BY-LAWS
of
ACCO BRANDS CORPORATION
ARTICLE I
Offices
SECTION 1. Registered Office in Delaware; Resident Agent. The address of
the Company's registered office in the State of Delaware and the name and
address of its resident agent in charge thereof are as filed with the Secretary
of State of the State of Delaware.
SECTION 2. Other Offices. The Company may also have an office or offices at
such other place or places either within or without the State of Delaware as the
Board of Directors may from time to time determine or the business of the
Company requires.
ARTICLE II
Meetings Of Stockholders
SECTION 1. Place of Meetings. All meetings of the stockholders of the
Company shall be held at such place, within or without the State of Delaware, as
may from time to time be designated by resolution passed by the Board of
Directors. The Board of Directors may, in its sole discretion, determine that
the meetings shall not be held at any place, but may instead be held solely by
means of remote communication.
SECTION 2. Annual Meeting. An annual meeting of the stockholders for the
election of directors and for the transaction of such other proper business,
notice of which was given in the notice of meeting, shall be held on a date and
at a time as may from time to time be designated by resolution passed by the
Board of Directors.
SECTION 3. Special Meetings. A special meeting of the stockholders for any
purpose or purposes shall be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the whole Board.
SECTION 4. Notice of Meetings. Except as otherwise provided by law, written
notice of each meeting of the stockholders, whether annual or special, shall be
mailed, postage prepaid, or sent by electronic transmission not less than ten
nor more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting, at the stockholder's address as it appears on
the records of the Company. Every such notice shall state the place, date and
hour of the meeting, the means of remote communications, if any, by which
stockholders and proxy holders may be deemed to be present in person or by proxy
and vote at such meeting, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Notice of any adjourned meeting of the
stockholders shall not be required to be given, except when expressly required
by law.
SECTION 5. List of Stockholders. The Secretary shall, from information
obtained from the transfer agent, prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting: (a) on a reasonably accessible
electronic network, provided that the information required to gain access to
such list is provided with the notice of the meeting, or (b) during ordinary
business hours, at the principal place of business of the Company. In the event
that the Company determines to make the list available on an electronic network,
the Company may take reasonable steps to ensure that such information is
available only to stockholders of the Company. If the meeting is to be held at a
specified place, then the list shall be produced and kept at the time and place
of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. If the meeting is to be held solely by means of
remote communication, then the list shall also be open to the examination of any
stockholder during the whole time of the meeting on a reasonably accessible
electronic network, and the information required to access the list shall be
provided with the notice of the meeting. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock ledger,
the list referred to in this section or the books of the Company, or to vote in
person or by proxy at any meeting of stockholders.
SECTION 6. Quorum. At each meeting of the stockholders, the holders of a
majority of the issued and outstanding stock of the Company present either in
person or by proxy shall constitute a quorum for the transaction of business
except where otherwise provided by law or by the Certificate of Incorporation or
by these By-laws for a specified action. Except as otherwise provided by law, in
the absence of a quorum, a majority in interest of the stockholders of the
Company present in person or by proxy and entitled to vote shall have the power
to adjourn the meeting
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from time to time, without notice other than announcement at the meeting, until
stockholders holding the requisite amount of stock shall be present or
represented. At any such adjourned meeting at which a quorum may be present, any
business may be transacted which might have been transacted at a meeting as
originally called, and only those stockholders entitled to vote at the meeting
as originally called shall be entitled to vote at any adjournment or
adjournments thereof. The absence from any meeting of the number of stockholders
required by law or by the Certificate of Incorporation or by these By-laws for
action upon any given matter shall not prevent action at such meeting upon any
other matter or matters which may properly come before the meeting, if the
number of stockholders required in respect of such other matter or matters shall
be present.
SECTION 7. Organization. At every meeting of the stockholders the Chairman
of the Board, or in the absence of the Chairman of the Board, the Chief
Executive Officer (if any) shall act as chairman of the meeting. If none of the
officers specified in the preceding sentence is present, a director or an
officer of the Company designated by the Board, shall act as chairman of the
meeting. The Secretary, or, in the Secretary's absence, an Assistant Secretary,
shall act as secretary at all meetings of the stockholders. In the absence from
any such meeting of the Secretary and the Assistant Secretaries, the chairman
may appoint any person to act as secretary of the meeting.
SECTION 8. Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Company and the proposal of business
to be considered by the stockholders may be made at an annual meeting of
stockholders (a) pursuant to the Company's notice of meeting, (b) by or at the
direction of the Board of Directors or (c) by any stockholder of the Company who
was a stockholder of record at the time of giving of notice provided for in this
by-law, who is entitled to vote at the meeting and who complies with the notice
procedures set forth in this by-law.
(2) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this by-law, the stockholder must have given timely notice thereof in writing to
the Secretary of the Company and such other business must otherwise be a proper
matter for stockholder action. To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices of the Company not
later than the close of business on the 120th day prior to the first anniversary
of the preceding year's annual meeting; provided, however, that in the case of
the annual meeting to be held in 2006 or in the event that the date of the
annual meeting is more than 30 days before or
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more than 60 days after such anniversary date, notice by the stockholder to be
timely must be so delivered not later than the close of business on the later of
the 120th day prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first made by the
Company. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a stockholder's
notice as described above. Such stockholder's notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (including
such person's consent to be named in the proxy statement as a nominee and
serving as a director if elected); (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such stockholder, as they appear on the Company's books, and of such
beneficial owner and (ii) the class and number of shares of stock of the Company
which are owned beneficially and of record by such stockholder and such
beneficial owner.
Notwithstanding anything in the second sentence of paragraph (A)(2) of this
by-law to the contrary, in the event that the number of directors to be elected
to the Board of Directors of the Company is increased and there is no public
announcement by the Company naming all of the nominees for director or
specifying the size of the increased Board of Directors at least 100 days prior
to the first anniversary of the preceding year's annual meeting, a stockholder's
notice required by this by-law shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary at the principal executive offices of the Company
not later than the close of business on the 10th day following the day on which
such public announcement is first made by the Company.
(B) Special Meetings of Stockholders. Only such business shall be conducted
at a special meeting of stockholders as shall have been brought before the
meeting pursuant to the Company's notice of meeting. Nominations of persons for
election to the Board of Directors may be made at a special meeting of
stockholders at which directors are to be elected pursuant to the Company's
notice of meeting (a) by or at the direction of the Board of Directors or (b)
provided that the Board of Directors has determined that directors shall be
elected at such meeting, by any
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stockholder of the Company who is a stockholder of record at the time of giving
of notice provided for in this by-law, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this by-law. In
the event the Company calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any stockholder who
shall be entitled to vote at the meeting may nominate a person or persons (as
the case may be) for election to such position(s) as specified in the Company's
notice of meeting if the stockholder shall have delivered to the Secretary at
the principal executive offices of the Company not later than the close of
business on the later of the 120th day prior to such special meeting or the 10th
day following the day on which public announcement is first made of the date of
the special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. In no event shall the public announcement of an
adjournment of a special meeting commence a new time period for the giving of a
stockholder's notice as described above. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors in an election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act (including such person's
consent to be named in the proxy statement as a nominee and serving as a
director if elected); and (b) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made (i)
the name and address of such stockholder, as they appear on the Company's books,
and of such beneficial owner and (ii) the class and number of shares of stock of
the Company which are owned beneficially and of record by such stockholder and
such beneficial owner.
(C) General.
(1) Only such persons who are nominated in accordance with the procedures
set forth in this by-law shall be eligible to serve as directors and only such
business shall be conducted at a meeting of stockholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
by-law. Except as otherwise provided by law, the Certificate of Incorporation or
these By-laws, the chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought before the
meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this by-law and, if any proposed nomination or business
is not in compliance with this by-law, to declare that such defective proposal
or nomination shall be disregarded.
(2) For purposes of this by-law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed
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by the Company with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this by-law, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in this
by-law. Nothing in this by-law shall be deemed to affect any rights (i) of
stockholders to request inclusion of proposals in the Company's proxy statement
pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any
series of Preferred Stock of the Company to elect directors under specified
circumstances.
SECTION 9. Business and Order of Business. At each meeting of the
stockholders such business may be transacted as may properly be brought before
such meeting, except as otherwise provided by law or in these By-laws. The order
of business at all meetings of the stockholders shall be as determined by the
chairman of the meeting, unless otherwise determined by a majority in interest
of the stockholders present in person or by proxy at such meeting and entitled
to vote thereat.
SECTION 10. Voting. Except as otherwise provided by law, the Certificate of
Incorporation or these By-laws, each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of stock held by such
stockholder. Any vote of share of stock may be given by the stockholder entitled
thereto in person or by proxy appointed by an instrument in writing, subscribed
(or transmitted by electronic means and authenticated as provided by law) by
such stockholder or by the stockholder's attorney thereunto authorized, and
delivered to the Secretary; provided, however, that no proxy shall be voted
after three years from its date unless the proxy provides for a longer period.
Except as otherwise provided by law, the Certificate of Incorporation or these
By-laws, at all meetings of the stockholders, all matters shall be decided by
the vote (which need not be by ballot) of a majority in interest of the
stockholders present in person or by proxy and entitled to vote thereat, a
quorum being present.
ARTICLE III
Board of Directors
SECTION 1. General Powers. The property, affairs and business of the
Company shall be managed by or under the direction of its Board of Directors.
SECTION 2. Number, Qualifications, and Term of Office. Subject to the
rights of the holders of any series of Preferred Stock to elect additional
directors
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under specified circumstances, the number of directors of the Company shall be
no fewer than nine and no greater than eleven and shall be fixed from time to
time exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the whole Board, provided, however, that prior to the annual meeting
of stockholders to be held in 2008, any resolution to fix the number of
directors in a number greater than 9 directors shall require the approval of at
least 80% of the directors then in office. A director need not be a stockholder.
The directors, other than those who may be elected by the holders of any
series of Preferred Stock or any other series or class of stock, as provided
herein or in any Preferred Stock Designation (as defined in the Certificate of
Incorporation), shall be divided into three classes, as nearly equal in number
as possible. One class of directors shall be initially elected for a term
expiring at the annual meeting of stockholders to be held in 2006, another class
shall be initially elected for a term expiring at the annual meeting of
stockholders to be held in 2007, and another class shall be initially elected
for a term expiring at the annual meeting of stockholders to be held in 2008.
Members of each class shall hold office until their successors are elected and
shall have qualified. At each annual meeting of the stockholders of the Company,
commencing with the 2006 annual meeting, the successors of the class of
directors whose term expires at that meeting shall be elected by a plurality
vote of all votes cast for the election of directors at such meeting to hold
office for a term expiring at the annual meeting of stockholders held in the
third year following the year of their election.
SECTION 3. Election of Directors. At each meeting of the stockholders for
the election of directors at which a quorum is present, the directors shall be
elected by a plurality vote of all votes cast for the election of directors at
such meeting.
SECTION 4. Quorum and Manner of Acting. A majority of the members of the
Board of Directors shall constitute a quorum for the transaction of business at
any meeting, and the act of a majority of the directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors unless
otherwise provided by law, the Certificate of Incorporation or these By-laws. In
the absence of a quorum, a majority of the directors present may adjourn any
meeting from time to time until a quorum shall be obtained. Notice of any
adjourned meeting need not be given. The directors shall act only as a board and
the individual directors shall have no power as such.
SECTION 5. Place of Meetings. The Board of Directors may hold its meetings
at such place or places within or without the State of Delaware as the
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Board may from time to time determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
SECTION 6. First Meeting. Promptly after each annual election of directors,
the Board of Directors shall meet for the purpose of organization, the election
of officers and the transaction of other business, at the same place as that at
which the annual meeting of stockholders was held or as otherwise determined by
the Board. Notice of such meeting need not be given. Such meeting may be held at
any other time or place which shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
SECTION 7. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such places and at such times as the Board shall from time to
time determine. If any day fixed for a regular meeting shall be a legal holiday
at the place where the meeting is to be held, then the meeting which would
otherwise be held on that day shall be held at the same hour on the next
succeeding business day not a legal holiday. Notice of regular meetings need not
be given.
SECTION 8. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board and shall
be called by the Chairman of the Board or the Secretary of the Company at the
written request of three directors. Notice of each such meeting stating the time
and place of the meeting shall be given to each director by mail, telephone,
other electronic transmission or personally. If by mail, such notice shall be
given not less than five days before the meeting; and if by telephone, other
electronic transmission or personally, not less than two days before the
meeting. A notice mailed at least two weeks before the meeting need not state
the purpose thereof except as otherwise provided in these By-laws. In all other
cases the notice shall state the principal purpose or purposes of the meeting.
Notice of any meeting of the Board need not be given to a director, however, if
waived by the director in writing before or after such meeting or if the
director shall be present at the meeting, except when the director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
SECTION 9. Organization. At each meeting of the Board of Directors, the
Chairman of the Board, or, in the absence of the Chairman of the Board, the
Chief Executive Officer (if any), or, in his or her absence, a director or an
officer of the Company designated by the Board shall act as chairman of the
meeting. The Secretary, or, in the Secretary's absence, any person appointed by
the chairman of the meeting, shall act as secretary of the meeting.
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SECTION 10. Order of Business. At all meetings of the Board of Directors,
business shall be transacted in the order determined by the Board.
SECTION 11. Resignations. Any director of the Company may resign at any
time by giving written notice to the Chairman of the Board or the Secretary of
the Company. The resignation of any director shall take effect at the time
specified therein, and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 12. Compensation. Each director shall be paid such compensation, if
any, as shall be fixed by the Board of Directors.
ARTICLE IV
Committees
SECTION 1. Appointment and Powers. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more directors of the Company
(or in the case of a special-purpose committee, one or more directors of the
Company), which, to the extent provided in said resolution or in these By-laws
and not inconsistent with Section 141 of the Delaware General Corporation Law
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Company, and may authorize the
seal of the Company to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Directors.
SECTION 2. Term of Office and Vacancies. Each member of a committee shall
continue in office until a director to succeed him or her shall have been
elected and shall have qualified, or until he or she ceases to be a director or
until he or she shall have resigned or shall have been removed in the manner
hereinafter provided. Any vacancy in a committee shall be filled by the vote of
a majority of the whole Board of Directors at any regular or special meeting
thereof.
SECTION 3. Alternates. The Board of Directors may, by resolution passed by
a majority of the whole Board, designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee.
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SECTION 4. Organization. Unless otherwise provided by the Board of
Directors, each committee shall appoint a chairman. Each committee shall keep a
record of its acts and proceedings and report the same from time to time to the
Board of Directors.
SECTION 5. Resignations. Any regular or alternate member of a committee may
resign at any time by giving written notice to the Chairman of the Board, the
Chief Executive Officer (if any) or the Secretary of the Company. Such
resignation shall take effect at the time of the receipt of such notice or at
any later time specified therein, and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 6. Removal. Any regular or alternate member of a committee may be
removed with or without cause at any time by resolution passed by a majority of
the whole Board of Directors at any regular or special meeting.
SECTION 7. Meetings. Regular meetings of each committee, of which no notice
shall be necessary, shall be held on such days and at such places as the
chairman of the committee shall determine or as shall be fixed by a resolution
passed by a majority of all the members of such committee. Special meetings of
each committee will be called by the Secretary at the request of any two members
of such committee, or in such other manner as may be determined by the
committee. Notice of each special meeting of a committee shall be mailed to each
member thereof at least two days before the meeting or shall be given personally
or by telephone or other electronic transmission at least one day before the
meeting. Every such notice shall state the time and place, but need not state
the purposes of the meeting. No notice of any meeting of a committee shall be
required to be given to any alternate.
SECTION 8. Quorum and Manner of Acting. Unless otherwise provided by
resolution of the Board of Directors, a majority of a committee (including
alternates when acting in lieu of regular members of such committee) shall
constitute a quorum for the transaction of business and the act of a majority of
those present at a meeting at which a quorum is present shall be the act of such
committee. The members of each committee shall act only as a committee and the
individual members shall have no power as such.
SECTION 9. Compensation. Each regular or alternate member of a committee
shall be paid such compensation, if any, as shall be fixed by the Board of
Directors.
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ARTICLE V
Officers
SECTION 1. Officers. The Board of Directors shall annually choose from
amongst its members a Chairman of the Board. The Board may also choose a Chief
Executive Officer (if any), President (if any), one or more Vice Presidents (if
any) (one or more of whom may be Executive Vice Presidents, Senior Vice
Presidents or otherwise as may be designated by the Board), and shall also
choose a Secretary and a Treasurer. Any two or more offices not inconsistent
with each other may be held by the same person. The Board of Directors may also
from time to time elect such other officers as it deems necessary.
SECTION 2. Term of Office. Each officer shall hold office until his or her
successor shall have been duly elected and qualified in his or her stead, or
until his or her death or until he or she shall have resigned or shall have been
removed in the manner hereinafter provided.
SECTION 3. Additional Officers; Agents. The Chairman of the Board may from
time to time appoint and remove such additional officers and agents as may be
deemed necessary. Such persons shall hold office for such period, have such
authority, and perform such duties as provided in these By-laws or as the
Chairman of the Board may from time to time prescribe. The Board of Directors or
the Chairman of the Board may from time to time authorize any officer to appoint
and remove agents and employees and to prescribe their powers and duties.
SECTION 4. Salaries. Unless otherwise provided by resolution passed by a
majority of the whole Board, the salaries of all officers elected by the Board
of Directors shall be fixed by the Board of Directors.
SECTION 5. Removal. Except where otherwise expressly provided in a contract
authorized by the Board of Directors, any officer may be removed, either with or
without cause, by the vote of a two-thirds majority of the Board at any regular
or special meeting or, except in the case of an officer elected by the Board, by
any superior officer upon whom the power of removal may be conferred by the
Board or by these By-laws.
SECTION 6. Resignations. Any officer elected by the Board of Directors may
resign at any time by giving written notice to the Chairman of the Board, the
Chief Executive Officer (if any) or the Secretary. Any other officer may resign
at any time by giving written notice to the Chairman of the Board, or the Chief
Executive Officer (if any). Any such resignation shall take effect at the date
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of receipt of such notice or at any later time specified therein, and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 7. Vacancies. A vacancy in any office because of death,
resignation, removal or otherwise, shall be filled for the unexpired portion of
the term in the manner provided in these By-laws for regular election or
appointment to such office.
SECTION 8. Chairman of the Board. The Chairman of the Board shall have the
power to call special meetings of the Board of Directors and, if present, to
preside at all meetings of the Board of Directors and to perform such other
duties and have such responsibilities as the Board may from time to time
determine.
SECTION 9. Chief Executive Officer. The Chief Executive Officer of the
Company (if any) shall have general direction of its business affairs, subject,
however, to the control of the Board of Directors. Such person shall perform
such other duties and have such responsibilities as the Board may from time to
time determine. At the request of the Chairman of the Board or in case of his or
her absence or disability, the Chief Executive Officer (if any), or if there is
no Chief Executive Officer such other elected officer designated by the Chairman
of the Board in writing filed with the records of the Secretary, shall perform
the duties of the Chairman of the Board, subject to the control of the Board of
Directors.
SECTION 10. President and Vice Presidents. The President (if any), the
Executive Vice Presidents (if any), the Senior Vice Presidents (if any) and such
other Vice Presidents as shall have been chosen shall have such powers and
perform such duties as shall at any time be delegated to them by the Board of
Directors.
SECTION 11. Secretary. The Secretary shall give the requisite notice of
meetings of stockholders and directors and shall record the proceedings of such
meetings, shall have the custody of the seal of the Company and shall affix it
or cause it to be affixed to such instruments as require the seal and attest it
and, besides his or her powers and duties prescribed by law, shall have such
other powers and perform such other duties as shall at any time be required of
him or her by the Board of Directors.
SECTION 12. Assistant Secretaries. The Assistant Secretaries shall assist
the Secretary in the discharge of his or her duties and shall have such powers
and perform such other duties as shall at any time be delegated to them by the
Board of Directors, and in the absence or disability of the Secretary, shall
perform the duties of his or her office, subject to the control of the Board.
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SECTION 13. Treasurer. The Treasurer shall have charge of the funds and
securities of the Company and shall have such powers and perform such duties as
shall at any time be delegated to him or her by the Board of Directors.
SECTION 14. Assistant Treasurers. The Assistant Treasurers shall assist the
Treasurer in the discharge of his or her duties and shall have such powers and
perform such other duties as shall at any time be delegated to them by the Board
of Directors, and in the absence or disability of the Treasurer, shall perform
the duties of his or her office subject to the control of the Board.
ARTICLE VI
Authorizations
SECTION 1. Contracts. The Board of Directors, except as in these By-laws
otherwise provided, may authorize any officer, employee or agent of the Company
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the Company, and such authority may be general or confined to
specific instances.
SECTION 2. Loans. No loan shall be contracted on behalf of the Company and
no negotiable paper shall be issued in its name, unless authorized by the Board
of Directors.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Company shall be signed by such officer or officers, employee or employees,
of the Company as shall from time to time be determined in accordance with
authorization of the Board of Directors.
SECTION 4. Deposits. All funds of the Company shall be deposited from time
to time to the credit of the Company in such banks, trust companies or other
depositories as the Board of Directors may from time to time designate, or as
may be designated by any officer or officers of the Company to whom such power
may be delegated by the Board, and for the purpose of such deposit the officers
and employees who have been authorized to do so in accordance with the
determinations of the Board may endorse, assign and deliver checks, drafts, and
other orders for the payment of money which are payable to the order of the
Company.
SECTION 5. Proxies. Except as otherwise provided in these By-laws or in the
Certificate of Incorporation, and unless otherwise provided by resolution of the
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Board of Directors, the Chairman of the Board, the Chief Executive Officer (if
any) or any other officer may from time to time appoint an attorney or attorneys
or agent or agents of the Company, in the name and on behalf of the Company, to
cast the votes which the Company may be entitled to cast as a stockholder or
otherwise in any other corporation any of whose stock or other securities may be
held by the Company, at meetings of the holders of the stock or other securities
of such other corporations, or to consent in writing to any action by such other
corporation, and may instruct the person or persons so appointed as to the
manner of casting such vote or giving such consent, and may execute or cause to
be executed in the name and on behalf of the Company and under its corporate
seal, or otherwise, all such written proxies or other instruments as such
officer may deem necessary or proper in the premises.
ARTICLE VII
Indemnification
SECTION 1. The Company 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
(other than an action by or in the right of the Company), by reason of the fact
that such person is or was a director, officer, employee or agent of the Company
or any of its majority-owned subsidiaries or is or was serving at the request of
the Company as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding
of agency contains provisions that supersede or abrogate indemnification under
this section) of another corporation or of any partnership, joint venture,
trust, employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her 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 and in a manner which such
person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful.
14
SECTION 2. The Company 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 by or in the right of the Company to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of the Company or any of its majority-owned subsidiaries, or is or was
serving at the request of the Company as a director, officer, employee or agent
(except in each of the foregoing situations to the extent any agreement,
arrangement or understanding of agency contains provisions that supersede or
abrogate indemnification under this section) of another corporation or of any
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Company and except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the Company
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought 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 which the Court of Chancery of Delaware or such other court shall deem
proper.
SECTION 3. To the extent that a director, officer, employee or agent of the
Company or any of its majority-owned subsidiaries has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
Sections 1 and 2 of this Article VII, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by or on behalf of such person
in connection therewith. If any such person is not wholly successful in any such
action, suit or proceeding but is successful, on the merits or otherwise, as to
one or more but less than all claims, issues or matters therein, the Company
shall indemnify such person against all expenses (including attorneys' fees)
actually and reasonably incurred by or on behalf of such person in connection
with each claim, issue or matter that is successfully resolved. For purposes of
this Section and without limitation, the termination of any claim, issue or
matter by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
SECTION 4. Notwithstanding any other provision of this section, to the
extent any person is a witness in, but not a party to, any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is or was a director, officer, employee or agent of
the Company or any of its majority-owned subsidiaries, or is or was serving at
the request of the Company as a director, officer, employee or agent (except in
each of the foregoing situations to the
15
extent any agreement, arrangement or understanding of agency contains provisions
that supersede or abrogate indemnification under this section) of another
corporation or of any partnership, joint venture, trust, employee benefit plan
or other enterprise, such person shall be indemnified against all expenses
(including attorneys' fees) actually and reasonably incurred by or on behalf of
such person in connection therewith.
SECTION 5. Indemnification under Sections 1 and 2 of this Article VII shall
be made only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth in Sections 1 and 2 of this Article VII. Such determination shall be made
(1) if a Change of Control (as hereinafter defined) shall not have occurred, (a)
by the Board of Directors by a majority vote of the Disinterested Directors (as
hereinafter defined), even though less than a quorum, or (b) if there are no
Disinterested Directors or, even if there are Disinterested Directors, a
majority of such Disinterested Directors so directs, by (x) Independent Counsel
(as hereinafter defined) in a written opinion to the Board of Directors, a copy
of which shall be delivered to the claimant, or (y) the stockholders of the
Company; or (2) if a Change of Control shall have occurred, by Independent
Counsel selected by the claimant in a written opinion to the Board of Directors,
a copy of which shall be delivered to the claimant, unless the claimant shall
request that such determination be made by or at the direction of the Board of
Directors, in which case it shall be made in accordance with clause (1) of this
sentence. Any claimant shall be entitled to be indemnified against the expenses
(including attorneys' fees) actually and reasonably incurred by such claimant in
cooperating with the person or entity making the determination of entitlement to
indemnification (irrespective of the determination as to the claimant's
entitlement to indemnification) and, to the extent successful, in connection
with any litigation or arbitration with respect to such claim or the enforcement
thereof.
SECTION 6. If a Change of Control shall not have occurred, or if a Change
of Control shall have occurred and a director, officer, employee or agent
requests pursuant to clause (2) of the second sentence in Section 5 of this
Article VII that the determination as to whether the claimant is entitled to
indemnification be made by or at the direction of the Board of Directors, the
claimant shall be conclusively presumed to have been determined pursuant to
Section 5 of this Article VII to be entitled to indemnification if (a)(i) within
fifteen days after the next regularly scheduled meeting of the Board of
Directors following receipt by the Company of the request therefor, the Board of
Directors shall not have resolved by majority vote of the Disinterested
Directors to submit such determination to (x) Independent Counsel for its
determination or (y) the stockholders for their determination at the next annual
meeting, or any special meeting that may be held
16
earlier, after such receipt, and (ii) within sixty days after receipt by the
Company of the request therefor (or within ninety days after such receipt if the
Board of Directors in good faith determines that additional time is required by
it for the determination and, prior to expiration of such sixty-day period,
notifies the claimant thereof), the Board of Directors shall not have made the
determination by a majority vote of the Disinterested Directors, or (b) after a
resolution of the Board of Directors, timely made pursuant to clause (a)(i)(y)
above, to submit the determination to the stockholders, the stockholders meeting
at which the determination is to be made shall not have been held on or before
the date prescribed (or on or before a later date, not to exceed sixty days
beyond the original date, to which such meeting may have been postponed or
adjourned on good cause by the Board of Directors acting in good faith);
provided, however, that this sentence shall not apply if the claimant has
misstated or failed to state a material fact in connection with his or her
request for indemnification. Such presumed determination that a claimant is
entitled to indemnification shall be deemed to have been made (I) at the end of
the sixty-day or ninety-day period (as the case may be) referred to in clause
(a)(ii) of the immediately preceding sentence or (II) if the Board of Directors
has resolved on a timely basis to submit the determination to the stockholders,
on the last date within the period prescribed by law for holding such
stockholders meeting (or a postponement or adjournment thereof as permitted
above).
SECTION 7. Expenses (including attorneys' fees) incurred in defending a
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Company in advance of the final disposition of such action,
suit or proceeding, promptly after receipt of a request therefor stating in
reasonable detail the expenses incurred; provided that in each case the Company
shall have received an undertaking by or on behalf of the present or former
director, officer, employee or agent to repay such amount if it shall ultimately
be determined that such person is not entitled to be indemnified by the Company
as authorized in this section.
SECTION 8. The Board of Directors shall establish reasonable procedures for
the submission of claims for indemnification pursuant to this Article VII,
determination of the entitlement of any person thereto and review of any such
determination. Such procedures shall be set forth in an appendix to these
By-laws and shall be deemed for all purposes to be a part hereof.
SECTION 9. For purposes of this Article VII,
(1) "Change of Control" means any of the following occurring at any time
after the distribution of the shares of capital stock of the Company held by
Fortune Brands, Inc., a Delaware corporation ("Fortune"), to the holders of
capital stock of Fortune (the "Distribution") and the consummation of their
merger pursuant
17
to the Agreement and Plan of Merger dated as of March 15, 2005, by and among
Fortune, the Company, Gemini Acquisition Sub, Inc. and General Binding
Corporation (the "Merger"):
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Corporation Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Corporation Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control: (w) any
acquisition directly from the Company, (x) any acquisition by the Company, (y)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or Fortune or any corporation controlled by the
Company or Fortune or (z) any acquisition pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of this Section
9(1); or
(b) Individuals who, as of the date of the Distribution and Merger,
constitute the Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors; provided, however,
that any individual becoming a director subsequent to that date whose election,
or nomination for election by the Company's stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors; or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another entity (a "Corporate Transaction"), in each
case, unless, following such Corporate Transaction, (i) all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Corporate Transaction beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Corporate Transaction
(including, without limitation,
18
a corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or related trust) of the
Company, of Fortune or of such corporation resulting from such Corporate
Transaction) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Corporate Transaction and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board of
Directors, providing for such Corporate Transaction; or
(d) Approval by the Company's stockholders of a complete liquidation or
dissolution of the Company.
(2) "Disinterested Director" means a director of the Company who is not and
was not a party to an action, suit or proceeding in respect of which
indemnification is sought by a director, officer, employee or agent.
(3) "Independent Counsel" means a law firm, or a member of a law firm, that
(i) is experienced in matters of corporation law; (ii) neither presently is, nor
in the past five years has been, retained to represent the Company, the
director, officer, employee or agent claiming indemnification or any other party
to the action, suit or proceeding giving rise to a claim for indemnification
under this section, in any matter material to the Company, the claimant or any
such other party; and (iii) would not, under applicable standards of
professional conduct then prevailing, have a conflict of interest in
representing either the Company or such director, officer, employee or agent in
an action to determine the Company's or such person's rights under this section.
SECTION 10. The indemnification and advancement of expenses herein
provided, or granted pursuant hereto, shall not be deemed exclusive of any other
rights to which any of those indemnified or eligible for advancement of expenses
may be entitled under any agreement, vote of stockholders or Disinterested
Directors or otherwise, both as to action in such person's official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
person. Notwithstanding any amendment,
19
alteration or repeal of this Article VII or any of its provisions, or of any of
the procedures established by the Board of Directors pursuant to Section 8 of
this Article VII, any person who is or was a director, officer, employee or
agent of the Company or any of its majority-owned subsidiaries or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation or of any partnership, joint venture, employee benefit
plan or other enterprise shall be entitled to indemnification in accordance with
the provisions hereof and thereof with respect to any action taken or omitted
prior to such amendment, alteration or repeal except to the extent otherwise
required by law.
SECTION 11. No indemnification shall be payable pursuant to this section
with respect to any action against the Company commenced by an officer,
director, employee or agent unless the Board of Directors shall have authorized
the commencement thereof or unless and to the extent that this Article VII or
the procedures established pursuant to Section 8 of this Article VII shall
specifically provide for indemnification of expenses relating to the enforcement
of rights under this section and such procedures.
ARTICLE VIII
Shares and Their Transfer
SECTION 1. Shares of Stock. The shares of the stock of the Company shall be
uncertificated shares, as approved by the Board of Directors.
SECTION 2. Record Ownership. A record of the name and address of each
holder of the shares of the Company, the number of shares held by such
stockholder and the date of issuance of the shares held by such stockholder
shall be made on the Company's books. The Company shall be entitled to treat the
holder of record of any share of stock (including any holder registered in a
book-entry or direct registration system maintained by the Company or a transfer
agent or a registrar designated by the Board of Directors) as the holder in fact
thereof and accordingly shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person, whether or
not it shall have express or other notice thereof, except as required by law.
SECTION 3. Transfer of Stock. Shares of stock shall be transferable on the
books of the Company by the holder of record of such stock in person or by such
person's attorney or other duly constituted representative, pursuant to
applicable law
20
and such rules and regulations as the Board of Directors shall from time to time
prescribe.
SECTION 4. Transfer Agent and Registrar; Regulations. The Company shall, if
and whenever the Board of Directors shall so determine, maintain one or more
transfer offices or agencies, each in charge of a transfer agent designated by
the Board of Directors, where the shares of the stock of the Company shall be
directly transferable, and also one or more registry offices, each in charge of
a registrar designated by the Board of Directors, where such shares of stock
shall be registered. The Board of Directors may also make such additional rules
and regulations as it may deem expedient concerning the issue, transfer and
registration of shares of stock of the Company and concerning the registration
of pledges of uncertificated shares.
SECTION 5. Fixing Record Date. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. If no record
date is fixed (1) the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held and (2) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 6. Examination of Books by Stockholders. The Board of Directors
shall, subject to the laws of the State of Delaware, have power to determine
from time to time, whether and to what extent and under what conditions and
regulations the accounts and books of the Company, or any of them, shall be open
to the inspection of the stockholders; and no stockholder shall have any right
to inspect any book or document of the Company, except as conferred by the laws
of the State of Delaware, unless and until authorized so to do by resolution of
the Board of Directors or of the stockholders of the Company.
21
ARTICLE IX
Notice
SECTION 1. Manner of Giving Written Notice.
(A) Any notice in writing required by law or by these By-laws to be given
to any person shall be effective if delivered personally, given by depositing
the same in the post office or letter box in a postpaid envelope addressed to
such person at such address as appears on the books of the Company or given by a
form of electronic transmission consented to by such person to whom the notice
is to be given. Any such consent shall be deemed revoked if (i) the Company is
unable to deliver by electronic transmission two consecutive notices given by
the Company in accordance with such consent and (ii) such inability becomes
known to the Secretary or an Assistant Secretary of the Company or to the
transfer agent, or other person responsible for the giving of notice; provided,
however, the inadvertent failure to treat such inability as a revocation shall
not invalidate any meeting or other action.
(B) Notice by mail shall be deemed to be given at the time when the same
shall be mailed and notice by other means shall be deemed given when actually
delivered (and in the case of notice transmitted by a form of electronic
transmission, such notice shall be deemed given (i) if by facsimile
telecommunication, when directed to a number at which the stockholder has
consented to receive notice; (ii) if by electronic mail, when directed to an
electronic mail address at which the stockholder has consented to receive
notice; (iii) if by a posting on an electronic network together with separate
notice to the stockholder of such specific posting, upon the later of (A) such
posting and (B) the giving of such separate notice; and (iv) if by any other
form of electronic transmission, when directed to the stockholder).
SECTION 2. Waiver of Notice. Whenever any notice is required to be given to
any person, a waiver thereof by such person in writing or transmitted by
electronic means (and authenticated if and as required by law), whether before
or after the time stated therein, shall be deemed equivalent thereto.
ARTICLE X
Seal
The corporate seal shall have inscribed thereon the name of the Company,
the year of its organization and the words "Corporate Seal" and "Delaware".
22
ARTICLE XI
Fiscal Year
The fiscal year of the Company shall end on December 31 in each year.
23
APPENDIX
Procedures for Submission and
Determination of Claims for Indemnification
Pursuant to Article VII of the By-laws.
SECTION 1. Purpose. The Procedures for Submission and Determination of
Claims for Indemnification Pursuant to Article VII, of the By-laws (the
"Procedures") are to implement the provisions of Article VII of the By-laws of
the Company (the "By-laws") in compliance with the requirement of Section 8
thereof.
SECTION 2. Definitions. For purposes of these Procedures:
(A) All terms that are defined in Article VII of the By-laws shall have the
meanings ascribed to them therein when used in these Procedures unless otherwise
defined herein.
(B) "Expenses" include all reasonable attorneys' fees, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in, a Proceeding; and shall
also include such retainers as counsel may reasonably require in advance of
undertaking the representation of an Indemnitee in a Proceeding.
(C) "Indemnitee" includes any person who was or is, or is threatened to be
made, a witness in or a party to any Proceeding by reason of the fact that such
person is or was a director, officer, employee or agent of the Company or any of
its majority-owned subsidiaries or is or was serving at the request of the
Company as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding
of agency contains provisions that supersede or abrogate indemnification under
Article VII of the By-laws) of another corporation or of any partnership, joint
venture, trust, employee benefit plan or other enterprise.
(D) "Proceeding" includes any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by an Indemnitee unless the Board of Directors shall have authorized
the commencement thereof.
24
SECTION 3. Submission and Determination of Claims.
(A) To obtain indemnification or advancement of Expenses under Article VII
of the By-laws, an Indemnitee shall submit to the Secretary of the Company a
written request therefor, including therein or therewith such documentation and
information as is reasonably available to the Indemnitee and is reasonably
necessary to permit a determination as to whether and what extent the Indemnitee
is entitled to indemnification or advancement of Expenses, as the case may be.
The Secretary shall, promptly upon receipt of a request for indemnification,
advise the Board of Directors thereof in writing if a determination in
accordance with Article VII, Section 5 of the By-laws is required.
(B) Upon written request by an Indemnitee for indemnification pursuant to
Section 3(A) hereof, a determination with respect to the Indemnitee's
entitlement thereto in the specific case, if required by the By-laws, shall be
made in accordance with Article VII, Section 5 of the By-laws, and, if it is so
determined that the Indemnitee is entitled to indemnification, payment to the
Indemnitee shall be made within ten days after such determination. The
Indemnitee shall cooperate with the person, persons or entity making such
determination, with respect to the Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to the Indemnitee
and reasonably necessary to such determination.
(C) If entitlement to indemnification is to be made by Independent Counsel
pursuant to Article VII, Section 5 of the By-laws, the Independent Counsel shall
be selected as provided in this Section 3(C). If a Change of Control shall not
have occurred, the Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to the Indemnitee advising
the Indemnitee of the identity of the Independent Counsel so selected. If a
Change of Control shall have occurred, the Independent Counsel shall be selected
by the Indemnitee (unless the Indemnitee shall request that such selection be
made by the Board of Directors, in which event the immediately preceding
sentence shall apply), and the Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected. In
either event, the Indemnitee or the Company, as the case may be, may, within
seven days after such written notice of selection shall have been given, deliver
to the Company or to the Indemnitee, as the case may be, a written objection to
such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Article VII of the By-laws, and the objection shall set
forth with particularity the factual basis of such assertion. If such written
objection is made, the Independent Counsel so selected may not serve as
Independent Counsel
25
unless and until a court has determined that such objection is without merit.
If, within twenty days after the next regularly scheduled Board of Directors
meeting following submission by the Indemnitee of a written request for
indemnification pursuant to Section 3(A) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or the Indemnitee may
petition the Court of Chancery of the State of Delaware or other court of
competent jurisdiction for resolution of any objection which shall have been
made by the Company or the Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the Court or by such other person as the Court shall designate, and the
person with respect to whom an objection is favorably resolved or the person so
appointed shall act as Independent Counsel under Article VII, Section 5 of the
By-laws. The Company shall pay any and all reasonable fees and expenses
(including without limitation any advance retainers reasonably required by
counsel) of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Article VII, Section 5 of the By-laws, and
the Company shall pay all reasonable fees and expenses (including without
limitation any advance retainers reasonably required by counsel) incident to the
procedures of Article VII, Section 5 of the By-laws and this Section 3(C),
regardless of the manner in which Independent Counsel was selected or appointed.
Upon the delivery of its opinion pursuant to Article VII of the By-laws or, if
earlier, the due commencement of any judicial proceeding or arbitration pursuant
to Section 4(A)(3) of these Procedures, Independent Counsel shall be discharged
and relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
(D) If a Change of Control shall have occurred, in making a determination
with respect to entitlement to indemnification under the By-laws, the person,
persons or entity making such determination shall presume that an Indemnitee is
entitled to indemnification under the By-laws if the Indemnitee has submitted a
request for indemnification in accordance with Section 3(A) hereof, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
SECTION 4. Review and Enforcement of Determination.
(A) In the event that (1) advancement of Expenses is not timely made
pursuant to Article VII, Section 7 of the By-laws, (2) payment of
indemnification is not made pursuant to Article VII, Section 3 or 4 of the
By-laws within ten days after receipt by the Company of written request
therefor, (3) a determination is made pursuant to Article VII, Section 5 of the
By-laws that an Indemnitee is not entitled to indemnification under the By-laws,
(4) the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Article VII,
26
Section 5 of the By-laws and such determination shall not have been made and
delivered in a written opinion within ninety days after receipt by the Company
of the written request for indemnification, or (5) payment of indemnification is
not made within ten days after a determination has been made pursuant to Article
VII, Section 5 of the By-laws that an Indemnitee is entitled to indemnification
or within ten days after such determination is deemed to have been made pursuant
to Article VII, Section 6 of the By-laws, the Indemnitee shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any other
court of competent jurisdiction, of the Indemnitee's entitlement to such
indemnification or advancement of Expenses. Alternatively, the Indemnitee, at
his or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association. The
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within one year following the date on which the Indemnitee first has
the right to commence such proceeding pursuant to this Section 4(A). The Company
shall not oppose the Indemnitee's right to seek any such adjudication or award
in arbitration.
(B) In the event that a determination shall have been made pursuant to
Article VII, Section 5 of the By-laws that an Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 4 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and the Indemnitee shall not be prejudiced by reason
of that adverse determination. If a Change of Control shall have occurred, the
Company shall have the burden of proving in any judicial proceeding or
arbitration commenced pursuant to this Section 4 that the Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be.
(C) If a determination shall have been made or deemed to have been made
pursuant to Article VII, Section 5 or 6 of the By-laws that an Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Section 4,
absent (1) a misstatement or omission of a material fact in connection with the
Indemnitee's request for indemnification, or (2) a prohibition of such
indemnification under applicable law.
(D) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 4 that the
procedures and presumptions of these Procedures are not valid, binding and
enforceable, and shall stipulate in any such judicial proceeding or arbitration
that the Company is bound by all the provisions of these Procedures.
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(E) In the event that an Indemnitee, pursuant to this Section 4, seeks to
enforce the Indemnitee's rights under, or to recover damages for breach of,
Article VII of the By-laws or these Procedures in a judicial proceeding or
arbitration, the Indemnitee shall be entitled to recover from the Company, and
shall be indemnified by the Company against, any and all expenses (of the types
described in the definition of Expenses in Section 2 of these Procedures)
actually and reasonably incurred in such judicial proceeding or arbitration, but
only if the Indemnitee prevails therein. If it shall be determined in such
judicial proceeding or arbitration that the Indemnitee is entitled to receive
part but not all of the indemnification or advancement of Expenses sought, the
expenses incurred by the Indemnitee in connection with such judicial proceeding
or arbitration shall be appropriately prorated.
SECTION 5. Amendments. These Procedures may be amended at any time and from
time to time in the same manner as any by-law of the Company in accordance with
the Certificate of Incorporation; provided, however, that notwithstanding any
amendment, alteration or repeal of these Procedures or any provision hereof, any
Indemnitee shall be entitled to utilize these Procedures with respect to any
claim for indemnification arising out of any action taken or omitted prior to
such amendment, alteration or repeal except to the extent otherwise required by
law.
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