1
EXHIBIT 3.5
AMENDED AND RESTATED BYLAWS OF
PARACELSUS HEALTHCARE CORPORATION
ARTICLE I
CORPORATE OFFICES
1.1 PRINCIPAL OFFICE
The Board of Directors shall fix the location of the principal
executive office of the corporation at any place within or outside the State of
California. If the principal executive office is located outside California and
the corporation has one or more business offices in California, then the Board
of Directors shall fix and designate a principal business office in California.
Unless and until redesignated by the Board of Directors, the principal
executive office of the corporation is 515 Greens Road, Suite 800, Houston,
Texas 77067.
1.2 OTHER OFFICES
The Board of Directors may at any time establish branch or subordinate
offices at any place or places.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1 PLACE OF MEETINGS
Except as otherwise provided in these Bylaws, meetings of shareholders
shall be held at any place within or outside the State of California designated
by the Board of Directors. In the absence of any such designation,
shareholders' meetings shall be held at the principal executive office of the
corporation or at any place consented to in writing by all persons entitled to
vote at such meeting, given before or after the meeting and filed with the
Secretary of the corporation.
2.2 ANNUAL MEETING
The annual meeting of shareholders shall be held each year on a date
and at a time designated by the Board of Directors. At each annual meeting,
directors shall be elected and any other proper business may be transacted.
2.3 SPECIAL MEETINGS
Special meetings of the shareholders may be called at any time,
subject to the provisions of Sections 2.4 and 2.5 of these Bylaws, by the Board
of Directors, the Chairman of the Board, the President or the holders of shares
entitled to cast not less than ten percent (10%) of
2
the votes at that meeting; provided, that no special meeting shall be held
during the period of sixty (60) days preceding or forty-five (45) days
succeeding the date fixed for the annual meeting of shareholders.
If a special meeting is called by anyone other than the Board of
Directors or the President or the Chairman of the Board, then the request shall
be in writing, specifying the time of such meeting and the general nature of
the business proposed to be transacted, and shall be delivered personally or
sent by registered mail or by other written communication to the Chairman of
the Board, the President, any Vice President or the Secretary of the
corporation. The officer receiving the request forthwith shall cause notice to
be given to the shareholders entitled to vote, in accordance with the
provisions of Sections 2.4 and 2.5 of these Bylaws, that a meeting will be held
at the time requested by the person or persons calling the meeting, so long as
that time is not less than thirty-five (35) nor more than sixty (60) days after
the receipt of the request. If the notice is not given within twenty (20) days
after receipt of the request, then the person or persons requesting the meeting
may give the notice. Nothing contained in this paragraph of this Section 2.3
shall be construed as limiting, fixing or affecting the time when a meeting of
shareholders called by action of the Board of Directors may be held.
2.4 NOTICE OF SHAREHOLDERS' MEETINGS
All notices of meetings of shareholders shall be written and sent or
otherwise given in accordance with Section 2.5 of these Bylaws not less than
ten (10) (or, if sent by third-class mail pursuant to Section 2.5 of these
Bylaws, not less than thirty (30)) nor more than sixty (60) days before the
date of the meeting to each shareholder entitled to vote thereat. Such notice
shall state the place, date, and hour of the meeting and (i) in the case of a
special meeting, the general nature of the business to be transacted, and no
business other than that specified in the notice may be transacted, or (ii) in
the case of the annual meeting, those matters which the Board of Directors, at
the time of the mailing of the notice, intends to present for action by the
shareholders, but, subject to the provisions of the next paragraph of this
Section 2.4, any proper matter may be presented at the meeting for such action.
The notice of any meeting at which Directors are to be elected shall include
the names of nominees intended at the time of the notice to be presented by the
Board for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a director has a direct or indirect financial
interest, pursuant to Section 310 of the California Corporations Code (the
"Code"), (ii) an amendment of the Restated Articles of Incorporation, pursuant
to Section 902 of the Code, (iii) a reorganization of the corporation, pursuant
to Section 1201 of the Code, (iv) a voluntary dissolution of the corporation,
pursuant to
3
Section 1900 of the Code, or (v) a distribution in dissolution other than in
accordance with the rights of any outstanding preferred shares, pursuant to
Section 2007 of the Code, then the notice shall also state the general nature
of that proposal.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of a shareholders' meeting shall be given either personally or
by first-class mail, or, if the corporation has outstanding shares held of
record by five hundred (500) or more persons (determined as provided in Section
605 of the Code) on the record date for the shareholders' meeting, notice may
be sent by third-class mail, or other means of written communication, addressed
to the shareholder at the address of the shareholder appearing on the books of
the corporation or given by the shareholder to the corporation for the purpose
of notice; or if no such address appears or is given, at the place where the
principal executive office of the corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located. The notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
other means of written communication.
If any notice (or any report referenced in Article VII of these
Bylaws) addressed to a shareholder at the address of such shareholder appearing
on the books of the corporation is returned to the corporation by the United
States Postal Service marked to indicate that the United States Postal Service
is unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if the same shall be available to the shareholder upon written demand
of the shareholder at the principal executive office of the corporation for a
period of one (1) year from the date of the giving of the notice or report to
all other shareholders.
An affidavit of mailing or other means of giving any notice or report
in accordance with the provisions of this Section 2.5, executed by the
Secretary, Assistant Secretary or any transfer agent, shall be prima facie
evidence of the giving of the notice or report.
Except as otherwise prescribed by the Board of Directors in particular
instances and except as otherwise provided by subdivision (c) of Section 601 of
the Code, the Secretary shall prepare and give, or cause to be prepared and
given, the notice of meetings of shareholders.
2.6 ORGANIZATION OF MEETINGS
The Chairman of the Board of Directors, if any, shall preside at each
meeting of shareholders, or in the absence of the Chairman of the
4
Board of Directors the Vice-Chairman of the Board of Directors, if any, or in
the absence of the Vice-Chairman the President, or in the absence of the
President the Chief Financial Officer of the Company, or in the absence of the
Chief Financial Officer, by a chairman designated by the Board of Directors, in
the absence of such designation, by a chairman chosen at the meeting. The
Secretary shall act as secretary of all meetings of shareholders and keep the
records of such meetings, and in the absence of the Secretary, his or her
duties shall be performed by any other officer authorized by the Board of
Directors or in the absence of such authorization any officer authorized by
these Bylaws or if no such officer is available or willing to so act, by any
person appointed by resolution duly adopted at the meeting.
The order of business at each such meeting shall be as determined by
the chairman of the meeting. The chairman of the meeting shall have the right
and authority, subject to applicable law and the provisions of the Restated
Articles of Incorporation and these Bylaws, to prescribe such rules,
regulations and procedures and to do all such acts and things as are necessary
or desirable for the proper conduct of the meeting, including without
limitation, the establishment of procedures for the maintenance of order and
safety, limitation on the time allotted to questions or comments on the affairs
of the corporation, restrictions on entry to such meetings after the time
prescribed for the commencement thereof and the opening and closing of the
voting polls.
2.7 QUORUM
Unless otherwise provided in the Restated Articles of Incorporation, a
majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of the shareholders. The shareholders
present at a duly called or held meeting at which a quorum is present may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum, if any action taken (other
than adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
In the absence of a quorum, any meeting of shareholders may be
adjourned from time to time by the vote of a majority of the shares represented
either in person or by proxy, but no other business may be transacted, except
as provided in the last sentence of the preceding paragraph.
2.8 ADJOURNED MEETING; NOTICE
Any shareholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of the majority of
the shares represented at that meeting, either in person or by proxy.
5
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if its time and place are announced at the meeting at which the
adjournment is taken. However, if the adjournment is for more than forty-five
(45) days from the date set for the original meeting or if a new record date
for the adjourned meeting is fixed, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the adjourned meeting
in accordance with the provisions of Sections 2.4 and 2.5 of these Bylaws. At
any adjourned meeting, the corporation may transact any business which might
have been transacted at the original meeting.
2.9 VOTING
The shareholders entitled to vote at any meeting of shareholders shall
be determined in accordance with the provisions of Section 2.12 of these
Bylaws, subject to the provisions of Chapter 7 of the Code.
Elections for directors and voting on any other matter at a
shareholders' meeting need not be by ballot unless a shareholder demands
election by ballot at the meeting and before the voting begins.
Except as provided in the last paragraph of this Section 2.9, or as
may be otherwise provided in the Restated Articles of Incorporation, each
outstanding share, regardless of class, shall be entitled to one vote on each
matter submitted to a vote of the shareholders. Any holder of shares entitled
to vote on any matter may vote part of the shares in favor of the proposal and
refrain from voting the remaining shares or may vote them against the proposal
other than elections to office, but, if the shareholder fails to specify the
number of shares such shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's approving vote is with respect to
all shares which the shareholder is entitled to vote.
The affirmative vote of the majority of the shares represented and
voting at a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders, unless the vote of a greater number or
percentage of voting shares is required by the Code or by the Restated Articles
of Incorporation.
Except as otherwise provided by law, no shareholder shall be entitled
to cumulate votes for any candidate or candidates. Directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of directors.
2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT
6
The transactions of any meeting of shareholders, either annual or
special, however called and noticed, and wherever held, are as valid as though
they had been taken at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. Neither the business to be
transacted at nor the purpose of any annual or special meeting of shareholders
need be specified in any written waiver of notice or consent to the holding of
the meeting or approval of the minutes thereof, unless otherwise provided in
the Restated Articles of Incorporation or these Bylaws, and except that if
action is taken or proposed to be taken for approval of any of those matters
specified in the second paragraph of Section 2.4 of these Bylaws, the waiver of
notice or consent or approval shall state the general nature of the proposal.
All such waivers, consents, and approvals shall be filed with the corporate
records or made a part of the minutes of the meeting.
Attendance of a person at a meeting shall constitute a waiver of
notice of and presence at that meeting, except when the person objects, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened and except that attendance at a
meeting is not a waiver of any right to object to the consideration of matters
required by the Code to be included in the notice of such meeting but not so
included, if such objection is expressly made at the meeting.
2.11 ACTION BY WRITTEN CONSENT
Except as otherwise provided in the Restated Articles of
Incorporation, any action which may be taken at any annual or special meeting
of shareholders may be taken without a meeting and without prior notice, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
All such consents shall be filed with the Secretary of the corporation
and shall be maintained in the corporate records. Any shareholder giving a
written consent, or the shareholder's proxyholders, or a transferee of the
shares, or a personal representative of the shareholder, or their respective
proxyholders, may revoke the consent by a writing received by the Secretary of
the corporation before written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary, but may not
do so thereafter.
7
If the consents of all shareholders entitled to vote have not been
solicited in writing, the Secretary shall give prompt notice to those
shareholders entitled to vote who have not consented in writing of the taking
of any corporate action approved by shareholders without a meeting by less than
unanimous written consent. Such notice shall be given in accordance with
Section 2.5. In the case of approval of (i) contracts or transaction in which a
director has a direct or indirect material financial interest, pursuant to
Section 310 of the Code, (ii) indemnification of agents of the corporation,
pursuant to Section 317 of the Code, (iii) a reorganization of the corporation,
pursuant to Section 1201 of the Code or (iv) a distribution in dissolution
other than in accordance with the rights of outstanding preferred shares,
pursuant to Section 2007 of the Code, such notice shall be given at least ten
(10) days before the consummation of the action authorized by such approval,
unless the consents of all shareholders entitled to vote have been solicited in
writing.
2.12 RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS
Except as otherwise provided in the Restated Articles of Incorporation
in order that the corporation may determine the shareholders entitled to notice
of any meeting or to vote, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
prior to the date of such meeting nor more than sixty (60) days before any
other action. Shareholders at the close of business on the record date are
entitled to notice and to vote, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the record date,
except as otherwise provided in the Restated Articles of Incorporation or the
Code.
A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting
unless the Board of Directors fixes a new record date for the adjourned
meeting, but the Board of Directors shall fix a new record date if the meeting
is adjourned for more than forty-five (45) days from the date set for the
original meeting.
If the Board of Directors does not so fix a record date: (i) the
record date for determining shareholders entitled to notice of or to vote at a
meeting of shareholders shall be at the close of business on the business day
next preceding the day on which notice is given or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held; and (ii) the record date for determining shareholders entitled
to give consent to corporate action in writing without a meeting, when no prior
action by the Board has been taken, shall be the day on which the first written
consent is given.
8
The record date for any other purpose shall be as provided in Section
8.1 of these Bylaws.
2.13 PROXIES
Every person entitled to vote for directors, or on any other matter,
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the Secretary
of the corporation. A proxy shall be deemed signed if the shareholder's name or
other authorization is placed on the proxy (whether by manual signature,
typewriting, telegraphic or electronic transmission or otherwise) by the
shareholder or the shareholder's attorney-in-fact. A validly executed proxy
which does not state that it is irrevocable shall continue in full force and
effect unless (i) the person who executed the proxy revokes it prior to the
time of voting by delivering a writing to the corporation stating that the
proxy is revoked or by executing a subsequent proxy and presenting it to the
meeting or by attendance at such meeting and voting in person, or (ii) written
notice of the death or incapacity of the maker of that proxy is received by the
corporation before the vote pursuant to that proxy is counted; provided,
however, that no proxy shall be valid after the expiration of eleven (11)
months from the date thereof, unless otherwise provided in the proxy. The dates
contained on the forms of proxy presumptively determine the order of execution,
regardless of the postmark dates on the envelopes in which they are mailed. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of the Code.
2.14 ADVANCE NOTICE
(a) Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the corporation,
except as may be otherwise provided in the Restated Articles of Incorporation
of the corporation with respect to the right of holders of certain classes of
stock of the corporation to nominate and elect a specified number of directors
in certain circumstances. Nominations of persons for election to the Board of
Directors may be made at any annual meeting of shareholders, or at any special
meeting of shareholders called for the purpose of electing directors, (i) by or
at the direction of the Board of Directors (or any duly authorized committee
thereof) or (ii) by the shareholder of the corporation (x) who is a shareholder
of record on the date of the giving of the notice provided for in this Section
2.14 and on the record date for the determination of shareholders entitled to
vote at such meeting and (y) who complies with the notice procedures set forth
in this Section 2.14.
In addition to any other applicable requirements, for a nomination to
be made by a shareholder, such shareholder must have given timely
9
notice thereof in proper written form to the Secretary of the Corporation.
To be timely, a shareholders's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than sixty (60) days nor more than ninety (90) days prior
to the anniversary date of the immediately preceding annual meeting of the
shareholders; provided, however, that (i) in the event that the annual meeting
is called for a date that is not within thirty (30) days before or after such
anniversary date notice by the shareholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed for
such public disclosure of the date of the annual meeting was made, whichever
first occurs; and (ii) in the case of a special meeting of shareholders called
for the purpose of electing directors, not later than the close of business on
the tenth (10th) day following the day on which notice of the date of the
special meeting was mailed or public disclosure of the date of the special
meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth (x) as to each person whom the shareholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (y) as to the
shareholder giving the notice (i) the name and record address of such
shareholder, (ii) the class or series and number of shares of capital stock of
the corporation which are owned beneficially (as determined pursuant to Rule
13d-3 of the Exchange Act) or of record by such shareholder, (iii) a
description of all arrangements or understandings between such shareholder and
each proposed nominee and any other person or persons (including their names)
pursuant to which the nomination(s) are to be made by such shareholder, (iv) a
representation that such shareholder intends to appear in person or by proxy at
the meeting to nominate the persons named in its notice and (v) any other
information relating to such shareholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of
the Exchange Act and the rules and regulations promulgated thereunder. Such
notice must be accompanied by a written consent of each proposed nominee to
being named as a nominee and to serve as a director if elected.
10
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures set forth in
this Section 2.14. If the Chairman of the meeting determines that a nomination
was not made in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the nomination was defective and such defective
nomination shall be disregarded.
(b) No business may be transacted at an annual meeting of
shareholders, other than business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any shareholder of the corporation (i) who
is a shareholder of record on the date of the giving of the notice provided for
in this Section 2.14 and on the record date for the determination of
shareholders entitled to vote at such annual meeting and (ii) who complied with
the notice procedures set forth in this Section 2.14.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a shareholder, such shareholder
must have given timely notice thereof in proper written form to the Secretary
of the corporation.
To be timely, a shareholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than sixty (60) days nor more than ninety (90) days prior
to the anniversary date of the immediately preceding annual meeting of
shareholders; provided, however, that in the event that the annual meeting is
called for a date that is not within thirty (30) days before or after such
anniversary date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed for
such public disclosure of the date of the annual meeting was made, whichever
first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth as to each matter such shareholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such shareholder, (iii) the
class or series and number of shares of capital stock of the corporation which
are owned beneficially (as determined pursuant to Rule 13d-3 of the Exchange
Act) or of record by such shareholders, (iv) a description of all arrangements
or understandings between such shareholder and any other person or persons
11
(including their names) in connection with the proposal of such business by
such shareholder and any material interest of such shareholder in such business
and (v) a representation that such shareholder intends to appear in person or
by proxy at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of shareholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 2.14, provided, however, that, once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 2.14 shall be deemed to preclude
discussion by any shareholder of any such business. If the Chairman of an
annual meeting determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
(c) For so long as the Shareholder Agreement, dated , 1996,
between the corporation and (the "Shareholder Agreement") shall be in
effect, nothing in Sections 2.14(a) or 2.15(b) shall be deemed to limit the
rights and other provisions under the Shareholder Agreement, including without
limitation Sections 6, 7 and 9 thereof.
2.15 INSPECTORS OF ELECTION
In advance of any meeting of shareholders, the Board of Directors may
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed or designated or if any
persons so appointed fail to appear or refuse to act, then the Chairman of the
meeting may, and on the request of any shareholder or a shareholder's proxy
shall, appoint inspectors of election (or persons to replace those who so fail
to appear) at the meeting. The number of inspectors shall be either one (1) or
three (3). If appointed at a meeting on the request of one (1) or more
shareholders or proxies, the majority of shares represented in person or by
proxy shall determine whether one (1) or three (3) inspectors are to be
appointed.
The inspectors of election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum and the authenticity, validity, and effect
of proxies, receive votes, ballots or consents, hear and determine all
challenges and questions in any way arising in connection with the right to
vote, count and tabulate all votes or consents, (if permitted by the Restated
Articles of Incorporation), determine when the polls shall close, determine the
result and do any other acts that may be proper to conduct the election or vote
with fairness to all shareholders. If there are three (3) inspectors or
election the
12
decision, act or certificate of a majority is effective in all respects as to
the decision, act or certificate or all. Any report or certificate made by the
inspectors of election is prima facie evidence of the facts stated therein.
2.16 COUNTING CONSENTS.
In the event of an amendment to the Restated Articles of Incorporation
or these Bylaws to permit shareholders action by written consent and except as
otherwise provided by the Restated Articles of Incorporation or by these
Bylaws, within three business days of the receipt of the first dated consent
delivered to the corporation in the manner provided by law and these Bylaws,
the Secretary shall engage nationally recognized independent inspectors of
elections for the purpose of performing a ministerial review of the validity of
the consents and revocations. The cost of retaining inspectors of elections
shall be borne by the corporation.
Consents and revocations shall be delivered to the inspectors upon
receipt by the corporation, the shareholder or shareholders soliciting consents
or soliciting revocations in opposition to action by consent proposed by the
corporation (the "Soliciting Shareholders") or their proxy solicitors or other
designated agents. As soon as consent and revocations are received, the
inspectors shall review the consents and revocations and shall maintain a count
of the number of valid and unrevoked consents. The inspectors shall keep such
count confidential and shall not reveal the count to the corporation, the
Soliciting Shareholders or their representatives or any other person. As soon
as practicable after the earlier of (i) sixty days after the date of the
earliest dated consent delivered to the corporation in the manner provided by
law and these Bylaws or (ii) a written request therefor by the corporation or
the Soliciting Shareholders, whichever is soliciting consents (which request
may be made no earlier than the commencement of the applicable solicitation or
consents and notice of which request shall be given to the party opposing the
solicitation of consents, if any), which request shall state that the
corporation or the Soliciting Shareholders, as the case may be, have a good
faith belief that the requisite number of valid and unrevoked consents to
authorize or take the action specified in the consents has been received in
accordance with these Bylaws, the inspectors shall issue a preliminary report
to the corporation and the Soliciting Shareholders stating: (i) the number of
valid consents; (ii) the number of valid revocations; (iii) the number of valid
and unrevoked consents; (iv) the number of invalid consents; (v) the number of
invalid revocations; and (vi) whether, based on their preliminary count, the
requisite number of valid and unrevoked consents has been obtained to authorize
or take the action specified in the consents. For purposes of this Bylaw, to
the extent that a proxy statement or an information statement is required by
law to be furnished to the corporation's shareholders, a consent solicitation
shall be
13
deemed to have commenced when a proxy statement or information statement
containing the information required by law is first furnished to the
corporation's shareholders.
Unless the corporation and the Soliciting Shareholders agree to a
shorter or longer period, the corporation and Soliciting Shareholders shall
have forty-eight hours to review the consents and revocations and to advise the
inspectors and the opposing party in writing as to whether they intend to
challenge the preliminary report of the inspectors. If no written notice of an
intention to challenge the preliminary report is received within forty-eight
hours after the inspectors' issuance of the preliminary report, the inspectors
shall issue to the corporation and the Soliciting Shareholders their final
report containing the information from the inspectors' determination with
respect to whether the requisite number of valid and unrevoked consents was
obtained to authorize and take the action specified in the consents. If the
corporation or the Soliciting Shareholders issue written notice of an intention
to challenge the inspectors' preliminary report, within forty-eight hours after
the issuance of that report, a challenge session shall be scheduled by the
inspectors as promptly as practicable. A transcript of the challenge session
shall be recorded by a certified court reporter. Following completion of the
challenge session, the inspectors shall as promptly as practicable issue their
final report to the Soliciting Shareholders and the corporation, which report
shall contain the information included in the preliminary report, plus all
changes in the totals as a result of the challenge and a certification of
whether the requisite number of valid and unrevoked consents was obtained to
authorize or take the action specified in the consents. A copy of the final
report of the inspectors shall be included in the book in which the proceedings
of meetings of shareholders are recorded.
The corporation shall give prompt notice to the shareholders of the
results of any consent solicitation or the taking of corporate action without a
meeting.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the Code and any limitations in the
Restated Articles of Incorporation and these Bylaws relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board of Directors. The Board may
delegate the management of the day-to-day operation of the business of the
corporation to a management company or other person provided that the business
and affairs of the
14
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board.
3.2 NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall be not
less than nine (9) nor more than twelve (12), and the exact number of directors
shall be nine (9) until changed, within the limits specified above, by a
resolution amending such exact number, duly adopted by at least seventy-five
percent (75%) of the entire Board of Directors or by the shareholders, in
accordance with the provisions set forth in the Restated Articles of
Incorporation, these Bylaws and applicable laws. In accordance with the
provisions set forth in the Restated Articles of Incorporation and subject to
the limitations contained therein, the minimum and maximum number of directors
may be changed, or a definite number may be fixed without provision for an
indefinite number, by a duly adopted amendment to the Restated Articles of
Incorporation or by an amendment to this Bylaw duly adopted by the vote or
written consent, if permitted by the Restated Articles of Incorporation, of
shareholders entitled to vote in such manner as set forth in the Restated
Articles of Incorporation; provided, however, that an amendment reducing the
fixed number or the minimum number of directors to a number less than five (5)
cannot be adopted if the votes cast against its adoption at a meeting, or the
shares not consenting in the case of an action by written consent, are equal to
more than sixteen and two-thirds percent (16-2/3%) of the outstanding shares
entitled to vote thereon.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS AND REMOVAL
At each annual meeting of shareholders, directors shall be elected to
hold office until the next election of the class for which such directors were
designated and until their successors have been elected and qualified, in
accordance with the provisions set forth in the Restated Articles of
Incorporation and in these Bylaws. Each director, including a director elected
to fill a vacancy, shall hold office, in accordance with the provisions set
forth in the Restated Articles of Incorporation and on these Bylaws, until the
expiration of the term for which elected and until a successor has been elected
and qualified, except in the case of the death, resignation, or removal of such
a director.
No director may be removed from office, except as provided by the
Restated Articles of Incorporation or by law.
3.4 CLASS OR SERIES DIRECTORS
15
Whenever the holders of any class or series of stock are entitled to
elect one or more directors by the articles of incorporation, the provisions of
the last sentence of Section 3.3 shall apply, with respect to the removal
without cause of a director or directors so elected, to the vote of the holders
of the outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Unless otherwise provided in the articles of
incorporation or these Bylaws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors elected by
all of the stockholders having the right to vote as a single class or from any
other cause may be filled by a majority of the directors then in office,
although less than a quorum, or by the sole remaining director. Whenever the
holders of any class or classes of stock or series thereof are entitled to
elect one or more directors by the articles of incorporation, vacancies and
newly created directorships of such class or classes or series may be filled by
a majority of the directors elected by such class or classes or series thereof
then in office, or by the sole remaining director so elected. Any director
elected or appointed to fill a vacancy shall hold office until the next
election of the class of directors of the director which such director
replaced, and until and his or her successor is elected and qualified or until
his or her earlier resignation or removal.
3.5 RESIGNATION AND VACANCIES
(a) Any director may resign effective upon giving oral or written
notice to the Chairman of the Board, the President, the Secretary or the Board
of Directors, unless the notice specifies a later time for the effectiveness of
such resignation. If the resignation of a director is effective at a future
time, the Board of Directors may elect a successor to take office when the
resignation becomes effective.
(b) Unless otherwise provided in the Restated Articles of
Incorporation of these Bylaws, vacancies on the Board of Directors may be
filled by a majority of the remaining directors, although less than a quorum,
or a sole remaining director.
(c) The shareholders may elect a director to fill any vacancy not
filled by the directors in accordance with law and with the provisions of the
Restated Articles of Incorporation and these Bylaws.
(d) A vacancy or vacancies in the Board of Directors shall be deemed
to exist (i) in the event of the death, resignation or removal of any director,
(ii) if the Board of Directors by resolution declares vacant the office of a
director who has been declared of unsound mind by an order of court or
convicted of a felony, (iii) if the authorized number of directors is increased
as provided in the Restated Articles of Incorporation, or (iv) if the
shareholders fail, at any meeting of
16
shareholders at which any director or directors are elected, to elect the full
authorized number of directors to be elected at that meeting, as provided in
the Restated Articles of Incorporation.
(e) Notwithstanding anything to the contrary in this Section 3.5,
for so long as the Shareholder Agreement shall be in effect:
(i) In the event that the size of the Board of Directors is
increased in accordance with the provisions of the Shareholder Agreement, the
nominees to the vacancies created by such increase shall be Independent
Directors (as defined in the Shareholder Agreement) in accordance with the
terms of the Shareholder Agreement); and
(ii) Vacancies among the Shareholder Directors and the Transferee
Directors (each as defined in the Shareholder Agreement) and among the
Independent Directors shall be filled in accordance with the terms of the
Shareholder Agreement.
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the Board of Directors may be held at any place
within or outside the State of California that has been designated from time to
time by resolution of the Board. In the absence of such a designation, regular
meetings shall be held at the principal executive office of the corporation.
Special meetings of the Board may be held at any place within or outside the
State of California that has been designated in the notice of the meeting or,
if not stated in the notice or if there is no notice, at the principal
executive office of the corporation.
Members of the Board may participate in a meeting through the use of
conference telephone or similar communications equipment, so long as all
directors participating in such meeting can hear one another. Participation in
a meeting pursuant to this paragraph constitutes presence in person at such
meeting.
3.7 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice
if the time and place of such meetings are fixed by the Board of Directors or
by these Bylaws.
3.8 SPECIAL MEETINGS; NOTICE
Subject to the provisions of the following paragraph, special meetings
of the Board of Directors for any purpose or purposes may be called at any time
by the Chairman of the Board, the President, any Vice President, the Secretary
or any two (2) directors.
17
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telegram, charges prepaid, or by telecopier, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone or by telecopier or telegram, it shall be
delivered personally or by telephone or by telecopier or to the telegraph
company at least forty-eight (48) hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated
either to the director or to a person at the office of the director who the
person giving the notice has reason to believe will promptly communicate it to
the director. The notice need not specify the purpose of the meeting.
3.9 QUORUM
(a) Except as set forth below, a majority of the authorized number
of directors shall constitute a quorum for the transaction of business. Except
as otherwise provided for in the Restated Articles of Incorporation or these
Bylaws, every act or decision done or made by a majority of the directors
present at a meeting duly held at which a quorum is present is the act of the
Board of Directors, subject to the provisions of Section 310 of the Code (as to
approval of contracts or transactions in which a director has a direct or
indirect material financial interest), Section 311 of the Code (as to
appointment of committees), Section 317(e) of the Code (as to indemnification
of directors), the Restated Articles of Incorporation, and other applicable
law, and subject to any provisions in the Restated Articles of Incorporation or
these Bylaws requiring a vote by more than a simple majority of directors.
(b) A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
(c) For so long as the Shareholder Agreement shall be in effect, the
quorum required for the transaction of business by the Board of Directors shall
include at least one director who is a Shareholder Director or a Transferee
Director and also one director who is an Independent Director, or their
respective designees, attending in person or, if necessary, via teleconference
call or other permitted means.
3.10 WAIVER OF NOTICE
18
Notice of a meeting need not be given to any director who signs a
waiver of notice or a consent to holding the meeting or an approval of the
minutes thereof, whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such director. All such waivers, consents, and approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.
A waiver of notice need not specify the purpose of any regular or special
meeting of the Board of Directors.
3.11 ADJOURNMENT
A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place.
3.12 NOTICE OF ADJOURNMENT
If the meeting is adjourned for more than twenty-four (24) hours,
notice of any adjournment to another time and place shall be given prior to the
time of the adjourned meeting to the directors who were not present at the time
of the adjournment.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the Board of Directors
under the provisions of the Restated Articles of Incorporation and these Bylaws
or otherwise may be taken without a meeting, if all members of the Board
individually or collectively consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the proceedings of the
Board. Such action by written consent shall have the same force and effect as a
unanimous vote of the Board of Directors.
3.14 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the Board of Directors. This Section 3.14 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
ARTICLE IV
COMMITTEES
4.1 EXECUTIVE COMMITTEE
Executive Committee. In accordance with the provisions set forth in these
Bylaws and the Restated Articles of Incorporation, the Board of
19
Directors may, by resolution passed by the affirmative vote of at least
seventy-five percent (75%) of the whole Board of Directors, appoint from its
membership, annually, an Executive Committee of two or more directors, which
shall include the Chief Executive Officer and the President of the Corporation.
The Board of Directors may designate in such resolution one or more directors
as alternate members of the Executive Committee, who may replace any absent or
disqualified member at any meeting of the Committee. The Executive Committee,
during the intervals between meetings of the Board of Directors, shall have and
there is hereby granted to it all of the authority and power of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation be affixed to papers which may
require it, except that the Executive Committee shall have authority to act in
the manner and to the extent provided in the resolution of the Board and may
have all the authority of the Board, except with respect to:
(a) The approval of any action which, under the Code, also requires
shareholders' approval or approval of the outstanding shares.
(b) The filling of vacancies on the Board of Directors 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 these Bylaws or the adoption of new
Bylaws.
(e) The amendment or repeal of any resolution of the Board of
Directors which by its express terms is not so amendable or repealable.
(f) A distribution to the shareholders of the corporation, except at
a rate, in a periodic amount or within a price range set forth in the Restated
Articles of Incorporation or determined by the Board of Directors.
(g) The appointment of any other committees of the Board of
Directors or the members thereof.
The Executive Committee shall have no power or authority in reference
to (i) amending the Restated Articles of Incorporation (except that the
Executive Committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of stock adopted by the Board
of Directors, fix the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the Corporation or the convention into, or the exchange of such
shares for, shares of any other class or classes of stock of the Corporation or
fix the number of shares
20
of any series of stock or authorizing the increase or decrease of the shares of
any series), (ii) adopting a certificate of ownership or an agreement of merger
or consolidation, (iii) recommending to the shareholders the sale, loans or
exchange of all or substantially all of the Corporation's property and assets,
(iv) recommending to the shareholders a dissolution of the Corporation or a
revocation of a dissolution or (v) removing or indemnifying directors.
The Executive Committee shall keep regular minutes of all business
transacted at its meetings, and all action of the Executive Committee shall be
reported to the Board of Directors at its next meeting. The minutes of the
Executive Committee shall be placed in the minute book of the Corporation.
Members of the Executive Committee shall receive such compensation as may be
set forth in the resolution appointing such member and shall be reimbursed for
reasonable expenses actually incurred by reason of membership on the Executive
Committee.
4.2 OTHER COMMITTEES OF DIRECTORS
(a) The Board of Directors may, by resolution adopted by a majority
of the authorized number of directors, designate one or more other committees,
each consisting of two (2) or more directors, to serve at the pleasure of the
Board of Directors. The Board may designate one or more directors as alternate
members of any committee, who may replace any absent member at any meeting of
the committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any such
committee shall have authority to act, in the manner and to the extent provided
in the resolution of the Board of Directors and may have all the authority of
the Board, except with respect to the limitations as set forth in Section 4.1.
(b) The Board of Directors may, by resolution adopted by a majority
of the authorized number of directors, appoint from its membership an Audit
Committee, a Compensation and Stock Option Committee and a Finance and
Strategic Planning Committee.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporations shall be a Chief Executive Officer, a
Secretary, and a Chief Financial Officer. The corporation may also have, at
the discretion of the Board of Directors, a Chairman of the Board, a Vice
Chairman of the Board, one or more Vice Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers as may
be appointed in accordance
21
with the provisions of Section 5.3 of these Bylaws. Any number of offices may
be held by the
5.2 APPOINTMENT OF OFFICERS
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these Bylaws, shall be chosen by the Board and serve at the pleasure of the
Board of Directors, subject to the rights, if any, of an officer under any
contract of employment.
5.3 SUBORDINATE OFFICERS
The Board of Directors may appoint, or may empower the chairman of the
Board or the President to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these Bylaws or as
the Board of Directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS.
Subject to the rights, if any, of an officer under any contract of
employment, all officers serve at the pleasure of the Board of Directors and
any officer may be removed, either with or without cause, by the Board of
Directors at any regular or special meeting of the Board or, except in case of
an officer chosen by the Board of Directors, by any officer upon whom such
power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless
otherwise specified in that notice, the acceptance of the resignation shall not
be necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
The Chairman of the Board, if such an officer be elected, shall, if
present, preside at meetings of the Board of Directors and exercise and perform
such other powers and duties as may from time to time be
22
assigned by the Board of Directors or as may be prescribed by these Bylaws or
by law.
5.7 CHIEF EXECUTIVE OFFICER
Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the Chairman of the Board, if there be such an officer,
the Chief Executive Officer shall have general supervision, direction, and
control of the business and the officers of the corporation. The Chief
Executive Officer shall preside at all meetings of the shareholders an, in the
absence or nonexistence of a Chairman of the Board, at all meetings of the
Board of Directors. The Chief Executive Officer shall have the general powers
and duties of management usually vested in the office of Chief Executive
Officer of a corporation, and shall have such other powers and duties as may be
prescribed by the Board of Directors or these Bylaws.
5.8 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the Chief Executive Officer, if there be such an officer,
the President shall have general supervision, direction and control of the
business and the officers of the corporation. The President shall preside at
all meetings of the shareholders and, in the absence or nonexistence of a Chief
Executive Officer, at all meetings of the Board of Directors. The President
shall have the general powers and duties of management usually vested in the
office of the President of a corporation, and shall have such other powers and
duties as may be prescribed by the Board of Directors or these Bylaws.
5.9 VICE PRESIDENTS
In the absence or disability of the President, the Vice Presidents, if
any, in order of their rank as fixed by the Board of Directors, or if not
ranked, a Vice President designated by the Board of Directors, shall perform
all the duties of the President and when so acting shall have all the powers
of, and be subject to all the restrictions upon, the President. The Vice
Presidents shall have such other powers and perform such other duties as from
time to time may be prescribed for them respectively by the Board of Directors,
these Bylaws, the President or the Chairman of the Board.
5.10 SECRETARY
The Secretary shall keep or cause to be kept at the principal
executive office of the corporation or such other place as the Board of
Directors may direct, a book of minutes of all meetings and actions of
Directors, committees of directors and shareholders. The minutes
23
shall show the time and place of each meeting, whether regular or special (and,
if special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the Board of
Directors, a share register, or a duplicate share register, showing the names
of all shareholders and their addresses, the number and classes of shares held
by each, the number and date of certificates evidencing such shares, and the
number and date of cancellation of every certificate surrendered for
cancellation.
The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board of Directors required to be given by law
or by these Bylaws. The Secretary shall keep the seal of the corporation, if
one be adopted, in safe custody and shall have such other powers and perform
such other duties as may be prescribed by the Board of Directors or by these
Bylaws.
5.11 CHIEF FINANCIAL OFFICER
The Chief Financial Officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The Chief Financial Officer shall deposit all money and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board of Directors. The Chief
Financial Officer shall disburse the funds of the corporation as may be ordered
by the Board of Directors, shall render to the President and directors,
whenever they request it, an account of all of his or her transactions as Chief
Financial Officer and of the financial condition of the corporation and shall
have such other powers and perform such other duties as may be prescribed by
the Board of Directors or these Bylaws.
ARTICLE IV
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS
24
The corporation shall, to the maximum extent and in the manner
permitted by the Code, indemnify each of its directors against expenses (as
defined in Section 317(a) of the code), judgments, fines, settlements, and
other amounts actually and reasonably incurred in connection with any
proceeding (as defined in Section 317 (a) of the Code), arising by reason of
the fact that such person is or was a director of the corporation. For
purposes of this Article VI, a "director" of the corporation includes any
person (i) who is or was a director of the corporation, (ii) who is or was
serving at the request of the corporation as a director of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise, or
(iii) who was a director of a corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of such predecessor
corporation.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the extent and in the manner
permitted by the Code, to indemnify each of its employees, officers, and agents
(other than directors) against expenses (as defined in Section 317(a) of the
code), judgments, fines settlements, and other amounts actually and reasonably
incurred in connection with any proceeding (as defined in Section 317(a) of the
Code), arising by reason of the fact that such person is or was an employee,
officer, or agent of the corporation. For purposes of this Article VI, an
"employee" or "officer" or "agent" of the corporation (other than a director)
includes any person (i) who is or was an employee, officer, or agent of the
corporation, (ii) who is or was serving at the request of the corporation as an
employee, officer, or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was an
employee, officer, or agent of a corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation.
6.3 PAYMENT OF EXPENSES IN ADVANCE
Expenses and attorney's fees incurred in defending any civil or
criminal action or proceeding for which indemnification is required pursuant to
Section 6.1, or if otherwise authorized by the Board of Directors, shall be
paid by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of the indemnified
party to repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified as authorized in this
Article VI.
6.4 INDEMNITY NOT EXCLUSIVE
25
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under by By-law agreement, vote of shareholders or directors or
otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office. The rights to indemnity hereunder
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 the person.
6.5 INSURANCE INDEMNIFICATION
The corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation against any liability asserted against or incurred
by such person in such capacity or arising out of that person's status as such,
whether or not the corporation would have the power to indemnify that person
against such liability under the provisions of this Article VI.
6.6 CONFLICTS
No indemnification or advance shall be made under this Article VI,
except where such indemnification or advance is mandated by law or the order,
judgment or decree of any court of competent jurisdiction, in any circumstance
where it appears:
(1) That it would be inconsistent with a provision of the Restated
Articles of Incorporation, these Bylaws, a resolution of the shareholders or an
agreement in effect at the time of the accrual of the alleged cause of the
action asserted in the proceeding in which the expenses were incurred or other
amounts were paid, which prohibits or otherwise limits indemnification; or
(2) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
6.7 RIGHT TO BRING SUIT
If a claim under this Article VI is not paid in full by the
corporation within 90 days after a written claim has been received by the
corporation (either because the claim is denied or because no determination is
made), the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses
of prosecuting such claim. The corporation shall be entitled to raise as a
defense to any such action that the claimant has not met the standards of
conduct that make it permissible under the Code for the corporation to
indemnify the claimant for the claim. Neither the failure of the corporation
(including its
26
Board of Directors, independent legal counsel, or its shareholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is permissible in the circumstances because he
or she has met the applicable standard of conduct, if any, nor an actual
determination by the corporation (including its Board of Directors independent
legal counsel, or its shareholders) that the claimant has not met the
applicable standard of conduct, shall be a defense to such action or create a
presumption for the purposes of such action that the claimant has not met the
applicable standard of conduct.
6.8 INDEMNITY AGREEMENTS
The Board of Directors is authorized to enter into a contract with any
director, officer, employee or agent of the corporation, or any person who is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including employee benefit plans, or any person who was a
director, officer, employee or agent of a corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation, providing for indemnification rights equivalent to or,
if the Board of Directors so determines and to the extent permitted by
applicable law, greater than those provided for in this Article VI.
6.9 AMENDMENT, REPEAL OR MODIFICATION
Any amendment, repeal or modification of any provision of this Article
VI shall not adversely affect any right or protection of a director or agent of
the corporation existing at the time of such amendment, repeal or modification.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF SHARE REGISTER
The corporation shall keep either at its principal executive office or
at the office of its transfer agent or registrar (if either be appointed), as
determined by resolution of the Board of Directors, a record of its
shareholders listing the names and addresses of all shareholders and the number
and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation or who hold at least one percent (1%) of such voting shares and
have filed a Schedule 14B with the United States Securities
27
and Exchange Commission relating to the election of directors, shall have an
absolute right to do either or both of the following (i) inspect and copy the
record of shareholders' names, addresses, and shareholdings during usual
business hours upon five (5) days' prior written demand upon the corporation,
or (ii) obtain from the transfer agent for the corporation, upon written demand
and upon the tender of such transfer agent's usual charges for such list (the
amount of which charges shall be stated to the shareholder by the transfer
agent upon request), a list of the shareholders' names and addresses who are
entitled to vote for the election of directors, and their shareholdings, as of
the most recent record date for which it has been compiled or as of a date
specified by the shareholder subsequent to the date of demand. The list shall
be made available on or before the later of five (5) business days after the
demand is received or the date specified therein as the date as of which the
list is to be compiled.
The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to the holder's interests as a shareholder or holder
of a voting trust certificate.
Any inspection and copying under this Section 7.1 may be made in
person or by an agent or attorney of the shareholder or holder of a voting
trust certificate making the demand.
7.2 MAINTENANCE AND INSPECTION OF BYLAWS
The corporation shall keep at its principal executive office or, if
its principal executive office is not in the State of California, at its
principal business office in California, the original or a copy of these Bylaws
as amended to date, which shall be open to inspection by the shareholders at
all reasonable times during office hours. If the principal executive office of
the corporation is outside the State of California and the corporation has no
principal business office in such state, then it shall, upon the written
request of any shareholder, furnish to such shareholder a copy of these Bylaws
as amended to date.
7.3 MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS
The accounting books and records and the minutes of proceedings of the
shareholders and the Board of Directors, and committees of the Board of
Directors shall be kept at such place or places as are designated by the Board
of Directors or, in absence of such designation, at the principal executive
office of the corporation. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form.
28
The minutes and accounting books and records shall be open to
inspection upon the written demand on the corporation of any shareholder or
holder of a voting trust certificate at any reasonable time during usual
business hours, for a purpose reasonably related to such holder's interests as
a shareholder or as the holder of a voting trust certificate. Such inspection
by a shareholder or holder of a voting trust certificate may be made in person
or by an agent or attorney and the right of inspection includes the right to
copy and make extracts. Such rights of inspection shall extend to the records
of each subsidiary corporation of the corporation.
7.4 INSPECTION BY DIRECTORS.
Every director shall have the absolute right at any reasonable time to
inspect and copy all books, records, and documents of ever kind and to inspect
the physical properties of the corporation and each of its subsidiary
corporations, domestic or foreign. Such inspection by a director may be made
in person or by an agent or attorney and the right of inspection includes the
right to copy and make extracts.
7.5 ANNUAL REPORT TO SHAREHOLDERS; WAIVER
The Board of Directors shall cause an annual report to be sent to the
shareholders not later than one hundred twenty (120) days after the close of
the fiscal year adopted by the corporation. Such report shall be sent to the
shareholders at least fifteen (15) (or, if sent by third-class mail,
thirty-five (35)) days prior to the annual meeting of shareholders to be held
during the next fiscal year and in the manner specified in Section 2.5 of these
Bylaws for giving notice to shareholders of the corporation.
The annual report shall contain a balance sheet as of the end of the
fiscal year and an income statement and statement of changes in financial
position for the fiscal year, accompanied by any report thereon of independent
accountants or, if there is no such report, the certificate of an authorized
officer of the corporation that the statements were prepared without audit from
the books and records of the corporation.
The foregoing requirement of an annual report shall be waived so long
as the shares of the corporation are held by fewer than one hundred (100)
holders of record.
7.6 FINANCIAL STATEMENTS
If no annual report for the fiscal year has been sent to shareholders,
than the corporation shall, upon the written request of any shareholder made
more than one hundred twenty (120) days after the close of such fiscal year,
deliver or mail to the person making the
29
request, within thirty (3) days thereafter, a copy of a balance sheet as of the
end of such fiscal year and an income statement and statements of changes in
financial position for such fiscal year.
A shareholder or shareholders holding at least five percent (5%) of
the outstanding shares of any class of the corporation may make a written
request to the corporation for an income statement of the corporation for the
three- month, six-month or nine-month period of the current fiscal year ended
more than thirty (30) days prior to the date of the request and a balance sheet
of the corporation as of the end of that period. The statements shall be
delivered or mailed to the person making the request within thirty (30) days
thereafter. A copy of the statements shall be kept on file in the principal
office of the corporation for twelve (12) months and it shall be exhibited at
all reasonable times to any shareholder demanding an examination of the
statements or a copy shall be mailed to the shareholder. If the corporation
has not sent to the shareholders its annual report for the last fiscal year,
the statements referred to in the first paragraph of this Section 7.6 shall
likewise be delivered or mailed to the shareholder or shareholders within
thirty (30) days after the request.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that the financial statements were prepared without
audit from the books and records of the corporation.
7.7 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The Chairman of the Board, the Vice Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the Secretary or
Assistant Secretary of this corporation, or any other person authorized by the
Board of Directors or the President or a Vice President, is authorized to vote,
represent, and exercise on behalf of this corporation all rights incident to
any and all shares of any other corporation or corporations standing in the
name of this corporation. The authority herein granted may be exercised either
by such person directly or by any other person authorized to do so by proxy or
power of attorney duly executed by such person having the authority.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For the purposes of determining the shareholders entitled to receive
payment of any dividend or other distribution or allotment of
30
any rights or entitled to exercise any rights in respect of any other lawful
action, other than with respect to notice or voting at a shareholders meeting,
the Board of Directors may fix, in advance, a record date, which shall not be
more than sixty (60) days prior to any such action. Only shareholders of
record at the close of business on the record date are entitled to receive the
dividend, distribution or allotment of rights, or to exercise the rights, as
the case may be, notwithstanding any transfer of any shares on the books of the
corporation after the record date, except as otherwise provided in the Restated
Articles of Incorporation or the Code.
If the Board of Directors does not so fix a record date, then the
record date for determining shareholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto or the sixtieth (60th) day prior to the date of that action, whichever
is later.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the Board of Directors shall determine by
resolution which person or persons may sign or endorse all checks, drafts,
other orders for payment of money, notes or other evidences of indebtedness
that are issued in the name of or payable to the corporation, and only the
persons so authorized shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED
The Board of Directors, except as otherwise provided in these Bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
8.4 CERTIFICATES FOR SHARES
A certificate or certificates for shares of the corporation shall be
issued to each shareholder when any such shares are fully paid. The Board of
Directors may authorize the issuance of certificates for shares partly paid
provided that these certificates shall state the total amount of the
consideration to be paid for them and the amount actually paid. All
certificates shall be signed in the name of the corporation by the Chairman of
the Board or the Vice Chairman of the Board or the President or a Vice
President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or an Assistant Secretary,
31
certifying the number of shares and the class or series of shares owned by the
shareholder. Any or all of the signatures on the certificate may be by
facsimile.
In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.
8.5 LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation or its transfer agent or registrar and canceled
at the same time. The Board of Directors may, in case any share certificate or
certificate for any other security is lost, stolen or destroyed (as evidenced
by a written affidavit or affirmation of such fact), authorize the issuance of
replacement certificates on such terms and conditions as the Board may require;
the Board may require indemnification of the corporation secured by a bond or
other adequate security sufficient to protect the corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft or destruction of the certificate or the issuance of
the replacement certificate.
8.6 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules
of construction, and definitions in the Code shall govern the construction of
these Bylaws. Without limiting the generality of this provision, the singular
number includes the plural, the plural number includes the singular, and the
term "person" includes both a corporation and a natural person.
ARTICLE IX
AMENDMENTS
9.1 AMENDMENT BY SHAREHOLDERS
Except as otherwise provided in the Restated Articles of Incorporation
or in these Bylaws new Bylaws may be adopted or these Bylaws may be amended or
repealed by the vote or written consent of holders of a majority of the
outstanding shares entitled to vote; provided, however, that if the Restated
Articles of Incorporation of the corporation set forth the number of authorized
Directors of the
32
corporation, then the authorized number of Directors may be changed only by an
amendment of the Restate Articles of Incorporation.
9.2 AMENDMENT BY DIRECTORS
Except as otherwise provided in the Restated Articles of Incorporation
or in these Bylaws, these Bylaws including amendments adopted by the
shareholders may be altered, amended or repealed by a majority vote of the
whole Board of Directors at any regular or special meeting of the Board of
Directors provided that the shareholders may from time to time specify
particular provisions of the Bylaws which shall not be amended by the Board of
Directors. Notwithstanding the foregoing, any alteration, amendment or repeal
of Sections 2.3, 2.4, 2.11, 2.12, 2.14, 2.16, 3.2, 3.3, 3.4, 3.5, 3.8, 3.9,
4.1, 4.4 Article VI or Article IX shall require the affirmative vote of not
less than seventy- five percent (75%) of the whole Board of Directors.
9.3 RECORD OF AMENDMENTS
Whenever an amendment or new Bylaw is adopted, it shall be copied in
the book of minutes with the original Bylaws. If any Bylaw is repealed, the
fact of repeal, with the date of the meeting at which the repeal was enacted or
written consent was filed, shall be stated in said book.
ARTICLE X
INTERPRETATION
Reference in these Bylaws to any provision of the California
Corporations Code shall be deemed to include all amendments thereof.