PROPOSED RESOLUTIONS
OF
THE BOARD OF DIRECTORS
OF
HARRIS & HARRIS GROUP, INC.
November 4, 1998
WHEREAS, the Board of Directors of Harris & Harris Group, Inc. (the
"Corporation") deems it desirable and in the best interests of the
Corporation to amend the Corporation's By-Laws in certain respects,
including (i) to require that special meetings of shareholders be called
only by the President or a majority of the entire Board of Directors then
in office; (ii) to prohibit the removal of directors without cause; (iii)
to provide that the Board of Directors may fix a record date not more than
60 days prior to the date of certain shareholder determinations or corporate
actions; and (iv) to require advance notice of shareholder nominations of
directors and shareholder intention to bring new business at annual meetings.
NOW, THEREFORE, BE IT RESOLVED, that each of the amendments to the
Corporation's By-Laws annexed as Exhibit A to these resolutions are hereby
approved and adopted by the Board of Directors in accordance with the
provisions of Article VII, Section 2 of the Corporation's By-Laws.
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Exhibit A
1. Article II, Section 4 of the Corporation's By-Laws is hereby
amended to read in its entirety as follows:
Section 4. Special Meetings. Special meetings of the shareholders for
any purpose or purposes may be called by only the President or a majority
of the entire Board of Directors then in office.
2. The second paragraph of Article III, Section 4 of the
Corporation's By-Laws is hereby amended to read in its entirety as follows:
Except where the Certificate of Incorporation contains provisions
authorizing cumulative voting or the election of one or more directors by
class or their election by holders of bonds, or requires all action by
shareholders to be by a greater vote, any one or more of the directors may
be removed, (a) for cause, at any time, by vote of the shareholders holding
a majority of the outstanding stock of the corporation entitled to vote,
present in person or by proxy, at any special meeting of the shareholders
or by written consent of all of the shareholders entitled to vote, or (b)
for cause, by action of the Board of Directors at any regular or special
meeting of the Board of Directors. Shareholders may not remove directors
without cause. A vacancy or vacancies occurring from such removal may be
filled at a special meeting of shareholders called for such purpose or at
a regular or special meeting of the Board of Directors.
3. Article V, Section 4 of the Corporation's By-Laws are hereby
amended to read in its entirety as follows:
Section 4. Record Date. In lieu of closing the books of the corporation,
for the purpose of determining the shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for
the purpose of determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of any other
action, the Board of Directors may fix, in advance, a date, not exceeding
sixty days, nor less than ten days, as the record date for any such
determination of shareholders.
4. The Corporation's By-Laws are hereby amended by adding to Article
II thereof a new section numbered Section 10, and reading in its entirety
as follows:
Section 10. Notice of Shareholder Nominees. Only persons who are
nominated in accordance with the following procedures set forth in these
By-Laws shall be eligible for election as directors of the corporation.
Nominations of persons for election to the Board of Directors may be made
at any annual meeting of shareholders (a) by or at the direction of the
Board of Directors (or any duly authorized committee thereof) or (b) by
any shareholder of the corporation (i) who is a shareholder of record on the
date of the giving of notice provided for in this Section 10 and on the
record date for the determination of shareholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth
in this Section 10.
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In addition to any other applicable requirements, for a nomination
to be made by a shareholder, such shareholder must have given timely notice
thereof in proper written form to the Secretary of the corporation.
To be timely, a shareholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the corporation not less than ninety (90) days nor more than one hundred
and twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
shareholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which notice
of the date of the annual meeting was mailed or such public disclosure of
the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth (a) as to each person whom the shareholder proposes to
nominate for election as a director (i) the name, age, business address
and residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class or series and number of shares
of capital stock of the corporation which are owned beneficially or of
record by the person and (iv) any other information relating to the person
that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election
of directors pursuant to Section 14 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder; and (b) as to the shareholder giving the notice (i) the name
and record address of such shareholder, (ii) the class or series and number
of shares of capital stock of the corporation which are owned beneficially
or of record by such shareholder, (iii) a description of all arrangements
or understandings between such shareholder and each proposed nominee and
any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, (iv) a representation that
such shareholder intends to appear in person or by proxy at the annual
meeting to nominate the persons named in its notice and (v) any other
information relating to such shareholder that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent of each
proposed nominee to be named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures set forth in
this Section 10. If the Chairman of the annual meeting determines that a
nomination was not made in accordance with the foregoing procedures, the
Chairman shall declare to the meeting that the nomination was defective and
such defective nomination shall be disregarded.
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5. The Corporation's By-Laws are hereby amended by adding to Article
II thereof a new section numbered Section 11, and reading in its entirety
as follows:
Section 11. Notice of Shareholder Business. No business may be
transacted at an annual meeting of shareholders, other than business that
is either (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors (or any duly
authorized committee thereof), (b) otherwise properly brought before the
annual meeting by or at the direction of the Board of Directors (or any duly
authorized committee thereof) or (c) otherwise properly brought before the
annual meeting by any shareholder of the corporation (i) who is a
shareholder of record on the date of the giving of the notice provided for
in this Section 11 and on the record date for the determination of
shareholders entitled to vote at such annual meeting and (ii) who complies
with the notice procedures set forth in this Section 11.
In addition to any other applicable requirement, for business to be
properly brought before an annual meeting by a shareholder, such
shareholder must have given timely notice thereof in proper written form
to the Secretary of the corporation.
To be timely, a shareholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the
corporation not less than ninety (90) days nor more than one hundred and
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
shareholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which
notice of the date of the annual meeting was mailed or public disclosure
of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth as to each matter such shareholder proposes to bring before
the annual meeting (i) a brief description of the business desired to be
brought before the annual meting and the reasons for conducting such
business at the annual meeting, (ii) the name and record address of such
shareholder, (iii) the class or series and number of shares of capital
stock of the corporation which are owned beneficially or of record by such
shareholder, (iv) a description of all arrangements or understandings
between such shareholder and any other person or persons (including their
names) in connection with the proposal of such business by such shareholder
and any material interest of such shareholder in such business and (v) a
representation that such shareholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of shareholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 11, provided, however, that, once
business has been properly brought before the annual meeting in accordance
with such procedures, nothing in this Section 11 shall be deemed to
preclude discussion by any shareholder of any such business. If the
Chairman of an annual meeting determines that business was not properly
brought before the annual meeting in accordance with the foregoing
procedures, the Chairman shall declare to the meeting that the business
was not properly brought before the meeting and such business shall not
be transacted.
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