, by
oral, telegraphic or written notice duly served or sent or mailed to each
Director not less than five (5) days before such meeting. A meeting of the Board
may be held without notice immediately after the annual meeting of stockholders
at the same place at which such meeting is held. Notice need not be given of
regular meetings of the Board held at times fixed by resolution of the Board.
Meetings may be held at any time without notice if all the Directors are present
or if those not present waive notice of the meeting in writing.
(Telephone Participation in Meetings)
Members of the Board of Directors (or any committees thereof) may
participate in a meeting of the Board of Directors (or of such committees) by
means of conference telephone or other communications equipment via which all
persons participating can hear each other. Such participation in the substantive
discussion and determinations of a meeting shall constitute presence in person
at such meeting.
A majority of the Directors shall constitute a quorum, but a smaller
number may adjourn any meeting from time to time without further notice until a
quorum is secured.
OFFICERS OF THE COMPANY
8. The officers of the Company shall be a Chairman of the Board of
Directors, a President, one or more vice presidents (with such duties and titles
as may be assigned to them), a secretary, a treasurer, one or more assistant
vice presidents (with such duties and titles as may be assigned to them), and
such other officers as may from time to time be chosen by the Board of
Directors.
The officers of the Company shall hold office until their successors
are elected and qualified. If the office of any officer or officers becomes
vacant for any reason, the vacancy shall be filled by the affirmative vote of a
majority of the whole Board of Directors.
DUTIES OF THE CHAIRMAN
9. The Chairman presides at all meetings of the Board of Directors and
at all meetings of the shareholders. It shall be his prerogative to see that all
orders, resolutions, and policy determinations of the Board of Directors are
carried into effect. He acts in a general oversight and advisory capacity with
respect to the affairs of the Company. He provides leadership to the Board in
reviewing and deciding upon matters which constitute major policies of the
Company, what the Company does and the manner in which the Company business is
conducted.
DUTIES OF THE CHIEF EXECUTIVE OFFICER
9A. It shall be the duty of the Chief Executive Officer to carry into
effect all orders, resolutions, and policy determinations of the Board of
Directors; to execute all contracts and agreements; to keep the seal of the
Company; and to sign and to affix the seal of the Company to any instrument
requiring the same, which seal shall be attested by the signature of the
Secretary or Treasurer or Assistant Secretary or Assistant Treasurer. He shall
have the general supervision and direction of the other officers of the Company.
He shall submit a report of the operations of the Company for the year
to the Directors at their meeting next preceding the annual meeting of the
stockholders and to the stockholders at their annual meeting.
He shall have the general duties and powers of supervision and
management usually vested in the chief executive officer of a corporation.
The Chief Executive may also hold another office with the Company.
Accordingly, the duties and responsibilities of the position may be assigned by
the Board of Directors to any Company officer.
DUTIES OF THE PRESIDENT
9B. Unless otherwise decided by the Board of Directors, the President
shall be the chief executive and administrative officer of the Company. It shall
be his duty to see that all orders and policy determination conveyed by the
Chairman are carried into effect. He shall have the general supervision and
direction of the operations and administration of the affairs of the Company and
general supervision and direction of the other officers and employees of the
Company and shall see that their duties are properly performed.
VICE PRESIDENT
10. The vice president or vice presidents, in the order of their
seniority, shall be vested with all the powers and required to perform all the
duties of the President in his absence or disability and shall perform such
other duties as may be prescribed by the Board of Directors.
CHIEF EXECUTIVE PRO TEM
11. In the absence or disability of both the Chairman and
President, the Board may appoint a chief executive pro tem.
SECRETARY
12. The secretary shall attend all meetings of the corporation and the
Board of Directors. He shall act as clerk thereof and shall record all of the
proceedings of such meetings in a book kept for that purpose. He shall give
proper notice of meetings of stockholders and Directors and shall perform such
other duties as shall be assigned to him by the Chairman, President or the Board
of Directors.
TREASURER
13. The treasurer shall have custody of the funds and securities of the
corporation and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
He shall disburse the funds of the corporation as may be ordered by the
Board, or Chairman or President, taking proper vouchers for such disbursements
and shall render to the Chairman, President and Directors, whenever they may
require it, an account of all his transactions as treasurer and of the financial
condition of the corporation.
He shall keep an account of stock and income notes registered and
transferred in such manner and subject to such regulations as the Board of
Directors may prescribe.
He shall give the corporation a bond, if required by the Board of
Directors, in such sum and in form and with security satisfactory to the Board
of Directors for the faithful performance of the duties of his office and the
restoration to the corporation, in case of his death, resignation, or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession, belonging to the corporation. He shall perform
such other duties as the Board of Directors may from time to time prescribe or
require.
DUTIES OF OFFICERS MAY BE DELEGATED
14. In case of the absence or disability of any officer of the
corporation or for any other reason deemed sufficient by a majority of the
Board, the Board of Directors may delegate his powers or duties to any other
officer or to any Director for the time being. The duties relating to the
execution of contracts and agreements and the signing of instruments and
affixing the seal of the Company and other matters may be delegated to any
officer, from time to time, as the Board shall see fit.
CERTIFICATES OF STOCK
15. Certificates of stock shall be signed by the Chairman, President or
a vice president and either the treasurer, assistant treasurer, secretary or
assistant secretary. If a certificate of stock be lost or destroyed, another may
be issued in its stead upon proof of such loss or destruction and the giving of
a satisfactory bond of indemnity, in an amount sufficient to indemnify the
corporation against any claim.
TRANSFER OF STOCK
16. All transfer of stock of the corporation shall be made upon its
books upon presentation of the certificate or certificates therefor, properly
endorsed by the holder of the shares in person or by his lawfully constituted
representative, and upon surrender of such certificate or certificates of stock
for cancellation.
CLOSING OF TRANSFER BOOKS
17. The Board of Directors shall have the power to close the stock
transfer books of the corporation for a period not exceeding sixty days
preceding the date for any meeting of stockholders or for payment of any
dividend or for the allotment of rights or when any change or conversion or
exchange of capital stock shall go into effect, or for a period of not exceeding
sixty days in connection with obtaining the consent of stockholders for any
purpose. In lieu of so closing the books, the Board of Directors may fix in
advance a date, not exceeding sixty days preceding the said above mentioned
dates, as a record date for the determination of the stockholders entitled to
notice of or to vote at any such meeting, and any adjournment thereof, or
entitled to dividends or other rights hereinbefore mentioned, or to give such
consent.
STOCKHOLDERS OF RECORD
18. The corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and accordingly shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person whether or not it shall have express or
other notice thereof, save as expressly provided by the laws of Delaware.
FISCAL YEAR
19. The fiscal year of the corporation shall begin on the first
day in January in each year.
DIVIDENDS
20. Dividends, to the extent not restricted by provisions of the
corporation's Certificate of Incorporation or by subsisting agreements of the
corporation, may be declared by the Board of Directors and paid in cash, in
property, or in shares of the capital stock of the corporation to the extent
permitted by law, out of net assets in excess of its capital or out of its net
profits, provided there shall be no impairment of the capital of the corporation
represented by its issued and outstanding stock of all classes having a
preference upon the distribution of assets.
BOOKS AND RECORDS
21. The books, accounts, and records of the corporation may be kept
within or without the State of Delaware, at such place or places as may from
time to time be designated by the Bylaws or by resolution of the Directors.
NOTICES
22. Notice required to be given under the provisions of these Bylaws to
any Director, officer or stockholder shall not be construed to mean personal
notice, but may be given in writing by depositing the same in a post office or
letter box, in a postpaid sealed or unsealed wrapper, addressed to such
stockholder, officer or Director at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the time when the
same shall be thus mailed. In computing the number of days notice required for
any meeting, the day on which the notice shall be deposited in the mail or sent
by telegraph shall be excluded.
WAIVER OF NOTICE
23. Any stockholder, officer, or Director may waive in writing, or by
telegraph, any notice required to be given under these Bylaws, whether before or
after the time stated therein.
INDEMNIFICATION OF
DIRECTORS AND OFFICERS
24. Paragraph (a). Right of Indemnification. The Corporation shall, to
the fullest extent permitted by applicable law as then in effect, indemnify any
person (the "indemnitee") who was or is involved in any manner (including,
without limitation, as a party or a witness) or was or is threatened to be made
so involved in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, criminal administrative or
investigative (including, without limitation, any action or proceeding by or in
the right of the Corporation to procure a judgement in its favor) (a
"Proceeding") by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, or of a partnership, joint venture,
trust or other enterprise (including, without limitation, service with respect
to any employee benefit plan), whether the basis of any such Proceeding is
alleged action in an official capacity as director or officer or in any other
capacity while serving as a director or officer, against all expenses, liability
and loss (including, without limitation, attorneys' fees, judgments, fines,
ERISA excise taxes or penalties, and amounts paid or to be paid in settlement)
actually and reasonably incurred by him in connection with such Proceeding. Such
indemnification shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of his heirs, executors, administrators
and legal representatives. The right to indemnification conferred in this By-law
shall include the right to receive payment of any expenses incurred by the
indemnitee in connection with such Proceeding in advance of the final
disposition of the Proceeding, consistent with applicable law as then in effect.
All rights to indemnification conferred in this By-law, including rights to the
advancement of expenses and the evidentiary, procedural and other provisions of
this By-law, shall be contract rights. The Corporation may, by action of its
Board of Directors, provide indemnification for employees, agents, attorneys and
representatives of the Corporation with the same, or with more or less, scope
and extent as herein provided for officers and directors. No amendment to the
Restated Certificate of Incorporation or amendment or repeal of the By-laws
purporting to have the effect of modifying or repealing any of the provisions of
this By-law in a manner adverse to the indemnitee shall abridge or adversely
affect any right to indemnification or other similar rights and benefits with
respect to any acts or omissions occurring prior to such amendment or repeal.
This By-law shall be applicable to all Proceedings, whether arising from acts or
omissions occurring before or after the adoption of this By-law. The phrases
"this By-law" and "By-law" shall refer to "By-laws 24 and 24A," and for all
purposes, except the corporate procedure required for amendment of the By-law,
this By-law shall be considered as one By-law.
Paragraph (b). By-Law Not Exclusive. The right of indemnification,
including the right to receive payment in advance of expenses, conferred in this
By-law shall not be exclusive of any other rights to which any person seeking
indemnification may otherwise be entitled under any provision of the Restated
Certificate of Incorporation, By-law, agreement, applicable corporate law and
statute, vote of disinterested directors or stockholders or otherwise. The
indemnitee is free to proceed under any of the rights or procedures available to
him.
Paragraph (c). Burden of Proof. In any determination, review of a
determination, action, arbitration, or other proceeding relating to the right to
indemnification conferred in this By-law, the Corporation shall have the burden
of proof that the indemnitee has not met any standard of conduct or belief which
may be required by applicable law to be applied in connection with a
determination that the indemnitee is not entitled to indemnity and also the
burden of proof on any of the issues which may be material to a determination
that the indemnitee is not entitled to indemnification. Neither a failure to
make such a determination of entitlement nor an adverse determination of
entitlement to indemnity shall be a defense of the Corporation in an action or
proceeding brought by the indemnitee or by or on behalf of the Corporation
relating to indemnification or create any presumption that the indemnitee has
not met any such standard of conduct or belief or is otherwise not entitled to
indemnity. If successful in whole or in part in such an action or proceeding,
the indemnitee shall be entitled to be further indemnified by the Corporation
for the expenses actually and reasonably incurred by him in connection with such
action or proceeding.
Paragraph (d). Advancement of Expenses. All reasonable expenses
incurred by or on behalf of indemnitee in connection with any Proceeding shall
be advanced from time to time to the indemnitee by the Corporation promptly
after the receipt by the Corporation of a statement from the indemnitee
requesting such advance, whether prior to or after final disposition of such
Proceeding.
Paragraph (e). Insurance, Contracts and Funding. The Corporation may
purchase and maintain insurance to protect itself and any person who is, or may
become an officer, director, employee, agent, attorney, trustee or
representative (any of the foregoing being herein referred to as a
"Representative") of the Corporation or, at the request of the Corporation, a
Representative of another corporation or entity, against any expenses, liability
or loss asserted against him or incurred by him in connection with any
Proceeding in any such capacity, or arising out of his status as such, whether
or not the Corporation would have the power to indemnify him against such
expense, liability or loss under the provisions of this By-law or otherwise. The
Corporation may enter into contracts with any Representative of the Corporation,
or any person serving as such at the request of the Corporation for another
corporation or entity, in furtherance of the provisions of this By-law. Such
contracts shall be deemed specifically approved and authorized by the
stockholders of the Corporation and not subject to invalidity by reason of any
interested directors. The Corporation may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification of any person entitled thereto.
Paragraph (f). Severability; Statutory Alternative. If any provision or
provisions of this By-law shall be held to be invalid, illegal or unenforceable
for any reason whatsoever (i) the validity, legality and enforceability of all
of the remaining provisions of this By-law shall not in any way be affected or
impaired thereby; and (ii) to the fullest extent possible, the remaining
provisions of this By-law shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable. In the event
that the indemnitee elects, as an alternative to the procedures specified in
this By-law, to follow one of the procedures authorized by applicable corporate
law or statute to enforce his right to indemnification and notifies the
Corporation of his election, the Corporation agrees to follow the procedure so
elected by the indemnitee. If in accordance with the preceding sentence, the
procedure therefor contemplated herein or the procedure elected by the
indemnitee in any specific circumstances (or such election by the indemnitee)
shall be invalid or ineffective in bringing about a valid and binding
determination of the entitlement of the indemnitee to indemnification, the most
nearly comparable procedure authorized by applicable corporate law or statute
shall be followed by the Corporation and the indemnitee.
24A. Procedures; Presumptions and Effect of Certain Proceedings;
Remedies.
In furtherance, but not in limitation, of the foregoing provisions of
this By-law, the following procedures, presumptions and remedies shall apply
with respect to advancement of expenses and the right to indemnification under
this By-law:
Section 1. Advancement of Expenses. The advancement or reimbursement of
expenses to an indemnitee shall be made within 20 days after the receipt by the
Corporation of a request therefor from the indemnitee. Such request shall
reasonably evidence the expenses incurred or about to be incurred by the
indemnitee and, if required by law at the time of such advance, shall include or
be accompanied by an undertaking by or on behalf of the indemnitee to repay the
amounts advanced if it should ultimately be determined that the indemnitee is
not entitled to be indemnified against such expenses.
Section 2. Procedure for Determination of Entitlement to
Indemnification.
Section 2.1. To obtain indemnification (except with respect to the
advancement of expenses), an indemnitee shall submit to the Chief Executive
Officer or Secretary of the Corporation a written request, including such
documentation and information as is reasonably available to the indemnitee and
reasonably necessary to determine whether and to what extent the indemnitee is
entitled to indemnification (the "Supporting Documentation"). The Secretary of
the Corporation shall promptly advise the Board of Directors in writing that the
indemnitee has requested indemnification. The determination of the indemnitee's
entitlement to indemnification shall be made not later than 60 days after
receipt by the Corporation of the written request and Supporting Documentation.
Section 2.2. The indemnitee's entitlement to indemnification shall be
determined in one of the following ways: (a) by a majority vote of the
Disinterested Directors (as hereinafter defined) (which term shall mean the
Disinterested Director, if there is only one); (b) by a written opinion of the
Independent Counsel (as hereinafter defined) if (i) a majority of the
Disinterested Directors so directs; (ii) there is no Disinterested Director, or
(iii) a Change of Control (as hereinafter defined) shall have occurred and the
indemnitee so requests in which case the Disinterested Directors shall be deemed
to have so directed; (c) by the stockholders of the Corporation (but only if a
majority of the Disinterested Directors determines that the issue of entitlement
to indemnification should be submitted to the stockholders for their
determination); or (d) as provided in Section 3 of this By-law.
Section 2.3. In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 2.2 of
this By-law, a majority of the Disinterested Directors shall select the
Independent Counsel, but only an Independent Counsel to which the indemnitee
does not reasonably object; provided, however, that if a Change of Control shall
have occurred, the indemnitee shall select such Independent Counsel, but only an
Independent Counsel to which the Board of Directors does not reasonably object.
Section 3. Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this By-law, the indemnitee shall be presumed to
be entitled to indemnification upon submission of a request for indemnification
together with the Supporting Documentation, and thereafter in any determination
or review of any determination, and in any arbitration, proceeding or
adjudication the Corporation shall have the burden of proof to overcome that
presumption in reaching a contrary determination. In any event, if the person or
persons empowered under Section 2.2 of this By-law to determine entitlement to
indemnification shall not have been appointed or shall not have made a
determination within 60 days after receipt by the Corporation of the request
therefor together with the Supporting Documentation, the indemnitee shall be
deemed to be entitled to indemnification. In either case, the indemnitee shall
be entitled to such indemnification, unless (a) the indemnitee misrepresented or
failed to disclose a material fact in making the request for indemnification or
in the Supporting Documentation or (b) such indemnification is prohibited by
law, in either case as finally determined by adjudication or, at the
indemnitee's sole option, arbitration (as provided in Section 4 of this 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 contendere or
its equivalent, shall not, of itself, adversely affect the right of the
indemnitee to indemnification or create any presumption with respect to any
standard of conduct or belief or any other matter which might form a basis for a
determination that the indemnitee is not entitled to indemnification. With
regard to the right to indemnification for expenses, (a) if and to the extent
that the indemnitee has been successful on the merits or otherwise in any
Proceeding, or (b) if a Proceeding was terminated without a determination of
liability on the part of the indemnitee with respect to any claim, issue or
matter therein or without any payments in settlement or compromise being made by
the indemnitee with respect to a claim, issue or matter therein, or (c) if and
to the extent that the indemnitee was not a party to the Proceeding, the
indemnitee shall be deemed to be entitled to indemnification, which entitlement
shall not be defeated or diminished by any determination which may be made
pursuant to clauses (a), (b) or (c) of Section 2.2. The indemnitee shall be
presumptively entitled to indemnification in all respects for any act, omission
or conduct taken or occurring which (whether by condition or otherwise) is
required, authorized or approved by any order issued or other action by any
commission or governmental body pursuant to any federal statute or state statute
regulating the Corporation or any of its subsidiaries by reason of its status as
a public utility or public utility holding company or by reason of its
activities as such. To the extent permitted by law, the presumption shall be
conclusive on all parties with respect to acts, omissions or conduct of the
indemnitee if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation or its subsidiary.
No presumption adverse to an indemnitee shall be drawn with respect to any act,
omission or conduct of the indemnitee if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation or its subsidiary taken or occurring in the absence of, or
inconsistent with, any order issued or action by any commission or governmental
body.
Section 4. Remedies of Indemnitee.
Section 4.1. In the event that a determination is made pursuant to
Section 2 of this By-law that the indemnitee is not entitled to indemnification
under this By-law, (a) the indemnitee shall be entitled to seek an adjudication
of his entitlement to such indemnification either, at the indemnitee's sole
option, in (i) an appropriate court of the State of Delaware or any other court
of competent jurisdiction or (ii) to the extent consistent with law, arbitration
to be conducted by three arbitrators (or, if the dispute involves less than
$100,000, by a single arbitrator) pursuant to the rules of the American
Arbitration Association; (b) any such judicial Proceeding or arbitration shall
be de novo and the indemnitee shall not be prejudiced by reason of such adverse
determination; and (c) in any such judicial Proceeding or arbitration the
Corporation shall have the burden of proof that the indemnitee is not entitled
to indemnification under this By-law.
Section 4.2. If a determination shall have been made or deemed to have
been made, pursuant to Sections 2 or 3 of this By-law, that the indemnitee is
entitled to indemnification, the Corporation shall be obligated to pay the
amounts constituting such indemnification within five days after such
determination has been made or deemed to have been made and shall be
conclusively bound by such determination, unless (a) the indemnitee
misrepresented or failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (b) such indemnification
is prohibited by law, in either case as finally determined by adjudication or,
at the indemnitee's sole option, arbitration (as provided in Section 4.1 of this
By-law). In the event that (i) advancement of expenses is not timely made by the
Corporation pursuant to this By-law or (ii) payment of indemnification is not
made within five days after a determination of entitlement to indemnification
has been made or deemed to have been made pursuant to Section 2 or 3 of this
By-law, the indemnitee shall be entitled to seek judicial enforcement of the
Corporation's obligations to pay to the indemnitee such advancement of expense
of indemnification. Notwithstanding the foregoing, the Corporation may bring an
action, in an appropriate court in the State of Delaware or any other court of
competent jurisdiction, contesting the right of the indemnitee to receive
indemnification hereunder due to the occurrence of a circumstance described in
subclause (a) of this Section 4.2 or a prohibition of law (both of which are
herein referred to as a "Disqualifying Circumstance"). In either instance, if
the indemnitee shall elect, at his sole option, that such dispute shall be
determined by arbitration (as provided in Section 4.1 of this By-law), the
indemnitee and the Corporation shall submit the controversy to arbitration. In
any such enforcement action or other proceeding whether brought by the
indemnitee or the Corporation, indemnitee shall be entitled to indemnification
unless the Corporation can satisfy the burden or proof that indemnification is
prohibited by reason of a Disqualifying Circumstance.
Section 4.3. The Corporation shall be precluded from asserting in any
judicial Proceeding or arbitration commenced pursuant to this Section 4 that the
procedures and presumptions of this By-law are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
or arbitrators that the Corporation is bound by all the provisions of this
By-law.
Section 4.4. In the event that the indemnitee, pursuant to this By-law,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this By-law, or is otherwise
involved in any adjudication or arbitration with respect to his right to
indemnification, the indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any expenses
actually and reasonably incurred by him if the indemnitee prevails in such
judicial adjudication or arbitration. If it shall be determined in such judicial
adjudication or arbitration that the indemnitee is entitled to receive part but
not all of the indemnification or advancement of expenses sought, the expenses
incurred by the indemnitee in connection with such judicial adjudication or
arbitration shall be prorated accordingly.
Section 5. Definitions. For purposes of indemnification under this
By-law or otherwise. Section 5.1. "Change in Control" means a change in
control of the Corporation of a nature that would be
required to be reported in response to Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 (the "Act"), whether or
not the Corporation is then subject to such reporting requirement; provided
that, without limitation, such a change in control shall be deemed to have
occurred if (a) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Corporation representing
20 percent or more of the combined voting power of the Corporation's then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such
acquisition; (b) the Corporation is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a consequence of which,
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (c) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (including
for this purpose any new Director whose election or nomination for election by
the Corporation's stockholders was approved by a vote of at least two-thirds of
the Directors then still in office who were Directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.
Section 5.2. "Disinterested Director" means a Director of the
Corporation who is not or was not a material party to the Proceeding in respect
of which indemnification is sought by the indemnitee.
Section 5.3. "Independent Counsel" means a law firm or a member of a
law firm that neither presently is, nor in the past five years has been,
retained to represent (a) the Corporation or the indemnitee in any manner or (b)
any other party to the Proceeding giving rise to a claim for indemnification
under this By-law. Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards of professional
conduct then prevailing under the law of the State of Delaware, would have a
conflict of interest in representing either the Corporation or the indemnitee in
an action to determine the indemnitee's rights under this By-law.
Section 6. Acts of Disinterested Directors. Disinterested Directors
considering or acting on any indemnification matter under this By-law or under
governing corporate law or otherwise may consider or take action as the Board of
Directors or may consider or take action as a committee or individually or
otherwise. In the event that Disinterested Directors consider or take action as
the Board of Directors, one-third of the total number of Directors in office
shall constitute a quorum.
AMENDMENTS OF BYLAWS
25. These By-laws may be amended or altered by the vote of
a majority of the whole Board of Directors at any meeting provided that
notice of such proposed amendment shall have been given in the notice given to
the Directors of such meeting. Such authority in the Board of Directors is
subject to the power of the stockholders to change or repeal any By-laws by a
majority vote of the stockholders present and represented at any annual
meeting or at any special meeting called for such purpose, and the Board of
Directors shall not repeal or alter any By-laws, other than By-law 24A,
adopted by the stockholders.
- ---------------------
SEVENTH SUPPLEMENTAL INDENTURE, dated as of ______________, 199_,
between CITIZENS UTILITIES COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company"), having
its principal administrative offices at High Ridge Park, Building No. 3,
Stamford, Connecticut 06905, to CHEMICAL BANK, a New York banking corporation,
as Trustee (herein called the "Trustee"), having its principal corporate trust
office at 450 West 33rd Street, New York, New York 10001.
RECITALS
WHEREAS, the Company has entered into an Indenture dated as of August
15, 1991 (the "Indenture"), with the Trustee to provide for the issuance from
time to time of the Company's debentures, notes or other evidences of
indebtedness (herein called the "Securities"), to be issued in one or more
series; and
WHEREAS, the Company has entered into a First Supplemental Indenture
dated as of August 15, 1991 (the "First Supplemental Indenture") with the
Trustee to establish the form and terms of a series of Securities designated
"8.45% Debentures Due 2001"; and
WHEREAS, the Company has entered into a Second Supplemental Indenture
dated as of January 15, 1992 (the "Second Supplemental Indenture") with the
Trustee to establish the form and terms of a series of Securities designated
"7.45% Debentures Due 2004"; and WHEREAS, the Company has entered into a Third
Supplemental Indenture dated as of April 15, 1994 (the "Third Supplemental
Indenture") with the Trustee to establish the form and terms of a series of
Securities designated "7.60% Debentures Due 2006"; and
WHEREAS, the Company has entered into a Fourth Supplemental Indenture
dated as of October 1, 1994 (the "Fourth Supplemental Indenture") with the
Trustee to establish the form and terms of a series of Securities designated
"7.68% Debentures Due 2034"; and
WHEREAS, the Company has entered into a Fifth Supplemental Indenture
dated as of June 15, 1995 (the "Fifth Supplemental Indenture") with the Trustee
to establish the form and terms of a series of Securities designated "7.45%
Debentures Due 2035";
WHEREAS, the Company has entered into a Sixth Supplemental Indenture
dated as of October 15, 1995 (the "Sixth Supplemental Indenture") with the
Trustee to establish the form and terms of a series of Securities designated as
"7% Debentures Due 2025"; and
WHEREAS, Section 901 of the Indenture provides, among other things,
that the Company and the Trustee may enter into indentures supplemental to the
Indenture for, among other things, the purpose of establishing the form and
terms of the Securities of any series as permitted in Sections 201 and 301 of
the Indenture and adding to the covenants of the Company for the benefit of the
Holders of any series of Securities; and
WHEREAS, the Company by corporate action duly taken has authorized the
issuance of a seventh series of Securities designated as the _% Debentures Due
____ (hereinafter sometimes called the "Debentures"), which series is limited in
aggregate principal amount to $___________, such Debentures to contain such
provisions as have been caused to be determined by or at the direction of, the
Board of Directors of the Company and as are set forth in this Seventh
Supplemental Indenture to the Indenture; and
WHEREAS, all conditions have been complied with, all actions have been
taken and all things have been done which are necessary to make the Debentures,
when executed by the Company and authenticated by or on behalf of the Trustee
and when delivered as herein and in the Indenture provided, the valid
obligations of the Company, and to make this Seventh Supplemental Indenture a
valid and binding supplemental indenture.
NOW, THEREFORE, THIS SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all holders of the Debentures, as follows:
Section 1. Definitions. For all purposes of this Seventh
Supplemental Indenture, except as otherwise herein expressly provided or
unless the context otherwise requires:
(1) terms used herein in capitalized form and defined in the
Indenture shall have the meanings
specified in the Indenture;
(2) the words "herein", "hereof" and "hereto" and other words of
similar import used in this Seventh Supplemental Indenture
refer to this Seventh Supplemental Indenture as a whole and
not to any particular Section or other subdivision of this
Seventh Supplemental Indenture;
(3) the provisions of this Seventh Supplemental Indenture shall be
read in conjunction with the provisions of the Indenture only
with respect to the Debentures and the provisions of the
Indenture and the First, Second, Third, Fourth, Fifth and
Sixth Supplemental Indentures shall not be modified by this
Seventh Supplemental Indenture with respect to any series of
the Securities outstanding or to be outstanding under the
Indenture, other than the Debentures; and
(4) terms defined in this Seventh Supplemental Indenture shall
apply only to this Seventh Supplemental Indenture and the
Debentures hereunder, and such definitions shall not apply to
any supplemental indenture other than this Seventh
Supplemental Indenture or to any Securities outstanding or to
be outstanding under the Indenture, other than the Debentures.
Except as otherwise expressly provided or unless the context otherwise
requires, "Seventh Supplemental Indenture" means this instrument as originally
executed or, if amended or supplemented pursuant to the applicable provisions of
the Indenture, as amended or supplemented.
Section 2. Forms of the Debentures. The Debentures shall be in
substantially the form set forth in Exhibit A to this Seventh Supplemental
Indenture, as such form may be completed pursuant to Section 3 hereof, the terms
of which Exhibit A are herein incorporated by reference and made a part of this
Seventh Supplemental Indenture.
Section 3. Terms of the Debentures. The terms of the Debentures
shall be as follows:
(1) the Securities to be issued under the Indenture and
this Seventh Supplemental Indenture shall be the Debentures and shall be
designated as the "_% Debentures Due ____";
(2) the Debentures shall constitute a single series of
the Securities under the Indenture,
which series is limited in aggregate principal amount to $___________;
(3) so long as any Debentures are registered in the name of
CEDE & Co., or any other nominee of The Depository Trust Company, and are
intended to be Book-Entry Securities, the provisions of Section 311 of the
Indenture shall apply to such Debentures. Thereafter the Debentures may be
subjected to the requirements of a successor book-entry securities system that
may be adopted by the Company in accordance with the provisions of the Indenture
and this Seventh Supplemental Indenture;
(4) interest on each of the Debentures shall be payable at the
rate per annum specified in the designation of the Debenture from ____________,
199_, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually, on ____ and ___________ in each year,
commencing on _________, 199_. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will be paid to the Person in
whose name such Debenture (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the _______ or ________ (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date by virtue of having been such a Holder and
shall be paid by the Company as provided in Section 307 of the Indenture;
(5) unless otherwise provided with respect to a Book- Entry
Security or pursuant to any successor book-entry security system or similar
system, payments of interest will be made by check mailed to the Holder of each
Debenture at the address shown in the Security Register or, at the option of the
Holder, to such other place in the United States of America as the Holder shall
designate to the Trustee in writing. The principal amount of the Debentures will
be paid at Maturity by check against presentation of the Debentures at the
office or agency of Chemical Bank, as Trustee, in New York, New York, or such
other address in New York, New York, as the Trustee shall designate by written
notice to the Holders of the Debentures;
(6) the Debentures shall be issued in registered form
only and in denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000;
(7) principal and interest on the Debentures shall be payable
in the coin or currency of the United States of America, which, at the time of
payment, is legal tender for public and private debts; and
(8) the Debentures shall be subject to defeasance, at the
Company's option, as provided for in Sections 1302 and 1303 of the Indenture.
Upon the Company's exercise of the option to effect such defeasance under
Section 1302 and 1303 of the Indenture in accordance with and subject to the
terms thereof, the Company shall be released from its obligations with respect
to the Debentures as provided in the applicable Section and other relevant
provisions of the Indenture.
Section 4. No Redemption by the Company. The Debentures will not be
redeemable at the option of the Company prior to maturity and will not be
subject to any sinking fund.
Section 5. Amendment to Indenture for Purposes of Seventh Series of
Debentures.
For all purposes of the Debentures and for no other purposes,
subsection (4) of Section 501 shall read:
"(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit
of a series of Securities other than that series), and continuance
of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of a
majority in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or" For all purposes of the
Debentures and for no other purposes, the first paragraph of Section
502 shall read:
"If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of a
majority in principal amount of the Outstanding Securities of
that series may declare the principal amount (or, if any of
the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such
Securities as may be specified in the terms thereof) of all of
the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become
immediately due and payable."
For all purposes of the Debentures and for no other purposes,
subsection (2) of Section 507 shall read:
"(2) the Holders of a majority in principal amount of the
Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee
hereunder;"
For all purposes of the Debentures and for no other purposes,
subsection (5) of Section 507 shall read:
"(5) no direction inconsistent with such written request
has been given to the Trustee during such 90-day period by
the Holders of 66-2/3% in principal amount of the
Outstanding Securities of that series."
Section 6. Incorporation of Indenture. From and after the date hereof,
the Indenture, as supplemented by this Seventh Supplemental Indenture, shall be
read, taken and construed as one and the same instrument with respect to the
Debentures.
Section 7. Acceptance of Trust. The Trustee accepts the trusts created
by the Indenture, as heretofore supplemented by the First Supplemental
Indenture, Second Supplemental Indenture, Third Supplemental Indenture, Fourth
Supplemental Indenture, Fifth Supplemental Indenture and Sixth Supplemental
Indenture and as hereby supplemented by this Seventh Supplemental Indenture, and
agrees to perform the same upon the terms and conditions in the Indenture, as so
supplemented.
Section 8. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required under such Act to be a part of and govern this Seventh Supplemental
Indenture, such provision of the Act shall control. If any provision of this
Seventh Supplemental Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, such provision of the Act
shall be deemed to apply to this Seventh Supplemental Indenture only as so
modified and if not so excluded, as the case may be.
Section 9. Governing Law. This Seventh Supplemental Indenture, and
the Debentures, shall be governed by and construed in accordance with the laws
of the State of New York.
Section 10. Recitals. The recitals contained in the Indenture, this
Seventh Supplemental Indenture and the Debentures, except the Trustee's
certificate of authentication, shall be taken as statements of the Company, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of the Indenture, as
supplemented by this Seventh Supplemental Indenture.
Section 11. Amendments. Notwithstanding any other provisions hereof,
all amendments to the Indenture made hereby shall have effect only with respect
to the Debentures, and not with respect to the Securities of any other series
created subsequent to the date hereof.
Section 12. Counterparts. This Seventh Supplemental Indenture may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the date first above
written.
CITIZENS UTILITIES COMPANY
By:______________________________
Title: Vice President and
Treasurer
Attest:
- --------------------------------
Secretary
CHEMICAL BANK, as Trustee
By:______________________________
Title: Vice President
Attest:
- -------------------------------
Senior Trust Officer
<PAGE>
-17-
County of Fairfield )
) ss.:
State of Connecticut )
On the day of __________, 199_, before me personally came Robert
DeSantis, to me known, who, being by me duly sworn, did depose and say that
he is Vice President and Treasurer of CITIZENS UTILITIES COMPANY, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporations; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
----------------------------------
Notary Public, State of Connecticut
<PAGE>
County of New York )
) ss.:
State of New York )
On this day of _________ in the year of 199_ before me
personally came _____________________________________________, to me personally
known, who being by me duly sworn did depose and say that
he resides at ______________________________________, that he is Vice President
of CHEMICAL BANK, one of the corporations described in and which executed
the foregoing indenture; that he knows the seal of said corporation; that the
seal affixed to said instrument opposite the execution thereof on behalf of said
corporation is the corporate seal of said corporation; that said instrument was
signed and said corporate seal was so affixed on behalf of said corporation by
authority and order of its board of directors; that he signed his name thereto
by like authority; and he acknowledged said instrument to be his free act and
deed and the free act and deed of said Chemical Bank.
IN WITNESS WHEREOF I have hereunder set my hand and affixed my
official seal, at New York in said State of New York, the day and year first
above written.
----------------------------------
Notary Public, State of New York
<PAGE>
CITIZENS UTILITIES COMPANY
TO
CHEMICAL BANK
(Trustee)
SEVENTH SUPPLEMENTAL INDENTURE
Dated as of _____________, 199_
Supplemental to the Indenture
Dated as of August 15, 1991
WINTHROP, STIMSON, PUTNAM & ROBERTS
One Battery Park Plaza
New York, New York 10004-1490
Telephone: 212-858-1000
Telefax: 212-858-1500
Telex: 62854 WINSTIM
June 20, 1996
Citizens Utilities Company
High Ridge Park
Stamford, Connecticut 06905
Gentlemen:
As special counsel to Citizens Utilities Company, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933 (the "Act"), of up to $904,125,000 aggregate amount of the Company's debt
and equity securities (the "Securities") to be issued and sold by the Company
from time to time in accordance with Rule 415 under the Act, we have examined
the registration statement on Form S-3 (the "Registration Statement") in regard
thereto, filed under the Act, including the prospectus which is a part thereof,
and such other documents as we have considered necessary for the purposes of
this opinion. Based upon such examination, we hereby advise you that:
(1) We are of the opinion that the Company is a corporation
validly organized and duly existing under the laws of the State of Delaware. We
are further of the opinion that, in the event that an offering of Securities
shall be made from time to time (the "Offered Securities") in accordance with
the Registration Statement, as amended and supplemented from time to time and
when the steps enumerated in Paragraph (2) hereof shall have been taken, the
Offered Securities will be validly issued and binding obligations of the
Company.
(2) The steps which are referred to in the foregoing Paragraph
(1) hereof are:
(a) It shall be determined that the public service commissions,
or other regulatory agencies or bodies, or other political entities relating to
public utilities matters of the pertinent states shall be without jurisdiction,
or shall have declined to exercise jurisdiction over the issuance and/or sale of
the Offered Securities, or shall have issued an appropriate order approving and
authorizing the issuance and/or sale of the Offered Securities and such order
shall be in full force and effect;
(b) The Board of Directors of the Company shall have taken the
appropriate steps to authorize the issuance and sale of the Securities;
(c) An appropriate order of the Federal Energy Regulatory
Commission with respect to the issuance and sale of the Offered Securities shall
have been issued and shall be in full force and effect;
(d) The applicable provisions of the Act shall have been
complied with;
(e) If the Offered Securities are debt securities, a supplemental
indenture to the Indenture dated as of August 15, 1991 relating to the Offered
Securities (the "Indenture") shall have been duly authorized, executed and
delivered in accordance with the terms of said Indenture and said Indenture (as
supplemented and to be supplemented) and shall have been qualified under the
Trust Indenture Act of 1939;
(f) The Offered Securities shall have been duly authorized,
executed and delivered and, if debt securities, shall have been authenticated in
accordance with terms of said Indenture (as supplemented and to be
supplemented); and
(g) The Offered Securities shall have been duly issued and paid
for.
We are members of the bar of the State of New York. In rendering the
forgoing opinion we express no opinion as to laws other than the laws of the
State of New York, the Delaware General Corporation Law and the Federal laws of
the United States.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference made to our firm under "Legal
Opinions" in the prospectus constituting part of the Registration Statement. In
giving such consent, we do not hereby admit that we are within the category of
persons whose consent is required under section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Winthrop, Stimson, Putnam & Roberts
- ---------------------------------------
CITIZENS UTILITIES COMPANY & SUBSIDARIES
Ratio of Earnings to Combined Fixed Charges and Dividends on
Convertible Preferred Securities and Ratio of Earnings to Fixed Charges
(In Thousands)
<TABLE>
Ratio of Earnings
to Combined
Fixed Charges
and Dividends on
Convertible Prefer-
red Securities Ratio of Earnings to Fixed Charges
------------------ ------------------------------------------------------------
Twelve months ended
March 31,1996 For the years ended December 31,
------------------------------------ ------------------------------------------
<CAPTION>
Proforma Actual Proforma Actual 1995 1994 1993 1992 1991
-------- -------- -------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Income per
Consolidated State-
ment of Income $175,586 $164,488 $181,039 $165,741 $159,536 $143,997 $125,630 $115,013 $112,354
Taxes based on
income or profits 86,496 72,365 83,196 71,588 66,817 64,323 52,298 43,767 43,571
-------- -------- -------- -------- -------- -------- -------- -------- --------
Earnings,before
income taxes 262,082 236,853 264,235 237,329 226,353 208,320 177,928 158,780 155,925
Fixed charges 97,110 95,565 88,510 93,535 94,227 77,458 40,984 41,676 35,987
-------- -------- -------- -------- -------- -------- -------- -------- --------
Earnings before
income taxes and
fixed charges $359,192 $332,418 $352,745 $330,864 $320,580 $285,778 $218,912 $200,456 $191,912
======== ======== ======== ======== ======== ======== ======== ======== ========
Ratio of Earnings
to Fixed charges 3.7 3.5 4.0 3.5 3.4 3.7 5.3 4.8 5.3
===== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
Independent Auditor's Consent
-----------------------------
The Board of Directors
Citizens Utilities Company:
We consent to the use of our report incorporated by reference to our firm under
the heading "Experts" in the Prospectus.
KPMG PEAT MARWICK LLP
New York, New York
June 27, 1996
-------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
CITIZENS UTILITIES COMPANY
(Exact name of obligor as specified in its charter)
Delaware 06-0619596
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
High Ridge Park, Bldg. No.3
P. O. Box 3801
Stamford, Connecticut 06905
(Address of principal executive offices) (Zip Code)
------------------------------------------
Debt Securities
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection
with Registration Statement No. 33-84460, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 3rd day of May, 1996.
CHEMICAL BANK
By
Thomas J. Foley
Vice President
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 3rd day of May, 1996.
CHEMICAL BANK
By /s/ Thomas J. Foley
Thomas J. Foley
Vice President
