BY-LAWS OF
FIREPLACE MANUFACTURERS, INC.
a California corporation
ARTICLE I
Offices
Section 1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office of
the corporation is hereby fixed and located at: 2701 South Harbor Boulevard,
Santa Ana, California 92704. The board of directors 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 by-laws by the secretary,
opposite this section, or this section may be amended to state the new location.
Section 2. OTHER OFFICES. Other business offices may at any time be
established by the board of directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
Meetings of Shareholders
Section 1. PLACE OF MEETINGS. All annual or other meetings of
shareholders shall be held 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 of directors or by the written consent of all
persons entitled to vote thereat and not present at the meeting, given either
before or after the meeting and filed with the secretary of the corporation.
Section 2. ANNUAL MEETINGS. Annual meetings shall be held at such date
and time as the directors may from time to time fix; provided, however, that
each annual meeting shall be held within fifteen months of the date of the
preceding annual meeting. At such meetings directors shall be elected, reports
of the affairs of the corporation shall be considered, and any other business
may be transacted which is within the powers of the shareholders.
Written notice of each annual meeting shall be given to each shareholder
entitled to vote, either personally or by first class mail (third class mail if
the corporation has 500 shareholders of record on the record date) or other
means of written communication, charges prepaid, addressed to such shareholder
at his address appearing on the books of the corporation or given by him to the
corporation for the purpose of notice. If any notice or report addressed to the
shareholder at the address of such shareholder appearing on the books of the
corporation is returned to the corporation by the United States Postal Service
marked to indicate that the United States Postal Service is unable to deliver
the notice or report to the shareholder at such address, all future notices or
reports shall be deemed to have been duly given without further mailing if the
same shall be available for the shareholder upon written demand of the
shareholder at the principal executive office of the corporation for a period of
one year from the date of the giving of the notice or report to all other
shareholders. If a shareholder gives no address, notice shall be deemed to have
been given him if sent by mail or other means of written communication addressed
to the place where the principal executive office of the corporation is
situated, or if published at least once in some newspaper of general circulation
in the county in which said principal executive office is located.
All such notices shall be given to each shareholder entitled thereto not
less than ten (10) days nor more than sixty (60) days before each annual
meeting. Any such notice shall be deemed to have been given at the time when
delivered personally or deposited in the mail or sent by other means of written
communication.
An affidavit of mailing of any such notice in accordance with the foregoing
provisions, executed by the secretary, assistant secretary or any transfer agent
of the Corporation shall be PRIMA FACIE evidence of the giving of the notice.
Such notices shall specify
(a) the place, the date, and the hour of such meeting;
(b) those matters which the board, at the time of the mailing of the
notice, intends to present for action by the shareholders;
(c) if directors are to be elected, the names of nominees intended at
the time of the notice to be presented by management for election;
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(d) the general nature of a proposal, if any, to take action with
respect to approval of, (i) a contract or other transaction with an
interested director, (ii) an amendment of the articles of incorporation,
(iii) a reorganization of the corporation as defined in Section 181 of the
General Corporation Law, (iv) a voluntary dissolution of the corporation,
or (v) a distribution in dissolution other than in accordance with the
rights of outstanding preferred shares, if any; and
(e) such other matters, if any, as may be expressly required by
statute.
Section 3. SPECIAL MEETINGS. Special meetings of the shareholders, for
the purpose of taking any action permitted by the shareholders under the General
Corporation Law and the articles of incorporation of this corporation may be
called at any time by the chairman of the board or the president, or by the
board of directors, or by one or more shareholders holding not less than ten
percent (10%) of the votes at the meeting. Upon request in writing that a
special meeting of shareholders be called for any proper purpose, directed to
the chairman of the board, president, vice president or 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 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 thirty-five (35) nor more than sixty (60)
days after receipt of the request. If the notice is not given within twenty
(20) days after receipt of the request, the person or persons requesting the
meeting may give the notice. Except in special cases where other express
provision is made by statute, notice of such special meetings shall be given in
the same manner as for annual meetings of shareholders. In addition to the
matters required by items (a) and, if applicable, (c) of the preceding Section
2, notice of any special meeting shall specify the general nature of the
business to be transacted, and that no other business may be transacted at such
meeting.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the chairman of the board, the president, any
vice president, or the secretary of the corporation.
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Section 4. QUORUM. The presence in person or by proxy of the persons
entitled to vote a majority of the voting shares at any meeting shall constitute
a quorum for the transaction of business. The shareholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the 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 5. ADJOURNED MEETING AND NOTICE THEREOF. Any shareholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum no other business may be transacted at such meeting, except as
provided in the preceding Section 4.
When any shareholders' meeting, either annual or special, is adjourned for
forty-five days or more, or if after adjournment a new record date is fixed for
the adjourned meeting, notice of the adjourned meeting shall be given as in the
case of an original meeting. Except as provided above, it shall not be
necessary to give notice of the time and place of the adjourned meeting or of
the business to be transacted thereat, other than by announcement of the time
and place thereof at the meeting at which such adjournment is taken.
Section 6. VOTING. Unless a record date for voting purposes be fixed as
provided in Section 1 of Article V of these by-laws then, subject to the
provisions of Section 4 of Article V of these by-laws, only persons in whose
names shares entitled to vote stand on the stock records of the corporation at
the close of business on the business day next preceding the day on which notice
of the meeting is given or if such notice is waived, at the close of business on
the business day next preceding the day on which the meeting of shareholders is
held, shall be entitled to vote at such meeting, and such day shall be the
record date for such meeting. Such vote may be a voice vote or by ballot;
provided, however, that all elections for directors must be by ballot upon
demand made by a shareholder at any election and before the voting begins.
If a quorum is present except with respect to election of directors, the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also
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constitute a majority of the required quorum) on any matter shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by the General Corporation Law or the articles of incorporation.
Subject to the requirements of the next sentence, every Shareholder entitled to
vote at any election for directors shall have the right to cumulate his 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 his shares are entitled, or
to distribute his votes on the same principle among as many candidates as he
shall think fit. No shareholder shall be entitled to cumulative votes unless
the name of the candidate or candidates for whom such votes would be cast has
been placed in nomination prior to the voting and any shareholder has given
notice at the meeting prior to the voting of such shareholder's intention to
cumulate his votes. The candidates receiving the highest number of affirmative
votes of shares entitled to be voted for them, up to the number of directors to
be elected, shall be elected. Votes against the director and votes withheld
shall have no legal effect.
Section 7. VALIDATION OF DEFECTIVELY CALLED OR NOTICED MEETINGS. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum be present either in person or by proxy,
and if, either before or after the meeting, each of the persons entitled to
vote, not present in person or by proxy, or who, though present, has, at the
beginning of the meeting, properly objected to the transaction of any business
because the meeting was not lawfully called or convened, or to particular
matters of business legally required to be included in the notice, but not so
included, signs a written waiver of notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof; provided, however, that unless
there has been unanimous approval by those entitled to vote, such written
waivers, consents or approvals shall contain a general statement of a proposal,
if any, to take action with respect to approval of, (i) a contract or other
transaction with an interested director, (ii) an amendment of the articles of
incorporation, (iii) a reorganization of the corporation as defined in Section
181 of the General Corporation Law, (iv) a voluntary dissolution of the
corporation, or (v) a distribution in dissolution other than in accordance with
the rights of outstanding preferred shares. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
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All written waivers of notice, or a consent to the holding of a meeting, or
any approval of the minutes shall state the general nature of a proposal, if
any, to take action with respect to approval of, (i) a contract or other
transaction with an interested director, (ii) an amendment of the articles of
incorporation, (iii) a reorganization of the corporation as defined in Section
181 of the General Corporation Law, (iv) a voluntary dissolution of the
corporation, or (v) a distribution in dissolution other than in accordance with
the rights of outstanding preferred shares, if any.
Section 8. ACTION WITHOUT MEETING. Directors may be elected without a
meeting by a consent in writing, setting forth action so taken, signed by all of
the persons who would be entitled to vote for the election of directors,
provided that, without notice except as hereinafter set forth, a director may be
elected at any time to fill a vacancy not filled by the directors by the written
consent of persons holding a majority of the outstanding shares entitled to vote
for the election of directors.
Any other action which, under any provision of the General Corporation Law,
may be taken at a meeting of the shareholders, may be taken without a meeting,
and without notice except as hereinafter set forth, if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted.
Unless the consents of all shareholders entitled to vote have been
solicited in writing,
(a) Notice of any proposed shareholder approval of, (i) a contract or
other transaction with an interested director, (ii) an indemnification of
an agent of the corporation as authorized by Section 16, of Article III, of
these by-laws, (iii) a reorganization of the corporation as defined in
Section 181 of the General Corporation Law, or (iv) a distribution in
dissolution other than in accordance with the rights of outstanding
preferred shares, if any, without a meeting by less than unanimous written
consent, shall be given at least ten (10) days before the consummation of
the action authorized by such approval; and
(b) Prompt notice shall be given of the taking of any other corporate
action approved by shareholders
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without a meeting by less than unanimous written consent, to those
shareholders entitled to vote who have not consented in writing.
Such notices shall be given in the manner and shall be deemed to have been given
as provided in Section 2 of Article II of these by-laws.
Unless, as provided in Section 1 of Article V of these by-laws, the board
of directors has fixed a record date for the determination of shareholders
entitled to notice of and to give such written consent the record date for such
determination shall be the day on which the first written consent is given. All
such written consents shall be filed with the secretary of the corporation.
Any shareholder giving a written consent, or the shareholder's
proxyholders, or a transferee of the shares or a personal representative of the
shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the secretary of the corporation.
Section 9. PROXIES. Every person entitled to vote or execute consents
shall have the right to do so either in person or by one or more agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the secretary of the corporation. Any proxy duly executed
is not revoked and continues in full force and effect until, (i) an instrument
revoking it or a duly executed proxy bearing a later date is filed with the
secretary of the corporation prior to the vote pursuant thereto, (ii) the person
executing the proxy attends the meeting and votes in person, or (iii) written
notice of the death or incapacity of the maker of such proxy is received by the
corporation before the vote pursuant thereto is counted; provided that no such
proxy shall be valid after the expiration of eleven (11) months from the date of
its execution, unless the person executing it specifies therein the length of
time for which such proxy is to continue in force.
A proxy is any written authorization signed by a shareholder or the
shareholder's attorney-in-fact giving another person or persons power to vote
with respect to the shares of such shareholder. Signed, for the purpose
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of a proxy, means the placing of the shareholder's name on the proxy (whether by
manual signature, typewriting, telegraphic transmission or otherwise) by the
shareholder or the shareholder's attorney-in-fact.
Section 10. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the board of directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment
thereof. If inspectors of election are not so appointed, the chairman of any
such meeting may, and on the request of any shareholder or his proxy shall, make
such appointment at the meeting. The number of inspectors shall be either one
or three. If appointed at a meeting on the request of one or more shareholders
or proxies, the majority of shares represented in person or by proxy shall
determine whether one or three inspectors are to be appointed. In case any
person appointed as inspector fails to appear or fails or refuses to act, the
vacancy may, and on the request of any shareholder or a shareholder's proxy
shall, be filled by appointment by the board of directors in advance of the
meeting, or at the meeting by the chairman of the meeting.
The duties of such inspectors shall be as prescribed by Section 707 of the
General Corporation Law and shall include: determining the number of shares
outstanding and the voting power of each; the shares represented at the meeting;
the existence of a quorum; the authenticity, validity and effect of proxies;
receiving votes, ballots or consents; hearing and determining all challenges and
questions in any way arising in connection with the right to vote; counting and
tabulating all votes or consents; determining when the polls shall close;
determining the result; and such acts as may be proper to conduct the election
or vote with fairness to all shareholders. In the determination of the validity
and effect of proxies the dates contained on the forms of proxy shall
presumptively determine the order of execution of the proxies, regardless of the
postmark dates on the envelopes in which they are mailed.
The inspectors of election shall perform their duties impartially, in good
faith, to the best of their ability and as expeditiously as is practical. If
there are three inspectors of election, the decision, act or certificate of a
majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is PRIMA
FACIE evidence of the facts stated therein.
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Section 11. PRESIDING OFFICER; ORDER OF BUSINESS; CONDUCT OF MEETING.
(a) Meetings of the shareholders shall be presided over by such
person as shall be designated by the board of directors or if no
designation is made, then by the chairman of the board of directors, or if
there is no chairman of the board of directors, then the president. The
secretary of this corporation, or in his absence, an assistant secretary,
shall act as secretary of the meeting.
(b) Subject to the following, meetings of shareholders shall
generally follow accepted rules of parliamentary procedure.
(1) The chairman of the meeting shall have absolute authority
over matters of procedure and there shall be no appeal from the ruling
of the chairman. If the chairman, in his absolute discretion, deems
it advisable to dispense with the rules of parliamentary procedure as
to any one meeting of shareholders or a part thereof, the chairman
shall so state and shall clearly state the rules under which the
meeting or appropriate part thereof shall be conducted.
(2) If disorder shall arise which prevents continuation of the
legitimate business of the meeting, the chairman may quit the chair
and announce the adjournment of the meeting; and upon his so doing,
the meeting is immediately adjourned.
(3) The chairman may ask or require that anyone not a bona fide
shareholder or proxy holder leave the meeting.
(4) A resolution or motion shall be only considered for a vote
if proposed by a shareholder or duly authorized proxy holder, and
seconded by an individual, who is a shareholder or a duly authorized
proxy holder, other than the individual who proposed the resolution or
motion.
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ARTICLE III
Directors
Section 1. POWERS. Subject to limitations of the articles of
incorporation and of the General Corporation Law as to action to be authorized
or approved by the shareholders, and subject to the duties of directors as
prescribed by the by-laws, all corporate powers shall be exercised by or under
the authority of, and the business and affairs of the corporation shall be
controlled by, the board of directors. Without prejudice to such general
powers, but subject to the same limitations, it is hereby expressly declared
that the directors shall have the following powers, to wit:
FIRST - To select and remove all the officers, agents and employees of
the corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the articles of incorporation or the by-laws, fix
their compensation and require from them security for faithful service.
SECOND - 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 of incorporation or the by-laws, as
they may deem best.
THIRD - To change the principal executive office and principal office
for the transaction of the business of the corporation from one location to
another as provided in Article I, Section 1, of these by-laws; to fix and locate
from time to time one or more subsidiary offices of the corporation within or
without the State of California, as provided in Article I, Section 2, of these
by-laws; to designate any place within or without the State of California for
the holding of any shareholders' meeting or meetings; and 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, provided such seal and such certificates
shall at all times comply with the provisions of law.
FOURTH - To authorize the issue of shares of stock of the corporation
from time to time, upon such terms as may be lawful.
FIFTH - To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to
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be executed and delivered therefor, in the corporate name, promissory notes,
bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other
evidences of debt and securities therefor.
SIXTH - By resolution adopted by a majority of the authorized number
of directors, to designate an executive and other committees, each consisting of
two or more directors, to serve at the pleasure of the board, and to prescribe
the manner in which proceedings of such committee shall be conducted. Unless
the board of directors shall otherwise prescribe the manner of proceedings of
any such committee, meetings of such committee may be regularly scheduled in
advance and may be called at any time by any two members thereof; otherwise, the
provisions of these by-laws with respect to notice and conduct of meetings of
the board shall govern. Any such committee, to the extent provided in a
resolution of the board, may have all of the authority of the board, except with
respect to:
(i) the approval of any action for which the General Corporation
Law or the articles of incorporation also require shareholder approval;
(ii) the filling of vacancies on the board or in any committee;
(iii) the fixing of compensation of the directors for serving on
the board or on any committee;
(iv) the adoption, amendment or repeal of by-laws;
(v) the amendment or repeal of any resolution of the board;
(vi) any distribution to the shareholders, except at a rate or in
a periodic amount or within a price range determined by the board; and
(vii) the appointment of other committees of the board or the
members thereof.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The number of directors
of the corporation shall not be less than four (4) nor more than seven (7) until
changed by amendment of the articles of incorporation or by a by-law amending
this Section 2 duly adopted by the vote or written consent of holders of a
majority of the outstanding shares
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entitled to vote; provided, however, that if the number of shareholders of the
corporation is at any time fewer than five (5), the number of directors of the
corporation shall be equal to such number of shareholders. The exact number of
directors shall be fixed from time to time, within the limits specified in the
articles of incorporation or in this Section 2, by a by-law or amendment thereof
duly adopted by the vote of a majority of the shares entitled to vote
represented and voting at a duly held meeting at which a quorum is present
(which shares voting affirmatively also constitute a majority of the required
quorum), or by the written consent of the holders of a majority of the
outstanding shares entitled to vote, or by the board of directors.
Subject to the foregoing provisions for changing the number of directors,
the number of directors of this corporation has been fixed at five (5).
Section 3. ELECTION AND TERM OF 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. All directors shall hold
office until their respective successors are elected, subject to the General
Corporation Law and the provisions of these by-laws with respect to vacancies on
the board.
Section 4. VACANCIES. A vacancy in the board of directors shall be deemed
to exist in case of the death, resignation or removal of any director, 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 voted for at
that meeting. The Board of Directors may also declare vacant the office of a
director who has been declared of unsound mind by an order of court or who has
been convicted of a felony.
Any or all of the directors may be removed without cause if such removal is
approved by the affirmative vote of a majority of the outstanding shares
entitled to vote, subject to the following:
(1) No director may be removed (unless the 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
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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
(2) When by the provisions of the articles of incorporation 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
applicable vote of the holders of the shares of that class or series.
Vacancies in the board of directors, except for a vacancy created by the
removal of a director, may be filled by a majority of the remaining directors,
though less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until his successor is elected at an annual or a
special meeting of the shareholders. A vacancy in the board of directors
created by the removal of a director may only be filled by the vote of a
majority of the shares entitled to vote represented at a duly held meeting at
which a quorum is present, or by the written consent of the holders of a
majority of the outstanding shares.
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 shall require the consent of holders of a majority of the outstanding
shares entitled to vote.
Any director may resign effective upon giving written notice to the
chairman of the board, the president, the secretary or the board of directors of
the corporation, unless the notice specifies a later time for the effectiveness
of such resignation. If the board of directors accepts the resignation of a
director tendered to take effect at a future time, the board or the shareholders
shall have the 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 his term of office.
Section 5. PLACE OF MEETING. Meetings of the board of directors shall be
held at any place within or without the State which has been designated from
time to time by resolution of the board or by written consent of all members of
the board. In the absence of such designation regular
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meetings shall be held at the principal executive office of the corporation.
Special meetings of the board may be held either at a place so designated or at
the principal executive office.
Section 6. ORGANIZATION MEETING. Immediately following each annual
meeting of shareholders the board of directors shall hold a regular meeting at
the place of said annual meeting or at such other place as shall be fixed by the
board of directors, for the purpose of organization, election of officers, and
the transaction of other business. Call and notice of such meetings are hereby
dispensed with.
Section 7. OTHER REGULAR MEETINGS. Until otherwise determined by a
majority of the board of directors, other regular meetings of the board of
directors shall not be held and, in lieu thereof, special meetings shall be held
at such times and places as may be appropriately designated in accordance with
Article III, Section 8 of these by-laws.
Section 8. SPECIAL MEETINGS. Special meetings of the board of directors
for any purpose or purposes shall be called at any time by the chairman of the
board, the president, any vice president, the secretary or by any two directors.
Written notice of the date, time and place of special meetings shall be
delivered personally to each director or communicated to each director by
telephone, or by telegraph or mail, charges prepaid, addressed to him at his
address as it is shown upon the records of the corporation or, if it is not so
shown on such records or is not readily ascertainable, at the place at which the
meetings of the directors are regularly held. In case such notice is mailed or
telegraphed, it shall be deposited in the United States mail or delivered to the
telegraph company in the place in which the principal executive office of the
corporation is located at least forty-eight hours prior to the time of the
holding of the meeting. In case such notice is delivered, personally or by
telephone, as above provided, it shall be so delivered at least twenty-four
hours prior to the time of the holding of the meeting. Such mailing,
telegraphing or delivery, personally or by telephone, as above provided, shall
be due, legal and personal notice to such director.
Any notice shall state the date, place and hour of the meeting and may
state the general nature of the business to be transacted.
Section 9. ACTION WITHOUT MEETING. Any action by the board of directors
may be taken without a meeting
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if all members of the board shall individually or collectively consent in
writing to such action. Such written consent or consents shall be filed with
the minutes of the proceedings of the board and shall have the same force and
effect as a unanimous vote of such directors.
Section 10. ACTION AT A MEETING: QUORUM AND REQUIRED VOTE. Presence of a
majority of the authorized number of directors at a meeting of the board of
directors constitutes a quorum for the transaction of business, except as
hereinafter provided. 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 as permitted in the preceding sentence constitutes presence in person at
such meeting. 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 of directors, unless a greater number, or the same number
after disqualifying one or more directors from voting, is required by the
General Corporation Law, by the articles of incorporation, or by these by-laws.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of a director, provided that any action
taken is approved by at least a majority of the required quorum for such
meeting.
Section 11. WAIVER OF DEFECTIVELY CALLED OR NOTICED MEETINGS. Notice of a
meeting need not be given to a director who signs a waiver of notice, or a
consent to holding the meeting or an approval of the minutes thereof, whether
before or after the meeting, or who attends the meeting without protesting the
lack of proper notice to him or her prior to or at the commencement of the
meeting. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Section 12. ADJOURNMENT. A majority of the directors present may adjourn
any directors' meeting to meet again at a stated date, hour and place.
Section 13. NOTICE OF ADJOURNMENT. If the meeting is adjourned for more
than 24 hours, notice of any adjournment to another date, 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 adjournment. Otherwise notice of the time and place of
holding an adjourned meeting need not be given to absent directors if the date,
time and place be fixed at the meeting adjourned.
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Section 14. COMPENSATION. Directors, and members of any committee of the
Board of Directors, shall be entitled to such reasonable compensation for their
services as directors and members of any such committee as shall be fixed from
time to time by resolution of the board of directors and shall also be entitled
to reimbursement for any reasonable expenses incurred in attending such
meetings. The compensation of directors may be on such basis as is determined
by the resolution of the board of directors. Any director receiving
compensation under these provisions shall not be barred from serving the
corporation in any other capacity and receiving reasonable compensation for such
other services.
Section 15. LOANS.
(a) The corporation shall not make any loan of money or property to, or
guarantee the obligation of, any director or officer of the corporation or its
parent or subsidiary, unless the transaction or an employee benefit plan
authorizing such loans or guaranties, after disclosure of the right under such a
plan to include officers or directors, (1) is approved by a vote of the
shareholders pursuant to Sections 6 or 8 of Article II of these by-laws, with
the shares owned by the director or officer, or by the directors or officers
then eligible to participate in such plan not being entitled to vote thereon or
(2) is approved by the unanimous vote of the shareholders.
(b) Notwithstanding subdivision (a), if the corporation has outstanding
shares held of record by 100 or more persons (determined as provided in Section
605 of the General Corporation Law) on the date of approval by the board of
directors, a loan or guaranty to an officer, whether or not a director, or an
employee benefit plan authorizing such a loan or guaranty to an officer, may be
approved by the board of directors alone by a vote sufficient without counting
the vote of any interested director or directors if the board determines that
such a loan or guaranty or plan may reasonably be expected to benefit the
corporation.
(c) A corporation shall not make any loan of money or property to, or
guarantee the obligation of, any person upon the security of shares of the
corporation or of its parent, unless the loan or guaranty is (1) otherwise
adequately secured, (2) made pursuant to an employee benefit plan permitted by
Section 408 of the General Corporation Law, (3) approved by the shareholders
pursuant to Sections 6 or 8 of Article II of these by-laws, with the shares
owned by the borrower not entitled to vote, or (4) approved by unanimous vote of
the shareholders.
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(d) Notwithstanding subdivision (a), a corporation may advance money to a
director or officer of the corporation or of its parent or any subsidiary for
any expenses reasonably anticipated to be incurred in the performance of the
duties of such director or officer, provided that in the absence of such advance
such director or officer would be entitled to be reimbursed for such expenses by
such corporation, its parent or any subsidiary.
(e) The provisions of subdivision (a) do not apply to the payment of
premiums in whole or in part by a corporation on a life insurance policy on the
life of a director or officer so long as repayment to the corporation of the
amount paid by it is secured by the proceeds of the policy and its cash
surrender value.
Section 16. INDEMNIFICATION OF AGENTS OF THE CORPORATION; PURCHASE OF
LIABILITY INSURANCE.
(a) For the purposes of this section, "agent" means any person who is or
was a director, officer, employee or other agent of this corporation, or is or
was serving at the request of this corporation as a director, officer, employee
or agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of this
corporation or of another enterprise at the request of such predecessor
corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative; and
"expenses" includes, without limitation, attorneys' fees and any expenses of
establishing a right to indemnification under subdivision (d) or subdivision
(e)(3) of this Section 16.
(b) This corporation shall indemnify 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 this corporation to procure a judgment in its favor) by reason
of the fact that such person is or was an agent of this corporation, against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding if such person acted in
good faith and in a manner such person reasonably believed to be in the best
interests of this 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 contendere or its equivalent shall not, of itself, create a
presumption
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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 this corporation or that the
person had reasonable cause to believe that his conduct was unlawful.
c) This corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed action
by or in the right of this corporation to procure a judgment in its favor by
reason of the fact that such person is or was an agent of this 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 this
corporation 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 subdivision (c):
(1) In respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to this corporation in the
performance of such person's duty to this corporation, unless and only to
the extent that the court in which such proceeding is or was pending shall
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 which such court shall determine;
(2) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval; or
(3) Of expenses incurred in defending a threatened or pending
action which is settled or otherwise disposed of without court
approval.
(d) To the extent that an agent of this corporation has been successful on
the merits in defense of any proceeding referred to in subdivision (b) or (c) 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.
(e) Except as provided in subdivision (d), any indemnification under this
Section 16 shall be made by this 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 subdivision (b) or (c), by:
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(1) A majority vote of a quorum consisting of directors who are not
parties to such proceeding;
(2) Approval or ratification by the affirmative vote of a majority of
the shares of this corporation entitled to vote represented at a duly held
meeting at which a quorum is present or by the written consent of holders
of a majority of the outstanding shares entitled to vote. For such
purpose, the shares owned by the person to be indemnified shall not be
considered outstanding or entitled to vote thereon; or
(3) The court in which such proceeding is or was pending, upon
application made by this 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 this
corporation.
(f) Expenses incurred in defending any proceeding shall be advanced by
this 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 Section 16.
(g) Nothing contained in this Section 16 shall affect any right to
indemnification to which persons other than directors and officers of this
corporation or any subsidiary hereof may be entitled by contract or otherwise.
(h) No indemnification or advance shall be made under this Section 16,
except as provided in subdivision (d) or subdivision (e)(3), in any circumstance
where it appears:
(1) That it would be inconsistent with a provision of the articles of
incorporation of this corporation, a resolution of the shareholders or an
agreement in effect at the time of the accrual of the alleged cause of
action asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits
indemnification; or
(2) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
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(i) Upon and in the event of a determination by the Board of Directors of
this corporation to purchase such insurance, this corporation shall 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 this corporation would have the
power to indemnify the agent against such liability under the provisions of this
section.
Section 17. TRANSFER AGENTS AND REGISTRARS. The board of directors may
appoint one or more transfer agents or transfer clerks, and one or more
registrars, either domestic or foreign, who shall be appointed at such times and
places as the requirements of the corporation may necessitate and the board of
directors may designate.
ARTICLE IV
OFFICERS
Section l. OFFICERS. The officers of the corporation shall be a
president, a vice president, a secretary and a chief financial officer. The
corporation may also have, at the discretion of the board of directors, a
chairman of the board, one or more additional vice presidents, one or more
assistant secretaries, one or more assistant chief financial officers, and such
other officers as may be appointed in accordance with the provisions of Section
3 of this Article IV. One person may hold two or more offices, except that the
offices of president and secretary shall not be held by the same person.
Section 2. ELECTION. The officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article IV, shall be chosen annually by the board of
directors, and each shall hold his office until he shall resign or shall be
removed or otherwise disqualified to serve, or his successor shall be elected
and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The board of directors may appoint,
and may empower the chairman of the board or the president to appoint, such
other 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 the by-laws or as the board of directors may from time to
time determine.
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Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the board of directors, at any regular or special
meeting thereof, or, except in case of an officer chosen by the board of
directors, by any officer upon whom such power of removal may be conferred by
the board of directors (subject, in each case, to the rights, if any, of an
officer under any contract of employment).
Any officer may resign at any time by giving written notice to the board of
directors or to the president, or to the secretary of the corporation, without
prejudice, however, to the rights, if any, of the corporation under any contract
to which such officer is a party. Any such resignation shall take effect at the
date 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 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the by-laws for regular appointments to such office.
Section 6. 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 of directors and exercise and perform such other powers and duties as may
be from time to time assigned to him by the board of directors or prescribed by
the by-laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may
be given by the board of directors to the chairman of the board, if there be
such an officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and, in the
absence of the chairman of the board, or if there be none, at all meetings of
the board of directors. He shall be ex officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers, and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the hoard of directors or the by-laws.
Section 8. VICE PRESIDENT. In the absence or disability of the president,
the vice presidents in order of their rank as fixed by the board of directors
or, if not
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ranked, the vice president designated by the board of directors, 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 of directors
or the by-laws.
Section 9. SECRETARY. The secretary shall record or cause to be recorded,
and shall keep or cause to be kept, at the principal executive office and such
other place as the board of directors may order, a book of minutes of actions
taken at all meetings of directors and shareholders, 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 directors' meetings, the number of
shares present or represented at shareholders' meetings, and the proceedings
thereof.
The secretary shall keep, or cause to be kept, at the principal executive
office or at the office of the corporation's transfer agent, a share register,
or a duplicate 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
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the meetings
of the shareholders and of the board of directors required by the by-laws or by
law to be given, and 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 of directors or by the by-laws.
Section 10. CHIEF FINANCIAL OFFICER. The chief financial officer shall
keep and maintain, or cause to be kept and maintained, adequate and correct
accounts of the properties and business transactions of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, surplus and shares. The books of account shall at all
reasonable 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 depositaries as may be
designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors,
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shall render to the president and board of directors, whenever they request it,
an account of all of his 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 of directors or by
the by-laws.
Section 11. SALARIES. The salaries for the principal officers of the
corporation shall be fixed, from time to time, by the board of directors. No
officer shall be disqualified from receiving a salary by reason of his also
being a director of the corporation.
ARTICLE V
Shares and Share Certificates
Section 1. RECORD DATE. The board of directors may fix a time in the
future as a record date for the determination of the shareholders entitled to
notice of and to vote at any meeting of shareholders or entitled to give consent
to corporate action in writing without a meeting, to receive any report, to
receive any dividend or distribution, or any allotment of rights, or to exercise
rights in respect to any change, conversion, or exchange of shares. The record
date so fixed shall be not more than sixty (60) days nor less than ten (10) days
prior to the date of any meeting, nor more than sixty (60) days prior to any
other event for the purposes of of which it is fixed. When a record date is so
fixed, only shareholders of record on the close of business on that date are
entitled to notice of and to vote at any such meeting, to give consent without a
meeting, to receive any report, to receive a dividend, distribution, or
allotment of rights, or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date, except as otherwise provided in Section 4 of this Article V.
Section 2. CERTIFICATE FOR SHARES. Every holder of shares in the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the chairman or vice chairman of the board or the president or a
vice president and by the chief financial officer or an assistant chief
financial officer or the secretary or any assistant secretary, certifying the
number of shares and the class or series of shares owned by the shareholder.
Any of the signatures on the certificate may be facsimile. In case any officer,
transfer agent
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or registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if such person were an officer, transfer agent or registrar at
the date of issue.
Any such certificate shall also contain such legend or other statement as
may be required by Section 418 of the General Corporation Law, the California
Corporate Securities Law of 1968, the federal securities laws, and any agreement
between the corporation and the issuee thereof.
Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the board of directors or the by-laws may
provide; provided, however, that any such certificate so issued prior to full
payment shall state on the face thereof the amount remaining unpaid and the
terms of payment thereof.
No new certificate for shares shall be issued in lieu of an old certificate
unless the latter is surrendered and cancelled at the same time; provided,
however, that a new certificate will be issued without the surrender and
cancellation of the old certificate if (1) the old certificate is lost,
apparently destroyed or wrongfully taken; (2) the request for the issuance of
the new certificate is made within a reasonable time after the owner of the old
certificate has notice of its loss, destruction, or theft; (3) the request for
the issuance of a new certificate is made prior to the receipt of notice by the
corporation that the old certificate has been acquired by a bona fide purchaser;
(4) the owner of the old certificate files a sufficient indemnity bond with or
provides other adequate security to the corporation; and (5) the owner satisfies
any other reasonable requirements imposed by the corporation. In the event of
the issuance of a new certificate, the rights and liabilities of the
corporation, and of the holders of the old and new certificates, shall be
governed by the provisions of Section 8104 and 8405 of the California Commercial
Code.
Section 3. TRANSFER OF SHARES. Upon surrender to the secretary or
transfer agent of the corporation of a certificate for shares fully endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to
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issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books, unless under the
California Corporate Securities Law of 1968 or the Securities Act of 1933 or
otherwise such transfer would be adverse to the best interests of the
corporation or unless the corporation has notice of an adverse claim, which may
be an adverse claim of the corporation, to the certificate.
Section 4. SHAREHOLDERS OF RECORD. Voting by shareholders shall in all
cases be subject to the following provisions:
(a) Subject to clause (g) of this Section 4, shares held by an
administrator, executor, guardian, conservator or custodian may be voted by such
holder either in person or by proxy, without a transfer of such shares into the
holder's name; and shares standing in the name of a trustee may be voted by the
trustee, either in person or by proxy, but no trustee shall be entitled to vote
shares held by such trustee without a transfer of such shares into the trustee's
name.
(b) Shares standing in the name of a receiver may be voted by such
receiver; and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.
(c) Subject to the provisions of Section 705 of the General Corporation
Law, and except where otherwise agreed in writing between the parties, a
shareholder whose shares are pledged shall be entitled to vote such shares until
the shares have been transferred into the name of the pledgee, and thereafter
the pledgee shall be entitled to vote the shares so transferred.
(d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.
(e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the by-laws of
such other corporation may prescribe or, in the absence of such provision, as
the Board of Directors of such other corporation may determine or, in the
absence of such determination, by the
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chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the board, president
or any vice president of such other corporation. Shares which are purported to
be voted or any proxy purported to be executed in the name of a corporation
(whether or not any title of the person signing is indicated) shall be presumed
to be voted or the proxy executed in accordance with the provisions of this
subdivision, unless the contrary is shown.
(f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.
(g) Shares held by the corporation in a fiduciary capacity, and shares of
the corporation held in a fiduciary capacity by any subsidiary, shall not be
entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.
(h) If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, husband
and wife as community property, tenants by the entirety, voting trustees,
persons entitled to vote under a shareholder voting agreement or otherwise, or
if two or more persons (including proxyholders) have the same fiduciary
relationship respecting the same shares, unless the secretary of the corporation
is given written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(i) If only one votes, such act binds all;
(ii) If more than one vote, the act of the majority so voting binds
all;
(iii) If more than one vote, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionately.
If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.
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ARTICLE VI
Records and Reports
Section 1. INSPECTION OF CORPORATE RECORDS. The accounting books and
records, the record of shareholders, and minutes of proceedings of the
shareholders and the board and committees of the board of this corporation and
any subsidiary of this corporation shall be open to inspection upon the 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 the holder
of such voting trust certificate. Such inspection by a shareholder or holder of
a voting trust certificate may be made in person or by agent or attorney, and
the right of inspection includes the right to copy and make extracts.
A shareholder or shareholders holding at least 5 percent in the aggregate
of the outstanding voting shares of the corporation or who hold at least one
percent of such voting shares and have filed a Schedule 14B with the United
States Securities and Exchange Commission relating to the election of directors
of the corporation shall have (in person, or by agent or attorney) the right to
inspect and copy the record of shareholders' names and addresses and
shareholdings during usual business hours upon five business days' prior written
demand upon the corporation and to obtain from the transfer agent for the
corporation, upon written demand and upon the tender of its usual charges, a
list of the shareholders' names and addresses, who are entitled to vote for the
election of directors, and their shareholdings, as of the most recent record
date for which it has been compiled or as of a date specified by the shareholder
subsequent to the date of demand. The list shall be made available on or before
the later of five business days after the demand is received or the date
specified therein as the date as of which the list is to be compiled.
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. Such inspection by a director may
be made in person or by agent or attorney and the right of inspection includes
the right to copy and make extracts.
Section 2. ANNUAL REPORTS. The board of directors of the corporation
shall cause an annual report to be sent to
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the shareholders not later than 120 days after the close of the fiscal or
calendar year and at least 15 days, if sent by first class mail, or 35 days, if
sent by third class mail, prior to the annual meeting of shareholders. Such
report shall contain a balance sheet as of the end of such fiscal year and an
income statement and statement of changes in financial position for such fiscal
year, accompanied by any report thereon of independent accountants or, if there
is no such report, the certificate of an authorized officer of the corporation
that such statements were prepared without audit from the books and records of
the corporation.
Section 3. OTHER REPORTS. A shareholder or shareholders holding at least
five percent of the outstanding shares of any class of the corporation may make
a written request to the corporation for an income statement of the corporation
for the three-month, six-month or nine-month period of the current fiscal year
ended more than 30 days prior to the date of the request and a balance sheet of
the corporation as of the end of such period and, in addition, if no annual
report for the last fiscal year has been sent to shareholders, an income
statement and a statement of changes in financial position of the corporation
for the last fiscal year and a balance sheet of the corporation as of the end of
the last fiscal year. The corporation shall use its best efforts to deliver
such statement to the person making the request within 30 days thereafter. A
copy of any such statements shall be kept on file in the principal executive
office of the corporation for 12 months and they shall be exhibited at all
reasonable times to any shareholder demanding an examination of them or a copy
shall be mailed to such shareholder.
The income statements, statement of changes in financial position and
balance sheets referred to in this section shall be accompanied by the report
thereon, if any, of any independent accountants engaged by the corporation or
the certificate of an authorized officer of the corporation that such financial
statements were prepared without audit from the books and records of the
corporation.
Section 4. INSPECTION OF BY-LAWS. The corporation shall keep in its
principal executive office in California, or if its principal executive office
is not in California, then at its principal business office in California the
original or a copy of the by-laws as amended or otherwise altered to date,
certified by the secretary, which shall be open to inspection by the
shareholders at all reasonable times during office hours. If the principal
executive office of the corporation is outside the State
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of California and the corporation has no principal business office in such
State, the Secretary shall, upon the written request of any shareholder, furnish
to that shareholder a copy of the by-laws as amended to date.
Section 5. RECORDS. This corporation shall maintain adequate and correct
accounts, books and records of its business and properties. All of such books,
records and accounts shall be kept at its principal executive office or at such
other location as may be convenient for the corporation.
Section 6. ANNUAL STATEMENT OF GENERAL INFORMATION. The corporation shall,
during the period commencing on each October 1 and ending on each March 31, file
with the Secretary of State of the State of California, on the prescribed form,
a statement setting forth the authorized number of directors, the names and
complete business or residence addresses of all incumbent directors, the names
and complete business or residence addresses of the chief executive officer,
secretary, and chief financial officer, the street address of its principal
executive office or principal business office in the State of California, and
the general type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for the
purpose of service of process, all in compliance with Section 1502 of the
General Corporation Law.
ARTICLE VII
Miscellaneous
Section l. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the board of directors.
Section 2. CONTRACTS, ETC., HOW EXECUTED. The board of directors, except
as in the by-laws otherwise provided, may authorize any officer or officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances; and, unless so authorized by the board of
directors, no officer, agent or employee shall
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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
for any amount. Subject to the provisions of applicable law, any note,
mortgage, evidence of indebtedness, contract, share certificate, conveyance,
or other instrument in writing and and any assignment or endorsements 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, any assistant sectretary, the chief
financial officer or any assistant chief financial officer of this corporation
shall be valid and binding on this corporation in the absence of actual
knowledge on the part of the other person that the signing officers did not
have the authority to execute the same.
Section 3. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The president
or any vice president and the secretary or any assistant secretary of this
corporation are authorized to vote, represent and execise on behalf of this
corporation all rights incident to any and all shares of any other
corporation or corporations standing in the name of this corporation. The
authority herein granted to said officers to vote or represent on behalf
of this corporation any and all shares held by this corporation in any other
corporation or corporations may be exercised either by such officers in
person or by any other person authorized so to do by proxy or power of
atttorney duly executed by said officers.
Section 4. SEAL. This corporation shall adopt and use a corporate seal
consisting of a circle setting forth on its circumference the name of this
corporation and showing the State of Incorporation.
Section 5. FISCAL YEAR. The fiscal year of this corporation shall be
fixed by resolution of the board of directors.
Section 6. LOANS. No loans shall be contracted on behalf of this
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the board of directors; such authority
may be general or confined to specific instances.
Section 7. DEPOSITS. The board of directors shall select banks, trust
companies or other depositories in which all funds of the corporation not
otherwise employed shall, from time to time, be deposited to the credit of
this corporation.
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Section 8. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the California General Corporation Law (the "General Corporation
Law") shall govern the construction of these by-laws. Without limiting the
generality of the foregoing, the masculine gender includes the feminine and
neuter, the singular number includes the plural and the plural number
includes the singular, and the term "person" includes a corporation as well
as a natural person.
ARTICLE VIII
Amendments
Section 1. POWER OF SHAREHOLDERS. New by-laws may be adopted or these
by-laws may be amended or repealed by the affirmative vote of a majority of
the outstanding shares entitled to vote, or by the written assent of
shareholders entitled to vote such shares, except as otherwise provided by
law or by the articles of incorporation.
Section 2. POWER OF DIRECTORS. Subject to the right of shareholders as
provided in Section 1 of this Article VIII to adopt, amend or repeal by-laws,
by-laws may be adopted, amended or repealed by the board of directors;
provided, however, that the board of directors may adopt a by-law or
amendment thereof changing the authorized number of directors only for the
purpose of fixing the exact number of directors within the limits specified
in the articles of incorporation or in Section 2 of Article III of these
by-laws.
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting secretary of Fireplace
Manufactures, Inc., a California corporation; and
2. That the foregoing by-laws, comprising 31 pages, constitute the
by-laws of said corporation as duly adopted by action of the Board of
Directors of the Corporation duly taken on October 19, 1984.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of said corporation this ______ day of ___________, 1984.
/s/ John D. Hornsby
--------------------------
John D. Hornsby, Secretary
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(Fireplace Manufacturing, Inc.)
APPROVAL OF AMENDMENT TO BY-LAWS
The Company's By-Laws provide for a Board of Directors comprised of
from four to seven members with the exact number of directors currently set at
four by the Board of Directors. However, the Company currently has only three
directors. From time to time, the Company has sought to add to its Board of
Directors additional members from the business community that management
believes will aid the Company in meeting its goals and objectives, but has not
been able to do so.
Under the California Corporation Code (the "new Code"), a range of
directors is permitted in which the maximum number of directors is double the
minimum number, less one. Further the minimum number of directors can not be
less than three. A stockholders' vote is needed to change the range of
directors or to change the fixed number of directors if a range is not provided
for. The Company proposes that the By-Laws be amended to provide for a range of
authorized directors from a number not less than three nor more than five. Such
change would reflect the existing number of directors and provide for the
possibility of adding additional directors. The Board of Directors can set the
exact number of directors within the range of authorized directors.
Approval of the amendment to the By-Laws requires the affirmative vote
of at least a majority of the outstanding shares of Common Stock of the Company.