BYLAWS
OF
YOUNG MINDS, INCORPORATED
TABLE OF CONTENTS
ARTICLE I. OFFICES
Section 1. Principal Executive Office
Section 2. Other Offices
ARTICLE II SHAREHOLDERS
Section 1. Place of Meetings
Section 2. Annual Meetings
Section 3. Special Meetings
Section 4. Notice of Annual or Special Meeting
Section 5. Quorum
Section 6. Voting
Section 7. Record Date
Section 8. Action Without Meeting
Section 9. Proxies
Section 10. Shareholder Agreement
ARTICLE III.DIRECTORS
Section 1. Powers
Section 2. Number and Qualification of Directors
Section 3. Election and Term of Office
Section 4. Vacancies and Removals
Section 5. Place of Meetings
Section 6. Regular Meetings
Section 7. Special Meetings
Section 8. Quorum
Section 9. Participation in Meetings by Conference
Telephone
Section 10. Waiver of Notice
Section 11. Adjournment
Section 12. Fees and Compensation
Section 13. Action Without Meeting
Section 14. Duties of Directors
Section 15. Rights of Inspection
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TABLE OF CONTENTS
(continued)
ARTICLE IV. OFFICERS
Section 1. Officers
Section 2. Election
Section 3. Removal and Resignation
Section 4. Vacancies
Section 5. Chairman of the Board
Section 6. President
Section 7. Vice Presidents
Section 8. Secretary
Section 9. Chief Financial Officer
ARTICLE V. OTHER PROVISIONS
Section 1. Inspection of Corporate Records
Section 2. Inspection of Bylaws
Section 3. Endorsement of Documents; Contracts
Section 4. Certificates of Stock
Section 3. Annual Report to Shareholders
Section 6. Construction and Definitions
ARTICLE VI. INDEMNIFICATIONS
Section 1. Definitions
Section 2. Indemnification in Actions by Third Parties
Section 3. Indemnification in Actions by or in the Right of the Corporation
Section 4. Indemnification Against Expenses
Section 5. Required Determinations
Section 6. Advance of Expenses
Section 7. Insurance
Section 8. Amendment to General Corporation Law
ARTICLE VII. AMENDMENTS
ii
BYLAWS
Bylaws for the regulation, except
as otherwise provided by statute
or its Articles of Incorporation,
of
YOUNG MINDS, INCORPORATED
a California corporation
ARTICLE 1. OFFICES
Section 1. PRINCIPAL EXECUTIVE OFFICE. The principal executive
office of the corporation is hereby fixed and located at 308 West State St.,
Suite 2-B, Redlands, California 92373.
The Board of Directors ("Board") is hereby granted full power and
authority to change said principal executive office from one location to
another. Any such change shall be noted on the Bylaws opposite this section,
or this section may be amended to state the new location.
Section 2. OTHER OFFICES. Branch or subordinate offices may be at
any time established by the Board at any place or places.
ARTICLE II. SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be
held either at the principal executive office of the corporation or at any
other place within or without the State of California which may be designated
either by the Board or by the written consent of all persons entitled to vote
thereat, given either before or after the meeting and filed with the
Secretary.
Section 2. ANNUAL MEETINGS. The annual meeting of shareholders
shall be held on the first Tuesday in May or such other date or such other
time as may he fixed by the Board; provided, however, that should said day
fall upon a Saturday, Sunday, or legal holiday observed by the corporation at
its principal executive office, then any such annual meeting of shareholders
shall be held at the same time and place on the next day thereafter ensuing
which is a full business day. At such meetings directors shall be elected
and any other proper business may be transacted.
Section 3. SPECIAL MEETINGS. Special meetings of the shareholders
may be called at any time by the Board, the Chairman of the Board, the
President, or by the holders of shares entitled to cast not less than 10
percent of the votes at such meeting. Upon request in writing to the Chairman
of the Board, the
President, any Vice President or the Secretary, by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer
forthwith shall cause notice to be given to the shareholders entitled to vote
that a meeting will be held at a time requested by the person or persons
calling the meeting, not less than 35 nor more than 60 days after the receipt
of the request. If the notice is not given within 20 days after receipt of
the request, the persons entitled to call the meeting may give the notice.
Section 4. NOTICE OF ANNUAL OR SPECIAL MEETING. Written notice of
each annual or special meeting or shareholders shall be given not less than
10 nor more than 60 days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date, and hour
of the meeting and (i) in the case of a special meeting the general nature of
the business to be transacted, and no other business may be transacted, or
(ii) in the case of the annual meeting, those matters which the Board, at the
time of the mailing of the notice, intends to present for action by the
shareholders, but, subject to the provisions of applicable law, any proper
matter may be presented at the meeting for such action. The notice of any
meeting at which directors are to be elected shall include the names of the
nominees intended at the time of the notice to be presented by the board of
directors for election.
Notice of a shareholders' meeting shall be given either personally
or by mail or by other means of written communication, addressed to the
shareholder at the address of such shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for the purpose of
notice; or, if no such address appears or is given, at the place where the
principal executive office of the corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located. Notice by mail shall be deemed to have
been given at the time a written notice is deposited in the United States
mails, postage pre-paid. Any other written notice shall be deemed to have
been given at the time it is personally delivered to the recipient or is
delivered to a common carrier for transmission, or actually transmitted by
the person giving the notice by electronic means, to recipient.
Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
the shareholders. Except as provided in the following sentence, the
affirmative vote of a majority of shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act
of the shareholders. The shareholders present at a duly called or held
meeting at which a quorum is present may continue
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to do business until adjournment, notwithstanding withdrawal of enough
shareholders to leave less than a quorum if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 6. VOTING. The shareholders entitled to notice any meeting
or to vote at any such meeting shall be only persons in whose name shares
stand on the stock records of the corporation on the record date determined
in accordance with Section 8 of this Article.
Any holder of shares entitled to vote on any matter may vote part of
the shares in favor of the proposal and refrain from voting the remaining
shares or vote them against the proposal, other than elections to office,
but, if the shareholder fails to specify the number of shares such
shareholder is voting affirmatively, it will be conclusively presumed that
the shareholder's approving vote is with respect to all shares such
shareholder is entitled to vote.
Subject to the following sentence, every shareholder entitled to vote
at any election of directors may cumulate such shareholder's votes and give
one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the shareholder's shares
are normally entitled, or distribute the shareholder's votes on the same
principle among as many candidates as the shareholder thinks fit. No
shareholder shall be entitled to cumulate votes for any candidate pursuant to
the preceding sentence unless such candidate's or candidates' names have been
placed in nomination prior to the voting and the shareholder has given
notice, at the meeting prior to the voting of the shareholder's intention to
cumulate the shareholder's votes. If any one shareholder has given such
notice, all shareholders may cumulate their votes for candidates in
nomination.
Elections need not be by ballot; provided, however, that all
elections for directors must be by ballot upon demand made by a shareholder
at the meeting and before the voting begins.
In any election of directors, the candidates receiving the highest
number of affirmative votes of the shares entitled to be voted for them up to
the number of directors to be elected by such shares are elected. Votes
against a director and votes withheld shall have no legal effect.
Section 7. RECORD DATE. The Board may fix, in advance, a record
date for the determination of the shareholders entitled to notice of any
meeting or to vote or entitled to receive payment of any dividend or other
distribution, or any allotment of rights, or to exercise rights in respect of
any other lawful action. The record date so fixed shall be not more than 60
nor
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less than 10 days prior to the date of the meeting nor more than 60 days
prior to any other action. When a record date is so fixed, only shareholders
of record at the close of business on that date are entitled to notice of and
to vote at the meeting or to receive the dividend, distribution, or allotment
of rights, or to exercise of the rights, as the case may be, notwithstanding
any transfer of shares on the books of the corporation after the record date.
If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given, or if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held. The record date for determining shareholders for any
purpose other than set forth in this Section 7 or Section 8 of this Article
shall be at the close of business on the day on which the Board adopts the
resolution relating thereto, or the sixtieth day prior to the date of such
other action, whichever is later.
Section 8. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of
the California General Corporation Law, may he taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior
notice if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding shares having not less than a minimum
number of votes that would be necessary to authorize or to take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Unless a record data for voting purposes be fixed as provided in
Section 7 of this Article, the record date for determining shareholders
entitled to give consent pursuant to this Section 8, when no prior action by
the Board has been taken, shall be the day on which the first written consent
is given.
Section 9. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect
until revoked by the person executing it prior to the vote pursuant thereto
by a writing delivered to the corporation stating that the proxy is revoked
or by a subsequent proxy executed by the person executing the prior proxy and
presented to the meeting, or as to any meeting by attendance at such meeting
and voting in person by the person executing the proxy; provided, however,
that no proxy shall be valid after the expiration of 11 months from the date
of its execution unless otherwise provided in the proxy. The dates contained
on the forms of proxy
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presumptively determine the order of execution, regardless of the postmark
dates on the envelopes in which they are mailed.
Section 10. SHAREHOLDER AGREEMENT. Subject to the limitations of the
California General Corporation law, shares of any class or classes or series
of capital stock of the corporation may not be transferred or hypothecated by
any shareholder except in compliance with all restrictions on transfer or
hypothecation to which such shareholder or such shares are subject pursuant
to agreements between shareholders of the corporation or agreements between
shareholders and the corporation. Any attempted transfer or hypothecation of
shares in violation of this Section shall be null and void and of no legal
effect.
ARTICLE III. DIRECTORS
Section I. POWERS. Subject to limitations of the Articles, of these
Bylaws, and of the California General Corporation Law relating to action
required to be approved by the shareholders or by the outstanding shares, the
business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the Board. The Board
may delegate the management of the day-to-day operation of the business of
the corporation to a management company or other person provided that the
business affairs of the corporation shall be managed and all corporate powers
shall be exercised under the ultimate direction of the Board. Without
prejudice to such general powers, but subject to the same limitations, it is
hereby expressly declared that the Board shall have the following powers in
addition to the other powers enumerated in these Bylaws:
(a) To select and remove all of the officers, agents, and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, or with the Articles or these Bylaws, fix their
compensation, and require from them security for faithful service.
(b) To conduct, manage, and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, or with the Articles or these Bylaws, as they may deem best.
(c) To adopt, make, and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of
such certificates from time to time as in their judgment they may deem best.
(d) To authorize the issuance of and to designate par value, if any,
of shares of stock of the corporation and any options therefor from time to
time, upon such terms and for such
5
consideration as may be lawful and in accordance with these Bylaws.
Shares may be issued:
(1) For such consideration consisting of any or all of the
following: money paid; labor done; services actually rendered to the
corporation or for its benefits or in its formation or reorganization; debts
or securities cancelled; and tangible or intangible property actually
received either by the issuing corporation or by a wholly owned subsidiary;
but neither promissory notes of the purchaser (unless adequately secured by
collateral other than the shares acquired or unless permitted by Article V,
Section 6 of these Bylaws) nor future services shall constitute payment or
part payment for shares of the corporation; or
(2) As a share dividend or upon a stock split, reverse stock
split, reclassification of outstanding shares into shares of another class,
conversion of outstanding shares into shares of another class, exchange of
outstanding shares for shares of another class or other change affecting
outstanding shares.
(e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, securities convertible
into debt or equity securities, deeds of trust, mortgages, pledges,
hypothecations or other evidences of debt and securities therefor.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized
number of directors shall not be less than three (3) nor more than five (5)
until changed by amendment of Bylaws. The exact number of directors shall be
fixed, within the limits specified, by the Board or shareholders in the same
manner provided in these Bylaws for the amendment hereof. However, if the
number of shareholders is one, there may be one director, or there may be two
directors; if the number of shareholders is two, there may be two directors.
The exact number of directors shall be three (3) until changed as provided in
this Section 2.
Section 3. ELECTION AND TERM OFFICE. The directors shall be elected
at each annual meeting of shareholders but if any such annual meeting is not
held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has
been elected and qualified.
Notwithstanding Article II, Section 8, subject to Section 4 of this
Article, directors may not be elected by written
6
consent except by unanimous written consent of all shares entitled to vote
for the election of directors.
Section 4. VACANCIES AND REMOVALS. Any director may resign
effective upon giving written notice to the Chairman of the Board, the
President, Secretary, or the Board, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective
at a future time, a successor may be elected to take office when the
resignation becomes effective.
Vacancies in the Board, including those existing as a result of a
removal of a director, may be filled by a majority of the remaining
directors, whether or not less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until the next
annual meeting and until such director's successor has been elected and
qualified.
A vacancy or vacancies in the Board shall be deemed to exist in case
of death, resignation, or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual
or special meeting of shareholders at which any director or directors are
elected, to elect the full authorized number of directors to be elected at
that meeting.
The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.
Any or all of the directors may be removed without cause if such
removal is approved by the outstanding shares, subject to the following: (a)
No director may be removed (unless entire Board is removed) when the votes
cast against removal, or not consenting in writing to such removal, would be
sufficient to elect such director if voted cumulatively at an election at
which the same total number of votes were cast (or, if such action is taken
by written consent, all shares entitled to vote were voted) and the entire
number of directors authorized at the time of the director's most recent
election were then being elected; and (b) when by the provisions of the
articles the holders of the shares of any class or series, voting as a class
or series, are entitled to elect one or more directors, any director so
elected may be removed only by the required vote of the holders of the shares
of that class or series.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors. Any such election
by written consent other than to fill a vacancy created by removal requires
the consent of a majority of the outstanding shares entitled to vote. If the
Board accepts the resignation of a director tendered to take
7
effect at a future time, the Board or the shareholders shall have power to
elect a successor to take office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's
term of office.
Section 5. PLACE OF MEETING. Regular or special meetings of the
Board shall be held at any place within or without the State of California
which has been designation from time to time by the Board. In the absence of
such designation regular meetings shall be held at the principal executive
office of the corporation.
Section 6. REGULAR MEETINGS. Immediately following each annual
meeting of shareholders the Board shall ho1d a regular meeting for the
purpose of organization, election of officers, and the transaction of other
business.
Other regular meetings of the Board shall be held without call on
such dates as the Board of Directors may determine; provided, however, should
said day fall upon a Saturday, Sunday, or legal holiday observed by the
corporation at its principal executive office, then said meeting shall be
held at the same time on the next day thereafter ensuing which is a full
business day. Call and notice of all regular meetings of the Board are
hereby dispensed with.
Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board,
the President, or the Secretary or by any two directors.
Special meetings of the Board shall be given upon four days' written
notice or 48 hours' notice given personally or by telephone, telegraph,
telex, or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the directors for purposes of notice or, if such address is
not shown on such records or is not readily ascertainable, at the place in
which the meetings of the directors are regularly held.
Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid.
Any other written notice shall be deemed to have been given at the time it
is personally delivered to the recipient or is delivered to a common carrier
for transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed
8
to have been given at the time it is communicated, in person or by telephone
or wireless, to the recipient or to a person at the office of the recipient
who the person giving the notice has reason to believe will promptly
communicate it to the recipient.
Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the Board for the transaction of business, except to
adjourn as hereinafter provided. Every act or decision done or made by a
majority of the directors present at a meeting duly held at which a quorum is
present shall be regarded as the act of the Board, unless a greater number be
required by law or by the Articles. A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
some directors, if any action so taken is approved by at least a majority of
the required quorum for such meeting.
Section 9. PARTICIPATION OF MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board may participate in a meeting through use of conference
telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another. Participation in a
meeting pursuant to this section constitutes presence in person at such
meeting.
Section 10. WAIVER OF NOTICE. The transactions of any meeting of the
Board, however called and noticed or wherever held, are as valid as though
had at a meeting duly held after regular call and notice if a quorum is
present, if no director in attendance at the meeting protests prior thereto
or at the commencement thereof of the lack of notice to such director, and
if, either before or after the meeting, each of the directors not present
signs a written waiver of notice, a consent to holding such meeting or an
approval of the minutes thereof. All such waivers, consents, or approvals
shall be filed with the corporate records or made a part of the minutes of
the meeting.
Section 11. ADJOURNMENT. A majority of the directors present,
whether or not a quorum is present, may adjourn any directors' meeting to
another time and place. Notice of the time and place of holding an adjourned
meeting need not be given to absent directors if the time and place be fixed
at the meeting adjourned. If the meeting is adjourned for more than 24
hours, notice of any adjournment to another time or place shall be given
prior to the time of the adjourned meeting to the directors who were not
present at the time of the adjournment.
Section 12. FEES AND COMPENSATION. Directors and members of
committees may receive such compensation, if any, for their services, and
such reimbursement for expenses, as may be fixed or determined by the Board.
9
Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action.
Such consent or consents shall have the same effect as a unanimous vote of
the Board and shall be filed with the minutes of the proceedings of the board.
Section 14. DUTIES OF DIRECTORS. A director shall perform the duties
of a director, including duties as a member of any committee of the Board
upon which the director may serve, in good faith, in a manner such director
believes to be in the best interests of the corporation and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances.
In performing the duties of a director, a director shall be entitled
to rely on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by:
(a) One or more officers or employees of the corporation whom the
director believes to be reliable and competent in the matters presented;
(b) Counsel, independent accountants or other persons as to matters
which the director believes to be within such person's professional or expert
competence; or
(c) A committee of the Board upon which the director does not serve,
as to matters within its designated authority, which committee the director
believes to merit confidence, so long as, and in such case, the director acts
in good faith, after reasonable inquiry when the need therefor is indicated
by the circumstances and without knowledge that would cause such reliance to
be unwarranted.
Section l5. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records,
and documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign.
Such inspection by a director may be made in person or by agent or attorney
and includes the right to copy and obtain extracts.
ARTICLE IV. OFFICERS
Section 1. OFFICERS. The required officers of the corporation
shall be a President, a Secretary, and a Chief Financial Officer. The
corporation may also have, at the discretion of the Board, one or more Vice
Presidents, and such
10
other officers as may be elected or appointed in accordance with the
provisions of Section 2 of this Article.
Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointees in accordance with the provisions of
the second paragraph of this section or Section 4 of this Article, shall be
chosen annually by, and shall serve at the pleasure of, the Board, and shall
hold their respective offices until their resignation or removal from
service, or until their terms expire and their respective successors shall be
elected.
The chief executive officer may appoint such additional officers, as
the business of the corporation may require, each of whom shall hold office
for such period, have such authority, and perform such duties as are
provided in these Bylaws or as the chief executive officer may from time to
time determine.
Section 3. REMOVAL AND RESIGNATION. Any officer may be removed,
either with or without cause, by the Board of Directors at any time, or,
except in the case of an officer chosen by the Board, by any officer upon
whom such power of removal may be conferred by the Board. Any such removal
shall be without prejudice to the rights, if any, of the officer under any
contract of employment of the officer.
Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation
shall take effect at the date of receipt of such notice or at any later time
specified therein; and, unless otherwise specific therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause shall be filled in
the manner prescribed in these Bylaws for regular election or appointment to
such office.
Section 5. CHAIRMAN OF THE BOARD. The chairman of the Board, if
there shall be such an officer, shall if present, preside at all meetings of
the Board and exercise and perform such other powers and duties as may be
from time to time assigned by the Board.
Section 6. PRESIDENT. Subject to such powers, if any, as may be
given, by the Board to the Chairman of the Board, if there be such an
officer, the President is the general manager and chief executive officer of
the corporation and has, subject to the control of the Board, general
supervision, direction, and control of the business and officers of the
corporation. The President shall preside at all meetings of the shareholders
and,
11
in the absence of the Chairman of the Board, or if there be none, at all
meetings of the Board. The President has the general powers and duties of
management usually vested in the office of president and general manager of a
corporation and such other powers and duties as may be prescribed by the
Board.
Section 7. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board
or, if not ranked, the Vice President designated by the Board, shall perform
all the duties of the President, and when so acting shall have all the powers
of, and be subject to all the restrictions upon, the President. The Vice
Presidents shall have such other powers and perform such other duties as from
time to time may be prescribed for them respectively by the Board.
Section 8. SECRETARY. The Secretary shall keep or cause to be kept,
at the principal executive office and such other place as the Board may
order, a book of minutes of all meetings of shareholders, the Board, and its
committees, with the time and place of holding, whether regular or special,
and if special, how authorized, the notice thereof given, the names of those
present at Board and committee meetings, the number of share present or
represented at shareholders' meetings, and the proceedings thereof. The
Secretary shall keep, or cause to be kept, a copy of the Bylaws of the
corporation at the principal executive office or business office in
accordance with Section 213 of the California General Corporation Law. The
Secretary shall keep, or cause to be kept, a copy of any shareholders'
agreement at the principal executive office, in accordance with Section
300(b) of the California General Corporation Law.
The Secretary shall keep, or cause to be kept, at the principal
executive office, a share register, showing the names of the shareholders and
their addresses, the number and classes of shares held by each, the number
and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall given, or cause to be given, notice of all the
meetings of the shareholders and of the Board and of any committee thereof
required by these Bylaws or by law to be given, shall keep the seal of the
corporation in safe custody, and shall have such other powers and perform
such other duties as may be prescribed by the Board.
Section 9. CHIEF FINANCIAL OFFICER. The Chief Financial Officer of
the corporation shall keep and maintain, or cause to be kept and maintained,
adequate and correct accounts of the properties and business transactions of
the corporation, and shall send or cause to be sent to the shareholders of
the corporation such financial statements and reports as are by law
12
or these Bylaws required to be sent to them. The books of account shall at
all times be open to inspection by any director.
The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositories as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform
such other duties as may be prescribed by the Board.
ARTICLE V. OTHER PROVISIONS
Section l. INSPECTION OF CORPORATE RECORDS.
(a) A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation shall have
an absolute right to inspect and copy the record of the shareholders' names
and addresses and shareholdings during usual business hours upon five
business days' prior written demand upon the corporation.
(b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any
time during usual business hours upon written demand on the corporation, for
a purpose reasonably related to such holder's interest as a shareholder or
holder of a voting trust certificate.
(c) The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or
holder of a voting trust certificate at any reasonable time during usual
business hours, for a purpose reasonably related to such holder's interests
as a shareholder or as a holder of such voting trust certificate.
(d) Any inspection and copying under this Article may be made in
person or by agent or attorney.
Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office the original or a copy of these Bylaws as amended
to date which shall be open to inspection by shareholders at all reasonable
times during office hours.
Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance, or other instrument in writing and
any assignment or endorsement
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thereof executed or entered into between this corporation and any other
person, when signed by the Chairman of the Board, the President or any Vice
President, and the Secretary, and Assistant Secretary, the Chief Financial
Officer, or any assistant to the Chief Financial Officer of this corporation
shall be valid and binding on this corporation in the absence of actual
knowledge of invalidity on the part of the other person or persons and in
such manner as from time to time shall be determined by the Board and, unless
me authorized by the Board, no officer, agent, or employee shall have any
power or authority to bind the corporation by any contract or engagement or
to pledge its credit or to render it liable for any purpose or amount.
Section 4. CERTIFICATE OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President
and by the Chief Financial Officer or an assistant to the Chief Financial
Officer or the Secretary or an Assistant Secretary, certifying the number of
shares owned by the shareholder. If any officer or registrar who has signed
a certificate shall have ceased to be such officer or registrar before such
certificate is issued, it may be issued by the corporation with the same
effect as if such person were an officer or registrar at the date of issue.
Certificates for shares may be issued prior to full payment under
such restrictions and for such purposes as the Board may provide; provided,
however, that on any certificate issued to represent any partly paid shares,
the total amount of the consideration to be paid therefor and the amount paid
thereon shall be stated. Upon the declaration of any dividend on fully paid
shares, the dividend on partly paid shares shall be proportionate to the
consideration actually paid thereon.
Section 5. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General
Corporation law is expressly waived, but nothing herein shall be interpreted
as prohibiting the Board from issuing annual or other periodic reports to
shareholders.
Section 6. CONSTRUCTION AND DEFINITIONS. Unless the context
otherwise requires, the general provisions, rules of construction, and
definitions contained in the General Provisions of the California
Corporations Code and in the California General Corporation Law shall govern
the construction of these Bylaws.
ARTICLE VI. INDEMNIFICATION
Section l. DEFINITIONS. For the purposes of this Article, "agent"
includes any person who is or was a director, officer, employee, or other
agent of the corporation or who is or
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was serving as such for another foreign or domestic corporation, partnership,
point venture, trust, or other enterprise at the request of the corporation
or who was serving as such for a predecessor corporation of the corporation
or of another enterprise at the request of such predecessor corporation;
"proceeding" includes any threatened, pending, or completed action or
proceeding, whether civil, criminal, administrative, or investigative; and
"expenses" include, without limitations, attorneys' fees and any expenses of
establishing a right to indemnification under Section 4 or Section 5(c).
Section 2. INDEMNIFICATION IN ACTIONS BY THIRD PARTIES. The
corporation shall have power to indemnity any person who was or is a party or
is threatened to be made a party to any proceeding (other than an action by
or in the right of the corporation to procure a judgment in its favor) by
reason of the fact that such person is or was an agent of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually
and reasonably incurred in connection with such proceeding if such person
acted in goad faith and in a manner such person reasonably believed to be in
the best interests of the corporation and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of such person
was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contender or its equivalent
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which the person reasonably believed to be in the
best interests of the corporation or that the person had reasonable cause to
believe that the person's conduct was unlawful.
Section 3. INDEMNIFICATION IN ACTIONS BY OR IN THE RIGHT OF THE
CORPORATION. The corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party of any threatened,
pending, or completed action by or in the right of the corporation to procure
a judgment in its favor by reason of the fact that such person is or was an
agent of the corporation, against expenses actually and reasonably incurred
by such person in connection with the defense or settlement of such action if
such person acted in good faith, in a manner such person believed to be in
the best interests of the corporation and its shareholders, and with such
care, including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances.
No indemnification shall be made under this Section 3:
(a) In respect of any claim, issue, or matter as to which a person
shall have been adjudged to be liable to the corporation in the performance
of such person's duty to the corporation and its shareholders, unless and
only to the extent that the court in which such action is or was pending shall
15
determine upon application that, in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for the
expenses and then only to the extent that such court shall determine;
(b) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval; or
(c) Of expenses incurred in defending a threatened or pending action
which is settled or otherwise disposed of without court approval.
Section 4. INDEMNIFICATION AGAINST EXPENSES. To the extent that an
agent of the corporation has been successful on the merits in defense of any
proceeding referred to in Section 2 or 3 or in defense of any claim, issue,
or matter therein, the agent shall be indemnified against expenses actually
and reasonably incurred by the agent in connection therewith.
Section 5. REQUIRED DETERMINATION. Except as provided in Section 4,
any indemnification under this Article shall be made by the corporation only
if authorized in the specific case, upon a determination that indemnification
of the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 by:
(a) A majority vote of a quorum consisting of directors who are not
parties of such proceeding
(b) If such a quorums of directors is not obtainable, by independent
legal counsel in a written opinion;
(c) Approval of the shareholders, with the shares owned by the
person to be indemnified not being entitled to vote thereon; or
(d) The court in which such proceeding is or was pending upon
application made by the corporation or the agent or the attorney or other
person rendering services in connection with the defense, whether or not such
application by the agent, attorney, or other person is opposed by the
corporation.
Section 6. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by the corporation prior to the final disposition
of such proceeding upon receipt of an undertaking by or on behalf of the
agent to repay such amount unless it shall be determined ultimately that the
agent is entitled to be indemnified as authorized in this Article.
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Section 7. INSURANCE. The corporation shall have power to purchase
and maintain insurance on behalf of any agent of the corporation against any
liability asserted against or incurred by the agent in such capacity or
arising out of the agent's status as such whether or not the corporation
would have the power to indemnify the agent against such liability under the
provisions of this Article.
Section 8. AMENDMENT TO GENERAL CORPORATION LAW. The corporation
may also indemnify its directors, officers, employees, and agents under other
or additional circumstances and in other or additional amounts in accordance
with amendments to the General Corporation Law as enacted from time to time.
ARTICLE VII. AMENDMENTS
These Bylaws may be amended or repealed either by approval of the
outstanding shares or by the approval of the Board; provided, however, that
after the issuance of shares, a Bylaw specifying or changing from a fixed
number of directors or the maximum or minimum number or changing from a fixed
to a variable Board or vice versa may only he adopted by approval of the
outstanding shares.
17
CERTIFICATE OF ADOPTION OF BYLAWS
I hereby certify that I am the duly elected and acting Secretary of
Young Minds, Incorporated, and that the foregoing Bylaws, comprised of 17
pages, constitute the Bylaws of said corporation as duly adopted by the sole
incorporator on April 28, 1989.
IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed
the seal of said corporation on April 28, 1989.
-------------------------------------
Andrew Young, Secretary
(SEAL)
CERTIFICATE OF SECRETARY
OF
YOUNG MINDS, INCORPORATED
I, the undersigned, do hereby certify that:
1. I am the duly appointed and acting secretary of the above-named
corporation;
2. The attached amendment to the bylaws of the corporation is a
true and correct copy of the amendment duly ratified by the board of
directors of the above-named corporation pursuant to action by unanimous
written consent of the board of directors, dated June 1, 1993, and approved
by the shareholders by mail ballot effective June 7, 1993;
3. Said amendment has not been rescinded or modified since its
ratification; and
4. Except for said amendment, the bylaws of the corporation have
not been modified, and are in full force and effect.
In witness whereof, the undersigned has signed this
certificate.
Dated: June 7, 1993 /s/ Matthew B. Hornbeck
----------------------------------
Matthew Hornbeck, Secretary
Article III, Section 2 to the Bylaws of Young Minds, Incorporated is hereby
amended to read in full as follows:
"Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized
number of directors shall not be less than three (3) nor more than five (5)
until changed by amendment of Bylaws. The exact number of directors shall be
fixed, within the limits specified, by the Board or shareholders in the same
manner provided in these Bylaws for the amendment hereof. However, if
the number of shareholders is one, there may be one director, or there may
be two directors; if the number of shareholders is two, there may be two
directors. The exact number of directors shall be five (5) until changed as
provided in this Section 2."