Exhibit 3.1
BY-LAWS
OF
CILCORP INC.
AMENDED AND RESTATED AS OF MAY 20, 2003
ARTICLE I.
OFFICES
Section 1. The registered office of the Corporation required by the
Illinois Business Corporation Act of 1983, as amended (the "Act"), to be
maintained in the State of Illinois shall be in the City of Chicago, County of
Cook, State of Illinois. The Corporation may also have offices at such other
places both within and without the State of Illinois as the Board of Directors
may from time to time determine or the business of the Corporation may require.
ARTICLE II.
SHAREHOLDERS
Section 1. Time and Place of Meetings. The annual meeting of the
shareholders shall be held on the fourth Tuesday in May of each year (or if such
day shall be a legal holiday, then upon the next succeeding day not a legal
holiday) or upon such other day determined by resolution of the Board of
Directors. Each such regular annual meeting shall be held at such time and at
such location, within or without the State of Illinois, as the Board of
Directors shall order. At such annual meeting, a board of directors shall be
elected and such other business shall be transacted as may properly come before
such meeting.
Section 2. Annual Meetings. An annual meeting of shareholders shall be held
for the purpose of electing directors and transacting such other business as may
properly be brought before the meeting. The date of the annual meeting shall be
determined by the Board of Directors.
Section 3. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by law, may be called by the
Chief Executive Officer, by the President, by the Chairman of the Board, by a
majority of the Board of Directors, or by the holders of not less than twenty
percent of the outstanding shares entitled to vote on the matter for which the
meeting is called by written request executed by such holders and delivered to
the President or the Secretary of the Corporation.
Section 4. Notice of Meetings. Written notice of each meeting of the
shareholders stating the place, date and time of the meeting and, in the case of
a special meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten nor more than sixty days before the date of
the meeting, or in the case of a merger, consolidation, share exchange,
dissolution or sale, lease or exchange of assets, not less than twenty nor more
than sixty days before the date of the meeting, either personally or by mail, by
the President, or by the Secretary at the direction of the President or the
person or persons calling the meeting, to each shareholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail, addressed to the shareholder at his
address as it appears on the records of the Corporation, with postage thereon
prepaid.
Any shareholder entitled to receive notice may waive notice of any meeting
by a writing executed and delivered to the Corporation either before or after
the meeting. Attendance of a
shareholder at any meeting shall constitute a waiver of notice of such meeting,
unless the shareholder attends such meeting for the express purpose of objecting
to the holding of such meeting because proper notice was not given and at the
beginning of such meeting records such objection with the person acting as
secretary of the meeting and does not thereafter vote on any action taken at the
meeting.
Section 5. Quorum. The holders of record of a majority of the shares issued
and outstanding and entitled to vote thereat, represented in person or by proxy,
shall constitute a quorum at all meetings of the shareholders for the
transaction of business, except as otherwise provided by the Act or by the
Articles of Incorporation. If a quorum is not represented, the holders of record
of the shares represented in person or by proxy at the meeting and entitled to
vote thereat shall have power, by the affirmative vote of the holders of a
majority of such shares, to adjourn the meeting to another time and/or place,
without notice other than announcement at the meeting, except as hereinafter
provided, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the original meeting. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each shareholder of record entitled to vote at the
meeting. Withdrawal of shareholders from any meeting shall not cause the failure
of a duly constituted quorum at such meeting.
Section 6. Voting. At all meetings of the shareholders, each shareholder
shall be entitled to vote, in person or by proxy, each share owned by such
shareholder of record on the record date for the meeting. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, unless otherwise provided in the Act or in the Articles of
Incorporation. When a quorum is present at any meeting, the affirmative vote of
the holders of record of a majority of the shares having voting power
represented in person or by proxy shall decide any question brought before such
meeting, unless the question is one upon which, by express provision of the Act
or of the Articles of Incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question. A
shareholder who is in attendance at a meeting of shareholders in person or by
proxy, but who abstains from the vote on any matter, shall not be deemed to be
represented at such meeting for purposes of the preceding sentence with respect
to such vote, but shall be deemed to be represented at such meeting for all
other purposes.
Section 7. Informal Action by Shareholders. Unless otherwise provided by
the Act or by the Articles of Incorporation, any action required to be taken at
a meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting and without a vote,
if a consent in writing, setting forth the action so taken, shall be signed by
(a) the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voting, provided,
that (i) at least five days prior to the execution of the consent a notice in
writing is delivered to all of the shareholders entitled to vote with respect to
the subject matter thereof, and (ii) those shareholders who have not consented
in writing are notified in writing of the taking of the corporate action
promptly after the effective date of such action; or (b) all of the shareholders
entitled to vote with respect to the subject matter thereof.
Section 8. Proxies. At all meetings of shareholders, a shareholder may vote
in person or vote by proxy which is executed by the shareholder or his duly
authorized attorney-in-fact. Such proxy shall be filed with the Secretary or
other person authorized to tabulate votes at any time prior to the commencement
of the meeting. No proxy shall be valid after eleven months from the date of its
execution unless otherwise provided in the proxy.
-2-
ARTICLE III.
DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
shall be managed and controlled by or under the direction of its Board of
Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Articles of Incorporation or
by these By-laws directed or required to be exercised or done by the
shareholders.
Section 2. Number, Qualification and Tenure. The Board of Directors of the
Corporation shall consist of not less than three (3) members and not more than
twelve (12) members, as may be determined by the Board of Directors from time to
time. Within the limits above specified, the number of directors shall be
determined from time to time by resolution of the Board of Directors. The
directors shall be elected at the annual meeting of the shareholders, except as
provided in the Articles of Incorporation or Section 3 of this Article, and each
director elected shall hold office until his successor is elected and qualified
or until his earlier death, termination, resignation or removal from office. Any
decrease in the number of directors shall not have the effect of shortening the
term of any incumbent director.
Section 3. Vacancies and Newly Created Directorships. Vacancies and newly
created directorships resulting from any increase in the number of directors may
be filled by the appointment of a majority of the directors then in office
though less than a quorum, and each director so appointed shall hold office
until the next annual meeting of shareholders and until his successor is elected
and qualified or until the earlier death, termination, resignation or removal
from office of such director.
Section 4. Independent Director.
--------------------
(a) The Corporation shall have at all times one individual who is an
Independent Director (as defined below). If the Independent Director resigns,
dies or becomes incapacitated, or such position is otherwise vacant, no action
requiring the unanimous affirmative vote of the directors shall be taken until a
successor Independent Director is appointed and qualified and approves such
action.
(b) Notwithstanding any other provision of these By-laws and any
provision of law that otherwise so empowers the Corporation, the Corporation
shall not, without the prior unanimous consent of the Board of Directors,
including the Independent Director, do any of the following: (i) make a general
assignment for the benefit of creditors; (ii) file a voluntary petition in
bankruptcy; (iii) file a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation; (iv) file an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against it in
any proceeding seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
or the entry of any order appointing a trustee, liquidator or receiver of it or
of its assets or any substantial portion thereof; or (v) seek, consent to or
acquiesce in the appointment of a trustee, receiver or liquidator of it or of
all or any substantial part of its assets. With regard to any action
contemplated by the preceding sentence, or with regard to any action taken or
determination made at any time when the Corporation is insolvent, each director
will owe its primary fiduciary duty to the Corporation (including the creditors
of the Corporation).
(c) For purposes of these By-laws of the Corporation, "Independent
Director" shall mean, with respect to the Corporation, a director who is not,
and within the last five years was not (except solely by virtue of such person's
serving as, or affiliation with any other person serving as, an independent
director of The AES Corporation ("Parent") or any of its affiliates, (i) a
-3-
stockholder, member, partner, director, officer, employee, affiliate, customer,
supplier, creditor or independent contractor of, or any person that has received
any benefit in any form whatever from, or any person that has provided any
service in any form whatever to, or any major creditor (or any affiliate of any
major creditor) of, the Parent or any of its affiliates, or (ii) any person
owning beneficially, directly or indirectly, any outstanding shares of common
stock, any limited liability corporation interests or any partnership interests,
as applicable, of the Parent or any of its affiliates, or of any major creditor
(or any affiliate of any major creditor) of any of the foregoing, or a
stockholder, member, partner, director, officer, employee, affiliate, customer,
supplier, creditor or independent contractor of, or any person that has received
any benefit in any form whatever from, or any person that has provided any
service in any form whatever to, such beneficial owner or any of such beneficial
owner's affiliates, or (iii) a member of the immediate family of any person
described above; provided that the indirect or beneficial ownership of stock
through a mutual fund or similar diversified investment vehicle with respect to
which the owner does not have discretion or control over the investments held by
such diversified investment vehicle shall not preclude such owner from being an
Independent Director. For purposes of this definition, "major creditor" shall
mean a natural person or business entity to which the Parent or any of its
affiliates has outstanding indebtedness for borrowed money or credit on open
account in a sum sufficiently large as would reasonably be expected to influence
the judgment of the proposed Independent Director adversely to the interests of
the Corporation when the interests of that person or entity are adverse to those
of the Corporation.
Section 5. Directors' Duties. The directors, including the Independent
Director, will act in good faith in accordance with the terms of the
organizational documents and applicable law, and make decisions with respect to
the business and operations of the Corporation independent of, and not dictated
by, the Parent, or any other affiliate thereof, and any director shall bear a
fiduciary duty to the Corporation (including its creditors).
Section 6. Place of Meetings. The Board of Directors may hold meetings,
both regular and special, either within or without the State of Illinois.
Section 7. Meetings. The Board of Directors shall hold a regular meeting,
to be known as the annual meeting, immediately following each annual meeting of
the shareholders without any notice being given. Other regular meetings of the
Board of Directors shall be held at such time and place as the Board of
Directors may designate from time to time. No notice of regular meetings need be
given, other than by announcement at the immediately preceding regular meeting.
Special meetings of the Board of Directors may be called by or at the request of
the Chairman of the Board or a majority of the Board of Directors. Notice of any
special meeting of the Board shall be given at least two days prior thereto,
either in writing, or telephonically if confirmed promptly in writing, to each
director at the address shown for such director on the records of the
Corporation.
Section 8. Waiver of Notice; Business and Purpose. Notice of any meeting of
the Board of Directors may be waived in writing signed by the person or persons
entitled to such notice either before or after the time of the meeting. The
attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened and at the beginning of such meeting records such
objection with the person acting as secretary of the meeting and does not
thereafter vote on any action taken at the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
need be specified in the notice or waiver of notice of such meeting, unless
specifically required by the Act.
Section 9. Quorum and Voting. At all meetings of the Board of Directors a
majority of the total number of directors then in office shall constitute a
quorum for the transaction of business.
-4-
If a quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting without notice other than
announcement at the meeting, to any other date, time and place until a quorum
shall be present. The act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors, unless
the act of a greater number is required by the Act or by the Articles of
Incorporation. Withdrawal of directors from any meeting shall not cause the
failure of a duly constituted quorum at such meeting. A director who is in
attendance at a meeting of the Board of Directors but who abstains from the vote
on any matter by announcing his abstention to the person acting as secretary of
the meeting and not voting on such matter shall not be deemed to be present at
such meeting for purposes of the preceding sentence or Section 15 of this
Article with respect to such vote, but shall be deemed to be present at such
meeting for all other purposes.
Section 10. Organization. The Chairman of the Board, if elected, shall act
as chairman at all meetings of the Board of Directors. If the Chairman of the
Board is not elected or if elected, is not present, the Vice Chairman, if any,
or, if no such Vice Chairman is present, a director chosen by a majority of the
directors present, shall act as chairman at such meeting of the Board of
Directors.
Section 11. Committees. The Board of Directors, by resolution adopted by a
majority of the whole Board, may designate two or more directors to constitute
an Executive Committee. The Board of Directors, by resolution adopted by a
majority of the whole Board, may create one or more other committees and appoint
two or more directors to serve on such committee or committees. Each director
appointed to serve on any such committee shall serve, unless the resolution
designating the respective committee is sooner amended or rescinded by the Board
of Directors, until the next annual meeting of the Board or until his respective
successor is designated. The Board of Directors, by resolution adopted by a
majority of the whole Board, may also designate additional directors as
alternate members of any committee to serve as members of such committee in the
place and stead of any regular member or members thereof who may be unable to
attend a meeting or otherwise unavailable to act as a member of such committee.
In the absence or disqualification of a member and all alternate members
designated to serve in the place and stead of such member, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
such member or members constitute a quorum, may unanimously appoint another
director to act at the meeting in the place and stead of such absent or
disqualified member.
The Executive Committee may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
Corporation between the meetings of the Board of Directors, and any other
committee may exercise the power and authority of the Board of Directors to the
extent specified by the resolution designating such committee, or the Articles
of Incorporation or these By-laws; provided, however, that no committee may take
any action that is expressly required by the Act or the Articles of
Incorporation or these By-laws to be taken by the Board of Directors and not by
a committee thereof. Each committee shall keep a record of its acts and
proceedings, which shall form a part of the records of the Corporation in the
custody of the Secretary, and all actions of each committee shall be reported to
the Board of Directors at the next meeting of the Board.
Meetings of committees may be called at any time by the Chairman of the
Board, if any, or the chairman of the respective committee. A majority of the
members of the committee shall constitute a quorum for the transaction of
business and, except as expressly limited by this section, the act of a majority
of the members present at any meeting at which there is a quorum shall be the
act of such committee. Except as expressly provided in this section or in the
resolution designating the committee, a majority of the members of any such
committee may select its chairman, fix its rules of procedure, fix the time and
place of its meetings and specify what notice of meetings, if any, shall be
given.
-5-
Section 12. Action without Meeting. Unless otherwise specifically
prohibited by the Articles of Incorporation or these By-laws, any action
required or permitted to be taken at any meeting of the Board of Directors or
any committee thereof may be taken without a meeting, if all members of the
Board of Directors or such committee, as the case may be, execute a consent
thereto in writing setting forth the action so taken, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
such committee.
Section 13. Attendance by Telephone. Members of the Board of Directors or
any committee thereof may participate in and act at any meeting of the Board of
Directors or such committee, as the case may be, through the use of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in such meeting
shall constitute attendance and presence in person at the meeting of the person
or persons so participating.
Section 14. Compensation. By resolution of the Board of Directors,
irrespective of any personal interest of any of the members thereof, the
directors may be paid their reasonable expenses, if any, of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for attendance at
meetings or a stated salary as directors, payable in cash or securities. These
payments shall not preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending committee
meetings.
Section 15. Presumption of Assent. A director who is present at a meeting
of the Board of Directors or any committee thereof when corporate action is
taken shall be deemed to have assented to the action taken unless: (1) he
objects at the beginning of the meeting to holding such meeting or transacting
business at such meeting; (2) his dissent from the action taken is entered in
the minutes of such meeting; or (3) he delivers written notice of his dissent to
the person acting as the secretary of the meeting before the adjournment thereof
or forwards such dissent by registered or certified mail to the Secretary
immediately after the adjournment of such meeting. The right of dissent is not
available to a director who votes in favor of the action taken.
ARTICLE IV.
OFFICERS
Section 1. Enumeration. The officers of the Corporation shall be chosen by
the Board of Directors and shall include a President and a Secretary. The Board
of Directors may also elect a Chairman of the Board, a Vice Chairman, one or
more Vice Presidents, a Treasurer, one or more Assistant Secretaries and
Assistant Treasurers and such other officers and agents as it may deem
appropriate. Any number of offices may be held by the same person.
Section 2. Term of Office. The officers of the Corporation shall be elected
at the annual meeting of the Board of Directors and shall hold office until
their successors are elected and qualified or until their earlier death,
termination, resignation or removal from office. Any officer or agent of the
Corporation may be removed, with or without cause, by the Board of Directors
whenever in its judgment the best interests of the Corporation will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights. Any vacancy in any office because of
death, resignation, termination, removal, disqualification or otherwise, may be
filled by the Board of Directors for the unexpired portion of the term.
-6-
Section 3. Chief Executive Officer. The Chief Executive Officer of the
Corporation, if elected, shall have general supervision, direction and control
of the business and affairs of the Corporation, subject to the control of the
Board of Directors, and shall have such other functions, authority and duties as
customarily appertain to the office of the chief executive officer of a business
corporation or as may be prescribed by the Board of Directors.
Section 4. President. During any period when there shall be an office of
Chief Executive Officer, the President shall be the chief operating officer of
the Corporation and shall have such functions, authority and duties as may be
prescribed by the Board of Directors or the Chief Executive Officer. During any
period when there shall not be an office of Chief Executive Officer, the
President shall be the chief executive officer of the Corporation, and, as such,
shall have the functions, authority and duties provided for the Chief Executive
Officer.
Section 5. Vice President. The Vice President or, if there shall be more
than one, each Vice President, in the absence of the President or in the event
of the President's inability or refusal to act (and if there be no Chief
Executive Officer), shall have the authority to perform the duties of the
President, subject to such limitations thereon as may be imposed by the Board of
Directors, and such other duties as may from time to time be prescribed by the
Board of Directors, the Chief Executive Officer or the President.
Section 6. Secretary. The Secretary shall: (a) keep a record of all
proceedings of the shareholders, the Board of Directors and any committees
thereof in one of more books provided for that purpose; (b) give, or cause to be
given, all notices that are required by law or these By-laws to be given by the
Secretary; (c) be custodian of the corporate records and, if the Corporation has
a corporate seal, of the seal of the Corporation; (d) have authority to affix
the seal of the Corporation to all instruments the execution of which requires
such seal and to attest such affixing of the seal; (e) keep a register of the
post office address of each shareholder which shall be furnished to the
Secretary by such shareholder; (f) sign, with the Chief Executive Officer, if
any, or President or any Vice President, or any other officer thereunto
authorized by the Board of Directors, any certificates for shares of the
Corporation, or any deeds, mortgages, bonds, contracts or other instruments
which the Board of Directors has authorized to be executed by the signature of
more than one officer; (g) have general charge of the share transfer books of
the Corporation; (h) have authority to certify as true and correct copies of the
By-laws, or resolutions of the shareholders, the Board of Directors and
committees thereof, and of other documents of the Corporation; and (i) in
general, perform the duties incident to the office of secretary and such other
duties as from time to time may be prescribed by the Board of Directors, the
Chief Executive Officer or the President. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation and
to attest such affixing of the seal.
Section 7. Assistant Secretary. The Assistant Secretary, or if there shall
be more than one, each Assistant Secretary in the absence of the Secretary or in
the event of the Secretary's inability or refusal to act, shall have the
authority to perform the duties of the Secretary, subject to such limitations
thereon as may be imposed by the Board of Directors, and such other duties as
may from time to time be prescribed by the Board of Directors, the Chief
Executive Officer, the President or the Secretary.
Section 8. Treasurer. The Treasurer shall be the principal accounting and
financial officer of the Corporation. The Treasurer shall: (a) have charge of
and be responsible for the maintenance of adequate books of account for the
Corporation; (b) have charge and custody of all funds and securities of the
Corporation, and be responsible therefor and for the receipt and disbursement
thereof; and (c) perform the duties incident to the office of treasurer and such
other duties as may from time to time be prescribed by the Board of Directors,
the Chief Executive Officer or the President. The Treasurer may sign with the
Chief Executive Officer, if any, or the President, or any Vice President, or any
other officer thereunto authorized by the Board of Directors,
-7-
certificates for shares of the Corporation. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board of Directors
may determine.
Section 9. Assistant Treasurer. The Assistant Treasurer, or if there shall
be more than one, each Assistant Treasurer, in the absence of the Treasurer or
in the event of the Treasurer's inability or refusal to act, shall have the
authority to perform the duties of the Treasurer, subject to such limitations
thereon as may be imposed by the Board of Directors, and such other duties as
may from time to time be prescribed by the Board of Directors, the Chief
Executive Officer, the President or the Treasurer.
Section 10. Other Officers and Agents. Any officer or agent who is elected
or appointed from time to time by the Board of Directors and whose duties are
not specified in these By-laws shall perform such duties and have such powers as
may from time to time be prescribed by the Board of Directors, the Chief
Executive Officer or the President.
ARTICLE V.
CERTIFICATES FOR SHARES
Section 1. Form. The shares of the Corporation shall be represented by
certificates; provided, however, the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
the Corporation's shares shall be uncertificated shares. Each certificate for
shares shall be consecutively numbered or otherwise identified. Certificates
representing shares in the Corporation shall be signed by or in the name of the
Corporation by the Chief Executive Officer or the President or a Vice President
and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation. Where a certificate is countersigned by a transfer
agent, other than the Corporation or an employee of the Corporation, or by a
registrar, the signatures of one or more officers of the Corporation may be
facsimiles. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, the certificate may be issued by the Corporation with the same effect as
if such officer, transfer agent or registrar were such officer, transfer agent
or registrar at the date of its issue.
Section 2. Transfer. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate or
uncertificated shares in place of any certificate therefor issued by the
Corporation to the person entitled thereto, cancel the old certificate and
record the transaction in its share book.
Section 3. Replacement. In case of the loss, destruction, mutilation or
theft of a certificate representing shares of the Corporation, a new certificate
may be issued upon the surrender of the mutilated certificate or, in the case of
loss, destruction or theft of a certificate, upon satisfactory proof of such
loss, destruction or theft and upon such terms as the Board of Directors may
prescribe. The Board of Directors may in its discretion require the owner of the
lost, destroyed or stolen certificate, or his legal representative, to give the
Corporation a bond, in such sum and in such form and with such surety or
sureties as it may direct, to indemnify the Corporation against any claim that
may be made against it with respect to the certificate alleged to have been
lost, destroyed or stolen.
ARTICLE VI.
-8-
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS
Section 1. Third Party Actions. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including all appeals (other than an action,
suit or proceeding by or in the right of the Corporation) by reason of the fact
that he is or was a director or officer of the Corporation (and the Corporation,
in the discretion of the Board of Directors, may so indemnify a person by reason
of the fact that he is or was an employee or agent of the Corporation or is or
was serving at the request of the Corporation, another corporation, partnership,
joint venture, trust or other enterprise in any capacity), against expenses
(including attorneys' fees), judgments, decrees, fines, penalties and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding 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 and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith or in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe his conduct was unlawful.
Section 2. Actions By or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit, including all
appeals, by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director or officer of the
Corporation (and the Corporation, in the discretion of the Board of Directors,
may so indemnify a person by reason of the fact that he is or was an employee or
agent of the Corporation or is or was serving at the request of the Corporation
in any other capacity for or on behalf of the Corporation), against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit 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, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
finally adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the court in
which such action or suit was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as such court
shall deem proper. Notwithstanding the foregoing, the Corporation shall be
required to indemnify an officer or director in connection with an action, suit
or proceeding initiated by such person only if such action, suit or proceeding
was authorized by the Board of Directors.
Section 3. Indemnity if Successful. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section 1
or 2 of this Article, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Section 4. Standard of Conduct. Except in a situation governed by Section 3
of this Article, any indemnification under Section 1 or 2 of this Article
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director
or officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in Section 1 or 2, as applicable,
of this Article. Such determination shall be made (i) by a majority vote of
directors acting at a
-9-
meeting at which a quorum consisting of directors who were not parties to such
action, suit or proceeding is present, or (ii) if such a quorum is not
obtainable, or even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
shareholders.
Section 5. Expenses. Expenses of each officer and director hereunder
indemnified actually and reasonably incurred in defending a civil or criminal
action, suit or proceeding or threat thereof shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of any undertaking by or on behalf of such person to repay such amount unless it
shall ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article. Such expenses incurred by employees
and agents may be so paid upon receipt of the aforesaid undertaking and such
other terms and conditions, if any, as the Board of Directors deems appropriate.
Section 6. Nonexclusivity. The indemnification and advancement of expenses
provided by, or granted pursuant to other Sections of this Article, shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may now or hereafter be entitled under any law, by-law,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
Section 7. Insurance. The Corporation may purchase and maintain insurance,
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him 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 liability under the provisions of the Act.
Section 8. Definitions. For purposes of this Article, references to "the
Corporation" shall include, in addition to the surviving corporation, any
merging corporation (including any corporation having merged with a merging
corporation) absorbed in a merger which, if its separate existence had
continued, would have had the power and authority to indemnify any or all of its
directors, officers, employees and agents, so that any person who was a
director, officer, employee or agent of such merging corporation, or was serving
at the request of such merging corporation in any other capacity, shall stand in
the same position under the provisions of this Article with respect to the
surviving corporation as such person would have had with respect to such merging
corporation if its separate existence had continued as such corporation was
constituted immediately prior to such merger.
For purposes of this Article, references to "other capacities" shall
include serving as a trustee or agent for any employee benefit plan; references
to "fines" shall include any excise taxes assessed on a person with respect to
an employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit plan,
its participants, or beneficiaries. A person who acted in good faith and in a
manner he reasonably believed to be in the best interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article.
Section 9. Reports to Shareholders. If required by the Act, the Corporation
shall report any indemnity payment or advancement of expenses by the Corporation
to any director, officer, employee or agent provided for in this Article to the
shareholders in writing either with or before the distribution of the notice of
the next shareholders' meeting.
-10-
Section 10. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction, and the remaining provisions hereof
shall be liberally construed to effectuate the provisions hereof, and the
invalidity of any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other jurisdiction.
Section 11. Amendment. The right to indemnification conferred by this
Article shall be deemed to be a contract between the Corporation and each person
referred to herein until amended or repealed, but no amendment to or repeal of
these provisions shall apply to or have any effect on the right to
indemnification of any person with respect to any liability or alleged liability
of such person for or with respect to any act or omission of such person
occurring prior to such amendment or repeal.
ARTICLE VII.
SEPARATENESS
Section 1. Funds, Assets and Accounts. The funds and other assets of the
Corporation shall not be commingled with those of any other entity, and the
Corporation shall maintain its accounts separate from any other person or
entity.
Section 2. Liability for Debts and Name. The Corporation shall not hold
itself out as being liable for the debts of any other entity, and shall conduct
its own business in its own name.
Section 3. Action through Agents and Identity. The Corporation shall act
solely in its own name and through its duly authorized directors, officers or
agents in the conduct of its business, and shall conduct its business so as not
to mislead others as to the identity of the entity or assets with which they are
concerned.
Section 4. Separate Records. The Corporation shall maintain separate
records, books of account and financial statements, and shall not commingle its
records and books of account with the records and books of account of any other
entity.
Section 5. Formalities. The Corporation shall observe in all material
respects all formalities required by its organizational documents and applicable
law.
Section 6. Capitalization. The Corporation shall at all times ensure that
its capitalization is adequate in light of its business and purpose.
Section 7. Debts of Affiliates. Subject to the last sentence of this
Section 7, (i) neither the Parent nor any affiliate of the Parent (other than
the Corporation) shall guaranty, become liable on or hold itself out as being
liable for the debts of the Corporation; (ii) the Corporation shall not
guarantee or become obligated for the debts of the Parent or any affiliate
thereof (other than the Corporation), or otherwise hold out its credit as being
available to satisfy the obligations of the Parent or any affiliate thereof
(other than the Corporation); (iii) the Corporation shall not pledge its assets
for the benefit of Parent or any of its affiliates; (iv) the Corporation shall
not make loans or advances to Parent or any of its affiliates, and shall not
acquire obligations or securities of the Parent or any affiliate thereof (other
than the Corporation), other than the settlement of purchase contracts with
respect to any Premium Income Equity Securities or similar securities issued by
the Corporation. Notwithstanding the foregoing, the Corporation may take any
action otherwise prohibited under this Section 7 if such action is taken with
respect to its own subsidiaries, and its own subsidiaries may take any action
otherwise prohibited under this Section 7 if such action is taken with respect
to the Corporation.
-11-
Section 8. Payment of Liabilities. The Corporation shall pay its own
liabilities out of its own funds.
Section 9. Arm's Length Relationship with Affiliates. The Corporation shall
maintain an arm's-length relationship with its affiliates.
Section 10. Overhead and Office Space. The Corporation shall allocate
fairly and reasonably any overhead for office space shared with the Parent or
any affiliate thereof.
Section 11. Separate Business Forms. The Corporation shall use its own
separate stationery, invoices, checks and other business forms.
Section 12. Correction of Misunderstandings. The Corporation shall correct
any known misunderstanding regarding its separate identity.
ARTICLE VIII.
GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be fixed
from time to time by resolution of the Board of Directors.
Section 2. Corporation Seal. The corporate seal, if any, of the Corporation
shall be in such form as may be approved from time to time by the Board of
Directors. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
Section 3. Notices and Mailing. Except as otherwise provided in the Act,
the Articles of Incorporation or these By-laws, all notices required to be given
by any provision of these By-laws shall be deemed to have been given (i) when
received, if given in person, (ii) on the date of acknowledgment of receipt, if
sent by telex, facsimile or other wire transmission, (iii) one day after
delivery, properly addressed, to a reputable courier for same day or overnight
delivery, or (iv) three days after being deposited, properly addressed, in the
U.S. mail, certified or registered mail, postage prepaid.
Section 4. Waiver of Notice. Whenever any notice is required to be given
under the Act or the provisions of the Articles of Incorporation or these
By-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent to notice.
Section 5. Interpretation. In these By-laws, unless a clear contrary
intention appears, the singular number includes the plural number and vice
versa, and reference to either gender includes the other gender.
ARTICLE IX.
AMENDMENTS
Unless the power to make, alter, amend or repeal these By-laws is reserved
to the shareholders by the Articles of Incorporation, these By-laws, including
any By-law adopted by the shareholders, may be made, altered, amended or
repealed by the shareholders or the Board of Directors, provided, that (i) the
unanimous consent of the Board of Directors, including the Independent Director,
shall be required to alter, amend or repeal (a) Section 4 and Section 5 of
-12-
Article III hereof; (b) Article VII hereof; and (c) this Article IX; and (ii)
subject to paragraph (i) above, the fact that the power to make, alter, amend or
repeal these By-laws has been conferred upon the Board of Directors shall not
divest the shareholders of the same powers.
-13-