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BYLAWS
AS AMENDED THROUGH MAY 1, 1992
OF
POLICY MANAGEMENT SYSTEMS CORPORATION
OF
SOUTH CAROLINA
ARTICLE 1: OFFICES
Section 1: Registered Office and Agent. The registered office
of the Corporation and the registered agent shall be at One PMS
Center, Blythewood, South Carolina 29016.
Section 2: Other Offices. The Corporation may also have
offices at such other places within and without the State of South
Carolina as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE 2: SHAREHOLDERS
Section 1: Place of Meetings. Meetings of shareholders shall
be held at the time and place, within or without the State of South
Carolina, stated in the notice of the meeting or in a waiver of
notice.
Section 2: Annual Meetings. An annual meeting of the
shareholders shall be held each year at 11:00 a.m. on a date to be
set by the Board of Directors each year in accordance with all
applicable notice requirements. At the meeting, the shareholders
shall elect directors and transact such other business as may
properly be brought before the meeting.
Section 3: Voting List. At least ten (10) days prior to each
meeting of the shareholders, a complete list of the shareholders
entitled to vote at the meeting, arranged in alphabetical order,
with the address of each and the number of voting shares held by
each, shall be prepared by the officer or agent having charge of
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the stock transfer books. The list, for a period of ten (10) days
prior to the meeting, shall be kept on file at the registered
office of the Corporation and shall be subject to inspection by any
shareholder at any time during usual business hours. The list
shall also be produced and kept open at the time and place of the
meeting during the whole time thereof, and shall be subject to the
inspection of any shareholder during the whole time of the meeting.
Section 4: Special Meeting. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute or by the Articles of Incorporation, or by
these Bylaws, may be called by the chief executive officer, the
president, the chairman of the Board of Directors, or a majority of
the Board of Directors. Business transacted at the special meeting
shall be confined to the purposes stated in the notice of the
meeting.
Section 5: Notice. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special
meeting the purpose or purposes for which the meeting is called,
shall be delivered not less than ten (10) nor more than sixty (60)
days before the date of the meeting, either personally or by mail,
by or at the direction of the chairman, the chief executive
officer, the president, the secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote
at such meeting. If mailed, such notice shall be deemed delivered
when deposited with postage prepaid in the United States mail,
addressed to the shareholder at the address appearing on the stock
transfer books of the Corporation. No failure or irregularity of
notice of any regular meeting shall invalidate the same or any
proceeding thereat.
Section 6: Quorum. The holders of a majority of the shares
issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall be requisite and shall
constitute a quorum at meetings of the shareholders for the
transaction of business except as otherwise provided by statute, by
the Articles of Incorporation or by these Bylaws. If a quorum is
not present or represented at a meeting of the shareholders, the
shareholders entitled to vote, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum is present or represented, provided, however, that such
adjournment or adjournments shall not extend beyond sixty (60) days
from the date such meeting is originally held without additional
notice of such meeting as provided in Section 5 immediately above.
At an adjourned meeting at which a quorum is present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 7: Majority Vote; Withdrawal of Quorum. Except in
regards to the election of directors, when a quorum is present at
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a meeting, the vote of the holders of a majority of the shares
having voting power, present in person or represented by proxy,
shall decide any question brought before the meeting, unless the
question is one on which, by express provision of the statutes, the
Articles of Incorporation, or these Bylaws, a higher vote is
required in which case the express provision shall govern.
Directors shall be elected by plurality vote of the shareholders.
The shareholders present at a duly constituted meeting may continue
to transact business until adjournment, despite the withdrawal of
enough shareholders to leave less than a quorum.
Section 8: Method of Voting. Each outstanding share,
regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of shareholders, except to the
extent that the Articles of Incorporation provide otherwise and
except to the extent that the Articles of Incorporation limit or
deny the voting rights of the shares of any class or classes. At
any meeting of the shareholders, every shareholder having the right
to vote may vote either in person, or by proxy executed in writing
by the shareholder or by his duly authorized attorney-in-fact, or
by a telegram or cablegram appearing to have been transmitted by a
shareholder. No proxy shall be valid after the expiration of
eleven (11) months from the date of its execution. Every proxy
shall be filed with the secretary of the Corporation prior to or at
the time of the meeting. Voting for directors shall be in
accordance with Article 3 Section 3 of these Bylaws. Any vote may
be taken by voice or by hands unless someone entitled to vote
objects, in which case written ballots shall be used.
Section 9: Record Date; Closing Transfer Books. The Board of
Directors shall fix in advance a record date for the purpose of
determining shareholders entitled to notice of and to vote at a
meeting of the shareholders, the record date to be not less than
ten (10) nor more than seventy (70) days prior to the meeting and
the Board of Directors shall cause the stock transfer books to be
closed for such purpose on such record date.
ARTICLE 3: DIRECTORS
Section 1: Management. The business and affairs of the
Corporation shall be managed by the Board of Directors who may
exercise all such powers of the Corporation and do all such lawful
acts and things as are not (by statute or by the Articles of
Incorporation or by these Bylaws) directed or required to be done
or exercised by the shareholders.
Section 2: Number, Classification and Election of Directors.
The Board of Directors shall be limited to a maximum of sixteen
directors, with the precise number thereof to be fixed as the Board
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shall from time to time resolve. The members of the Board of
Directors need not be shareholders nor need they be residents of
any particular state. Subject to the provisions of S.C. Code
33-8-104, formerly S.C. Code 33-15-50, the directors shall be
classified with respect to the time for which they shall severally
hold office by dividing them into three classes, each consisting of
an approximately equal number of directors, and each director of
the Corporation shall hold office until his successor shall be
elected and shall qualify.
Section 3: Election of Directors. Directors shall be elected
by plurality vote. Each shareholder entitled to vote at an
election of directors shall be entitled to cumulate his votes. Any
shareholder who intends to cumulate his votes shall either give
written notice of such intention to an officer of the Corporation
not less than forty-eight (48) hours before the time fixed for the
meeting or shall announce his intention in such meeting before the
election of directors has commenced. If a shareholder intending to
accumulate his votes gives notice in the meeting, the person
presiding may, or if requested by any shareholder shall, recess the
meeting for a period not to exceed two (2) hours. If any
shareholder his given notice of his intention to cumulate his votes
either prior to or in the meeting, all shareholders entitled to
vote at such meeting shall, without further notice, be entitled to
accumulate their votes.
Section 4: Retirement of Directors. Any member of the Board
of Directors who shall attain his seventieth (70th) birthday during
his term shall retire from the Board on the last day of his term
and shall be deemed to retire from the Board on such day. No
person shall be elected to serve upon the Board of Directors who
has attained the age of seventy (70) years.
Section 5: Removal of Directors.
(a) Directors may be removed without cause by the
affirmative vote of the holders of a majority of the
shares entitled to vote at an election of directors, such
vote being taken at a meeting of the shareholders called
for that purpose at which the holders of eighty percent
(80%) of the shares entitled to vote are present in person
or represented by proxy. No amendment, alternation,
change or repeal of this subparagraph of Article 3,
Section 5 may be effected unless it is first approved by
the affirmative vote of holders of not less than eighty
percent (80%) of each class of shares of the Corporation
entitled to vote thereon.
(b) Directors may be removed for cause by the affirmative
vote of the holders of a majority of the shares entitled
to vote at an election of directors, such vote being taken
at a meeting of the shareholders called for that purpose
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at which quorum as provided in Article 2, Section 6 is
present.
(c) No director who has been elected by cumulative voting
may be removed if the votes cast against his removal would
be sufficient to elect him if then cumulatively voted at
an election of the entire Board of Directors, or, if there
be classes of directors, at an election of the class of
Directors of which his is a part.
Section 6: Vacancies. Any vacancy occurring in the Board of
Directors, whether by increase in the number of directors or by
death, resignation, removal, or otherwise may be filled by an
affirmative vote of a majority of the remaining directors then in
office for a term ending at the next annual meeting of the
shareholders of the Corporation.
Section 7: Place of Meetings. Meetings of the Board of
Directors, regular or special, may be held either within or without
the State of South Carolina.
Section 8: Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place as
shall from time to time be determined by the Board.
Section 9: Special Meetings. Special meetings of the Board of
Directors may be called without notice by the chairman, the chief
executive officer, the president, or any executive vice president.
Section 10: Telephone and Similar Meetings. Directors may
participate in and hold a meeting by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in
such a meeting shall constitute presence in person at the meeting,
except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 11: Quorum; Majority Vote. At meetings of the Board
of Directors a majority of the number of directors then in office
shall constitute a quorum for the transaction of business. The act
of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors,
except as otherwise specifically provided by statute, the Articles
of Incorporation, or these Bylaws. If a quorum is not present at
a meeting of the Board of Directors, the directors present may
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
Section 12: Compensation. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be
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paid a fixed sum for attendance at each meeting of the Board of
Directors. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving
compensation therefor. Members of the executive committee, audit
committee, or of special or standing committees may, by resolution
of the Board of Directors, be allowed compensation for attending
committee meetings.
Section 13: Procedure. The Board of Directors shall keep
regular minutes of its proceedings. The minutes shall be placed in
the minute book of the Corporation.
Section 14: Action Without Meeting. Any action required or
permitted to be taken at a meeting of the Board of Directors may be
taken without a meeting by a majority of directors, and such action
shall be deemed action of the Board of Directors if all directors
execute, either before or after the action is taken a written
consent thereto, and the consent is filed with the records of the
Corporation. Such consent shall have the same force and effect as
a majority vote or such greater percentage vote as is required by
the Articles of Incorporation, Bylaws, or statute, at a meeting.
ARTICLE 4: EXECUTIVE COMMITTEE; AUDIT COMMITTEE;
NOMINATING COMMITTEE; COMPENSATION COMMITTEE
AND OTHER COMMITTEES
Section 1: Designation. The Board of Directors may, by
resolution adopted by a majority of the full Board, designate an
Executive Committee, an Audit Committee, a Nominating Committee, a
Compensation Committee and other committees.
Section 2: Executive Committee.
(a) Number; Qualifications; Term. The Executive
Committee shall consist of one or more directors elected
by the Board, one of whom shall be the chief executive
officer of the Corporation. The Executive Committee shall
serve at the pleasure of the Board of Directors.
(b) Authority. The Executive Committee, to the extent
provided in such resolution, shall have and may exercise
all of the authority of the Board of Directors in the
management of the business and affairs of the Corporation,
including authority over the use of the corporate seal.
However, the Executive Committee shall not have the
authority of the Board to:
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(1) Amend the Articles of Incorporation;
(2) Adopt a plan of merger, consolidation, or
exchange;
(3) Recommend to the shareholders the sale or
disposition of all or substantially all of the
property and assets of the Corporation other than
in the usual course of its business;
(4) Recommend to the shareholders a voluntary
dissolution of the Corporation or revocation of
such dissolution;
(5) Declare dividends or other corporate
distributions;
(6) Adopt or revise a bylaw of the Corporation;
(7) Fill vacancies on the Board of Directors;
(8) Issue stock, except by Board of Directors'
resolution, or provisions of the Articles or
Bylaws.
Section 3: Audit Committee.
(a) Number; Qualification; Term. The Audit Committee
shall consist of three (3) or more directors elected by
the Board, none of whom shall be employed by the
Corporation in any capacity other than as a director, the
chairman of which shall be appointed by the chief
executive officer of the Corporation. The Audit Committee
shall serve, by resolution addressed thereto, at the
pleasure of the Board of Directors.
(b) Authority. The Audit Committee, to the extent
provided in such resolution, shall select and nominate for
consideration of the Board of Directors independent
auditors of the Corporation, shall be responsible for the
arrangements for and scope of the independent examination
of the financial records of the Corporation by such
auditors, shall give appropriate consideration to the
controls of such audit, and shall perform such other
duties and assume such additional responsibility as may
from time to time be placed upon it by the Board of
Directors, subject, however, to the same restrictions set
forth in Section 2(b) of this Article 4 with respect to
the Executive Committee.
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Section 4: Nominating Committee.
(a) Number; Qualification; Term. The Nominating
Committee shall consist of one or more directors elected
by the Board. The Nominating Committee shall serve at the
pleasure of the Board of Directors.
(b) Authority. The Nominating Committee shall nominate
for consideration of the Board of Directors candidates for
the various offices provided under these Bylaws. The
Nominating Committee shall perform such other duties and
assume such additional responsibility as may from time to
time be placed upon it by the Board of Directors, subject,
however, to the same restrictions set forth in Section
2(b) of the Article 4 with respect to the Executive
Committee.
Section 5: Compensation Committee.
(a) Number; Qualification; Term. The Compensation
Committee shall consist of one or more directors elected
by the Board. The Compensation Committee shall serve at
the pleasure of the Board of Directors.
(b) Authority. The Compensation Committee shall be
responsible for the overall administration of all matters
pertaining to compensation of the officers and employees
of the Corporation. The committee shall give appropriate
consideration to any salary administration plan or bonus
plan which may from time to time be proposed or adopted by
the Corporation. The Compensation Committee shall perform
such other duties and assume such additional
responsibility as may be placed upon it by the Board of
Directors, subject, however, to the same restrictions set
forth in Section 2(b) of the Article 4 with respect to the
Executive Committee.
Section 6: Other Committees.
(a) Number; Qualification; Term. The Board of Directors
may appoint such other committees as it deems appropriate,
each consisting of one or more directors. Any director
may serve on any such other committee. Any committee
appointed under this Section 6 shall serve at the pleasure
of the Board.
(b) Authority. Any committee appointed under this
Section 6 shall perform such duties and assume such
responsibility as may from time to time be placed upon it
by the Board of Directors, subject, however, to the same
restrictions set forth in Section 2(b) of this Article 4
with respect to the Executive Committee.
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Section 7: Meetings. Time, place and notice of Executive,
Audit, Nominating, Compensation and other committee meetings shall
be as called and specified by the chief executive officer, the
committee chairman, or any two (2) members of each committee.
Section 8: Quorum; Majority Vote. At meetings of the
Executive, Audit, Nominating, Compensation and other committees, a
majority of the number of members designated by the Board of
Directors shall constitute a quorum for the transaction of
business. The act of a majority of the members present at any
meeting at which a quorum is present shall be the act of the
Executive, Audit, Nominating, Compensation and other committees,
except as otherwise specifically provided by statute, the Articles
of Incorporation, or these Bylaws. If a quorum is not present at
a meeting of the Executive, Audit, Nominating, Compensation and
other committees, the members present may adjourn the meeting from
time to time, without notice other than an announcement at the
meeting, until a quorum is present.
Section 9: Procedure. The Executive, Audit, Nominating,
Compensation and other committees shall keep regular minutes of
their proceedings and report the same to the Board of Directors at
its next regular meeting. The minutes of the proceedings of the
Executive, Audit and other committees shall be placed in the minute
book of the Corporation.
Section 10: Action Without Meeting. Any action required or
permitted to be taken at a meeting of the Executive, Audit,
Nominating, Compensation or other committees may be taken without
a meeting by a majority of the members of the Executive, Audit,
Nominating, Compensation, or other committees and such action shall
be deemed the action of the respective committee if all committee
members execute, either before or after the action is taken, a
written consent thereto, and the consent is filed with the records
of the Corporation.
Section 11: Telephone and Similar Meetings. Executive, Audit,
Nominating, Compensation and other committee members may
participate in and hold a meeting by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in
such a meeting shall constitute presence in person at the meeting,
except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 12: Responsibility. The designation of an Executive,
Audit, Nominating, Compensation or other committee and the
delegation of authority to it shall not operate to relieve the
Board of Directors, or any member thereof, of any responsibility
imposed upon it or him by law.
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ARTICLE 5: NOTICE
Section 1: Method. Whenever by statute, the Articles of
Incorporation, these Bylaws, or otherwise, notice is required to be
given to a director, committee member, or security holder, and no
provision is made as to how the notice shall be given, it shall not
be construed to mean personal notice, but any such notice may be
given: (a) in writing, by first class mail, postage prepaid,
addressed to the director, committee member, or security holder at
the address appearing on the books of the Corporation; or (b) in
any other method permitted by law. Any notice required or
permitted to be given by mail shall be deemed given at the time
when the same is thus deposited in the United States mails.
Section 2: Waiver. Whenever, by statute or the Articles of
Incorporation or these Bylaws, notice is required to be given to
security holder, committee member, or director, a waiver thereof in
writing signed by the person or persons entitled to such notice,
whether before or after the time stated in such notice, shall be
equivalent to the giving of such notice. Attendance at a meeting
shall constitute a waiver of notice of such meeting, except where
a person attends for the express purpose of objecting to the
transaction of any business on the grounds that the meeting is not
lawfully called or convened.
ARTICLE 6: OFFICERS
Section 1: Number; Qualification; Election; Term.
(a) The Corporation shall have: (1) a president, a
secretary, a treasurer and a general counsel, and such
other officers as the Board of Directors thereof may elect
from time to time, and (2) such assistant officers to
those positions elected by the Board of Directors as the
president may in his discretion, without approval of the
Board, appoint from time to time.
(b) Officers named by Bylaw Article 6, Section 1(a)(1)
shall be elected by the Board of Directors on the
expiration of an officer's term or whenever a vacancy
exists. Officers named in Bylaw Article 6, Section
1(a)(2) may be appointed by president at any time.
(c) Unless otherwise specified by the Board at the time
of election or appointment, or in an employment contract
approved by the Board, each officer's term shall end at
the first meeting of directors after the next annual
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meeting of shareholders. He shall serve until the end of
his term or, if earlier, his death, resignation, or
removal.
Section 2: Removal. Any officer elected or appointed by the
Board of Directors may be removed by two-thirds (2/3) vote of the
Board of Directors or the executive committee whenever in its
judgment the best interests of the Corporation will be served
thereby. Such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment
of an officer shall not of itself create contract rights.
Section 3: Vacancies. Any vacancy occurring in any office of
the Corporation (by death, resignation, removal or otherwise) may
be filled by the Board of Directors.
Section 4: Authority. Officers shall have such authority and
perform such duties in the management of the Corporation as are
provided in these Bylaws or as may be determined by resolution of
the Board of Directors not inconsistent with these Bylaws.
Section 5: Compensation. The compensation of officers shall
be fixed from time to time by the Board of Directors or as they may
delegate.
Section 6: Chairman of the Board. The office of the chairman
of the Board may be filled by the Board at its pleasure by the
election of one of its members of the office. The chairman shall
preside at all meetings of the Board, and shall perform such other
duties as may be assigned to him by the Board of Directors.
Section 7: Vice Chairman of the Board. The office of vice
chairman of the Board may be filled by the Board at its pleasure by
the election of one of its members to the office. In the absence
of the chairman of the Board or in the event that that office is
vacant either temporarily or otherwise, during such period the vice
chairman shall assume the duties of the office of chairman of the
Board.
Section 8: Chief Executive Officer. The position of chief
executive officer may be filled by the Board at its pleasure by the
election of one of its members to the office. The chief executive
officer shall be responsible for the general and active management
of the business and affairs of the Corporation, and shall see that
all orders and resolutions of the Board are carried into effect.
He shall perform such other duties and have such other authority
and powers as the Board of Directors may from time to time
prescribe.
Section 9: President. The president shall preside at all
meetings of the shareholders and the Board of Directors. In the
event no other person is designated the chief executive officer of
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the Corporation, or in the event that office is vacant either
temporarily or otherwise, during such period the president shall
assume the duties of that office. He shall perform such other
duties and have such other authority and powers as the Board of
Directors may from time to time prescribe.
Section 10: Vice Presidents. The executive vice president and
vice presidents, in the order of their seniority, unless otherwise
determined by the Board of Directors, shall, in the absence or
disability of the president, perform the duties and have the
authority and exercise the powers of the president. They shall
perform such other duties and have such other authority and powers
as the Board of Directors may from time to time prescribe or as the
president may from time to time delegate.
Section 11: Secretary.
(a) The secretary shall attend all meetings of the Board
of Directors and all meetings of the shareholders and
record all votes, actions and the minutes of all
proceedings in a book to be kept for that purpose and
shall perform like duties for the executive and other
committees when required.
(b) He shall give, or cause to be given, notice of all
meetings of the shareholders and special meetings of the
Board of Directors.
(c) He shall keep in safe custody the seal of the
Corporation and, when authorized by the Board of Directors
or the executive committee, affix it to any instrument
requiring it. When so affixed, it shall be attested by
his signature or by the signature of the treasurer or an
assistant secretary.
(d) He shall be under the supervision of the president.
He shall perform such other duties and have such other
authority and powers as the Board of Directors may from
time to time prescribe or as the president may from time
to time delegate.
Section 12: Assistant Secretary. The assistant secretaries in
the order of their seniority, unless otherwise determined by the
Board of Directors, shall, in the absence or disability of the
secretary, perform the duties and have the authority and exercise
the powers of the secretary. They shall perform such other duties
and have such other powers as the Board of Directors may from time
to time prescribe or as the president may from time to time
delegate.
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Section 13: Treasurer.
(a) The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate
accounts of receipts and disbursements of the Corporation
and shall deposit all moneys and other valuables in the
name and to the credit of the Corporation in appropriate
depositories.
(b) He shall disburse the funds of the Corporation
ordered by the Board of Directors, and prepare financial
statements as they direct.
(c) He shall perform such other duties and have such
other authority and powers as the Board of Directors may
from time to time prescribe or as the president may from
time to time delegate.
(d) His books and accounts shall be opened at any time
during business hours to the inspection of any director of
the Corporation.
Section 14: Assistant Treasurers. The assistant treasurers in
the order of their seniority, unless otherwise determined by the
Board of Directors, shall in the absence or disability of the
treasurer, the duties and have the authority and exercise the
powers of treasurer. They shall perform such other duties and have
such other powers as the Board of Directors may from time to time
prescribe or as the president may from time to time delegate.
Section 15: General Counsel. The general counsel of the
Corporation shall prepare and review such contracts and agreements
as are required in the business of the Corporation and shall
inspect and pass upon all such instruments presented to the
Corporation as may be of sufficient importance to justify such
examination. He shall counsel the officers of the Corporation in
all legal matters pertaining to the affairs of the Corporation.
The general counsel shall be responsible for the administration of
the legal affairs of the Corporation including employment and
coordination of outside counsel.
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS
Section 1: Certificates. Certificates in the form determined
by the Board of Directors shall be delivered representing all
shares of which shareholders are entitled. Certificates shall be
consecutively numbered and shall be entered in the books of the
Corporation as they are issued. Each certificate shall state on
its face the holder's name, the number and class of shares, the par
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value and such other matters as may be required by law. It shall
be signed by the president or a vice president and such other
officer or officers as the Board of Directors shall designate, and
may be sealed with the seal of the Corporation or a facsimile
thereof. If a certificate is countersigned by a transfer agent, or
an assistant transfer agent or registered by a registrar (either of
which is other than the Corporation or an employee of the
Corporation), the signature of any officer may be facsimile.
Section 2: Issuance. Shares (both treasury and authorized but
unissued) may be issued for such consideration (not less than par
value) and to such persons as the Board of Directors may determine
from time to time. Shares may not be issued until the full amount
of consideration has been paid as provided by law.
Section 3: Payment for Shares.
(a) Kind. The consideration of the issuance of shares
shall consist of money paid, labor done (including
services actually performed for the Corporation) or
property (tangible or intangible) actually received.
Neither promissory notes nor the promise of future
services shall constitute payment for shares.
(b) Valuation. In the absence of fraud in the
transaction, the judgment of the Board of Directors as to
the value of consideration received shall be conclusive.
(c) Effect. When consideration, fixed as provided by
law, has been paid, the shares shall be deemed to have
been issued and shall be considered fully paid and
nonassessable.
(d) Allocation of Consideration. The consideration
received for shares shall be allocated by the Board of
Directors, in accordance with law, between stated capital
and capital surplus accounts.
Section 4: Subscriptions. Unless otherwise provided in the
subscription agreement, subscriptions for shares, whether made
before or after organization of the Corporation, shall be paid in
full at such time or in such installments and at such times as
shall be determined by the Board of Directors. Any call made by
the Board of Directors for payment on subscriptions shall be
uniform as to all shares of the same series. In case of default in
the payment on any installment or call when payment is due, the
Corporation may proceed to collect the amount due in the same
manner as any debt due to the Corporation.
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Section 5: Lien. For any indebtedness of a shareholder to the
Corporation with respect to his stock, the Corporation shall have
a first and prior lien on all shares of its stock owned by him and
on all dividends or other distributions declared thereon.
Section 6: Lost, Stolen or Destroyed Certificates. The
Corporation shall issue a new certificate in place of any
certificate for shares previously issued if the registered owner of
the certificate:
(a) Claim. Makes proof in affidavit form that it has
been lost, destroyed or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new
certificate before the Corporation has notice that the
certificate has been acquired by a purchaser for value in
good faith and without notice of an adverse claim; and
(c) Bond. Gives a bond in such form, and with such
surety or sureties, with fixed or open penalty, as the
Corporation may direct, to indemnify the Corporation (and
its transfer agent and registrar, if any) against any
claim that may be made on account of the alleged loss,
destruction, or theft of the certificate; and
(d) Other Requirements. Satisfies any other reasonable
requirements imposed by the Corporation.
When a certificate has been lost, apparently destroyed or
wrongfully taken, and the holder of record fails to notify the
Corporation within a reasonable time after he has notice of it, and
the Corporation registers a transfer of the shares represented by
the certificate before receiving such notification, the holder of
record is precluded from making any claim against the Corporation
for the transfer or for a new certificate.
Section 7: Registration of Transfer. The Corporation shall
register the transfer of a certificate for shares presented to it
for transfer if:
(a) Endorsement. The certificate is properly endorsed by
the registered owner or by his duly authorized attorney;
and
(b) Guarantee and Effectiveness of Signature. The
signature of such person has been guaranteed by a
commercial bank or brokerage firm that is a member of the
National Association of Securities Dealers and reasonable
assurance is given that such endorsements are effective;
and
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(c) Adverse Claims. The Corporation has no notice of an
adverse claim or has discharged any duty to inquire in
such a claim; and
(d) Collection of Taxes. Any applicable law relating to
the collection of taxes has been complied with.
Section 8: Registered Owner. Prior to due presentment for
registration of transfer of a certificate for shares, the
Corporation may treat the registered owner as the person
exclusively entitled to vote, to receive notices and otherwise to
exercise all the rights and powers of a shareholder.
Section 9: Pre-Emptive Rights. No shareholder or other person
shall have any pre-emptive right whatsoever.
ARTICLE 8: GENERAL PROVISIONS
Section 1: Dividends and Reserves
(a) Declaration and Payment. Subject to statute and the
Articles of Incorporation, dividends may be declared by
the Board of Directors at any regular or special meeting
and may be paid in cash, in property, or in shares of the
Corporation. The declaration and payment shall be at the
discretion of the Board of Directors.
(b) Record Date. The Board of Directors shall fix in
advance a record date for the purpose of determining
shareholders entitled to receive payment of any dividend,
the record date to be not more than seventy (70) days
prior to the payment date of such dividend, and shall
cause the stock transfer books to be closed for such
purpose on such record date.
(c) Reserves. By resolution the Board of Directors may
create such reserve or reserves out of the earned surplus
of the Corporation as the directors from time to time, in
their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or
maintain any property of the Corporation, or for any other
purpose they think beneficial to the Corporation. The
directors may modify or abolish any such reserve in the
manner in which it was created.
Section 2: Books and Records. The Corporation shall keep
correct and complete books and records of account and shall keep
minutes of the proceedings of its shareholders and Board of
Directors, and shall keep at its registered office or principal
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place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and
addresses of all shareholders and the number and class of the
shares held by each.
Section 3: Checks and Notes. All checks or demands for money
and notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of Directors
may from time to time designate.
Section 4: Fiscal Year. The fiscal year of the Corporation
shall be the same as the calendar year.
Section 5: Seal. The Corporation seal (of which there may be
one or more examplars) shall contain the name of the Corporation
and the name of the state of incorporation. The seal may be used
by impressing it or reproducing a facsimile of it, or otherwise.
Section 6: Indemnification. The Corporation shall indemnify
those persons and to the extent provided in the Articles of
Incorporation.
Section 7: Resignation. Any director, committee member, or
officer may resign by giving written notice to the president or the
secretary. The resignation shall take effect at the time specified
therein, or immediately if no time is specified. Unless otherwise
specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 8: Amendment of Bylaws.
(a) These Bylaws may be altered, amended, or repealed or
new Bylaws may be adopted at any meeting of the Board of
Directors at which a quorum is present, by a two- thirds
(2/3) vote of the directors then in office, provided
notice of the proposed alteration, amendment, or repeal is
contained in the notice of the meeting.
(b) These Bylaws may also be altered, amended or repealed
or new Bylaws may be adopted at any meeting of the
shareholders at which a quorum is present or represented
by proxy, by the affirmative vote of the holders of
sixty-six and two-thirds percent (66 2/3%) of each class
of shares entitled to vote thereon, provided notice of the
proposed alteration, amendment or repeal is contained in
the notice of the meeting.
(c) Upon adoption of any new Bylaws by the shareholders,
the shareholders may provide that such Bylaw shall not be
repealed, altered or amended by the Board of Directors.
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Section 9: Construction. Whenever the context so requires,
the masculine shall include the feminine and neuter, and the
singular shall include the plural, and conversely. If any portion
of these Bylaws shall be invalid or inoperative, then, so far as is
reasonable and possible:
(a) The remainder of these Bylaws shall be considered
valid and operative, and
(b) Effect shall be given to the intent manifested by the
portion held invalid or inoperative.
Section 10: Headings. The headings are for organization,
convenience and clarity. In interpreting these Bylaws, they shall
be subordinated in importance to the other written material.
Section 11: Relation to Articles of Incorporation. These
Bylaws are subject to, and governed by, the Articles of
Incorporation.
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