APS 2013 Annual Report Download - page 42

Table of Contents
In addition, the stock market in general has experienced volatility that has often been unrelated to the operating performance of a particular company.
These broad market fluctuations may adversely affect the market price of our common stock.
Certain provisions of our articles of incorporation and bylaws and of Arizona law make it difficult for shareholders to change the composition of
our board and may discourage takeover attempts.
These provisions, which could preclude our shareholders from receiving a change of control premium, include the following:
· restrictions on our ability to engage in a wide range of “business combination” transactions with an “interested shareholder” (generally, any
person who owns 10% or more of our outstanding voting power or any of our affiliates or associates) or any affiliate or associate of an
interested shareholder, unless specific conditions are met;
· anti-greenmail provisions of Arizona law and our bylaws that prohibit us from purchasing shares of our voting stock from beneficial
owners of more than 5% of our outstanding shares unless specified conditions are satisfied;
· the ability of the Board of Directors to increase the size of the Board of Directors and fill vacancies on the Board of Directors, whether
resulting from such increase, or from death, resignation, disqualification or otherwise; and
· the ability of our Board of Directors to issue additional shares of common stock and shares of preferred stock and to determine the price
and, with respect to preferred stock, the other terms, including preferences and voting rights, of those shares without shareholder approval.
While these provisions have the effect of encouraging persons seeking to acquire control of us to negotiate with our Board of Directors, they could
enable the Board of Directors to hinder or frustrate a transaction that some, or a majority, of our shareholders might believe to be in their best interests and, in
that case, may prevent or discourage attempts to remove and replace incumbent directors.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Neither Pinnacle West nor APS has received written comments regarding its periodic or current reports from the SEC staff that were issued 180 days
or more preceding the end of its 2013 fiscal year and that remain unresolved.
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