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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 24, 2008
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Exact Name of Registrant as Specified in |
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Charter; State of Incorporation;
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IRS Employer |
Commission File Number
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Address and Telephone Number
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Identification Number |
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1-8962
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Pinnacle West Capital Corporation
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86-0512431 |
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(an Arizona corporation) |
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400 North Fifth Street, P.O. Box 53999 |
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Phoenix, AZ 85072-3999 |
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(602) 250-1000 |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 8.01 Other Events.
The following Description of Common Stock is filed for purposes of updating and superseding
the description of the common stock of Pinnacle West Capital Corporation (the Company, we,
us, our), contained in the Companys Registration Statement on Form 8-B filed on July 25, 1985,
as amended to the date hereof. It also includes a general description of our associated preferred
stock purchase rights that are registered pursuant to our Registration Statement on Form 8-A filed
March 31, 1989, as amended to the date hereof.
DESCRIPTION OF COMMON STOCK
In the paragraphs below, we describe our common stock. However, this summary does not purport
to be complete and is subject to, and is qualified in its entirety by express reference to, the
provisions of our articles of incorporation, bylaws and shareholder rights plan, copies of which
have been filed with the Securities and Exchange Commission.
Authorized Shares
Under our articles of incorporation, we have the authority to issue 150,000,000 shares of
common stock.
Dividends
Subject to any preferential rights of any series of preferred stock, holders of shares of
common stock will be entitled to receive dividends on the stock out of assets legally available for
distribution when, as and if authorized and declared by our Board of Directors. The payment of
dividends on the common stock will be a business decision to be made by our Board of Directors from
time to time based upon results of our operations and our financial condition and any other factors
as our Board of Directors considers relevant. Payment of dividends on the common stock may be
restricted by loan agreements, indentures and other transactions entered into by us from time to
time. In addition, our principal income consists of dividends paid to us by our subsidiaries,
primarily Arizona Public Service Company (APS). APS ability to pay dividends could be limited
or restricted from time to time by loan agreements, indentures and other transactions or by law or
regulatory authorities.
Voting Rights
Holders of common stock are entitled to one vote per share on all matters voted on generally
by the shareholders, including the election of directors, and, except as otherwise required by law
or except as provided with respect to any series of preferred stock, the holders of the shares
possess all voting power. Arizona law provides for cumulative voting for the election of directors.
As a result, any shareholder may cumulate his or her votes by casting them all for any one director
nominee or by distributing them among two or more nominees.
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Liquidation Rights
Subject to any preferential rights of any series of preferred stock, holders of shares of
common stock are entitled to share ratably in our assets legally available for distribution to our
shareholders in the event of our liquidation, dissolution or winding up.
Absence of Other Rights
Holders of common stock have no preferential, preemptive, conversion or exchange rights. When
issued in accordance with our articles of incorporation and law, shares of our common stock are
fully paid and not liable to further calls or assessment by us.
Transfer Agent and Registrar
The Bank of New York Mellon is the principal transfer agent and registrar for the common
stock.
Preferred Stock
Our Board of Directors has the authority, without any further action by our shareholders, to
issue from time to time up to ten million shares of preferred stock, in one or more series and to
fix the designations, preferences, rights, qualifications, limitations and restrictions thereof,
including voting rights, dividend rights, dividend rates, conversion rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting any series. The
issuance of preferred stock with voting rights could have an adverse effect on the voting power of
holders of common stock by increasing the number of outstanding shares having voting rights. In
addition, if our Board of Directors authorizes preferred stock with conversion rights, the number
of shares of common stock outstanding could potentially be increased up to the authorized amount.
The issuance of preferred stock could decrease the amount of earnings and assets available for
distribution to holders of common stock. Any such issuance could also have the effect of delaying,
deterring or preventing a change in control of us and may adversely affect the rights of holders of
our common stock.
Certain Anti-takeover Effects
General. Certain provisions of our articles of incorporation, bylaws, and the Arizona Revised
Statutes (ARS), as well as our shareholder rights plan, may have an anti-takeover effect and may
delay or prevent a tender offer or other acquisition transaction that a shareholder might consider
to be in his or her best interest, including a transaction that results in a premium over the
market price of the common stock. The summary of the provisions of our articles, bylaws,
shareholder rights plan, and the ARS set forth below does not purport to be complete and is
qualified in its entirety by reference to our articles, bylaws, shareholder rights plan, and the
ARS.
Business Combinations. ARS § 10-2741 through 2743 and Article XII of our bylaws restrict a
wide range of transactions (collectively, business combinations) between us or, in certain cases,
one of our subsidiaries, and an interested shareholder (or any affiliate or associate of the
interested shareholder). An interested shareholder is, generally, any person who
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beneficially owns, directly or indirectly, 10% or more of our outstanding voting power or any
of our affiliates or associates who at any time within the prior three years was such a beneficial
owner. The statute broadly defines business combinations to include, among other things and with
certain exceptions:
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mergers and consolidations with an interested shareholder or an affiliate or
associate of the interested shareholder; |
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share exchanges with an interested shareholder or an affiliate or associate of the
interested shareholder; |
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any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets
to an interested shareholder or an affiliate or associate of the interested
shareholder, representing 10% or more of (i) the aggregate market value of all of our
consolidated assets as of the end of the most recent fiscal quarter, (ii) the aggregate
market value of all our outstanding shares, or (iii) our consolidated revenues or net
income for the four most recent fiscal quarters; |
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the issuance or transfer of shares of stock having an aggregate market value of 5%
or more of the aggregate market value of all of our outstanding shares to an interested
shareholder or an affiliate or associate of the interested shareholder; |
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the adoption of a plan or proposal for our liquidation or dissolution or
reincorporation in another state or jurisdiction pursuant to an agreement or
arrangement with an interested shareholder or an affiliate or associate of the
interested shareholder; |
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corporate actions, such as stock splits and stock dividends, and other transactions
resulting in an increase in the proportionate share of the outstanding shares of any
series or class of stock of us or any of our subsidiaries owned by an interested
shareholder or an affiliate or associate of the interested shareholder; and |
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the receipt by an interested shareholder or an affiliate or associate of the
interested shareholder of the benefit (other than proportionately as a shareholder) of
any loans, advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by or through us or any of our subsidiaries. |
The ARS and our bylaws provide that, subject to certain exceptions, we may not engage in a
business combination with an interested shareholder (or any affiliate or associate of the
interested shareholder) or authorize one of our subsidiaries to do so, for a period of three years
after the date on which the interested shareholder first acquired the shares that qualify such
person as an interested shareholder (the share acquisition date), unless either the business
combination or the interested shareholders acquisition of shares on the share acquisition date is
approved by a committee of our Board of Directors (comprised solely of disinterested directors or
other disinterested persons) prior to the interested shareholders share acquisition date.
In addition, after such three-year period, the ARS and our bylaws prohibit us from engaging in
any business combination with an interested shareholder (or any affiliate or associate of the
interested shareholder), subject to certain exceptions, unless:
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the business combination or acquisition of shares by the interested shareholder on
the share acquisition date was approved by our Board of Directors prior to the share
acquisition date; |
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the business combination is approved by holders of a majority of our outstanding
shares (excluding shares beneficially owned by the interested shareholder or any
affiliate or associate of the interested shareholder) at a meeting called after such
three-year period; or |
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the business combination satisfies specified price and other requirements. |
Anti-Greenmail Provisions. ARS § 10-2704 and Article XIII of our bylaws prohibit us from
purchasing any shares of our voting stock from any beneficial owner (or group of beneficial owners
acting together to acquire, own or vote our shares) of more than 5% of the voting power of our
outstanding shares at a price per share in excess of the average closing sale price during the 30
trading days preceding the purchase or if the person or persons have commenced a tender offer or
announced an intention to seek control of us, during the 30 trading days prior to the commencement
of the tender offer or the making of the announcement, if the 5% beneficial owner has beneficially
owned the shares to be purchased for a period of less than three years, unless:
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holders of a majority of our voting power (excluding shares held by the 5%
beneficial owner or its affiliates or associates or by any of our officers and
directors) approve the purchase; or |
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we make the repurchase offer available to all holders of the class or series of
securities to be purchased and to all holders of other securities convertible into
that class or series. |
Control Share Acquisition Statute. Through a provision in our bylaws, we have opted out of ARS
§ 10-2721 through 2727, the Arizona statutory provisions regulating control share acquisitions. As
a result, potential acquirors are not subject to the limitations imposed by that statute.
Shareholder Rights Plan. We have adopted a shareholder rights plan under which one preferred
share purchase right is attached to each outstanding share of our common stock. The rights become
exercisable and will be separated from the common stock on the Distribution Date, as such term is
defined in the plan. Generally, subject to specified exceptions, the Distribution Date will occur
on the earlier of:
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10 days following a public announcement that a person or group of affiliated or
associated persons (an acquiring person) has acquired beneficial ownership of 15% or
more of our outstanding common stock; or |
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10 business days following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer that would result in the beneficial ownership by
a person or group of 15% or more of our outstanding common stock. |
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Each right entitles the registered holder to purchase from us one one-hundredth of a share of
Series A Participating Preferred Stock (the Series A Preferred Stock) at an exercise price of
$130, subject to adjustment under specified circumstances. However, after any person has become an
acquiring person (a Flip-In Event), upon exercise of the right, the holder will be entitled to
receive common stock valued at twice the exercise price of the right. In other words, a rights
holder may purchase common stock at a 50% discount. In some circumstances, the holder will receive
cash, property or other securities instead of common stock. Upon the occurrence of a Flip-In Event,
any rights owned by an acquiring person, its affiliates and associates and certain of its
transferees will become null and void.
In the event that a person becomes an acquiring person, we are then merged, and the common
stock is exchanged or converted in the merger, then each right (other than those formerly held by
the acquiring person, which became void) would flip-over and be exercisable for a number of
shares of common stock of the acquiring company having a market value of two times the exercise
price of the right. In other words, a rights holder may purchase the acquiring companys common
stock at a 50% discount.
After a Flip-In Event but before a flip-over event (as described above) occurs and before an
acquiring person becomes the owner of 50% or more of the common stock, the Board may cause the
rights (either in whole or in part) to be exchanged for shares of common stock (or fractional
interests in Series A Preferred Stock, or equivalent securities, of equal value) at a one-to-one
exchange ratio. Rights held by the acquiring person, however, which became void upon the Flip-In
Event, would not be entitled to participate in such exchange.
We may redeem the rights for $0.01 per right at any time prior to the date on which a person
becomes an acquiring person. The shareholder rights plan and the rights expire in March 2009,
subject to extension.
For so long as the rights are redeemable, the terms of the rights may be amended or
supplemented by the Board of Directors at any time and from time to time without the consent of the
holders of the rights. At any time when the rights are not redeemable, the Board of Directors may
amend or supplement the terms of the rights, provided that such amendment does not adversely affect
the interests of the holders of the rights. In no event may any amendment or supplement be made
which changes the redemption price.
Until a right is exercised, the holder thereof will have no rights as a shareholder,
including, without limitation, the right to vote or to receive dividends, except as holder of the
common stock to which the right is attached.
For information on the terms of the Series A Preferred Stock, see the certificate of
designation for the Series A Preferred Stock, the form of which is attached as Exhibit A to the
Amended and Restated Rights Agreement, dated as of March 26, 1999, filed as an exhibit to our
Current Report on Form 8-K filed with the SEC on April 19, 1999, which is incorporated herein by
reference.
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Special Meetings of Shareholders. Pursuant to ARS § 10-702, except with respect to certain
business combinations, as required by Arizona law, a special meeting of shareholders may be called
by a corporations Board of Directors or any other person authorized to do so in its articles of
incorporation or bylaws. Our bylaws provide that, except as required by law, special meetings of
shareholders may only be called by a majority of our Board of Directors, the Chairman of the Board,
or the President.
Election and Removal of Directors. Each member of our Board of Directors is elected annually
to hold office until the next annual meeting of the shareholders or until his or her earlier death,
resignation or removal or until his or her successor is duly elected and qualified. Arizona law
provides for cumulative voting in the election of directors, which may make it more difficult for
shareholders to elect a majority of the Board of Directors.
Our bylaws provide that any director may be removed with or without cause, but only at a
special meeting of shareholders called for that purpose, if the votes cast in favor of such removal
exceed the votes cast against such removal. However, if less than the entire Board of Directors is
to be removed, no one director may be removed if the votes cast against the directors removal
would be sufficient to elect the director if then cumulatively voted at an election of
directors.
Shareholder Proposals and Director Nominations. A shareholder can submit shareholder proposals
and nominate candidates for election to our Board of Directors if he or she follows the advance
notice provisions set forth in our bylaws.
With respect to shareholder proposals to bring business before the annual meeting,
shareholders must submit a written notice to the Secretary of the Company not fewer than 90 nor
more than 120 days prior to the first anniversary of the date of our previous years annual meeting
of shareholders. However, if we have changed the date of the annual meeting by more than 30 days
from the date of the previous years annual meeting, the written notice must be submitted no
earlier than 120 days before the annual meeting and not later than 90 days before the annual
meeting or ten days after the day we make public the date of the annual meeting. The written notice
must briefly describe the business the shareholder desires to bring before the meeting, the text of
the proposal or business, the reasons for conducting such business at the meeting, and any material
interest in the proposal of the shareholder and the beneficial owner, if any, on whose behalf the
proposal is made.
With respect to director nominations, shareholders must submit written notice to the Secretary
of the Company at least 180 days prior to the date of the annual meeting. This requirement is
also contained in our articles of incorporation. Our bylaws require that the written notice must
contain all information relating to the director nominee that is required to be included in a proxy
statement pursuant to Regulation 14A under the Securities Exchange Act of 1934, as well as the
written consent of the proposed nominee to be named in the proxy statement as a nominee and to
serving as a director if elected.
All written notices delivered pursuant to the advance notice provisions of our bylaws are
required to state (i) the name and address as they appear on our books of the sponsoring
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shareholder and the beneficial owner, if any, on whose behalf the proposal or nomination is
made, (ii) the class and number of shares that are owned beneficially and of record by the
shareholder and such beneficial owner, (iii) a representation that the shareholder is a holder of
record entitled to vote at the meeting and intends to appear in person or by proxy at the meeting
to propose such business or nomination, and (iv) whether the shareholder or beneficial owner
intends or is part of a group that intends to deliver a proxy statement to holders of at least the
number of shares required to adopt the proposal or elect the nominee or otherwise solicit proxies
in favor of the proposal or nomination.
Shareholder proposals and director nominations that are late or that do not include all
required information may be rejected. This could prevent shareholders from bringing certain matters
before an annual meeting, including proposing the election of non-incumbent directors.
A shareholder must also comply with all applicable laws in proposing business to be conducted
and in nominating directors. The notice provisions of the bylaws do not affect rights of
shareholders to request inclusion of proposals in our proxy statement pursuant to Rule 14a-8 of the
Securities Exchange Act of 1934.
Additional Authorized Shares of Capital Stock. The authorized but unissued shares of common
stock and preferred stock available for issuance under our articles of incorporation could be
issued at such times, under such circumstances, and with such terms and conditions as to impede an
acquisition transaction.
Amendment to Articles of Incorporation and Bylaws. ARS § 10-1001 through 1003 generally
provide that both the Board of Directors and the shareholders must approve amendments to an Arizona
corporations articles of incorporation, except that the Board of Directors may adopt specified
ministerial amendments without shareholder approval. Unless the articles of incorporation, Arizona
law or the Board of Directors would require a greater vote or unless the articles of incorporation
or Arizona law would require a different quorum, the vote required by each voting group allowed or
required to vote on the amendment would be:
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a majority of the votes entitled to be cast by the voting group, if the amendment
would create dissenters rights for that voting group; and |
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in any other case, if a quorum is present in person or by proxy consisting of a
majority of the votes entitled to be cast on the matter by the voting group, the votes
cast by the voting group in favor of the amendment must exceed the votes cast against
the amendment by the voting group. |
ARS § 10-1020 provides that the Board of Directors may amend the corporations bylaws unless
either: (i) the articles or applicable law reserves this power exclusively to shareholders in whole
or in part or (ii) the shareholders in amending or repealing a particular bylaw provide expressly
that the Board may not amend or repeal that bylaw. An Arizona corporations shareholders may amend
the corporations bylaws even though they may also be amended by the Board of Directors. Our bylaws
may not be amended or repealed without the vote of a majority of the Board of Directors or the
affirmative vote of a majority of votes cast on the matter at a meeting of shareholders.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PINNACLE WEST CAPITAL CORPORATION
(Registrant)
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Dated: November 24, 2008 |
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/s/ James R. Hatfield
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James R. Hatfield |
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Senior Vice President and Chief Financial Officer |
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