1
EXHIBIT 3.2
BYLAWS
(as amended through March 16, 2000)
of
SOUTHWEST AIRLINES CO.
Dallas, Texas
2
SOUTHWEST AIRLINES CO.
BYLAWS
ARTICLE I
IDENTIFICATION AND OFFICES
Section 1. Name: The name of the corporation is SOUTHWEST AIRLINES CO.
Section 2. Principal Business Office: The principal business office of the
corporation shall be in Dallas, Texas.
Section 3. Other Offices: The corporation may also have offices at such
other places within or without the State of Texas as the Board of Directors may
from time to time determine or the business of the corporation may require.
ARTICLE II
THE SHAREHOLDERS
Section 1. Place of Meetings: All meetings of the shareholders for the
election of directors shall be held at the principal executive offices of the
corporation in Dallas, Texas, or at such other place as may be designated by the
Board of Directors of the corporation. Meetings of the shareholders for any
other purpose may be held at such time and place, within or without the State of
Texas, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2. Annual Meetings: Annual meetings of shareholders shall be held
on such date and at such time as shall be designated from time to time by the
Board of Directors. At each annual meeting, the shareholders shall elect a Board
of Directors and transact such other business as may be properly brought before
the meeting.
Section 3. Special Meetings: Special meetings of the shareholders may be
called by the President and shall be called by the Secretary upon written
request, stating the purpose or purposes therefor, by a majority of the whole
Board of Directors or by the holders of at least ten (10) percent (or such
greater percentage not exceeding a majority as may be specified in the Articles
of Incorporation) of all of the shares entitled to vote at the meeting.
Section 4. Notice of Meetings: Written or printed notice of all
shareholders' meetings stating the place, day and hour, and, in the case of a
special meeting, the purpose or purposes
1
3
for which the meeting is called, shall be delivered not less than ten (10) days
nor more than sixty (60) days before the date of the meeting, either personally
or by mail, by or at the direction of the officer or person calling the meeting,
to each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
addressed to the shareholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.
Section 5. Purpose of Special Meetings: Business transacted at all special
meetings of shareholders shall be confined to the purposes stated in the notice
thereof.
Section 6. Fixing Record Date: For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive a distribution by the corporation
(other than a distribution involving a purchase or redemption by the corporation
of any of its own shares) or a share dividend or in order to make a
determination of shareholders for any other purpose, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than sixty (60) days, and, in
the case of a meeting of shareholders, not less than ten (10) days, prior to the
date on which the particular action requiring such determination of shareholders
is to be taken. If no record date is fixed for the determination of shareholders
entitled to notice of or vote at a meeting of shareholders, or shareholders
entitled to receive a distribution by the corporation (other than a distribution
involving a purchase or redemption by the corporation of any of its own shares)
or a share dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring such
distribution or share dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this Section, such determination shall apply to any adjournment
thereof.
Section 7. Voting List: The officer or agent having charge of the stock
transfer books for the shares of the corporation, shall make, at least ten (10)
days before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten (10) days prior to such meeting, shall be kept
on file at the registered office of the corporation and shall be subject to
inspection by any shareholder at any time during usual business hours; such list
shall also be produced and be kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole time of
the meeting. The original stock transfer books shall be prima facie evidence as
to who are the shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders.
Section 8. Quorum: The holders of a majority of the shares entitled to vote
(counting for such purposes all abstentions and broker nonvotes), represented in
person or by proxy, shall constitute a quorum at meetings of the shareholders,
except as otherwise provided in the Articles of Incorporation. If, however, such
quorum shall be not present or represented at a meeting of the shareholders, the
holders of a majority of the shares entitled to vote thereat,
2
4
and represented in person or by proxy, shall have power to recess the meeting
from time to time, without notice other than power to recess the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such recessed meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally convened had a quorum
been present. Shareholders present at a duly organized meeting with a quorum
present may continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 9. Voting at Meetings:
(a) With respect to any matter other than the election of
directors or a matter for which the affirmative vote of the holders of
a specified portion of the shares entitled to vote is required by the
Texas Business Corporation Act, the act of the shareholders shall be
the affirmative vote of the holders of a majority of the shares
entitled to vote on, and voted for or against, the matter at a meeting
of shareholders at which a quorum is present; provided that, for
purposes of this sentence, all abstentions and broker nonvotes shall
not be counted as voted either for or against such matter. With
respect to the election of directors, directors shall be elected by a
plurality of the votes cast by the holders of shares entitled to vote
in the election of directors at a meeting of shareholders at which a
quorum is present; provided, that abstentions and broker nonvotes
shall not be counted as votes cast either for or against any nominee
for director.
(b) Each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a meeting
of shareholders, except to the extent that the voting rights of shares
of any class or series are limited or denied by the Articles of
Incorporation, or as otherwise provide by law. No shareholder shall
have the right of cumulative voting.
(c) A shareholder may vote either in person or by proxy executed
in writing by the shareholder or by his duly authorized attorney in
fact. No proxy shall be valid after eleven (11) months from the date
of its execution unless otherwise provided in the proxy. Each proxy
shall be revocable unless the proxy form conspicuously states that the
proxy is irrevocable and the proxy is coupled with an interest.
Section 10. Actions by Shareholders Without a Meeting: Any action required
by law to be taken at a meeting of the shareholders, or any action which may be
taken at a meeting of the shareholders, may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter thereof.
Section 11. Inspectors of Election: The chairman of each meeting of
shareholders shall appoint one or more persons to act as inspectors of election.
The inspectors of election shall report to the meeting the number of shares of
each class and series of stock, and of all
3
5
classes, represented either in person or by proxy. The inspectors of election
shall oversee the vote of the shareholders for the election of directors and for
any other matters that are put to a vote of shareholders at the meeting; receive
a ballot evidencing votes cast by the proxy committee of the Board of Directors;
judge the qualifications of shareholders voting; collect, count, and report the
results of ballots cast by any shareholders voting in person; and perform such
other duties as may be required by the chairman of the meeting or the
shareholders.
Section 12. Notice of Shareholder Business: At an annual meeting of
shareholders, only such business shall be conducted as shall have been brought
before the meeting (i) by or at the direction of the Board of Directors or (ii)
by any shareholder of the corporation who complies with the notice procedures
set forth in this Section 12. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
shareholder's notice 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 meeting; provided, however, that in
the event that less than thirty (30) days' notice or prior public disclosure of
the date of the meeting is given or made to the shareholders, notice by the
shareholder to be timely must be 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 or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting the following
information: (a) 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; (b) the name and address, as they appear on the corporation's
books, of the shareholder proposing such business; (c) the number of shares of
the corporation which are beneficially owned by the shareholder; and (d) any
material interest of the shareholder in such business. Notwithstanding anything
in these Bylaws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 12.
The chairman of an annual meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the meeting
and in accordance with the provisions of this Section 12, and if he should so
determine, he shall so declare to the meeting and any such business not properly
brought before the meeting shall not be transacted. Notwithstanding the
foregoing provisions of this Section 12, a shareholder seeking to have a
proposal included in the corporation's proxy statement shall comply with the
requirements of Regulation 14A under the Securities Exchange Act of 1934, as
amended (including, but not limited to, Rule 14a-8 or its successor provision).
Section 13. Notice of Shareholder Nominees: Nominations of persons for
election to the Board of Directors of the corporation may be made at a meeting
of shareholders (i) by or at the direction of the Board of Directors or (ii) by
any shareholder of the corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 13. Nominations by shareholders shall be made pursuant to timely
notice in writing to the Secretary of the corporation. To be timely, a
shareholder's notice shall 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 meeting; provided,
4
6
however, that in the event that less than thirty (30) days' notice or prior
public disclosure of the date of the meeting is given or made to shareholders,
notice by the shareholder 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 meeting was mailed or such public disclosure was made. Such
shareholder's notice shall set forth (a) as to each person whom the shareholder
proposes to nominate for election or reelection as a director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); and (b) as to the
shareholder giving the notice (i) the name and address, as they appear on the
corporation's books, of such shareholder and (ii) the number of shares of the
corporation which are beneficially owned by such shareholder. At the request of
the Board of Directors, any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the corporation that
information required to be set forth in a shareholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election as a
director of the corporation unless nominated in accordance with the procedures
set forth in these Bylaws. The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Management: The business and affairs of the corporation shall be
managed by a Board of Directors.
Section 2. Number; Term of Office; Qualifications: The number of directors
of the corporation shall be determined from time to time by resolution of the
Board of Directors, but no decrease in such number shall have the effect of
shortening the term of any incumbent director. At each annual meeting of
shareholders, the shareholders shall elect directors to hold office until the
next succeeding annual meeting, except in case of the classification of
directors as provided in these Bylaws. Each director shall hold office for the
term for which he is elected and until his successor shall have been elected and
qualified or until his earlier death, retirement, resignation, or removal for
cause in accordance with the provisions of these Bylaws. Directors need not be
residents of the State of Texas or shareholders of the corporation, but they
must be less than seventy (70) years of age at the time of election and they
must have been nominated in accordance with the procedures set forth in these
Bylaws in order to be eligible for election as directors.
Section 3. Classification of Directors: Effective at the time of the annual
meeting of shareholders in 1990, in lieu of electing the whole number of
directors annually, the directors
5
7
shall be divided into three classes, Class I, Class II and Class III, each class
to be as nearly equal in number as possible, and the remainder of this Section 3
shall be effective. Each director shall serve for a term ending on the date of
the third annual meeting of shareholders following the annual meeting at which
such director was elected; provided, however, that each initial director in
Class I shall hold office until the first annual meeting of shareholders after
his election; each initial director in Class II shall hold office until the
second annual meeting of shareholders after his election; and each initial
director in Class III shall hold office until the third annual meeting of
shareholders after his election. In the event of any increase or decrease in the
authorized number of directors, (i) each director then serving as such shall
nevertheless continue as a director of the class of which he is a member until
the expiration of his current term or until his prior death, retirement,
resignation, or removal for cause in accordance with the provisions of these
Bylaws, and (ii) the newly created or eliminated directorships resulting from
such increase or decrease shall be apportioned by the Board of Directors among
the three classes of directors so as to maintain such classes as nearly equal in
number as possible.
Section 4. Vacancies; Increases in the Number of Directors: Any vacancy
occurring in the Board of Directors may be filled in accordance with the
following paragraph of this Section 4 or may be filled by the affirmative vote
of a majority of the remaining directors though less than a quorum of the Board
of Directors. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office.
Any vacancy occurring in the Board of Directors or any directorship to be
filled by reason of an increase in the number of directors (i) may be filled by
election at an annual or special meeting of shareholders called for that purpose
or (ii) may be filled by the Board of Directors; provided that, with respect to
any directorship to be filled by the Board of Directors by reason of an increase
in the number of directors (a) such directorship shall be for a term of office
continuing only until the next election of one or more directors by shareholders
and (b) the Board of Directors may not fill more than two such directorships
during the period between any two successive annual meetings of shareholders. If
the Board of Directors is classified, any director elected at an annual or
special meeting of shareholders to fill a directorship created by reason of an
increase in the number of directors shall be elected for a term coterminous with
the remaining term of the other members of the class to which he has been
designated in accordance with the provisions of these Bylaws.
Section 5. Removal: At any meeting of shareholders called expressly for
that purpose, any director may be removed, but only for cause, by vote of the
holders of a majority of the shares then entitled to vote for the election of
directors.
Section 6. Place of Meeting: Meetings of the Board of Directors, regular or
special, may be held either within or without the State of Texas.
Section 7. First Meeting: The first meeting of each newly elected Board
shall be held immediately following the shareholders' meeting at which the
directors are elected and at the place at which such annual meeting is held, or
the directors may meet at such time and place
6
8
as shall be fixed by the consent in writing of the directors. No notice of such
meeting shall be necessary to the newly elected directors in order to legally
constitute the meeting provided a quorum shall be present.
Section 8. Regular Meetings: Regular meetings of the Board of Directors may
be held without notice at such time and place as shall from time to time be
determined by resolution of the Board of Directors.
Section 9. Special Meetings: Special meetings of the Board of Directors may
be called by the President on two days' notice to each director, either
personally, by telephone, by mail, or by telegram. Special meetings shall be
called by the President, or by the Secretary, in like manner and on like notice
on the written request of the majority of the whole Board of Directors.
Section 10. Purpose of Meetings: Neither the purpose of, nor the business
to be transacted at, any regular or special meeting of the Board of Directors
need be specified in the notice or waiver of notice of such meeting.
Section 11. Quorum: A majority of the number of directors shall constitute
a quorum for the transaction of business at any meeting thereof. The act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless the act of a greater number
is required by law or the Articles of Incorporation or these bylaws. If a quorum
shall not be present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
Section 12. Committee of Directors: The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, including an "Executive Committee," each committee to consist of one
or more of the directors of the corporation, which, to the extent provided in
said resolution, shall have and may exercise all of the authority of the Board
of Directors in the business and affairs of the corporation, except where action
of the Board is mandatorily required by law, and may have power to authorize the
seal of the corporation to be affixed to all papers which may require it. 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. Such committees
shall keep regular minutes of their proceedings and report the same to the Board
when required.
Section 13. Action Without Meeting: Any action required or permitted to be
taken at a meeting of the Board of Directors or any committee may be taken
without a meeting if a consent in writing, setting forth the action so taken, is
signed by all the members of the Board of Directors or committee, as the case
may be. Such consent shall have the same force and effect as a unanimous vote at
a meeting. The signed consent, or a signed copy, shall be placed in the minute
book.
7
9
ARTICLE IV
OFFICERS
Section 1. Number and Designation: The officers of the corporation shall
consist of a President, a Vice President, a Secretary, an Assistant Secretary, a
Treasurer, an Assistant Treasurer, and, if the Board of Directors so elects, a
Chairman of the Board. Any two or more offices may be held by the same person,
except that the President and Secretary shall not be the same person.
Section 2. Election: The Board of Directors at its first meeting after the
annual meeting of the shareholders may elect a Chairman of the Board from among
its members and shall elect a President, a Vice President, a Secretary, an
Assistant Secretary, a Treasurer, and an Assistant Treasurer, none of whom need
to be a member of the Board.
Section 3. Other Officers: The President may appoint such other officers
and agents as he may deem necessary for the efficient and successful conduct of
the business of the corporation, but none of such other officers and agents
shall be given a contract of employment unless such is first approved by the
Board of Directors.
Section 4. Term of Office and Removal: The officers, agents, or members of
any committees of the corporation elected or appointed by the Board of Directors
shall hold office until their successors are chosen and qualify in their stead;
provided, that any such officer, agent, or member of such committees may be
removed at any time by the majority vote of the whole Board of Directors
whenever in its sole judgment the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any officer or agent appointed by the
President may be removed at any time by majority vote of the whole Board of
Directors or by the President. Election or appointment of an officer or agent
shall not of itself create contract rights.
Section 5. Compensation: The salaries of all officers of the corporation
shall be fixed by, or at the direction of, the Board of Directors or its
Compensation Committee.
Section 6. The Chairman of the Board: If elected, the Chairman of the Board
shall preside at all meetings of the shareholders and directors; and he shall
have such other powers and duties as the Board of Directors shall prescribe.
Section 7. The President: The President shall be the chief executive
officer of the corporation; in the absence of the Chairman of the Board or if
there be no Chairman of the Board, he shall preside at all meetings of the
shareholders and directors; shall be ex officio a member of all standing
committees; and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President may execute deeds, conveyances,
notes, bonds, and other contracts either or without the attestation of the
Secretary required thereon and either with or without the seal of the
corporation.
8
10
Section 8. Vice Presidents: The Vice Presidents, in the order of their rank
and seniority in office, in the absence or disability of the President shall
perform the duties and exercise the powers of the President, and shall perform
such other duties as the Board of Directors shall prescribe.
Section 9. The Secretary: The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and record all votes and
the minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or President, under whose supervision he
shall be; he shall keep the seal the corporation and, when authorized by the
Board, affix the same to any instrument requiring it and, when so affixed, it
shall be attested by his signature or by the signature of the Treasurer or an
Assistant Secretary or Assistant Treasurer.
Section 10. The Assistant Secretaries: The Assistant Secretaries, in order
of their seniority in office, 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 as the Board of Directors shall prescribe.
Section 11. The Treasurer: The Treasurer shall have supervision over the
corporate funds and securities and shall keep or cause to be kept full and
accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit or cause to be deposited all moneys and other
valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors, shall disburse the
funds of the corporation as may be ordered by the Board, taking proper vouchers
for such disbursements, and shall render to the President and directors, at the
regular meetings of the Board, or whenever they may require it, an account of
all the transactions under his supervision as Treasurer and of the financial
condition of the corporation. If required by the Board of Directors, the
Treasurer and persons acting under this supervision shall give the corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the Board for the faithful performance of their duties and for the restoration
to the corporation, in case of their death, resignation, retirement, or removal
from office, of all books, papers, vouchers, money, and other property of
whatever kind in their possession or under their control belonging to the
corporation.
Section 12. The Assistant Treasurers: The Assistant Treasurers, in the
order of their seniority in office, shall, in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer and shall
perform such other duties as the Board of Directors shall prescribe.
9
11
ARTICLE V
CERTIFICATES REPRESENTING SHARES
Section 1. Form and Issuance: The certificates representing shares of the
corporation of each class or series shall be in such form as approved by
resolution of the Boards of Directors and as may be required by law and shall be
numbered and entered in the stock records of the corporation as they are issued.
They shall show the holder's name and number of shares and shall be signed by
the Chairman of the Board, if any, or the President and the Secretary of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof. The signatures of the Chairman of the Board or President and of the
Secretary upon a certificate may be facsimiles. In case any officer who has
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance. No certificate shall be issued for any share until the
consideration therefor, fixed as provided by law, has been fully paid.
Section 2. Fractional Shares: The corporation may, but shall not be
obligated to, issue a certificate for a fractional share, and the Board of
Directors may, in lieu thereof, arrange for the disposition thereof by those
entitled thereto, pay the fair value in cash or issue scrip in registered or
bearer form which shall entitle the holder to receive a certificate for a full
share only upon the surrender of such scrip aggregating a full share. A
certificate for a fractional share shall, but scrip shall not, unless otherwise
provided herein, entitle the holder to exercise voting rights, to receive
dividends, or to participate in any of the assets of the corporation in the
event of liquidation. Such scrip if issued shall become void if not exchanged
for certificates representing full shares within one year after its issue, or
such scrip may be subject to the condition that the shares for which it is
exchangeable may be sold by the corporation and the proceeds thereof distributed
to the holders of such scrip, and the same may be subject to any other
conditions which the Board of Directors may deem advisable.
Section 3. Lost, Stolen, or Destroyed Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen, or destroyed, upon the making of an affidavit of the
fact by the person claiming the certificate of stock to be lost, stolen, or
destroyed, and by such other persons as may have knowledge of the pertinent
facts with reference thereto. 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 legal representative,
to make proof of loss, theft, or destruction in such manner as it shall require
and/or give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfer of Shares: Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, and upon payment of all taxes as may be imposed by law, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction upon its books.
10
12
Section 5. Registered Shareholders: The corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, 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, except as
otherwise provided by the laws of Texas.
ARTICLE VI
NOTICES
Section 1. Waiver in Writing: Whenever any notice is required to be given
any shareholder or director under the provisions of the law or the Articles of
Incorporation or these Bylaws, a waiver thereof in writing signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
Section 2. Waiver by Attendance: Attendance of a director or a shareholder,
whether in person or by proxy, at any meeting shall constitute a waiver of
notice of such meeting, except where such director or shareholder attends a
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends and Reserves: Dividends upon the shares of the
corporation, subject to the provisions, if any, of the Articles of
Incorporation, may in the exercise of its discretion be declared by the Board of
Directors at any regular or special meeting, to the extent permitted by law.
Dividends may be paid in cash, in property, or in shares of the corporation.
Before payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the directors from time
to time in their absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
Section 2. Fiscal Year: The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.
11
13
Section 3. Seal: The corporate seal shall have inscribed therein the name
of the corporation and shall be in such form as may be approved by the Board of
Directors. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.
Section 4. Amendments to Bylaws: All of the powers of this corporation,
insofar as the same may be lawfully vested by these Bylaws in the Board of
Directors, are hereby conferred upon the Board of Directors of this corporation.
In furtherance and not in limitation of that power, the Board of Directors may
amend or repeal these Bylaws, or adopt new bylaws, unless (i) such power shall
be reserved exclusively to the shareholders in whole or part by the Articles of
Incorporation or the laws of Texas or (ii) the shareholders in amending,
repealing or adopting a particular bylaw shall have expressly provided that the
Board of Directors may not amend or repeal that bylaw. Unless the Articles of
Incorporation or a bylaw adopted by the shareholders shall provide otherwise as
to all or some portion of the corporation's bylaws, the shareholders may amend,
repeal, or adopt (but only by the affirmative vote of the holders of not less
than eighty (80) percent of the then outstanding shares of capital stock of the
corporation entitled to vote with respect thereto) the corporation's bylaws even
though the bylaws may also be amended, repealed, or adopted by the Board of
Directors.
Section 5. Preferred Shareholders: The provisions of Sections 12 and 13 of
Article II and of Sections 2, 3, 4 and 5 of Article III are subject to the
rights of any holders of any class or series of stock having a preference over
the Common Stock of the corporation as to dividends or upon liquidation to elect
directors under specified circumstances.
Section 6. Action With Respect to Securities of Other Corporations: Unless
otherwise directed by the Board of Directors, the chief executive officer shall
have power to vote and otherwise act on behalf of the corporation, in person or
by proxy, at any meeting of shareholders of, or with respect to any action of
shareholders of, any other corporation in which the corporation may hold
securities and otherwise to exercise any and all rights and powers which the
corporation may possess by reason of its ownership of securities in such other
corporation.
ARTICLE VIII
INDEMNIFICATION
Section 1. Right to Indemnification: Subject to the limitations and
conditions as provided in this Article VIII, each person who was or is made a
party to, or is threatened to be made a party to, any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative (hereinafter called a "proceeding"),
12
14
or any appeal in such a proceeding or any inquiry or investigation that could
lead to such a proceeding, by reason of the fact that he (or a person of whom he
is the legal representative) is or was a director or officer of the corporation
(or while a director or officer of the corporation is or was serving at the
request of the corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, proprietorship, trust,
employee benefit plan, or other enterprise) shall be indemnified by the
corporation to the fullest extent permitted by the Texas Business Corporation
Act, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the corporation
to provide broader indemnification rights than said law permitted the
corporation to provide prior to such amendment) against judgments, penalties
(including excise and similar taxes and punitive damages), fines, settlements
and reasonable expenses (including, without limitation, court costs and
attorneys' fees) actually incurred by such person in connection with such
proceeding, appeal, inquiry or investigation, and indemnification under this
Article VIII shall continue as to a person who has ceased to serve in the
capacity which initially entitled such person to indemnity hereunder; provided,
however, that in no case shall the corporation indemnify any such person (or the
legal representative of any such person) otherwise than for his reasonable
expenses, in respect of any proceeding (i) in which such person shall have been
finally adjudged by a court of competent jurisdiction (after exhaustion of all
appeals therefrom) to be liable on the basis that personal benefit was
improperly received by him, whether or not the benefit resulted from an action
taken in such person's official capacity, or (ii) in which such person shall
have been found liable to the corporation; and provided, further, that the
corporation shall not indemnify any such person for his reasonable expenses
actually incurred in connection with any proceeding in which he shall have been
found liable for willful or intentional misconduct in the performance of his
duty to the corporation. The rights granted pursuant to this Article VIII shall
be deemed contract rights, and no amendment, modification or repeal of this
Article VIII shall have the effect of limiting or denying any such rights with
respect to actions taken or proceedings arising prior to any such amendment,
modification or repeal. it is expressly acknowledged that the indemnification
provided in this Article VIII could involve indemnification for negligence or
under theories of strict liability.
Section 2. Advance Payment: The right to indemnification conferred in this
Article VIII shall include the right to be paid or reimbursed by the corporation
the reasonable expenses incurred by a person of the type entitled to be
indemnified under Section 1 who was, or is threatened to be made a named
defendant or respondent in a proceeding, in advance of the final disposition of
the proceeding and without any determination as to the person's ultimate
entitlement to indemnification; provided, however, that the payment of such
expenses incurred by any such person in advance of the final disposition of a
proceeding shall be made only upon delivery to the corporation of a written
affirmation by such person of his good faith belief that he has met the standard
of conduct necessary for indemnification under this Article VIII and a written
undertaking, by or on behalf of such person, to repay all amounts so advanced if
it shall be ultimately determined that such person is not entitled to be
indemnified under this Article VIII or otherwise.
13
15
Section 3. Indemnification of Employees and Agents: The corporation, by
adoption of a resolution of the Board of Directors, may indemnify and advance
expenses to an employee or agent of the corporation to the same extent and
subject to the same conditions under which it may indemnify and advance expenses
to directors and officers under this Article VIII; and the corporation may so
indemnify and advance expenses to persons who are not or were not directors,
officers, employees, or agents of the corporation but who are or were serving at
the request of the corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, proprietorship, trust,
employee benefit plan, or other enterprise against any liability asserted
against him and incurred by him in such a capacity or arising out of his status
as such a person to the same extent that it may indemnify and advance expenses
to directors and officers under this Article VIII.
Section 4. Appearance as a Witness: Notwithstanding any other provision of
this Article VIII, the corporation may pay or reimburse expenses incurred by a
director or officer in connection with his appearance as a witness or his other
participation in a proceeding at a time when he is not a named defendant or
respondent in the proceeding.
Section 5. Nonexclusivity of Rights: The right to indemnification and the
advancement and payment of expenses conferred in this Article VIII shall not be
exclusive of any other right which a director or officer or other person
indemnified pursuant to Section 3 of this Article VIII may have or hereafter
acquire under any law (common or statutory), provision of the Articles of
Incorporation or these Bylaws, agreement, vote of shareholders or disinterested
directors or otherwise.
Section 6. Insurance: The corporation may purchase and maintain insurance,
at its expense, to protect itself and any person who is or was serving as a
director, officer, employee, or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, proprietorship, employee
benefit plan, trust, or other enterprise against any expense, liability, or
loss, whether or not the corporation would have the power to indemnify such
person against such expense, liability, or loss under this Article VIII.
Section 7. Shareholder Notification: To the extent required by law, any
indemnification of or advance of expenses to a director or officer in accordance
with this Article VIII shall be reported in writing to the shareholders with or
before the notice or waiver of notice of the next shareholders' meeting or with
or before the next submission to shareholders of a consent to action without a
meeting and, in any case, within the 12-month period immediately following the
date of the indemnification or advance.
Section 8. Savings Clause: If this Article VIII or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify and advance expenses to each director,
officer, and other person indemnified pursuant to this Article VIII to the
extent permitted by any applicable portion of this Article VIII that shall not
have been invalidated.
14