BY-LAWS
OF
EMCORE CORPORATION
As Amended Through December 21, 2000
ARTICLE I
OFFICES
1. Principal Place of Business. The principal place of business of EMCORE
Corporation (the "Corporation") is 145 Belmont Drive, Somerset, New Jersey
08873.
2. Other Places of Business. Branch or subordinate places of business or
offices may be established at any time by the Board of Directors of the
Corporation (the "Board") at any place or places where the Corporation is
qualified to do business.
ARTICLE II
SHAREHOLDERS
1. Annual Meeting. The annual meeting of shareholders shall be held at a
time fixed by the Board that shall be within thirteen months of the last annual
meeting, upon not less than ten nor more than sixty days written notice of the
time, place, and purpose of the meeting at the corporate offices, or at such
other time and place as shall be specified in the notice of meeting, in order to
elect directors of the Corporation ("Directors") and transact such other
business as shall come before the meeting.
2. Special Meetings. A special meeting of shareholders may be called for
any purpose by the president or the Board. A special meeting shall be held upon
not less than ten nor more than sixty days written notice of the time, place and
purpose of the meeting.
3. Action Without Meeting. The shareholders may act without a meeting if,
prior or subsequent to such action, each shareholder who would have been
entitled to vote upon such action shall consent in writing to such action. Such
written consent or consents shall be filled in the minute book.
4. Quorum. The presence at a meeting in person or by proxy of the holders
of shares entitled to cast a majority of the votes shall constitute a quorum.
5. Organization. The president, or in the absence of the president, such
vice president as may be designated by the president, shall preside at all
meetings of the shareholders. If both are absent, any other officer designated
by the Board shall preside. If no officer so designated is present, the
shareholders present in person or represented by proxy may elect one of their
number to preside. The secretary shall act as secretary at all meetings of the
shareholders; but in the absence of the secretary the presiding officer may
appoint any person to act as secretary of the meeting.
ARTICLE III
VOTING AND ELECTIONS
1. Voting. Each holder of shares with voting rights shall be entitled to
one vote for each such share registered in his or her name, except as otherwise
provided in the certificate of incorporation of the Corporation (the
"Certificate of Incorporation"). Whenever any action, other than the election of
Directors, is to be taken by vote of the shareholders, it shall be authorized by
a majority of the votes cast at a meeting of shareholders by the holders of
shares entitled to vote thereon, unless a greater percentage is required by
statute or by the Certificate of Incorporation.
2. Voting Lists. The officer or agent having charge of the stock transfer
books for shares of the Corporation shall make a complete list of shareholders
entitled to vote at a shareholders' meeting or any adjournment thereof. A list
required by this Section 2 may consist of cards arranged alphabetically or any
equipment which permits the visual display of the information required. Such
list shall be arranged alphabetically within each class, series or group of
shareholders maintained by the Corporation for convenience of reference, with
the address of, and the number of shares held by, each shareholder; be produced
(or available by means of a visual display) at the time and place of the
meeting; be subject to the inspection of any shareholder for reasonable periods
during the meeting; and be prima facie evidence of the identity of the
shareholders entitled to examine such list or to vote at any meeting. If the
requirements of this Section 2 have not been complied with, the meeting shall,
on the demand of any shareholder in person or by proxy, be adjourned until the
requirements are complied with. Failure to comply with the requirements of this
Section 2 shall not affect the validity of any action taken at such meeting
prior to the making of such demand.
3. Fixing Record Date. (a) The Board may fix, in advance, a date as the
record date for determining the Corporation's shareholders with regard to any
corporate action or event and, in particular, for determining the shareholders
who are entitled to
(i) notice of or to vote at any meeting of shareholders or any
adjournment thereof;
(ii) give a written consent to any action without a meeting; or
(iii) receive payment of any dividend or allotment of any right.
The record date may in no case be more than sixty days prior to the
shareholders' meeting or other corporate action or event to which it relates.
The record date for a shareholders' meeting may not be less than ten days before
the date of the meeting. The record date to determine shareholders to give a
written consent may not be more than sixty days before the date fixed for
tabulation of the consents or, if no date has been fixed for tabulation, more
than sixty days before the last day on which consents received may be counted.
(b) If no record date is fixed,
(i) the record date for a shareholders' meeting shall be the close of
business on the day next preceding the day on which notice is given, or, if
no notice is given, the day next preceding the day on which the meeting is
held; and
(ii) the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the
resolution of the Board relating thereto is adopted.
(c) The record date for determining shareholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
is required by this act, shall be the first date on which a signed written
consent setting forth the action taken or proposes to be taken is delivered to
the Corporation by delivery to its registered office in New Jersey, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceeding of meetings of shareholders are
recorded.
(d) When a determination of shareholders of record for a shareholders'
meeting has been made as provided in this Subsection 3(d), such determination
shall apply to any adjournment thereof, unless the Board fixes a new record date
under this Subsection 3(d) for the adjourned meeting.
4. Inspectors of Election. The Board may, in advance of any shareholders'
meeting, or of the tabulation of written consents of shareholders without a
meeting, appoint one or more inspectors to act at the meeting or any adjournment
thereof or to tabulate such consents and make a written report thereof. If
inspectors to act at any meeting of shareholders are not so appointed or shall
fail to qualify, the person presiding at a shareholders' meeting may, and on the
request of any shareholder entitled to vote thereat shall, make such
appointment.
Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability. No person shall be
elected a Director in an election for which he or she has served as an
inspector.
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 or consents,
hear and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes or consents, determine the result,
and do such acts as are proper to conduct the election or vote with fairness to
all shareholders. If there are three or more inspectors, the act of a majority
shall govern. 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. Any report made
by them shall be prima facie evidence of the facts therein stated, and such
report shall be filed with the minutes of the meeting.
5. Proxies. (a) Every shareholder entitled to vote at a shareholder meeting
may authorize another person or persons to act for him or her by proxy. Every
proxy shall be executed by the shareholder or his or her agent, but a proxy may
be given by telegram, cable, telephonic transmission, or any other means of
electronic communication so long as that telegram, cable, telephonic
transmission or other means of electronic communication either sets forth or is
submitted with information from which it can be determined that the proxy was
authorized by shareholder or his agent.
(b) No proxy shall be valid after eleven months from the date of its
execution unless a longer time is expressly provided therein. A proxy shall be
revocable at will unless it states that it is irrevocable and is coupled with an
interest either in the stock itself or in the Corporation. A proxy shall not be
revoked by the death or incapacity of the shareholder, but the proxy shall
continue in force until revoked by the personal representative or guardian of
the shareholder.
(c) The presence at a meeting of any shareholder who has given a proxy
shall not revoke the proxy unless the shareholder (i) files written notice of
the revocation with the secretary of the meeting prior to the voting of the
proxy or (ii) votes the shares subject to the proxy by written ballot. A person
named as proxy of a shareholder may, if the proxy so provides, substitute
another person to act in his or her place, including any other person named as
proxy in the same proxy. The substitution shall not be effective until an
instrument effecting it is filed with the secretary of the Corporation.
(d) Each person holding a proxy shall either file the proxy with the
secretary of the meeting or the inspectors at the start of the meeting or shall
submit the proxy to the inspectors together with his or her ballot, as
determined by the presiding officer. No proxy shall be counted or acted upon
that is submitted to the secretary of the meeting or the inspectors any later
than the first time during the meeting a vote is taken by ballot.
ARTICLE IV
BOARD OF DIRECTORS
1. Election; Term of Office; Removal; Vacancies; Nomination. (a) Election;
Term of Office. The number of Directors constituting the entire Board shall be
not less than six nor more than twelve, as fixed from time to time by the vote
of not less than 66 2/3% of the entire Board; provided, however, that the number
of Directors shall not be reduced so as to shorten the term of any Director at
the time in office, and provided further, that the number of Directors
constituting the entire Board shall be nine unless and until otherwise fixed by
the vote of not less than 66 2/3% of the entire Board. The phrase "66 2/3% of
the entire Board" shall be deemed to refer to 66 2/3% of the number of Directors
constituting the Board as provided in or pursuant to this Subsection 1(a),
without regard to any vacancies then existing.
(b) Classification. The Board shall be divided into three classes, as
nearly equal in number as the then total number of Directors constituting the
entire Board permits. The initial term of office of the first class shall expire
at the 2002 Annual Meeting of Shareholders. The initial term of office of the
second class shall expire at the 2001 Annual Meeting of Shareholders. The
initial term of office of the third class expired at the 2000 Annual Meeting of
Shareholders. The Directors elected at an annual meeting of shareholders to
succeed those whose terms then expire shall be identified as being Directors of
the same class as the Directors whom they succeed, and each of them shall hold
office until the third succeeding annual meeting of shareholders and until such
Director's successor shall have been elected and qualified. Any vacancies in the
Board for any reason, and any created Directorships resulting from any increase
in the number of Directors, may be filled by the vote of not less than 66 2/3%
of the members of the Board then in office, although less than a quorum, and any
Directors so chosen shall hold office until the next election of the class for
which such Directors shall have been chosen and until their successors shall be
elected and qualified. No decrease in the number of Directors shall shorten the
term of any incumbent Director. Notwithstanding the foregoing, and except as
otherwise required by law, whenever the holders of any one or more series of
preferred stock of the Corporation ("Preferred Stock") shall have the right,
voting separately as a class, to elect one or more Director, the then authorized
number of Directors shall be increased by the number of Directors so to be
elected, and the terms of the Director or Directors elected by such holders
shall expire at the next succeeding annual meeting of shareholders.
(c) Removal. Notwithstanding any other provisions of these by-laws (the
"By-Laws"), any Director, or the entire Board, may be removed at any time, but
only for cause and only by the affirmative vote of the holders of 80% or more of
the outstanding shares of capital stock of the Corporation ("Capital Stock")
entitled to vote generally in the election of Directors (considered for this
purpose as one class) cast at a meeting of the shareholders called for that
purpose. Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have the
right, voting separately as a class, to elect one or more Directors, the
provisions of this Subsection 1(c) shall not apply with respect to the Director
or Directors elected by such holders of Preferred Stock.
(d) Nomination. Nominations for the election of Directors may be made by
the Board or by any shareholder entitled to vote for the election of Directors.
Nominations for election at the annual meeting of shareholders which are not
made by the Board shall be made by notice in writing, delivered or mailed by
first class mail, postage prepaid, to the secretary by the date specified in the
Corporation's proxy statement mailed to shareholders relating to the immediately
preceding annual meeting of shareholders; provided, that in the event of an
election to be held at a special meeting of shareholders, or if no such date was
specified in the relevant proxy statement, such notice shall be given not more
than 10 days after the date of notice of the meeting of the shareholders called
for the election of Directors. Notice of nominations which are proposed by the
Board shall be given by the Board.
Each notice under this Subsection 1(d) shall set forth (i) the name, age,
and business address of each nominee proposed in such notice, (ii) the principal
occupation or employment of each such nominee, (iii) the number of shares of
Capital Stock which are beneficially owned by each such nominee; and (iv) such
other information as would be required to be included in a proxy or disclosure
to be filed with the Securities and Exchange Commission.
The person presiding at the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
2. Regular Meetings. A regular meeting of the Board shall be held without
notice immediately following and at the same place as the annual shareholders'
meeting for the purposes of electing officers and conducting such other business
as may come before the meeting. The Board, by resolution, may provide for
additional regular meetings which may be held without notice, except advance
notice, as described in Section 3 below, shall be provided to Directors not
present at the time of the adoption of the resolution.
3. Special Meetings. A special meeting of the Board may be called at any
time by the president or a majority of the members of the Board for any purpose.
Such meeting shall be held upon one days notice if given orally (either by
telephone or in person) or by telegraph, e-mail or facsimile transmission, or by
three days notice if given by depositing the notice in the United States mails,
postage prepaid. Such notice shall specify the time and place of the meeting.
4. Action Without Meeting. The Board may act without a meeting if, prior or
subsequent to such action, each member of the Board shall consent in writing to
such action. Such written consent or consents shall be filed in the minute book.
5. Quorum. One-half of the entire Board shall constitute a quorum for the
transaction of business.
6. Committees. The Board, by resolution adopted by a majority of the entire
Board, may appoint from among its members an executive committee and one or more
other committees, each of which shall have at least three members. To the extent
provided in such resolution, each such committee shall have and may exercise all
the authority of the Board, except that no such committee shall (a) make, alter
or repeal any By-Law; (b) elect any Director, or remove any officer or Director;
(c) submit to shareholders any action that requires shareholders' approval; or
(d) amend or repeal any resolution theretofore adopted by the Board which by its
terms is amendable or repealable only by the Board.
The Board, by resolution adopted by a majority of the entire Board, may (a)
fill any vacancy in any such committee; (b) appoint one or more Directors to
serve as alternate members of any such committee, to act in the absence or
disability of members of any such committee with all the powers of such absent
or disabled members; (c) abolish any such committee at its pleasure; (d) remove
any Director from membership on such committee at any time, with or without
cause; and (e) establish as a quorum for any such committee less than a majority
of the entire committee, but in no case less than the greater of two persons or
one-third of the entire committee.
Actions taken at a meeting of any such committee shall be reported to the
Board at its next meeting following such committee meeting; except that, when
the meeting of the Board is held within two days after the committee meeting,
such report shall, if not made at the first meeting, be made to the Board at its
second meeting following such committee meeting.
7. Compensation of Directors. The Board, by the affirmative vote of a
majority of Directors in office and irrespective of any personal interest of any
of them, shall have authority to establish reasonable compensation of Directors
for services to the Corporation as Directors, officers or otherwise.
ARTICLE V
WAIVERS OF NOTICE
Any notice required by these By-Laws, by the Certificate of Incorporation,
or by applicable law, including the New Jersey Business Corporation Act may be
waived in writing by any person entitled to notice. The waiver or waivers may be
executed either before or after the event with respect to which notice is
waived. Each Director or shareholder attending a meeting without protesting,
prior to its conclusion, the lack of proper notice shall be deemed conclusively
to have waived notice of the meeting.
ARTICLE VI
OFFICERS
1. Election. At its regular meeting following the annual meeting of
shareholders, the Board shall elect a president, a treasurer and a secretary,
and it may elect such other officers, including one or more vice presidents, as
it shall deem necessary. One person may hold two or more offices. Each officer
shall hold office until the end of the period for which such officer was
elected, and until his or her successor has been elected and has qualified,
unless he or she is earlier removed.
2. Duties and Authority of President. The president shall be chief
executive officer of the Corporation. Subject only to the authority of the
Board, the president shall have responsibility for the business and affairs of
the Corporation. Unless otherwise directed by the Board, all other officers
shall be subject to the authority and supervision of the president. The
president may enter into and execute in the name of the Corporation contracts or
other instruments in the regular course of business or contracts or other
instrument not in the regular course of business which are authorized, either
generally or specifically, by the Board. He shall have the general powers and
duties of management usually vested in the office of president of a corporation.
3. Duties and Authority of Vice Presidents. Each vice president shall
perform such duties and have such authority as from time to time may be
delegated to him by the president or by the Board. The Board shall have the
authority to append such prefixes as "executive," "senior" and "assistant" to
any vice president's title as it shall determine. In the absence of the
president or in the event of his death, inability, or refusal to act, such vice
president as shall have been designated by the Board or, in the absence of such
designation, by the president, shall perform the duties and be vested with the
authority of the president.
4. Duties and Authority of Treasurer. The treasurer shall have the custody
of the funds and securities of the Corporation and shall keep or cause to be
kept regular books of account for the Corporation. The treasurer shall perform
such other duties and possess such other powers as are incident to that office
or as shall be assigned by the president or the Board.
5. Duties and Authority of Secretary. The secretary shall cause notices of
all meetings to be served as prescribed in these By-Laws and shall keep or cause
to be kept the minutes of all meetings of the shareholders and the Board. The
secretary shall have charge of the seal of the Corporation. The secretary shall
perform such other duties and possess such other powers as are incident to that
office or as are assigned by the president or the Board.
6. Vacancies. Any vacancy in any office may be filled by the Board.
7. Removal and Resignation. Any officer may be removed, either with or
without cause, by the Board or by any officer upon whom the power of removal has
been conferred by the Board. An officer elected by the shareholders may be
removed, with or without cause, only by vote of the shareholders but his or her
authority to act as an officer may be suspended by the Board for cause. Removal
of an officer shall be without prejudice to the officer's contract rights, if
any. Election or appointment of an officer shall not of itself create contract
rights. Any officer may resign at any time by giving written notice to the Board
or to the president. A resignation shall take effect on the date of the receipt
of the notice or at any later time specified therein and, unless otherwise
specified therein, the acceptance of the resignation shall not be necessary to
make it effective.
ARTICLE VII
CAPITAL STOCK AND OTHER SECURITIES
1. Issuance of Capital Stock and Other Securities. Certificates of any
class of Capital Stock and certificates representing any other securities of the
Corporation shall be signed by the president, or any vice president and
countersigned by the secretary, any assistant secretary, the treasurer or any
assistant treasurer. The signature of each officer may be an engraved or printed
facsimile. If an officer or transfer agent or registrar whose facsimile
signature has been placed upon certificates ceases to hold the official capacity
in which he or she signed, the certificates may continue to be used. The
certificates may, but need not, be sealed with the seal of the Corporation, or a
facsimile of the seal. The certificates shall be countersigned and registered in
whatever manner the Board may prescribe.
2. Lost, Stolen and Destroyed Certificates. In case of lost, stolen or
destroyed certificates, new certificates may be issued to take their place upon
receipt by the Corporation of a bond of indemnity and under whatever regulations
may be prescribed by the Board. The giving of a bond of indemnity may be waived.
3. Transfer of Securities. The shares of the Capital Stock or any other
registered securities of the Corporation shall be transferable on the books of
the Corporation by the holder thereof in person or by that person's authorized
agent, or by the transferee, upon surrender for cancellation to the relevant
transfer agent of an outstanding certificate or certificates for the same number
of shares or other security with an assignment and authorization to transfer
endorsed thereon or attached thereto, duly executed, together with such proof of
the authenticity of the signature and of the power of the assignor to transfer
the securities as the Corporation or its agents may require.
4. Fractional Shares. The Corporation may, but shall not be required to,
issue certificates for fractions of a share where necessary to effect authorized
transactions, or the Corporation may pay in cash the fair value of fractions of
a share as of the time when those entitled to receive such fractions are
determined, or it may issue scrip in registered or bearer form over the manual
or facsimile signature of an officer of the Corporation or of its agent,
exchangeable as therein provided for full shares, but such scrip shall not
entitle the holder to any rights of a shareholder except as therein provided.
ARTICLE VIII
AMENDMENTS TO AND EFFECT OF
BY-LAWS; FISCAL YEAR; SEAL;
CHECKS; CONTRACTS; RECORDS
1. Force and Effect of By-Laws. These By-Laws are subject to the provisions
of the applicable law, including the New Jersey Business Corporation Act, and
the Certificate of Incorporation, as it may be amended from time to time. If any
provision in these By-Laws is inconsistent with a provision in that Act or the
Certificate of Incorporation, the provision of that Act or the Certificate of
Incorporation shall govern.
2. Amendments to By-Laws. These By-Laws may be altered, amended or repealed
by the shareholders or the Board in accordance with the terms of the Certificate
of Incorporation, these By-laws and applicable law. Any By-Law adopted, amended
or repealed by the shareholders may be amended or repealed by the Board, unless
the resolution of the shareholders adopting such By-Law expressly reserves to
shareholders the right to amend or repeal it.
3. Fiscal Year. The fiscal year of the Corporation shall begin on the first
day of October of each year.
4. Seal. The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its incorporation, and the words "Corporate Seal New
Jersey". The corporate seal may be used by causing it or a facsimile thereof to
be impressed or reproduced on a document or instrument, or affixed thereto.
Except to the extent required by applicable law or by resolution of the Board,
no contract, instrument or other document executed by or on behalf of the
Corporation, or to which the Corporation is otherwise a party, shall be required
to bear the corporate seal.
5. Checks, Drafts, Etc. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness, issued in the name of or
payable to the Corporation, shall be signed or endorsed by the person or persons
and in such manner, manually or by facsimile signature, as shall be determined
from time to time by the Board.
6. Execution of Contracts. The Board may authorize any officer or officers,
employee or employees, or agent or agents of the Corporation, to enter into any
contract or execute any instrument in the name of and on behalf of the
Corporation. The authority may be general or confined to specific instances.
7. Records. The Corporation shall keep books and records of account and
minutes of the proceedings of the shareholders, Board and such committees as the
Board may determine. Such books, records and minutes may be kept outside the
State of New Jersey. The Corporation shall keep at its principal office, its
registered office, or at the office of its registrar and transfer agent, a
record or records containing the names and addresses of all shareholders, the
number, class and series 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 readable form within a reasonable time.
Any person who shall have been a shareholder of record of the Corporation
for at least six months immediately preceding his demand, or any person holding,
or so authorized in writing by the holders of, at least five percent of the
outstanding shares of any class or series, upon at least five days' written
demand shall have the right for any proper purpose to examine in person or by
agent or attorney, during usual business hours, the minutes of the proceedings
of the shareholders and record of shareholders and to make extracts therefrom at
the places where the same are kept.
ARTICLE IX
INDEMNIFICATION
1. General. The Corporation shall indemnify an Indemnitee (as hereinafter
defined) against Liabilities (as hereinafter defined) and advance Expenses (as
hereinafter defined) to an Indemnitee to the fullest extent permitted by
applicable law and as provided in this Article IX. An Indemnitee shall be
entitled to the indemnification provided in this Section 1, if, by reason of his
being or having been an Officer/Director (as hereinafter defined), he is, or is
threatened to be made, a party to any threatened, pending, or completed
Proceeding (as hereinafter defined). Pursuant to this Section 1, an Indemnitee
shall be indemnified against Expenses and Liabilities actually incurred by him
or on his behalf in connection with such Proceeding or any claim, issue or
matter therein.
2. Advancement of Expenses. The Corporation shall advance all Expenses
incurred by or on behalf of an Indemnitee in connection with any Proceeding upon
the receipt by the Corporation of a statement or statements from the Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by the Indemnitee or refer to invoices
or bills for Expenses furnished or to be furnished directly to the Corporation,
and shall include or be preceded or accompanied by an undertaking by or on
behalf of the Indemnitee to repay any Expenses advanced unless it shall
ultimately be determined pursuant to Section 5 of this Article IX that the
Indemnitee is entitled to be indemnified against such Expenses.
3. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Article IX, to the extent that an Indemnitee is, by reason of
his being or having been an Officer/Director, a witness in any Proceeding in
which such Indemnitee is not also a party, the Corporation shall indemnify such
witness against all Expenses actually incurred by him or on his behalf in
connection therewith.
4. Limitation on Indemnity. No indemnification shall be made to any
Indemnitee pursuant to this Article IX to the extent that, in connection with
the relevant Proceeding, a judgment or other final adjudication adverse to the
Indemnitee establishes that his acts or omissions (a) were in breach of such
Indemnitee's duty of loyalty to the Corporation or its shareholders, as defined
in subsection (3) of N.J.S. 14A:2-7, (b) were not in good faith or involved a
knowing violation of law, or (c) resulted in the receipt by such Indemnitee of
an improper personal benefit. In the event of any such finding, the Indemnitee
shall promptly disgorge and pay over to the Corporation any amounts theretofore
paid to such Indemnitee pursuant to this Article IX, including any advance of
Expenses pursuant to Section 2 of this Article IX. The termination of any
Proceeding or of any claim, issue or matter therein by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not of itself adversely affect the right of an Indemnitee to
indemnification or create a presumption that an Indemnitee did not act in good
faith or that an Indemnitee had reasonable cause to believe that his conduct was
unlawful.
5. Procedure for Determination of Entitlement to Indemnification. (a) To
obtain indemnification under this Article IX, an Indemnitee shall submit to the
Corporation a written request for indemnification, and provide for the
furnishing to the Corporation of such documentation and information as is
reasonably available to the Indemnitee and is reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification. The
secretary shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that the Indemnitee has requested indemnification.
(b) Upon written request by an Indemnitee for indemnification pursuant to
Section 5(a) of this Article IX, a written determination with respect to the
Indemnitee's entitlement thereto shall be made: (i) if a Change in Control (as
hereinafter defined) shall have occurred, by Independent Counsel (as hereinafter
defined); (ii) if a Change in Control shall not have occurred, (A) by the Board
by a majority vote of a quorum consisting of Disinterested Directors (as
hereinafter defined), or (B) by a majority vote of a quorum of Disinterested
Directors on a Committee of the Board authorized by the Board to make such
determination, or (C) by Independent Counsel. If it is so determined that the
Indemnitee is entitled to indemnification, payment to the Indemnitee shall be
made in a timely fashion. An Indemnitee shall cooperate with the person, persons
or entity making such determination with respect to the Indemnitee's entitlement
to indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to the Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by an
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Corporation (irrespective of the
determination as to an Indemnitee's entitlement to indemnification).
(c) In the event the determination of entitlement is to be made by
Independent Counsel pursuant to Subsection 5(b) of this Article IX, the
Independent Counsel shall be selected as provided in this Subsection 5(c). If a
Change in Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors or a Committee thereof authorized by the
Board to make such selection, and the Corporation shall give written notice to
the Indemnitee advising him of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, the Independent Counsel
shall be selected jointly by the Indemnitee and the Board or a Committee thereof
authorized by the Board to make such determination. In the event that the Board
or such a Committee thereof cannot agree with the Indemnitee on the choice of
Independent Counsel, such Independent Counsel shall be selected by the Board or
a Committee thereof from among the New York City law firms having more than 100
attorneys. The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Subsection 5(b) of this Article IX, and the Corporation shall
pay all reasonable fees and expenses incident to the procedures of this
Subsection 5(c), regardless of the manner in which such Independent Counsel was
selected or appointed.
6. Presumptions and Effect of Certain Proceedings. (a) If a Change in
Control shall have occurred, in making a determination with respect to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall presume that an Indemnitee is entitled to
indemnification under this Article if the Indemnitee has submitted a request for
indemnification in accordance with Subsection 5(a) of this Article IX, and the
Corporation shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 5
of this Article IX to determine whether an Indemnitee is entitled to
indemnification shall not have made such determination in a timely fashion after
receipt by the Corporation of the request therefor, the requisite determination
of entitlement to indemnification shall be deemed to have been made and the
Indemnitee shall be entitled to such indemnification, absent (i) a misstatement
by the Indemnitee of a material fact, or an omission of a material fact
necessary to make the Indemnitee's statement not materially misleading, in
connection with the request for indemnification (which shall have been proven by
clear and convincing evidence), or (ii) a prohibition of such indemnification
under applicable law.
(c) Every Indemnitee shall be presumed to have relied upon this Article IX
in serving or continuing to serve as an Officer/Director.
7. Indemnification of Estate; Standards for Determination. If an Indemnitee
is deceased and would have been entitled to indemnification under any provision
of this Article IX, the Corporation shall indemnify the Indemnitee's estate and
his spouse, heirs, administrators and executors. When the Board, Committee
thereof or Independent Counsel acting in accordance with Section 5 of this
Article IX is determining the availability of indemnification under this Article
IX and when an Indemnitee is unable to testify on his own behalf by reason of
his death or mental or physical incapacity, said Board, Committee or Independent
Counsel shall deem the Indemnitee to have satisfied applicable standards set
forth in the relevant section or sections of this Article IX unless it is
affirmatively demonstrated by clear and convincing evidence that indemnification
is not available thereunder.
8. Limitation of Actions and Release of Claims. No legal action shall be
brought and no cause of action shall be asserted by or on behalf of the
Corporation or its Affiliates against an Indemnitee, his spouse, heirs,
executors or administrators after the expiration of two years from the date the
Indemnitee ceases (for any reason) to serve as an Officer/Director, and any
claim or cause of action of the Corporation or its Affiliates shall be
extinguished and deemed released unless asserted by filing of a legal action
within such two-year period.
9. Other Rights and Remedies of Indemnitee. (a) The Corporation shall
purchase and maintain on behalf of Indemnitees such insurance covering such
Liabilities and Expenses arising from actions or omissions of an Indemnitee in
his capacity as an Officer/Director as is obtainable and is reasonable and
appropriate in cost and amount.
(b) In the event that (i) a determination is made pursuant to Section 5 of
this Article IX that an Indemnitee is not entitled to indemnification under this
Article IX, (ii) advancement of Expenses is not timely made pursuant to Section
2 of this Article IX, (iii) the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Subsection 5(b) of this Article
IX and such determination shall not have been made and delivered in a written
opinion in a timely fashion after receipt by the Corporation of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
3 of this Article IX in a timely fashion after receipt by the Corporation of a
written request therefor, or (v) payment of indemnification is not made in a
timely fashion after a determination has been made that an Indemnitee is
entitled to indemnification or such determination is deemed to have been made
pursuant to Section 6 of this Article IX, the Indemnitee shall be entitled to an
adjudication in the Superior Court of the State of New Jersey, or in any other
court of competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, the Indemnitee, at his option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. The Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration in a timely
manner following the date on which the Indemnitee first has the right to
commence such Proceeding pursuant to this Subsection 9(b). The Corporation shall
not oppose the Indemnitee's right to exercise his rights under this Subsection
9(b).
(c) In the event that a determination shall have been made pursuant to
Section 5 of this Article that an Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial or arbitration on the
merits, and the Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the Corporation
shall have the burden of proving that the Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(d) If a determination shall have been made or deemed to have been made
pursuant to Section 5 of this Article IX that an Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by the Indemnitee of a material fact, or an omission of a
material fact necessary to make the Indemnitee's statement not materially
misleading, in connection with the request for indemnification (which shall have
been proven by clear and convincing evidence), or (ii) a prohibition of such
indemnification under applicable law.
(e) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Article are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Corporation is bound by all the provisions of this Article IX.
(f) In the event that an Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Article, the Indemnitee shall be
entitled to recover from the Corporation, and shall be indemnified by the
Corporation against, any and all expenses (of the types described in the
definition of Expenses in Section 12 of this Article IX) actually incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that the Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the Expenses incurred by the
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.
10. Non-Exclusivity; Survival of Rights; Subrogation. (a) The rights of
indemnification and to receive advancement of Expenses as provided by this
Article shall not be deemed exclusive of any other rights to which an Indemnitee
may at any time be entitled under applicable law, the Certificate of
Incorporation, the certificate of incorporation or other similar organizational
document of any Affiliate (as hereinafter defined) of the Corporation, the
By-Laws, the by-laws or other similar organizational document of any Affiliate
of the Corporation, any agreement, any insurance policy maintained or issued
directly or indirectly by the Corporation or any Affiliate of the Corporation, a
vote of stockholders, a resolution of Disinterested Directors, or otherwise. No
amendment, alteration or repeal of this Article or of any provision hereof shall
be effective as to any Indemnitee with respect to any action taken or omitted by
such Indemnitee as an Officer/Director prior to such amendment, alteration or
repeal. The provisions of this Article IX shall continue as to an Indemnitee
whose status as an Officer/Director has ceased and shall inure to the benefit of
his heirs, executors and administrators.
(b) In the event of any payment under this Article IX, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Corporation to bring suit to enforce such rights.
(c) The Corporation shall not be liable under this Article IX to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
the Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
11. Severability. If any provision or provisions of this Article shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this
Article (including without limitation, each portion of any subsection of this
Article IX containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (b) to the fullest extent possible,
the provisions of this Article (including, without limitation, each portion of
any subsection of this Article IX containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
12. Definitions. For purposes of this Article IX:
(a) "Affiliate" or "Associate" shall have the same meaning as in Rule
405 under the Securities Act of 1933, as amended.
(b) "Change in Control" shall mean either:
(i) a change in the membership of the Board such that one-third
or more of its members were neither recommended nor elected to the
Board by a majority of those of its members (A) who are not Affiliates
or Associates or representatives of a beneficial owner described in
clause (ii) below or (B) who were members of the Board prior to the
time the beneficial owner became such; or
(ii) The attainment of "beneficial ownership" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended, as Rule
13d-3 was in existence on the date hereof) by any person, corporation
or other entity, or any group, including, associates or affiliates of
such beneficial owner, of more than 10% of the voting power of all
classes of Capital Stock, other than by any such entity that held more
than such percentage as of the date hereof.
(c) "Corporate Agent" means a person who is or was a director,
officer, employee, agent or fiduciary of the Corporation or of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the request of the
Corporation, but shall not include any Officer/Director.
(d) "Disinterested Director" means a Director who is not and was not a
party to the Proceeding in respect of which indemnification is sought by an
Indemnitee.
(e) "Expenses" means all reasonable costs, disbursements and counsel
fees.
(f) "Indemnitee" means any person who is, or is threatened to be made,
a witness in, or a party to, any Proceeding by reason of his being or
having been an Officer/Director.
(g) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is,
nor in the past five years has been, retained to represent: (i) the
Corporation or the Indemnitee or, following a Change in Control, any person
acquiring control or any beneficial owner referred to in clause (ii) of
Section 12(b) of this Article or any Affiliate or Associate of any such
person or beneficial owner, in any matter material to any such person, or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or the Indemnitee in an
action to determine the Indemnitee's rights under this Article IX.
(h) "Liabilities" shall mean amounts paid or incurred in satisfaction
of settlements, judgments, awards, fines and penalties.
(i) "Officer/Director" shall mean any officer of the Corporation or
any Director.
(j) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or investigative,
except one initiated by an Indemnitee pursuant to Section 9 of this Article
IX to enforce his rights under this Article IX.
13. Notices. Any notice, request or other communication required or
permitted to be given to the Corporation under this Article IX shall be in
writing and either delivered in person or sent by telex, telegram or certified
or registered mail, postage prepaid, return receipt requested, to the secretary
of the Corporation and shall be effective only upon receipt by the secretary.
14. Amendments. This Article IX may be amended or repealed only by action
of the Board approved by the favorable vote of a majority of the votes cast by
stockholders entitled to vote thereon at a meeting of stockholders for which
proxies are solicited in accordance with then applicable requirements of the
Securities and Exchange Commission, except that (i) the Board, without
stockholder approval, may make technical amendments that do not substantively
affect the rights of an Indemnitee hereunder and (ii) following a Change of
Control, as defined in clause (ii) of Subsection 12(b) of this Article IX, there
shall also be required for approval of any such amendment or repeal the
favorable vote of a majority of the votes cast by persons other than the
beneficial owners referred to in clause (ii) of Section 12(b) of this Article IX
and their Affiliates and Associates.
15. Indemnification of Corporate Agents. The Corporation may at the
discretion of the Board indemnify any Corporate Agent to the fullest extent
permitted by applicable law; provided, that the Corporation shall in any event
indemnify a Corporate Agent to the extent required by applicable law. The
procedures to be followed in the event of such indemnification shall be such as
may be determined by the Board in its discretion; provided, that in the event
any procedures are mandated by applicable law, such procedures shall be
followed.