EXHIBIT 3.2
AMENDED AND RESTATED BY-LAWS
OF
CHIPPAC, INC.
A California corporation
(Adopted as of August 5, 1999)
ARTICLE I
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OFFICES
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Section 1. Principal Office. The board of directors shall fix the
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location of the principal office of the corporation.
Section 2. Other Offices. The corporation may also have offices at such
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other places, both within and without the State of California, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
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MEETINGS OF SHAREHOLDERS
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Section 1. Place of Meetings. Meeting of the shareholders shall be held
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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 corporation's principal executive office.
Section 2. Annual Meeting. The annual meeting of shareholders shall be
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held on the second Friday of the month of May of each year, or at any other time
designated by the board of directors provided that the annual meeting in any
year shall be held not longer than 15 months after the preceding annual meeting.
At each annual meeting, directors shall be elected and any other proper business
may be transacted which it is within the power of the shareholders to conduct.
Section 3. Special Meetings. Special meetings of shareholders may be
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called for any purpose and may be held at such time and place, within or without
the State of California, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors or the chief executive officer and shall be called by the
chief executive officer upon the written request of holders of shares entitled
to cast not less than twenty five percent (25%) of the votes at the meeting.
Such written request shall state the purpose or purposes of the meeting and
shall be delivered to the chief executive officer. Upon
receipt of such written request, the chief executive officer shall fix a date
and time for such meeting within two days of the date requested for such meeting
in such written request.
Section 4. Notice. Whenever shareholders are required or permitted to
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take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each shareholder entitled to vote at such meeting not
less than ten (10) nor more than sixty (60) days before the date of the meeting.
All such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the chief executive officer or the
secretary, and if mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, postage prepaid, addressed to the
shareholder at his, her or its address as the same appears on the records of the
corporation. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends for the express purpose
of objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 5. Shareholders List. The officer having charge of the stock
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ledger of the corporation shall make, at least ten (10) days before every
meeting of the shareholders, a complete list of the shareholders entitled to
vote at such meeting arranged in alphabetical order, showing the address of each
shareholder and the number of shares registered in the name of each shareholder.
Such list shall be open to the examination of any shareholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days nor more than sixty (60) days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any shareholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
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capital stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the shareholders, except as otherwise
provided by statute or by the articles of incorporation. If a quorum is not
present, the holders of a majority of the shares present in person or
represented by proxy at the meeting, and entitled to vote at the meeting, may
adjourn the meeting to another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
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time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting the corporation may transact any business which might
have been
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transacted at the original meeting. If the adjournment is for more than forty-
five (45) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative vote
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of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
shareholders, unless the question is one upon which by express provisions of an
applicable law, the Shareholders Agreement, dated as of August 5, 1999, by and
among the corporation and certain of its shareholders (the "Shareholders
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Agreement"), or the articles of incorporation a different vote is required, in
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which case such express provision shall govern and control the decision of such
question.
Section 9. Voting Rights. Except as otherwise provided by the
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Corporations Code of the State of California or by the articles of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every shareholder shall at every meeting of the shareholders be
entitled to one (1) vote in person or by proxy for each share of common stock
held by such shareholder.
Section 10. Proxies. Each shareholder entitled to vote at a meeting of
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shareholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. A duly executed
proxy shall be irrevocable if it states that it is irrevocable and if, and only
as long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. Any proxy is suspended when the person
executing the proxy is present at a meeting of shareholders and elects to vote,
except that when such proxy is coupled with an interest and the fact of the
interest appears on the face of the proxy, the agent named in the proxy shall
have all voting and other rights referred to in the proxy, notwithstanding the
presence of the person executing the proxy. At each meeting of the
shareholders, and before any voting commences, all proxies filed at or before
the meeting shall be submitted to and examined by the secretary or a person
designated by the secretary, and no shares may be represented or voted under a
proxy that has been found to be invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
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articles of incorporation, any action required to be taken at any annual or
special meeting of shareholders of the corporation, or any action which may be
taken at any annual or special meeting of such shareholders, may be taken
without a meeting, without prior
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notice and without a vote, if a consent or consents in writing, setting forth
the action so taken and bearing the dates of the signature of the shareholders
who signed the consent or consents, shall be signed by the holders of
outstanding stock 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 and shall be delivered to the
corporation by delivery to its principal executive office, or an officer or
agent of the corporation having custody of the book or books in which
proceedings of meetings of the shareholders are recorded. All consents properly
delivered in accordance with this section shall be deemed to be recorded when so
delivered. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those shareholders who
have not consented in writing. Any action taken pursuant to such written consent
or consents of the shareholders shall have the same force and effect as if taken
by the shareholders at a meeting thereof.
If the consents of all shareholders entitled to vote have not been
solicited in writing or if the unanimous written consents of all such
shareholders have not been received, the secretary shall give prompt notice of
the corporate action approved by the shareholders without a meeting. Such
notice shall be given in the manner specified in Section 4 of this Article II.
ARTICLE III
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DIRECTORS
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Section 1. General Powers. The business and affairs of the corporation
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shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
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which shall constitute the board shall be established from time to time in
accordance with the provisions of the Shareholders Agreement. Except as
otherwise provided in the corporation's articles of incorporation, the 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 in the election of
directors. The directors shall be elected in this manner at the annual meeting
of the shareholders, except as provided in Section 4 of this Article III or in
the Shareholders Agreement. Each director elected shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
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directors shall be removed in accordance with the provisions of the Shareholders
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Agreement. Any director may resign at any time upon written notice to the
corporation.
Section 4. Vacancies. Vacancies and newly created directorships resulting
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from any increase in the authorized number of directors shall be filled in
accordance with the provisions of the Shareholders Agreement. Each director so
chosen shall hold office until a successor is duly elected and qualified or
until his or her earlier death, resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
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board of directors shall be held without other notice than this by-law
immediately after, and at the same place as, the annual meeting of shareholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
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annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the chief executive officer or two directors on at least twenty-
four (24) hours notice to each director, either personally, by telephone, by
mail, by telegraph or by facsimile. A notice, or waiver of notice, need not
specify the purpose of any regular or special meeting of the board.
Section 7. Quorum. A majority of the total number of directors shall
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constitute a quorum for the transaction of business, except to adjourn as
provided in Section 9 of this Article III. Every act or decision done or made
by a majority of the directors present at a meeting duly held at which a quorum
is present shall be regarded as the act of the board of directors. 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 that meeting. Notwithstanding
the foregoing, no action shall be taken without the affirmative vote of a
majority of the Bain Directors and a majority of the SXI Directors (as each such
term is defined in the Shareholders Agreement) with respect to:
(A) any merger of the corporation into any other corporation or
merger of any other corporation into the corporation, or any
consolidation of the corporation with any other corporation (other
than the merger of a wholly-owned subsidiary into the corporation),
the liquidation or dissolution of the corporation, or the sale,
assignment, lease, transfer or other disposition of all or
substantially all of the assets of the corporation as, or
substantially as, an entirety to any other corporation or other entity
or person;
(B) the amendment or repeal of any provision of, or the addition
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of any provision to the corporation's Articles of Incorporation or the
corporation's Bylaws;
(C) the expenditure by the corporation of an amount of funds in
excess of $5,000,000 for a purpose which is not within the then
current strategic and operating plan referred to in clause (H) hereof;
(D) any declaration or payment of any dividend on, or other
distribution in respect of, the corporation's capital stock, or any
payment in cash of interest on indebtedness that by its terms may be
paid in kind or accrued;
(E) any issuance, redemption, repurchase or other transaction
involving the capital stock of the corporation (other than in
connection with the exercise of stock options granted pursuant to any
plan or arrangement approved under clause (N) hereof, or the issuance
of no more than $3,000,000 in shares of the corporation's common stock
(determined for this purpose by the price allocated to shares of
common stock acquired pursuant to the Recapitalization Agreement (as
such term is defined in the Shareholders Agreement)) issued to members
of the corporation's management within 120 days after the date
hereof);
(F) any borrowings (or guarantees thereof) in excess of
$5,000,000 from any bank or other person or entity, other than
drawings on borrowings or lines of credit existing as of the date
hereof (or any extensions, renewals or refinancings thereof) or as
previously approved as provided herein;
(G) any loans to any persons or entities by the corporation,
other than advances to employees of the corporation or its
subsidiaries for ordinary and necessary business expenses consistent
with past practice or to purchase the corporation's common stock
described in the parenthetical in clause (E) above;
(H) the annual strategic and operating plan of the corporation,
which shall be prepared by the officers of the corporation and shall
include a summary of expected capital expenditures and expenditures in
respect of acquisitions, and any material departures from such plan;
(I) any sale or encumbrance of assets in excess of $5,000,000;
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(J) any business acquisition by the corporation, by purchase of
assets, capital stock, merger or otherwise, for purchase consideration
exceeding $5,000,000;
(K) the selection of commercial or investment bankers for the
corporation;
(L) the selection of the public accountants for the corporation;
(M) the selection of the Chief Executive Officer of the
corporation;
(N) the approval of compensation payable to the corporate
officers of the corporation, including executive bonus and incentive plans
and arrangements of such officers; or
(O) the approval of any action by a subsidiary of the corporation
in respect of any matter of the nature set forth in this Section
7 with respect to such subsidiary.
Section 8. Waiver of Notice. The transactions of any meeting of the board
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of directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice if a quorum is
present and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, a consent to holding the meeting or an
approval of the minutes. The waiver of notice or consent need not specify the
purpose of the meeting. All such waivers, consents, and approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.
Notice of a meeting shall also be deemed given to any director who attends the
meeting without protesting, before or at its commencement, the lack of notice to
that director.
Section 9. Adjournment. A majority of the directors present, whether or
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not constituting a quorum, may adjourn any meeting to another time and place.
Section 10. Notice of Adjournment. Notice of the time and place of
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holding an adjourned meeting need not be given, unless the meeting is adjourned
for more than twenty-four hours, in which case notice of the time and place
shall be given before the time of the adjourned meeting, in the manner specified
in Section 6 of this Article III, to the directors who were not present at the
time of adjournment.
Section 11. Action without Meeting. Any action required or permitted to
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be taken at any meeting of the board of directors, or of any committee thereof,
may be taken without a meeting if all members of the board or committee, as the
case may be,
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consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 12. Committees. The board of directors may, by resolution passed
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by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these by-laws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law. The board of directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep regular minutes of its meetings and report the same to the board of
directors when required.
Section 13. Committee Rules. Each committee of the board of directors may
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fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 12 of this Article III, of such committee is or are absent
or disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.
Section 14. Communications Equipment. Members of the board of directors
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or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 15. Waiver of Notice and Presumption of Assent. Any member of the
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board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting except when such
member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary
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of the meeting before the adjournment thereof or shall be forwarded by
registered mail to the secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to any member
who voted in favor of such action.
ARTICLE IV
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OFFICERS
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Section 1. Number. The officers of the corporation shall be elected by
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the board of directors and shall consist of a chairman of the board, chief
executive officer, president, chief financial officer, one or more vice-
presidents, secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable, except that the offices of chief executive officer and secretary
shall be filled as expeditiously as possible.
Section 2. Election and Term of Office. The officers of the corporation
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shall be elected annually by the board of directors at its first meeting held
after each annual meeting of shareholders or as soon thereafter as conveniently
may be. The chief executive officer shall be elected annually by the board of
directors at the first meeting of the board of directors held after each annual
meeting of shareholders or as soon thereafter as conveniently may be. The chief
executive officer shall appoint other officers to serve for such terms as he or
she deems desirable. Vacancies may be filled or new offices created and filled
at any meeting of the board of directors. Each officer shall hold office until
a successor is duly elected and qualified or until his or her earlier death,
resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
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directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
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death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
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the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
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Section 6. Chairman of the Board. The chairman of the board, if such an
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officer is elected, shall, if present, preside at meetings of the board of
directors and exercise and perform such other powers and duties as may be from
time to time assigned to him or her by the board of directors or prescribed by
the by-laws. If there is no chief executive officer, the chairman of the board
shall in addition be the chief executive officer of the corporation and shall
have the powers and duties prescribed in Section 7 of this Article IV.
Section 7. The Chief Executive Officer. The chief executive officer shall
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be the chief executive officer of the corporation and shall have the powers and
perform the duties incident to that position. Subject to the powers and
direction of the board of directors, the chief executive officer shall have
general charge of the business, affairs and property of the corporation, shall
have control over the corporation's officers, agents and employees and shall be
its chief policy making officer. Except as set forth in Section 6 of this
Article IV, the chief executive officer shall preside at all meetings of the
shareholders and board of directors at which he is present and shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or as may be provided in these by-laws.
Section 8. The President. The president shall, subject to the powers and
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direction of the Board and the chief executive officer, be in the general and
active charge of all day-to-day activities and affairs of the corporation and
shall be responsible for implementing the policies of the board of directors and
the chief executive officer. The president shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors or the chief executive officer to some other officer or
agent of the corporation. The president shall have such other powers and
perform such other duties as may be prescribed by the board of directors,
chairman of the board, the chief executive officer or as may be provided in
these by-laws. The president shall, in the absence or disability of the chief
executive officer, act with all of the powers and be subject to all of the
restrictions of the chief executive officer.
Section 9. Chief Financial Officer. The chief financial officer shall
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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 chief financial officer shall deposit all moneys and other valuables in
the name and to the credit of the corporation with such depositories as may be
designated
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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 chief executive officer and directors, whenever they request it, an account
of all his transactions as chief financial officer and of the financial
condition of the corporation, and shall have other powers and perform such other
duties as may be prescribed by the board of directors, the chief executive
officer or the by-laws.
Unless the board of directors has elected a separate treasurer, the chief
financial officer shall be deemed to be the treasurer for purposes of giving any
reports or executing any certificates or other documents.
Section 10. Vice-presidents. The vice-president, or if there shall be
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more than one, the vice-presidents in the order determined by the board of
directors or by the chief executive officer, shall, in the absence or disability
of the president, act with all of the powers and be subject to all the
restrictions of the president. The vice-presidents shall also perform such
other duties and have such other powers as the board of directors, chief
executive officer, the president or these by-laws may, from time to time,
prescribe.
Section 11. The Secretary and Assistant Secretaries. The secretary shall
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attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the shareholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these by-laws or by law; shall have such powers
and perform such duties as the board of directors, the chief executive officer,
the president or these by-laws may, from time to time, prescribe; and shall have
custody of the corporate seal of the corporation. The secretary, or an
assistant secretary, shall have authority to affix the corporate seal to any
instrument requiring it and when so affixed, it may be attested by his signature
or by the signature of such assistant secretary. The board of directors may give
general authority to any other officer to affix the seal of the corporation and
to attest the affixing by his signature. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the board
of directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors, the chief executive
officer, the president, or secretary may, from time to time, prescribe.
Section 12. The Treasurer and Assistant Treasurer. The treasurer shall
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have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be
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disbursed when such disbursements have been duly authorized, taking proper
vouchers for such disbursements; and shall render to the chief executive officer
and the board of directors, at its regular meeting or when the board of
directors so requires, an account of the corporation; shall have such powers and
perform such duties as the board of directors, the chief executive officer or
these by-laws may, from time to time, prescribe. If required by the board of
directors, the treasurer shall give the corporation a bond (which shall be
rendered every six (6) years) in such sums and with such surety or sureties as
shall be satisfactory to the board of directors for the faithful performance of
the duties of the office of treasurer and for the restoration to the
corporation, in case of death, resignation, retirement, or removal from office,
of all books, papers, vouchers, money, and other property of whatever kind in
the possession or under the control of the treasurer belonging to the
corporation. The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the board of directors, shall in
the absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer. The assistant treasurers shall perform such other
duties and have such other powers as the board of directors, the chief executive
officer, the president or treasurer may, from time to time, prescribe.
Section 13. Other Officers, Assistant Officers and Agents. Officers,
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assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 14. Absence or Disability of Officers. In the case of the absence
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or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
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INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
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Section 1. Agents, Proceedings, and Expenses. For the purposes of this
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Article, "agent" means any person who is or was a director, officer, employee or
other agent of this corporation, or is or was serving at the request of this
corporation as a director, officer, employee, or agent of another foreign or
domestic corporation, limited liability company, partnership, joint venture,
trust or other enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of this
corporation or of another enterprise at the request of such predecessor
corporation; "proceeding" means any threatened, pending or completed
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action or proceeding, whether civil, criminal, administrative, or investigative;
and "expenses" include, without limitation, attorneys' fees and any expenses of
establishing a right to indemnification under Section 4 or Section 5(c) of this
Article V.
Section 2. Actions Other Than by the Corporation. This corporation shall
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indemnify any person who was or is a party, or is threatened to be made a party,
to any proceeding (other than an action by or in the right of this corporation)
by reason of the fact that such person is or was an agent of this corporation,
against expenses, judgments, fines, settlements or other amounts actually and
reasonably incurred in connection with such proceeding if that person acted in
good faith and in a manner that person reasonably believed to be in the best
interests of this corporation and, in the case of a criminal proceeding, if that
person had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction, or
plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in the best interests of this corporation or
that the person had reasonable cause to believe that his conduct was unlawful.
Section 3. Actions by the Corporation. This corporation shall indemnify
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any person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action by or in the right of this corporation
to procure a judgment in its favor by reason of the fact that that person is or
was an agent of this corporation, against expenses actually and reasonably
incurred by that person in connection with the defense or settlement of that
action if that person acted in good faith, in a manner that that person believed
to be in the best interests of this corporation, and with such care, including
reasonably inquiry, as a reasonable person would exercise under similar
circumstances. No indemnification shall be made under this Section 3:
(a) in respect of any claim, issue or matter as to which that person
shall have been adjudged to be liable to this corporation in the performance of
that person's duty to this corporation, unless and only to the extent that the
court in which that action was brought shall determine upon application that, in
view of all the circumstances of the case, that person is fairly and reasonably
entitled to indemnity for the expenses which the court shall determine;
(b) of amounts paid in settling or otherwise disposing of a threatened
or pending action, with or without court approval; or
(c) of expenses incurred in defending a threatened or pending action
which is settled or otherwise disposed of without court approval.
Section 4. Successful Defense by Agent. To the extent that an agent of
--------- ---------------------------
this
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corporation has been successful on the merits in defense of any proceeding
referred to in Sections 2 or 3 of this Article, or in defense of any claim,
issue, or matter therein, the agent shall be indemnified against expenses
actually and reasonably incurred by the agent in connection therewith.
Section 5. Required Approval. Except as provided in Section 4 of this
--------- -----------------
Article, any indemnification under this Article shall be made by this
corporation only if authorized in the specific case on a determination that
indemnification of the agent is proper in the circumstances because the agent
has met the applicable standard of conduct set forth in Sections 2 or 3 of this
Article, by:
(a) a majority vote of a quorum consisting of directors who are not
parties to the proceeding;
(b) approval by the affirmative vote of a majority of the shares of
this corporation entitled to vote represented at a duly held meeting at which a
quorum is present or by the written consent of holders of a majority of the
outstanding shares entitled to vote. For this purpose, the shares owned by the
person to be indemnified shall not be considered outstanding or entitled to vote
thereon; or
(c) the court in which the proceeding is or was pending, on
application made by this corporation or the agent or the attorney or other
person rendering services in connection with the defense, whether or not such
application by the agent, attorney, or other person is opposed by this
corporation.
Section 6. Advance of Expenses. Expenses incurred in defending any
--------- -------------------
proceeding may be advanced by this corporation before the final disposition of
the proceeding on receipt of an undertaking by or on behalf of the agent to
repay the amount of the advance unless it shall be determined ultimately that
the agent is entitled to be indemnified as authorized in this Article.
Section 7. Other Contractual Rights. Nothing contained in this Article
--------- ------------------------
shall affect any right to indemnification to which persons other than directors
and officers of this corporation or any subsidiary hereof may be entitled by
contract or otherwise.
Section 8. Limitations. No indemnification or advance shall be made under
--------- -----------
this Article, except as provided in Section 4 or Section 5(c), in any
circumstance where it appears:
(a) that it would be inconsistent with a provision of the articles, a
resolution of the shareholders, or an agreement in effect at the time of the
accrual of the alleged cause of action asserted in the proceeding in which the
expenses were
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incurred or other amounts were paid, which prohibits or otherwise limits
indemnification; or
(b) that it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 9. Insurance. Upon and in the event of a determination by the
--------- ---------
board of directors of this corporation to purchase such insurance, this
corporation shall purchase and maintain insurance on behalf of any agent of the
corporation against any liability asserted against or incurred by the agent in
such capacity or arising out of the agent's status as such whether or not this
corporation would have the power to indemnify the agent against that liability
under the provisions of this section.
Section 10. Fiduciaries of Corporate Employee Benefit Plan. This Article
---------- ----------------------------------------------
does not apply to any proceeding against any trustee, investment manager, or
other fiduciary of an employee benefit plan in that person's capacity as such
even though that person may also be an agent of the corporation as defined in
Section 1 of this Article. Nothing contained in this Article shall limit any
right to indemnification to which such a trustee, investment manager or other
fiduciary may be entitled by contract or otherwise, which shall be enforceable
to the extent permitted by applicable law other than this Article.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
--------- ----
entitled to have a certificate, signed by, or in the name of the corporation by
the chairman of the board, chief executive officer, president, chief financial
officer, or a vice-president and the secretary or an assistant secretary of the
corporation, certifying the number of shares of a specific class or series owned
by such holder in the corporation. If such a certificate is countersigned (1)
by a transfer agent or an assistant transfer agent other than the corporation or
its employee or (2) by a registrar other than the corporation or its employee,
the signature of any such chairman of the board, chief executive officer,
president, chief financial officer, vice-president, secretary, or assistant
secretary may be facsimiles. In case any officer or officers who have signed,
or whose facsimile signature or signatures have been used on, any such
certificate or certificates shall cease to be such officer or officers of the
corporation whether because of death, resignation or otherwise before such
certificate or certificates have been delivered by the corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
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such officer or officers of the corporation. All certificates for shares shall
be consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation. Shares of
stock of the corporation shall only be transferred on the books of the
corporation by the holder of record thereof or by such holder's attorney duly
authorized in writing, upon surrender to the corporation of the certificate or
certificates for such shares endorsed by the appropriate person or persons, with
such evidence of the authenticity of such endorsement, transfer,
authorization, and other matters as the corporation may reasonably require, and
accompanied by all necessary stock transfer stamps. In that event, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate or certificates, and record the transaction
on its books. The board of directors may appoint a bank or trust company
organized under the laws of the United States or any state thereof to act as its
transfer agent or registrar, or both in connection with the transfer of any
class or series of securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
--------- -----------------
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Shareholder Meetings. In order that
--------- ---------------------------------------------
the corporation may determine the shareholders entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by
the board of directors, the record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. 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; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
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Section 4. Fixing a Record Date for Action by Written Consent. In order
--------- --------------------------------------------------
that the corporation may determine the shareholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining shareholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of California, its principal
place of business, or an officer or agent of the corporation having custody of
the book in which proceedings of meetings of shareholders are recorded.
Delivery made to the corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record date has
been fixed by the board of directors and prior action by the board of directors
is required by statute, the record date for determining shareholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the board of directors adopts the resolution
taking such prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
--------- ---------------------------------------
corporation may determine the shareholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the shareholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty (60) days prior to such action. If no record date is fixed,
the record date for determining shareholders for any such purpose shall be at
the close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 6. Registered Shareholders. Prior to the surrender to the
--------- -----------------------
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
--------- -----------------------
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in
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such installments and at such times, as shall be determined by the board of
directors. Any call made by the board of directors for payment on subscriptions
shall be uniform as to all shares of the same class or as to all shares of the
same series. In case of default in the payment of any installment or call when
such payment is due, the corporation may proceed to collect the amount due in
the same manner as any debt due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Checks, Drafts or Orders. All checks, drafts, or other orders
--------- ------------------------
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 2. Contracts. The board of directors may authorize any officer or
--------- ---------
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 3. Loans. The corporation may lend money to, or guarantee any
--------- -----
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 4. Fiscal Year. The fiscal year of the corporation shall be fixed
--------- -----------
by resolution of the board of directors.
Section 5. Corporate Seal. The board of directors shall provide a
--------- --------------
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, California".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
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Section 6. Voting Securities Owned By Corporation. Voting securities in
--------- --------------------------------------
any other corporation held by the corporation shall be voted by the chief
executive officer, unless the board of directors specifically confers authority
to vote with respect thereto, which authority may be general or confined to
specific instances, upon some other person or officer. Any person authorized to
vote securities shall have the power to appoint proxies, with general power of
substitution.
Section 7. Inspection of Books and Records. Any shareholder of record, in
--------- -------------------------------
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
shareholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a shareholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
shareholder. The demand under oath shall be directed to the corporation at its
registered office in the State of California or at its principal place of
business.
Section 8. Section Headings. Section headings in these by-laws are for
--------- ----------------
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
---------- -----------------------
these by-laws is or becomes inconsistent with any provision of the Shareholders
Agreement, the articles of incorporation, the Corporations Code of the State of
California or any other applicable law, the provision of these by-laws shall not
be given any effect to the extent of such inconsistency but shall otherwise be
given full force and effect.
ARTICLE VIII
------------
AMENDMENTS
----------
These by-laws may be amended, altered, or repealed and new by-laws adopted
at any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the by-laws has been conferred upon the
board of directors shall not divest the shareholders of the same powers.
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