EXHIBIT 3.1
SECOND AMENDED AND RESTATED
CODE OF BY-LAWS
OF
FORTUNE INDUSTRIES, INC.
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1.01. Place, Date and Time of Meeting. Meetings of the stockholders of
the Corporation shall be held on such date and at such time and place, either
within or without the State of Indiana, as may be specified by the Board of
Directors.
Section 1.02. Annual and Special Meetings. The annual meeting of stockholders,
for the election of directors and the transaction of any other business which
may be brought before the meeting, shall be held on such date and at such time
and place, either within or without the State of Indiana, as may be specified by
the Board of Directors.
Special Meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute or by the Articles of Incorporation, may be
called by the Chairman, the Chief Executive Officer or the President and shall
be called by the President or Secretary at the request in writing of a majority
of the Board of Directors. Any such request shall state the purpose or purposes
of the proposed meeting.
Section 1.03. Notice of Meetings. Notice of all meetings of stockholders shall
be given to each stockholder of record entitled to vote at the meeting, at least
ten days prior to the day named for the meeting, unless a greater period of
notice is by law required in a particular case.
Section 1.04. Organization. At every meeting of the stockholders, the Chairman
of the Board, or in his absence, the Chief Executive Officer, the President, or
a Vice President designated by the Board of Directors, respectively, or in the
absence of the Chairman, the Chief Executive Officer, the President or any Vice
President so designated, a chairman chosen by the stockholders, shall act as
chairman of the meeting; and the Secretary, or in his absence, a person
appointed by the chairman of the meeting, shall act as secretary of the meeting.
Section 1.05. Quorum; Voting. Except as otherwise specified herein or in the
Articles of Incorporation or provided by law, (a) a quorum shall consist of the
holders of one-third of the stock issued and outstanding and entitled to vote,
and (b) when a quorum is present,
all matters shall be decided by the vote of the holders of a majority of the
stock having voting power present in person or by proxy.
In each election of directors, the candidates receiving the highest number of
votes, up to the number of directors to be elected in such election, shall be
elected.
Section 1.06. Procedure for Nomination of Candidates for Director and Proposal
of Business. Subject to the rights of holders of any outstanding preferred
stock, nominations for election of directors at an annual meeting or a special
meeting called for the purpose of electing directors may be made either by the
Board of Directors or by any stockholder of record entitled to vote for the
election of directors who gives advance notice as hereafter provided.
Any such stockholder may nominate persons for election as directors only if
written notice of such stockholder's intent to make such nomination is
transmitted to, and received by, the Secretary of the Corporation at the
principal place of business of the Corporation not later than (a) in the case of
an annual meeting, the earlier of (i) the 10th day prior to the forthcoming
meeting date or (ii) the close of business on the 10th day following the date on
which the Corporation first makes public disclosure of the meeting date and (b)
in the case of a special meeting (provided that the Board of Directors has
determined that directors shall be elected at such special meeting), the close
of business on the 10th day following the date on which the Corporation first
makes public disclosure of the meeting date. Each notice given by such
stockholder shall set forth: (a) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be nominated; (b)
a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting (or if the record date for such
meeting is subsequent to the date required for such stockholder notice, a
representation that the stockholder is a holder of record at the time of such
notice and intends to be a holder of record on the date for such meeting), and
setting forth the class and number of shares so held (including shares held
beneficially), (c) a representation that such stockholder intends to appear in
person or by proxy as a holder of record at the meeting to nominate the person
or persons specified in the notice; (d) a description of all arrangements or
understandings between such stockholder and each nominee proposed by the
stockholder and any other person or persons (identifying such person or persons)
pursuant to which the nomination or nominations are to be made by the
stockholder; (e) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (f)
the consent of each nominee to serve as a director of the Corporation if so
elected.
If the facts show that a nomination was not made in accordance with the
foregoing provisions, the Chairman of the meeting shall so determine and declare
to the meeting, whereupon the defective nomination shall be disregarded. Public
disclosure of the date of a forthcoming meeting may be made by the Corporation
for purposes of this Section 1.06 not only by the giving of the formal notice of
the meeting but also (a) by notice to a national securities exchange or to the
National Association of Securities Dealers, Inc. (if the Corporation's common
stock is then listed on such exchange or quoted on NASDAQ or the OTC Bulletin
Board), (b) by filing a report under Section 13 or 15(d) of the
2
Securities Exchange Act of 1934, as amended (the "Exchange Act") (if the
Corporation is then subject thereto) or (c) by a mailing to stockholders or
general press release.
All business properly brought before an annual meeting or a special meeting
shall be transacted at such meeting. Business shall be deemed properly brought
only if it is (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors or
(c) in the case of an annual meeting, (i) brought before the meeting by a
stockholder of record present and entitled to vote at such meeting, (ii) upon
prior written notice transmitted to, and received by, the Secretary of the
Corporation at the principal place of business of the Corporation not later than
the earlier of (A) the 10th day prior to the forthcoming meeting date or (B) the
close of business on the 10th day following the date on which the Corporation
first makes public disclosure of the meeting date and (iii) each such notice
given by such stockholder sets forth: (A) a brief description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting; (B) the name and address of the stockholder who intends
to propose such business; (C) a representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such meeting (or if
the record date for such meeting is subsequent to the date required for such
notice, a representation that the stockholder is a holder of record at the time
of such notice and intends to be a holder of record on the date of such meeting)
and intends to appear in person or by proxy at such meeting to propose such
business; and (D) any material interest of the stockholder in such business. The
Chairman of the meeting may refuse to transact any business at any meeting made
without compliance with the foregoing procedure.
Notwithstanding the foregoing provisions of this Section 1.06, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in this
Section 1.06. Nothing in this Section 1.06 shall be deemed to affect any rights
of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-S under the Exchange Act.
Section 1.07. Participation in Meetings. One or more stockholders may
participate in a meeting of the stockholders by means of conference telephone or
similar communications equipment by which all persons participating in the
meeting can hear each other.
ARTICLE II
DIRECTORS
Section 2.01. Number and Term of Office. A variable range board consisting of a
minimum of two (2) directors and a maximum of fifteen (15) directors is hereby
established. The number of directors may be changed from the current number of
directors to a number within the range herein established by resolution of the
Board of Directors. In the absence of a resolution of the Board of Directors
fixing the number of directors, the number shall be the current number of
directors, which is hereby set at six (6).
3
Section 2.02. Resignations. Any director may resign at any time by giving
written notice to the Board of Directors, to the Chairman, the Chief Executive
Officer, the President, or to the Secretary. Such resignation shall take effect
at the time of the receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Any vacancy in the Board of Directors, resulting from death, resignation,
increase in the authorized number of directors or otherwise, may be filled for
the unexpired term by a majority vote of the remaining directors in office,
although less than a quorum.
Section 2.03. Annual Meeting. As promptly as practicable after each annual
election of directors, the Board of Directors shall meet for the purpose of
organization, election of officers, and the transaction of other business, at
the place where such election of directors was held. Notice of such meeting need
not be given. In the absence of a quorum at said meeting, the same may be held
at any other time and place which shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
Section 2.04. Regular Meetings. Regular meetings of the Board of Directors or
any committee designated under Section 2.09 hereof may be held without notice at
such time and place as shall from time to time be determined by the Board.
Section 2.05. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman, the Chief Executive Officer or two or more of the
directors, and special meetings of any committee designated under Section 2.09
hereof may be called by any regular member thereof, and in either case shall be
held at such time and place as shall be designated in the call for the meeting.
Notice of each special meeting shall be given by mail, telegram, telephone, or
orally, by or at the direction of the person or persons authorized to call such
meeting, to each director, at least two days prior to the day named for the
meeting.
Section 2.06. Organization. Every meeting of the Board of Directors shall be
presided over by the Chairman, or in his absence, the Chief Executive Officer,
or in the absence of the Chairman and the Chief Executive Officer, by a chairman
of the meeting chosen by a majority of the directors present. The Secretary, or
in his absence, a person appointed by the chairman of the meeting, shall act as
secretary of the meeting.
Section 2.07. Participation in Meetings. One or more directors may participate
in a meeting of the Board of Directors or a committee of the Board by means of
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other.
Section 2.08. Quorum; Voting. One-third of the total number of directors shall
constitute a quorum for the transaction of business by the Board of Directors,
and one third of the total number of directors who are members of any committee
designated under Section 2.09 hereof shall constitute a quorum for the
transaction of business by said committee.
4
The vote of a majority of the directors present at any meeting of the Board of
Directors or of any aforesaid committee at which there is a quorum shall be the
act of the Board of Directors or said committee, as the case may be, except as
may be otherwise specifically provided by statute or by the Articles of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors or of any aforesaid committee, 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 2.09. Committees. The Board of Directors may, by resolution passed by
the entire 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 the resolution and permitted by law, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of the
Corporation and may 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. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
Section 2.10. Compensation of Directors. Each director shall be entitled to
receive such compensation, if any, as may from time to time be fixed by the
Board of Directors. Directors may also be reimbursed by the Corporation for all
reasonable expenses incurred in attending meetings of the Board or any committee
thereof of which they are members or otherwise incurred in the performance of
their duties as directors.
ARTICLE III
OFFICERS
Section 3.01. Number and Qualifications. The officers of the Corporation shall
be a President and a Secretary, and may include, if the board of directors deems
such officers necessary, a Chairman of the Board, a Chief Executive Officer, a
Chief Operating Officer, a Chief Financial Officer, one or more Vice Presidents,
a Treasurer, and may include such other officers as may be elected or appointed
in accordance with the provisions of Section 3.02 herein. One person may hold
more than one office. Officers shall be natural persons of full age.
Section 3.02. Additional Officers and Agents. The Board of Directors may, from
time to time, elect such other officers and appoint such other agents as it
deems necessary, who shall hold their offices for such terms and shall exercise
such powers and perform such duties as are provided in these By-laws, or as the
Board may, from time to time, determine. The Board also may delegate to any
officer the power to appoint and remove subordinate officers and to retain,
appoint and remove other agents, and to prescribe the authority, term of office
and duties of such subordinate officers and other agents.
Section 3.03. Election and Term of Office. The officers of the Corporation,
except those appointed by delegated authority pursuant to Section 3.02 herein,
shall be elected by the Board of Directors at its annual meeting, but the Board
may elect officers or fill
5
vacancies among the officers at any other meeting. Subject to earlier
termination of office and without prejudice to the contract rights, if any,
which he may have under a written agreement between him and the Corporation,
each elected officer shall hold office until the next annual meeting of
directors and until his successor shall have been elected and qualified.
Section 3.04. Resignations. Any officer may resign at any time by giving written
notice to the Board of Directors, or to the Chairman, the Chief Executive
Officer, the President, or to the Secretary of the Corporation. Any such
resignation shall take effect at the time of the receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 3.05. Removal. Any officer may be removed at any time, either with or
without cause, by the vote of a majority of the Board of Directors.
Section 3.06. The Chairman of the Board. The Chairman of the Board shall preside
at the meetings of the Board and shall also perform such other duties as may be
specified by these By-Laws or as from time to time may be assigned to him by the
Board.
Section 3.07. The Chief Executive Officer. The Chief Executive Officer shall be
the chief executive officer of the Corporation and shall have overall
responsibility for the supervision of the business and operations of the
Corporation, subject, however, to the control of the Board. The Chief Executive
Officer shall preside at meetings of the Board in the absence of the Chairman
and also shall perform such other duties as may be specified by these By-Laws or
as from time to time may be assigned to him by the Board.
Section 3.08. The President. The President shall perform such duties as
specified by these By-Laws or by law and shall also discharge all duties as from
time to time may be assigned by the board of directors or the Chief Executive
Officer. The President (or the Chief Executive Officer) shall sign, execute, and
acknowledge, in the name of the Corporation, deeds, mortgages, bonds, contracts,
and other instruments authorized by the board of directors, except in cases
where the signing and execution shall be expressly delegated by the board of
directors to some other officer of the Corporation.
Section 3.09. Vice Presidents. In the absence of the President or when so
directed by the President, any Vice President may perform all the duties of the
President, and, when so acting, shall have all the powers of, and be subject to
all the restrictions upon, the President. The Vice Presidents also shall perform
such other duties as, from time to time, may be assigned to them by the
President.
Section 3.10. The Secretary. The Secretary shall record all the votes of the
stockholders and of the directors and the minutes of the meetings of the
stockholders and of the Board of Directors in a book or books to be kept for
that purpose; he shall see that notices of the meetings of the stockholders and
the Board are given and that all records and reports are properly kept and filed
by the Corporation as required by law; he shall be the custodian of the seal of
the Corporation and shall see that it is affixed to all documents to be executed
6
on behalf of the Corporation under its seal; and, in general, he shall perform
all duties as may from time to time be assigned to him by the President.
Section 3.11. Assistant Secretary. In the absence or disability of the Secretary
or when so directed by the Secretary, any Assistant Secretary may perform all
the duties of the Secretary, and, when so acting, shall have all the powers of;
and be subject to all the restrictions upon, the Secretary. The Assistant
Secretaries shall perform such other duties as from time to time may be assigned
to them respectively by the President or the Secretary.
Section 3.12. The Treasurer. The Treasurer shall have charge of all receipts and
disbursements of the Corporation and shall have or provide for the custody of
its funds and securities; he shall have full authority to receive and give
receipts for all money due and payable to the Corporation, and to endorse
checks, drafts, and warrants in its name and on its behalf and to give full
discharge for the same; he shall deposit all funds of the Corporation, except
such as may be required for current use, in such banks or other places of
deposit as the Board of Directors may from time to time designate; and, in
general, he shall perform all duties incident to the office of Treasurer and
such other duties as may from time to time be assigned to him by the President.
Section 3.13. Assistant Treasurers. In the absence or disability of the
Treasurer or when so directed by the Treasurer, any Assistant Treasurer may
perform all the duties of the Treasurer, and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may be
assigned to them respectively by the Board of Directors, the Chief Executive
Officer, the President or the Treasurer.
Section 3.14. The Chief Operating Officer. The Chief Operating Officer shall
perform such duties as specified by these By-Laws or by law and shall also
discharge all duties as from time to time may be assigned by the board of
directors, the Chief Executive Officer, or the President.
Section 3.15. The Chief Financial Officer. The Chief Financial Officer shall
maintain a correct and complete record of accounts showing accurately at all
times the financial condition of the Corporation. The Chief Financial Officer
shall be the legal custodian of all monies, notes, securities, and other
valuables that may from time to time come into the possession of the
Corporation. The Chief Financial Officer shall immediately deposit all funds of
the Corporation in a bank or other depository to be designated by the board of
directors and shall keep such bank account in the name of the Corporation.
Section 3.16. Compensation of Officers and Others. The compensation of all
officers shall be determined by the Board of Directors, or any committee or
officer authorized by the Board to do so. No officer shall be precluded from
receiving such compensation by reason of the fact he is also a director of the
Corporation.
Additional compensation, determined as above provided, may be paid to any
officers or employees for any year or years, based upon the success of the
operations of the Corporation during such period.
7
ARTICLE IV
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 4.01. Right to Indemnification. The Corporation shall indemnify, to the
full extent permissible under Indiana law, any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he 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 or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorneys' fees), judgments, fines, excise taxes and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or preceding.
Section 4.02. Payment of Expenses in Advance. Expenses incurred in defending an
action, suit or proceeding referred to in Section 4.01 shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding in the manner and to the full extent permissible under Indiana law
upon request of any person requesting indemnification under Section 4.01.
Section 4.03. Procedure. On the request of any person requesting indemnification
under Section 4.01 or any advance under Section 4.02, the Board of Directors or
a committee thereof shall determine whether such indemnification or advance is
permissible or such determination shall be made by independent legal counsel if
the Board or committee so directs or if the Board or committee is not empowered
by statute to make such determination.
Section 4.04. Other Rights. The indemnification provided by these By-Laws shall
not be deemed exclusive of any other rights to which a person seeking
indemnification may be entitled under any statute, agreement, vote of
stockholders or disinterested directors, or otherwise both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Without limiting the generality of the
foregoing, by action of the Board of Directors (notwithstanding the interest of
its members in the transaction) the Corporation may enter into agreements with
persons indemnified under this Section 4 and other providing for indemnification
of such persons by the Corporation either under the provisions of this Section 4
or otherwise, and, in the event of any conflict between the provisions of this
Section 4 and the provisions of any such indemnification agreement, the
provisions of such indemnification agreement shall prevail.
Section 4.05. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against any liability
asserted against him and incurred by him in any
8
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of these By-Laws.
Section 4.06. Effect; Benefit; Modification. The obligations of the Corporation
to indemnify and to advance expenses to a party under the provisions of this
Section 4 shall be in the nature of a contract between the Corporation and each
such party. No amendment or repeal of any provision of this Section 4 shall
alter, to the detriment of such party, the right of such party to
indemnification or the advancement of expenses with respect to any claim based
on an actual or alleged act or failure to act which took place prior to such
amendment, repeal or termination.
ARTICLE V
STOCK CERTIFICATES; TRANSFERS
Section 5.01. Stock Articles. Every stockholder shall be entitled to a stock
certificate or certificates in such form as the Board of Directors shall
prescribe certifying the number of shares of capital stock of the Corporation
owned by such stockholder. Stock certificates shall be signed by the Chairman,
the Chief Executive Officer, the President or a Vice President and by the
Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer
of the Corporation, but, to the extent permitted by law, such signatures may be
facsimiles, engraved or printed.
Section 5.02. Transfer of Stocks. Transfer of stock certificates and the shares
represented thereby shall be made only upon surrender to the Corporation or a
transfer agent of the Corporation of a certificate for the shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer.
Section 5.03. Fixing Date for Determination of Stockholders of Record. The Board
of Directors may fix in advance a date, which shall not be more than sixty or
less than ten days before the date of any meeting of stockholders, nor more than
sixty days prior to any other action as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such meeting, and
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution, or any allotment of rights, or to exercise the rights in respect
of any change or conversion or exchange of capital stock, or to give any consent
of stockholders for any purpose, and in such case such stockholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting and any adjournment thereof, or to receive payment of such dividend or
other distribution, or to receive such allotment of rights, or to exercise such
rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the Corporation after any such record date
fixed as aforesaid.
Section 5.04. Registered Stockholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of stock to receive dividends and to vote as such owner and shall not be bound
to recognize any equitable or other claim to or interest in such stock on the
part of any other person, whether or not it
9
shall have express or other notice thereof, except as otherwise provided by the
laws of Indiana.
Section 5.05. Transfer Agent and Registrar; Regulations. The Corporation may, if
and whenever the Board of Directors so determines, maintain, in the State of
Indiana, or any other state of the United States, one or more transfer offices
or agencies, each in charge of a Transfer Agent designated by the Board, where
the stock of the Corporation shall be transferable. If the Corporation maintains
one or more such transfer offices or agencies, it also may, if and whenever the
Board of Directors so determines, maintain one or more registry offices each in
charge of a Registrar designated by the Board, where such stock shall be
registered. No certificates for stock of the Corporation in respect of which a
Transfer Agent shall have been designated shall be valid unless countersigned by
such Transfer Agent, and no certificates for stock of the Corporation in respect
of which both a Transfer Agent and a Registrar shall have been designated shall
be valid unless countersigned by such Transfer Agent and registered by such
Registrar. To the extent permitted by law, such signatures may be facsimiles,
engraved or printed. The Board may also make such additional rules and
regulations as it may deem expedient concerning the issue, transfer and
registration of stock certificates.
Section 5.06. Lost, Destroyed and Mutilated Articles. The Board of Directors, by
standing resolution or by resolutions with respect to particular cases, may
authorize the issuance of new stock certificates in lieu of stock certificates
allegedly lost, destroyed or mutilated, upon such terms and conditions as the
Board may direct.
ARTICLE VI
AMENDMENTS
Section 6.01. By Stockholders or Directors. Any or all of the provisions of
these By-Laws, whether contractual in nature or merely regulatory of the
internal affairs of the Corporation, may be amended or repealed, except as
otherwise provided by law or by the Articles of Incorporation: (a) by a majority
vote of the total number of directors; (b) by vote of the stockholders entitled
to cast at least a majority of the votes which all stockholders are entitled to
cast thereon, in either case at any regular or special meeting duly convened
after notice of such purpose to the directors or stockholders, as the case may
be; (c) or by consent of the directors or stockholders, as the case may be, as
and to the extent permitted by the Indiana Business Corporation Law.
The foregoing Second Amended and Restated Code of By-Laws of the
Corporation was duly adopted by the Board of Directors of the Corporation on the
20th day of December, 2006.
/s/ Amy E. Gallo
---------------------------
Amy E. Gallo, Secretary
10