EXHIBIT 3.2
BY-LAWS
OF
ADVANSTAR COMMUNICATIONS INC.
(formerly Edgell Communications, Inc.)
Under the Business Corporation Law
of the State of New York
ARTICLE I
Shareholders
------------
Section 1.01. Annual Meeting. The annual meeting of shareholders for the
------------ --------------
election of directors and the transaction of such other business as may come
before it shall be held on such date in each calendar year, not later than the
one hundred twentieth day after the close of the Corporation's preceding fiscal
year, and at such place, within or without the State of New York, as shall be
fixed by the Board of Directors (or by any officer so designated by the Board)
and stated in the notice or waiver of notice of the meeting.
Section 1.02. Special Meetings. Special meetings of the shareholders, for
------------ ----------------
any purpose or purposes, may be called at any time by resolution of the Board of
Directors (or by any officer designated by the Board) and shall be so called
when requested by the holders of not less than 50% of all shares entitled to
vote at such meeting. Special meetings of shareholders shall be held at such
place, within or without the State of New York, as shall be fixed by the Board
of Directors (or such designated officer) and stated in the notice or waiver of
notice of the meeting. At any such special meeting only such business may be
transacted which is related to the purpose or purposes set forth in the notice
required by the next Section 1.03.
-2-
A special meeting, other than one called at the request of the holders of
not less than 50% of all shares entitled to vote at such meeting, may be
canceled by resolution of the Board of Directors.
Section 1.03. Notice of Meetings of Shareholders. Whenever shareholders
------------ ----------------------------------
are required or permitted to take any action at a meeting, a written notice
thereof shall state the place, date and hour of the meeting, and, unless it is
the annual meeting, shall indicate that it is being issued by or at the
direction of the Board of Directors (or officer designated by the Board to call
the meeting). A notice of a special meeting shall also state the purpose or
purposes for which the meeting is called. A copy of the notice of any meeting
shall be given either personally, by telegraph or by mail, not less than ten nor
more than fifty days before the date of the meeting, to each shareholder
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail, with postage thereon prepaid,
directed to the shareholder at his address as it appears on the record of
shareholders, or, if he shall have filed with the Secretary of the Corporation a
written request that notices to him be mailed to some other address, then
directed to him at such other address.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken; however, if after the adjournment the Board fixes a new
record date for the adjourned meeting, a notice of the adjourned meeting shall
be given to each shareholder of record on the new record date entitled to notice
under the next preceding paragraph.
Section 1.04. Waivers of Notice. Notice of meeting need not be given to
------------ -----------------
any shareholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the
-3-
meeting. The attendance of any shareholder at a meeting, in person or by proxy,
without protesting prior to the conclusion of the meeting the lack of notice of
such meeting, shall constitute a waiver of notice by him.
Section 1.05. Quorum. The holders of a majority of the shares entitled to
------------ ------
vote thereat, present in person or by proxy, shall constitute a quorum at a
meeting of shareholders for the transaction of any business, provided that when
a specified item of business is required to be voted on by a class or series,
voting as a class, the holders of a majority of the shares of such class or
series, present in person or by proxy, shall constitute a quorum for the
transaction of such specified item of business.
When a quorum is once present to organize a meeting, it shall not be broken
by the subsequent withdrawal of any shareholders.
The shareholders present in person or by proxy may adjourn the meeting
despite the absence of a quorum and at any such adjourned meeting at which the
requisite holders of shares shall be present, in person or by proxy, any
business may be transacted which might have been transacted at the meeting as
originally noticed.
Section 1.06. Fixing Record Date. For the purpose of determining the
------------ ------------------
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the Board may fix, in advance, a date as the record
date for any such determination of shareholders. Such date shall not be more
than fifty nor less than ten days before the date of such meeting, nor more than
fifty days prior to any other action.
-4-
Section 1.07. List of Shareholders at Meetings. A list of shareholders as
------------ --------------------------------
of the record date, certified by the corporate officer responsible for its
preparation or by a transfer agent, shall be produced at any meeting of
shareholders upon the request thereat or prior thereto of any shareholder. If
the right to vote at any meeting is challenged, the inspectors of election, or
person presiding thereat, shall require such list of shareholders to be produced
as evidence of the right of the persons challenged to vote at such meeting, and
all persons who appear from such list to be shareholders entitled to vote
thereat may vote at such meeting.
Section 1.08. Proxies. Every shareholder entitled to vote at a meeting of
------------ -------
shareholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the shareholder executing it except as otherwise provided in Section
609 of the Business Corporation Law.
Section 1.09. Selection and Duties of Inspectors. The Board may appoint
------------ ----------------------------------
in advance of any shareholders' meeting one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so appointed, the
person presiding at a shareholders' meeting may, and on the request of any
shareholder entitled to vote thereat shall appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board in advance of the meeting or at the meeting by the
person presiding thereat. Each inspector, before entering upon the discharge of
his duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best of
his ability.
-5-
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder entitled to vote thereat, the inspectors shall
make a report in writing of any challenge, question or matter determined by them
and execute a certificate of any fact found by them. Any report or certificate
made by them shall be prima facie evidence of the facts stated and of the vote
as certified by them.
Unless appointed by the Board or the person presiding at the meeting, as
above provided in this section, inspectors shall be dispensed with at all
meetings of shareholders.
Section 1.10. Qualification of Voters. Except as otherwise provided by
------------ -----------------------
the Certificate of Incorporation of the Corporation, every shareholder shall be
entitled at every meeting of shareholders to one vote for every share standing
in his name on the record of shareholders.
Treasury shares and shares of the Corporation held by any majority-owned
domestic or foreign subsidiary of the Corporation shall not be shares entitled
to vote or to be counted in determining the total number of outstanding shares.
Shares held by an administrator, executor, guardian, conservator,
committee, or other fiduciary, except a trustee, may be voted by him, either in
person or by proxy, without transfer of such shares into his name. Shares held
by a trustee may be voted by him, either in person or by proxy, only after the
shares have been transferred into his name as trustee or into the name of his
nominee.
-6-
Section 1.11. Vote of Shareholders. Director shall be elected by a
------------ --------------------
plurality of the votes cast at a meeting of shareholders by the holders of
shares entitled to vote in the election. Whenever any corporate action, other
than the election of directors, is to be taken by vote of the shareholders, it
shall, except as otherwise required by the Business Corporation Law or by the
Certificate of Incorporation of the Corporation in conformity with the Business
Corporation Law, be authorized by a majority of the votes cast at a meeting of
shareholders by the holders of shares entitled to vote thereon.
The vote upon any question at any shareholders' meeting need not be by
ballot.
Section 1.12. Action Without a Meeting. Whenever shareholders are
------------ ------------------------
required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by the holders of all issued and outstanding shares entitled to vote thereon.
This paragraph shall not be construed to alter or modify the provisions of any
section of the Business Corporation Law or any provision in the Certificate of
Incorporation of the Corporation not inconsistent with the Business Corporation
Law under which the written consent of the holders of less than all outstanding
shares is sufficient for corporate action.
Written consent thus given by the holders of all outstanding shares
entitled to vote shall have the same effect as a unanimous vote of shareholders.
ARTICLE II
Directors
---------
Section 2.01. Management of Business; Qualifications of Directors. The
------------ ---------------------------------------------------
business of the Corporation shall be managed under the direction of the Board of
Directors. Each director shall be at least eighteen years of age but need not
be a shareholder.
-7-
The Board, in addition to the powers and authority expressly conferred upon
it herein, by statute, by the Certificate of Incorporation of the Corporation
and otherwise, is hereby empowered to exercise all such powers as may be
exercised by the Corporation, except as expressly provided otherwise by the
statutes of the State of New York, by the Certificate of Incorporation of the
Corporation and by these By-Laws.
Section 2.02. Number. The number of directors which shall constitute the
------------ ------
entire Board shall be such number as shall be fixed by action of a majority of
the entire Board from time to time, but no decrease in number shall shorten the
term of any incumbent director. The number of directors constituting the entire
Board shall not be less than three, except that if there are less than three
shareholders, the number of directors may be less than three but not less than
the number of shareholders.
Section 2.03. Election and Term. At each annual meeting of shareholders,
------------ -----------------
directors shall be elected to hold office until the next annual meeting. Each
director shall hold office until the expiration of the term for which he is
elected and until his successor has been elected and qualified, or until his
earlier resignation or removal.
Section 2.04. Resignation. Any director of the Corporation may resign at
------------ -----------
any time by giving written notice to the Board, the President or the Secretary
of the Corporation. Such resignation shall take effect at the time specified
therein, if any, or if no time is specified therein, then upon receipt of such
notice by the addressee; and, unless otherwise provided therein, the acceptance
of such resignation shall not be necessary to make it effective.
Section 2.05. Removal. Any member of the Board of Directors may be
------------ -------
removed, with or without cause, at any time prior to the expiration of his term
by a majority vote of the outstanding shares.
-8-
Section 2.06. Vacancies. Newly created directorships resulting from an
------------ ---------
increase in the number of directors and vacancies occurring in the Board for any
reason except the removal of directors without cause may be filled by vote of a
majority of directors then in office although less than a quorum.
A director elected to fill a vacancy shall be elected to hold office for
the unexpired term of his predecessor.
Section 2.07. Quorum of Directors. At all meetings of the Board a
------------ -------------------
majority of the entire Board shall be necessary and sufficient to constitute a
quorum for the transaction of business, and the vote of a majority of the
directors present at the time of the vote, if a quorum is present at such time,
shall be the act of the Board except as expressly provided otherwise by the laws
of the State of New York and except as provided in Sections 2.06, 2.11 and 2.14
hereof.
A majority of the directors present, whether or not a quorum is present,
may adjourn any meeting of the directors to another time and place. Notice of
such adjournment need not be given if such time and place are announced at the
meeting.
Section 2.08. Annual Meetings. The newly elected Board shall meet
------------ ---------------
immediately following the adjournment of the annual meeting of shareholders in
each year at the same place and no notice of such meeting shall be necessary.
Section 2.09. Regular Meetings. Regular meetings of the Board may be held
------------ ----------------
at such time and at such place, within or without the State of New York, as
shall from time to time be fixed by the Board and no notice thereof shall be
necessary.
Section 2.10. Special Meetings. Special meetings of the Board may be
------------ ----------------
called at any time by the President or any Vice-President or by any two
directors or by resolution of the entire
-9-
Board, at such place within or without the State of New York as shall be fixed
by the person or persons calling the meeting.
Notice of each special meeting, stating the time and place of the meeting,
shall be given by the President or the Secretary to each director by delivered
letter, by telegram or by personal communication either over the telephone or
otherwise, in each such case not later than forty-eight (48) hours prior to the
meeting, or by mailed letter deposited in the United States mail with postage
thereon prepaid not later than the fifth day prior to the meeting, or on such
shorter notice as the person or persons calling the meeting may deem necessary
or appropriate under the circumstances.
Notice of a special meeting need not be given to any director who submits a
signed waiver of notice whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to him. Notices of special meetings of the Board and waivers thereof
need not state the purpose or purposes of the meeting.
Section 2.11. Action Without a Meeting. Any action required or permitted
------------ ------------------------
to be taken by the Board may be taken without a meeting if all the members of
the Board consent in writing to the adoption of a resolution authorizing the
action. The resolution and the written consents thereto by the members of the
Board shall be filed with the minutes of the proceedings of the Board.
Section 2.12. Action By Means of Conference Telephone. Any one or more
------------ ---------------------------------------
members of the Board may participate in a meeting of the Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
-10-
Section 2.13. Compensation., Directors shall receive such compensation for
------------ -------------
their services in any capacity as may be determined from time to time by the
Board. Nothing herein contained shall be construed to preclude any director
from serving the Corporation in any other capacity and receiving compensation
therefor.
Section 2.14. Committees. The Board, by resolution adopted by a majority
------------ ----------
of the entire Board, may designate from among its members an Executive Committee
and other committees, each consisting of three or more directors, and each of
which, to the extent provided in the resolution, shall have all the authority of
the Board, except that no such committee shall have authority as to the
following matters:
(a) The submission to shareholders of any action that needs
shareholders' authorization under the Business Corporation Law.
(b) The filling of vacancies in the Board or in any committee.
(c) The fixing of compensation of the directors for serving on the
Board or on any committee.
(d) The amendment or repeal of the By-Laws, or the adoption of new
By-Laws.
(e) The amendment or repeal of any resolution of the Board which by
its terms shall not be so amendable or repealable.
The Board may designate one or more directors as alternate members of any
such committee, who may replace any absent member or members at any meeting of
such committee.
Section 2.15. Action of Committees Without a Meeting. Any action required
------------ --------------------------------------
or permitted to be taken by any committee as provided in Section 2.14 hereof may
be taken without a meeting if all the members of the committee consent in
writing to the adoption of a resolution authorizing the action. The resolution
and the written consents thereto by the members of the committee shall be filed
with the minutes of the proceedings of the committee.
-11-
Section 2.16. Action of Committees by Means of Conference Telephone. Any
------------ -----------------------------------------------------
one or more members of any committee may participate in a meeting of the
committee by means of a conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
Section 2.17. Interested Directors. No contract or other transaction
------------ --------------------
between the Corporation and one or more of its directors, or between the
Corporation and any other corporation, firm, association or other entity in
which one or more of the Corporation's directors are directors or officers, or
have a substantial financial interest, shall be either void or voidable by
reason alone of such interest or by reason alone that such director or directors
are present at the meeting of the Board, or of a committee thereof, which
approves such contract or transaction, or that his or their votes are counted
for such purpose so long as:
(a) The material facts as to such director's interest in such
contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or
known to the Board or committee, and the Board or committee
approves such contract or transaction by a vote sufficient for
such purpose without counting the vote or votes of such
interested director or directors; or
(b) The material facts as to such director's interest in such
contract or transaction and as to any such common directorship,
officership or financial interest are disclosed or known to the
shareholders entitled to vote thereon, and such contract or
transaction is approved by vote of the shareholders; or
(c) The contract or transaction is fair and reasonable as to the
Corporation at the time it is approved by the Board, a committee
or the shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board or of a committee which approves such
contract or transaction.
-12-
Section 2.18. Loans to Directors. A loan shall not be made by the
------------ ------------------
Corporation to any director unless it is authorized by vote of the shareholders.
For this purpose, the shares of the director who would be the borrower shall not
be shares entitled to vote. A loan made in violation of this section shall be a
violation of the duty to the Corporation of the directors approving it, but the
obligation of the borrower with respect to the loan shall not be affected
thereby.
ARTICLE III
Officers
--------
Section 3.01. Election or Appointment; Number. The officers of the
------------ -------------------------------
Corporation shall be elected or appointed by the Board of Directors and shall be
a President, a Secretary and a Treasurer. The Board of Directors, in its
discretion, may also choose a Chairman of the Board of Directors (who must be a
director) and such number of Vice-Presidents, Assistant Secretaries and
Assistant Treasurers, and such other officers, as the Board may from time to
time determine. Any person may hold two or more offices at the same time,
except (subject to the next sentence) the offices of President and Secretary or,
additionally if there be a Chairman of the Board, the offices of Chairman of the
Board and Secretary. When all of the issued and outstanding stock of the
Corporation is owned by one person, such person may hold all or any combination
of offices. The officers of the Corporation may, but need not, be shareholders
of the Corporation nor, except in the case of the Chairman of the Board of
Directors, need such officers be directors of the Corporation.
Section 3.02. Term. Subject to the provisions of Section 3.03 hereof, all
------------ ----
officers shall be elected or appointed to hold office until the next annual
meeting of the Board, and each officer shall hold office for the term for which
he is elected or appointed and until his successor has been elected or appointed
and qualified or until his earlier resignation or removal.
-13-
The Board may require any officer to give security for the faithful
performance of his duties.
Section 3.03. Removal. Any officer elected or appointed by the Board may
------------ -------
be removed by the Board with or without cause. The removal of an officer
without cause shall be without prejudice to his contract rights, if any;
however, the election or appointment of an officer shall not of itself create
contract rights.
Section 3.04. General Authority. The officers shall have such authority,
------------ -----------------
duties and powers as may be assigned to them from time to time by the Board, the
Chairman of the Board, if there be one, or the President and, to the extent
consistent therewith and with other provisions of these By-Laws, shall have the
authority, perform the duties and exercise the powers in the management of the
Corporation usually incident to the offices held by them.
Section 3.05. Voting Securities Owned by the Corporation. Powers of
------------ ------------------------------------------
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chairman of the Board, if there be one,
the President or any Vice-President and any such officer may, in the name of and
on behalf of the Corporation, take all such action as any such officer may deem
advisable to vote in person or by proxy at any meeting of security holders of
any corporation in which the Corporation may own securities and at any such
meeting shall possess and may exercise any and all rights and powers incident to
the ownership of such securities and which, as the owner thereof, the
Corporation might have exercised and possessed if present. The Board may, by
resolution, from time to time confer like powers upon any other person or
persons.
Section 3.06. Chairman of the Board of Directors. The Chairman of the
------------ ----------------------------------
Board of Directors, if there be one, shall preside at all meetings of the
shareholders and of the Board of
-14-
Directors. He shall be the Chief Executive Officer of the Corporation, unless
the Board of Directors designates the President as the Chief Executive Officer,
and except where by law the signature of the President is required, the Chairman
of the Board of Directors shall possess the same power as the President to sign
all contracts, certificates and other instruments of the Corporation which may
be authorized by the Board of Directors. During the absence or disability of the
President, the Chairman of the Board of Directors shall exercise all the powers
and discharge all the duties of the President. The Chairman of the Board of
Directors shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 3.07. President. The President shall, subject to the control of
------------ ---------
the Board of Directors and, if there be one, the Chairman of the Board of
Directors, have general supervision of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. He shall execute all bonds, mortgages, contracts and other instruments
of the Corporation requiring a seal, under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except that the other officers of the Corporation may sign and execute documents
when so authorized by these By-Laws, the Board of Directors or the President.
In the absence or disability of the Chairman of the Board of Directors, or if
there be none, the President shall preside at all meetings of the shareholders
and the Board of Directors. If there be no Chairman of the Board of Directors,
or if the Board of Directors designates the President as Chief Executive Officer
of the Corporation, the President shall be the Chief Executive Officer of the
Corporation. The President shall also perform such other duties and may
exercise such other powers as from time to time may be assigned to him by these
By-Laws or by the Board of Directors.
-15-
Section 3.08. Vice-Presidents. At the request of the President or in his
------------ ---- ----------
absence or in the event of his inability or refusal to act, and if there be no
Chairman of the Board of Directors, the Vice-President or the Vice-Presidents if
there is more than one (in the order designated by the Board of Directors) shall
perform 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. Each Vice-
President shall perform such other duties and have such other powers as the
Board of Directors from time to time may prescribe. If there be no Chairman of
the Board of Directors and no Vice-President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the President,
or in the event of the inability or refusal of the President to act, shall
perform 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.
Section 3.09. Secretary. The Secretary shall attend all meetings of the
------------ ---------
Board of Directors and all meetings of the shareholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of Directors
or President, under whose supervision he shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
shareholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then the Board of Directors, the Chairman of the Board, if
there be one, or the President may choose another officer to cause such notice
to be given. The Secretary shall have custody of the seal of the Corporation
and the Secretary or any Assistant Secretary, if there be one, shall have
authority to affix the same to any instrument requiring it and when so affixed,
-16-
it may be attested by the signature of the Secretary or by the signature of any
such Assistant Secretary. The Board of Directors may give general authority to
any other officer to affix the seal of the Corporation and to attest the
affixing by his signature. The Secretary shall see that all books, reports,
statements, certificates and other documents and records required by law to be
kept or filed are properly kept or filed, as the case may be.
Section 3.10. Treasurer. The Treasurer shall have the custody of the
------------ ---------
corporate funds and securities and shall keep full and accurate accounts of
receipts an disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation.
Section 3.11. Assistant Secretaries. Except as may be otherwise provided
------------ ---------------------
in these By-Laws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Vice-President, if there be one, or the
Secretary, and in the absence of the Secretary or in the event of his disability
or refusal to act, shall perform the duties of the Secretary, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Secretary.
Section 3.12. Assistant Treasurers. Assistant Treasurers, if there be
------------ --------------------
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice-President,
if there be one, or the Treasurer, and in the absence
-17-
of the Treasurer or in the event of his disability or refusal to act, shall
perform the duties of the Treasurer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the Treasurer.
Section 3.13. Other Officers. Such other officers as the Board of
------------ --------------
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE IV
Capital Stock
-------------
Section 4.01. Stock Certificates. The shares of the Corporation shall be
------------ ------------------
represented by certificates signed by the President or a Vice-President and the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
of the Corporation, and may be sealed with the seal of the Corporation or a
facsimile thereof. The signatures of the officers upon a certificate may be
facsimiles if the certificate is countersigned by a transfer agent or registered
by a registrar other than the Corporation itself or its employee. If any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer at the date of issue.
Each certificate representing shares shall also set forth such additional
material as is required by subdivisions (b) and (c) of Section 508 of the
Business Corporation Law.
Section 4.02. Transfers. Stock of the Corporation shall be transferable
------------ ---------
in the manner prescribed by the laws of the State of New York and in these By-
Laws. Transfers of stock shall
-18-
be made on the books of the Corporation only by the person named in the
certificate or by attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate or certificates shall be issued.
Section 4.03. Registered Holders. The Corporation shall be entitled to
------------ ------------------
treat and shall be protected in treating the persons in whose names shares or
any warrants, rights or options stand on the record of shareholders, warrant
holders, rights holders or option holders, as the case may be, as the owners
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to, or interest in, any such share, warrant, right or option on the
part of any other person, whether or not the Corporation shall have notice
thereof, except as expressly provided otherwise by these By-Laws and the laws of
the State of New York.
Section 4.04. New Certificates. The Corporation may issue a new
------------ ----------------
certificate of stock in the place of any certificate theretofore issued by it,
alleged to have been lost, stolen or destroyed, and the directors may, in their
discretion, require the owner of the lost, stolen or destroyed certificate, or
his legal representative, to give the Corporation a bond sufficient (in the
judgment of the directors) to indemnify the Corporation against any claim that
may be made against it on account of the alleged loss or theft or destruction of
any such certificate or the issuance of such new certificate. A new certificate
may be issued without requiring any bond when, in the judgment of the directors,
it is proper so to do.
Section 4.05. Dividends. The Corporation may declare and pay dividends or
------------ ---------
make other distributions in cash or its bonds or its property, including the
shares or bonds of other corporations, on its outstanding shares, except when
currently the Corporation is insolvent or would thereby be made insolvent, or
when the declaration, payment or distribution would be contrary to any
restrictions contained in the Certificate of Incorporation of the Corporation.
-19-
Dividends may be declared or paid and other distributions may be made out of
surplus only, so that the net assets of the Corporation remaining after such
declaration, payment or distribution shall at least equal the amount of its
stated capital. When any dividend is paid or any other distribution is made, in
whole or in part, from sources other than earned surplus, it shall be
accompanied by a written notice (a) disclosing the amounts by which such
dividend or distribution affects stated capital, capital surplus and earned
surplus, or (b) if such amounts are not determinable at the time of such notice,
disclosing the approximate effect of such dividend or distribution upon stated
capital, capital surplus and earned surplus and stating that such amounts are
not yet determinable.
ARTICLE V
Financial Notices to Shareholders
---------------------------------
Section 5.01. Cancellation of Reacquired Shares. When reacquired shares
------------ ---------------------------------
other than converted shares are cancelled, the stated capital of the Corporation
shall be reduced by the amount of stated capital then represented by such shares
plus any stated capital not theretofore allocated to any designated class or
series which is thereupon allocated to the shares cancelled. The amount by
which stated capital has been reduced by cancellation of reacquired shares
during a stated period of time shall be disclosed in the next financial
statement covering such period that is furnished by the Corporation to all its
shareholders or, if practicable, in the first notice of dividend or share
distribution that is furnished to the holders of each class or series of its
shares between the end of the period and the next such financial statement, and
in any event to all its shareholders within six months of the date of the
reduction of capital.
Section 5.02. Reduction of Stated Capital. When a reduction of stated
------------ ---------------------------
capital has been effected under Section 516 of the Business Corporation Law, the
amount of such reduction shall
-20-
be disclosed in the next financial statement covering the period in which such
reduction is made that is furnished by the Corporation to all its shareholders
or, if practicable, in the first notice of dividend or share distribution that
is furnished to the holders of each class or series of its shares between the
date of such reduction and the next such financial statement, and in any event
to all its shareholders within six months of the date of such reduction.
ARTICLE VI
Duties of Directors and Officers; Indemnification
-------------------------------------------------
Section 6.01. Duties of Directors. A director shall perform his duties as
------------ -------------------
a director, including his duties as a member of any committee of the Board upon
which he may serve, in good faith and with that degree of care which an
ordinarily prudent person in a like position would use under similar
circumstances. In performing his duties, 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:
(1) one or more officers or employees (i) of the Corporation or (ii)
of any other corporation of which at least fifty percentum of the
outstanding shares of stock entitling the holders thereof to vote for the
election of directors is owned directly or indirectly by the Corporation or
(iii) of any other corporation of any type or kind, domestic or foreign, or
of any partnership, joint venture, trust, employee benefit plan or other
enterprise which such director has served in any capacity at the request of
the Corporation, whom the director believes to be reliable and competent in
the matters presented, or
(2) counsel, public accountants or other persons as to matters which
the director believes to be within such person's professional or expert
competence, or
-21-
(3) a committee of the Board upon which he does not serve, duly
designated in accordance with a provision of the Certificate of
Incorporation or the By-Laws, as to matters within its designated
authority, which committee the director believes to merit confidence.
so long as in so relying he shall be acting in good faith and with such degree
of care, but he shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance to be
unwarranted. A person who so performs his duties shall have no liability by
reason of being or having been a director of the Corporation.
Section 6.02. Duties of Officers. An officer shall perform his duties as
------------ ------------------
an officer in good faith and with that degree of care which an ordinarily
prudent person in a like position would use under similar circumstances. In
performing his duties, an officer 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:
(1) one or more other officers or employees (i) of the Corporation or
(ii) of any other corporation of which at least fifty percentum of the
outstanding shares of stock entitling the holders thereof to vote for the
election of directors is owned directly or indirectly by the Corporation or
(iii) of any other corporation of any type or kind, domestic or foreign, or
of any partnership, joint venture, trust, employee benefit plan or other
enterprise which such officer has served in any capacity at the request of
the Corporation, whom the officer believes to be reliable and competent in
the matters presented, or
(2) counsel, public accountants or other persons as to matters which
the officer believes to be within such person's professional or expert
competence, so long as
-22-
in so relying he shall be acting in good faith and with such degree of
care, but he shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
to be unwarranted. A person who so performs his duties shall have no
liability by reason of being or having been an officer of the Corporation.
Section 6.03. Indemnification of Directors, Officers, Employees and Agents
------------ ------------------------------------------------------------
in Actions by or in the Right of the Corporation.
- ------------------------------------------------
(a) Subject to Section 6.05, the Corporation shall indemnify any person,
made a party to an action by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he, his testator or intestate,
is or was a director, officer, employee or agent of the Corporation, against the
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense of such action, or in connection
with an appeal therein, except in relation to matters as to which a director or
officer is adjudged to have breached his duty to the Corporation under Section
6.01 or under Section 6.02, as the case may be, or in which an employee or agent
is adjudged to have breached his duty to the Corporation, as that duty may from
time to time be defined.
(b) The indemnification authorized under paragraph (a) shall in no case
include:
(1) amounts paid in settling or otherwise disposing of a threatened
action, or a pending action with or without court approval, or
(2) expenses incurred in defending a threatened action, or a pending
action which is settled or otherwise disposed of without court approval.
Section 6.04. Indemnification of Directors, Officers, Employees and Agents
------------ ------------------------------------------------------------
in Other Actions or Proceedings.
- -------------------------------
-23-
(a) Subject to Section 6.05, the Corporation shall indemnify any person,
made, or threatened to be made, a party to an action or proceeding other than
one by or in the right of the Corporation to procure a judgment in its favor,
whether civil or criminal, including an action by or in the right of any other
corporation of any type or kind, domestic or foreign, of any partnership, joint
venture, trust, employee benefit plan or other enterprise, which any director,
officer, employee or agent of the Corporation served in any capacity at the
request of the Corporation, by reason of the fact that he, his testator or
intestate, was a director, officer, employee or agent of the Corporation, or
served such other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise in any capacity, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, if such director, officer, employee or agent of the
Corporation acted, in good faith, for a purpose which he reasonably believed to
be in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interests of the Corporation and, in criminal actions or proceedings,
in addition, had no reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
---- ----------
equivalent, shall not in itself create a presumption that any such director,
officer, employee or agent of the Corporation did not act, in good faith, for a
purpose which he reasonably believed to be in, or, in the case of service for
any other corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise, not opposed to, the best interests of the Corporation
or that he had reasonable cause to believe that his conduct was unlawful.
-24-
(c) For the purpose of this Section, the Corporation shall be deemed to
have requested a person to serve an employee benefit plan where the performance
by such person of his duties to the Corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be considered fines; and
action taken or omitted by a person with respect to an employee benefit plan in
the performance of such person's duties for a purpose reasonably believed by
such person to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best
interests of the Corporation.
Section 6.05. Payment of Indemnification Other than by Court Award.
------------ ----------------------------------------------------
(a) A person who has been wholly successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding of the character
described in Section 6.03 or 6.04 shall be entitled to indemnification as
authorized in such sections.
(b) Except as provided in paragraph (a), any indemnification under Section
6.03 or 6.04 unless ordered by a court under Section 725 of the Business
Corporation Law of New York, shall be made by the Corporation, only if
authorized in the specific case:
(1) by the Board acting by a quorum consisting of directors who are
not parties to such action or proceeding upon a finding that the director,
officer, employee or agent has met the standard of conduct set forth in
Section 6.03 or 6.04, as the case may be, or,
(2) if a quorum under subparagraph (1) is not obtainable with due
diligence:
(A) by the Board upon the opinion in writing of independent
legal counsel that indemnification is proper in the circumstances
because the applicable
-25-
standard of conduct set forth in such sections has been met by such
director, officer, employee or agent, or
(B) by the shareholders upon a finding that the director,
officer, employee or agent has met the applicable standard of conduct
set forth in such sections.
It is the policy of the Corporation that indemnification of the persons
specified in Sections 6.03 and 6.04 shall be made to the fullest extent
permitted by law.
(c) Expenses incurred in defending a civil or criminal action or
proceeding may be paid by the Corporation in advance of the final disposition of
such action or proceeding if authorized under paragraph (b).
Section 6.06. Other Provisions Affecting Indemnification of Directors,
------------ --------------------------------------------------------
Officers, Employees and Agents.
- ------------------------------
(a) All expenses incurred in defending a civil or criminal action or
proceeding which are advanced by the Corporation under paragraph (c) of Section
6.05 or allowed by a court shall be repaid in case the person receiving such
advancement or allowance is ultimately found, under the procedure set forth in
this Article VI or in Section 725 of the New York Business Corporation Law, not
to be entitled to indemnification or, where indemnification is granted, to the
extent the expenses so advanced by the Corporation or allowed by the court
exceed the indemnification to which he is entitled.
(b) No indemnification, advancement or allowance shall be made under this
Article VI in any circumstance where it appears:
(1) that the indemnification would be inconsistent with a provision
of the Certificate of Incorporation, a By-Law, a resolution of the Board or
of the shareholders,
-26-
an agreement or other proper corporate action, in effect at the time of the
accrual of the alleged cause of action asserted in the threatened or
pending action or proceeding in which the expenses were incurred or other
amounts were paid, which prohibits or otherwise limits indemnification; or
(2) if there has been a settlement approved by the court, that the
indemnification would be inconsistent with any condition with respect to
indemnification expressly imposed by the court in approving the settlement.
(c) If, under this Article VI, any expenses or other amounts are paid by
way of indemnification, otherwise than by court order or action by the
shareholders, the Corporation shall, not later than the next annual meeting of
shareholders unless such meeting is held within three months from the date of
such payment, and, in any event, within fifteen months from the date of such
payment, mail to its shareholders of record at the time entitled to vote for the
election of directors a statement specifying the persons paid, the amounts paid,
and the nature and status at the time of such payment of the litigation or
threatened litigation.
Section 6.07. Non-Exclusivity and Survival of Indemnification. The
------------ -----------------------------------------------
provisions of this Article VI shall not be deemed to preclude the
indemnification of any person who is not specified in Section 6.03 or 6.04 but
whom the Corporation has the power or obligation to indemnify under the
provisions of the Business Corporation Law of New York, or otherwise. The
indemnification provided by this Article VI shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors, and administrators of such person. The
indemnification provided by this Article VI shall not be deemed exclusive of any
other right to which employees or agents (other than officers or directors) of
the Corporation seeking indemnification may be entitled under any By-Law,
-27-
agreement, contract, vote of shareholders or disinterested directors or pursuant
to the direction (howsoever embodied) of any court of competent jurisdiction or
otherwise, both as to actions in their official capacity and as to actions in
another capacity while serving the Corporation.
Section 6.08. Insurance for Indemnification of Directors, Officers,
------------ -----------------------------------------------------
Employees and Agents.
- --------------------
(a) Subject to paragraph (b) below, the Corporation shall have the power
to purchase and maintain insurance:
(1) to indemnify the Corporation for any obligation which it incurs
as a result of the indemnification of directors, officers, employees and
agents under the provisions of this Article VI, and
(2) to indemnify directors, officers, employees and agents in
instances in which they may be indemnified by the Corporation under the
provisions of this Article VI, and
(3) to indemnify directors, officers and employees and agents in
instances in which they may not otherwise be indemnified by the Corporation
under the provisions of this Article VI provided the contract of insurance
covering such directors, officers employees and agents provides, in a
manner acceptable to the superintendent of insurance, for a retention
amount and for co-insurance.
(b) No insurance under paragraph (a) may provide for any payment, other
than cost of defense, to or on behalf of any director, officer or employee or
agent:
(1) if a judgment or other final adjudication adverse to the insured
director, officer, employee or agent establishes that his acts of active
and deliberate dishonesty
-28-
were material to the cause of action so adjudicated, or that he personally
gained in fact a financial profit or other advantage to which he was not
legally entitled, or
(2) in relation to any risk the insurance of which is prohibited
under the insurance law of the State of New York.
(c) Insurance under any or all subparagraphs of paragraph (a) may be
included in a single contract or supplement thereto. Retrospective rated
contracts are prohibited.
(d) The Corporation shall, within the time and to the persons provided in
paragraph (c) of Section 6.06, mail a statement in respect of any insurance it
has purchased or renewed under this Section, specifying the insurance carrier,
date of the contract, cost of the insurance, corporate positions insured, and a
statement explaining all sums, not previously reported in a statement to
shareholders, paid under any indemnification insurance contract.
Section 6.09. Meaning of "Corporation" for Purposes of Article VI. For
------------ ---------------------------------------------------
purposes of this Article VI, references to "the Corporation" shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents so that any person who is
or was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation of any type or kind,
domestic or foreign, partnership, joint venture, trust, employee benefit plan or
other enterprise, shall stand in the same position under the provisions of this
Article VI with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
-29-
ARTICLE VII
Miscellaneous
-------------
Section 7.01. Offices. The principal office of the Corporation shall be
------------ -------
in the City of New York, County of New York, State of New York or such other
place within the State of New York as may from time to time be designated by the
Board of Directors. The Corporation may also have offices at other places
within or without the State of New York.
Section 7.02. Seal. The Corporate seal shall have inscribed thereon the
------------ ----
name of the Corporation, the year of its incorporation and the words "Corporate
Seal New York"
Section 7.03. Checks. All checks or demands for money shall be signed by
------------ ------
such person or persons as the Board of Directors may from time to time
determine.
Section 7.04. Books and Records. The Corporation shall keep correct and
------------ -----------------
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, Board of Directors and Executive Committee, if any, and
shall keep at the office of the Corporation in New York State or at the office
of its transfer agent or registrar in New York State, a record containing the
names and addresses of all shareholders, the number and class of shares held by
each and the dates when they respectively became the owners of record thereof.
Any of the foregoing books, minutes or records may be in written form or in any
other form capable of being converted into written form within a reasonable
time.
Section 7.05. When Notice of Lapse of Time Unnecessary; Notices Dispensed
------------ -----------------------------------------------------------
With When Delivery is Prohibited. Whenever, under the Business Corporation Law
- --------------------------------
or the Certificate of Incorporation of the Corporation or these By-Laws or by
the terms of any agreement or instrument, the Corporation or the Board of
Directors or any committee thereof is authorized to take any action after notice
to any person or persons or after the lapse of a prescribed period of
-30-
time, such action may be taken without notice and without the lapse of such
period of time, if at any time before or after such action is completed the
person or persons entitled to such notice or entitled to participate in the
action to be taken or, in the case of a shareholder, by his attorney-in-fact,
submit a signed waiver of notice of such requirements.
Whenever any notice or communication is required to be given to any person
by the Business Corporation Law, the Certificate of Incorporation of the
Corporation or these By-Laws, or by the terms of any agreement or instrument, or
as a condition precedent to taking any corporate action and communication with
such person is then unlawful under any statute of the State of New York or of
the United States or any regulation, proclamation or order issued under said
statutes, then the giving of such notice or communication to such person shall
not be required and there shall be no duty to apply for license or other
permission to do so. Any affidavit, certificate or other instrument which is
required to be made or filed as proof of the giving of any notice or
communication required under the Business Corporation Law shall, if such notice
or communication to any person is dispensed with under this paragraph, include a
statement that such notice or communication was not given to any person with
whom communication is unlawful. Such affidavit, certificate or other instrument
shall be as effective for all purposes as though such notice or communication
had been personally given to such person.
Section 7.06. Entire Board. As used in these By-Laws, the term "entire
------------ ------------
Board" means the total number of directors which the Corporation would have if
there were no vacancies.
Section 7.07. Amendment of By-Laws. These By-Laws may be amended or
------------ --------------------
repealed and new By-Laws adopted by the Board of Directors or by vote of the
holders of the shares at the time entitled to vote in the election of any
directors, except that any action by the Board changing
-31-
the number of directors shall require the vote of a majority of the entire Board
and except that any By-Laws adopted by the Board may be amended or repealed by
the shareholders entitled to vote thereon as provided in the Business
Corporation Law.
If any By-Law regulating an impending election of directors is adopted,
amended or repealed by the Board, there shall be set forth in the notice of the
next meeting of shareholders for the election of directors the By-Laws so
adopted, amended or repealed, together with a concise statement of the changes
made.
Section 7.08. Section Headings. The headings of the Articles and Sections
------------ ----------------
of these By-Laws have been inserted for convenience of reference only and shall
not be deemed to be a part of these By-Laws.