AMENDED AND RESTATED BYLAWS
OF
PREMIUM CIGARS INTERNATIONAL, LTD.
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I. CORPORATE ARTICLES
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1.01 References Thereto. Any reference made herein to the Corporation's
Articles will be deemed to refer to its Articles of Incorporation and all
amendments thereto which are on file with the Arizona Corporation Commission at
any given time, together with any and all certificates theretofore filed by the
Corporation with the Arizona Corporation Commission pursuant to Arizona Revised
Statutes ("A.R.S.") ss. 10-203 or any amended or successor statute thereto.
1.02 Seniority Thereof. The Articles will in all respects be considered
senior and superior to these Bylaws, with any inconsistency to be resolved in
favor of the Articles, and with these Bylaws to be deemed automatically amended
from time to time to eliminate any such inconsistency which may then exist.
II. SHAREHOLDERS' MEETINGS
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2.01 Annual Meetings. Annual meetings of the shareholders shall be held
on the first Friday of May of each year unless that day is a Saturday, Sunday or
legal holiday, in which event the annual meeting will be held on the next
succeeding business day and at a time of day and place as determined by the
Board of Directors (or, in the absence of action by the Board, as set forth in
the notice given, or waiver signed, with respect to such meeting pursuant to
Section 2.03 below) or at the principal place of business of the Corporation,
unless a different place is specified in the notice. If any such annual meeting
is for any reason not held on the date determined as aforesaid, a special
meeting may thereafter be called and held in lieu thereof, and the same
proceedings (including the election of directors) may be conducted thereto as at
an annual meeting.
2.02 Special Meetings. Special meetings of the shareholders may be held
whenever and wherever called for by the President or the Board of Directors, or
by the written demand of the holders of not fewer than ten percent (10%) of all
issued and outstanding shares of stock, regardless of class. The business which
may be conducted at any such special meeting will be confined to the purposes
stated in the notice thereof, and to such additional matters as the chairman of
such meeting may rule to be germane to such purpose.
2.03 Notices. At least ten (10) but no more than sixty (60) days
(inclusive of the date of meeting) before the date of any meeting of the
shareholders, the Secretary will cause a written notice setting forth the day,
time and place and, in the case of a special meeting the purpose or purposes of
the meeting, to be deposited in the mail, with postage prepaid, addressed to
each shareholder of record at his last address as it then, or on the applicable
record date, appears on the stock transfer books of the Corporation. Any
shareholder may expressly waive call or notice of any annual or special meeting
(and any adjournment thereof) at any time before, during or after it is held.
The waiver shall be in writing, signed by the Shareholder entitled to the call
or notice and delivered to the corporation for inclusion in the minutes or
filing with the corporate records. Attendance by a shareholder at any such
meeting in person or by proxy will automatically evidence his waiver thereof
without a writing unless he or his proxy at the beginning of the meeting objects
to holding the meeting or transacting business at the meeting. A Shareholder's
attendance shall also be deemed a waiver of objection to a consideration of a
particular matter at the meeting that is not within the purposes described in
the meeting notice, unless the Shareholder objects to considering the matter
when it is presented. No call or notice of a meeting of the shareholders will be
necessary if each of them waives the same in writing or by attendance as
aforesaid.
2.04 Registered Shareholders. To determine the shareholders entitled to
notice of any shareholders' meeting, to demand a special meeting, to vote or to
take any other action by consent or otherwise, the Board of Directors may fix in
advance a date, not exceeding seventy (70) days preceding the date of such
meeting or action, as a record date for the determination of shareholders of
record entitled to notice of, and to vote at, such meeting or to take such
action. The shares of stock, and the shareholders, "entitled to vote" (as that
or any similar term is hereafter used) at any meeting of the shareholders will
be determined as of the applicable record date if one has been fixed as
aforesaid; otherwise, as of four o'clock in the afternoon on the day before
notice of the meeting is sent, first demand is made, or action is taken; or, if
notice is waived, at the commencement of the meeting.
2.05 Proxies. Any shareholder entitled to vote thereat may vote by
proxy at any meeting of the shareholders (and at any adjournment thereof) which
is specified in such proxy, provided that his proxy is executed in writing by
him (or by his duly authorized attorney-in-fact) within eleven (11) months prior
to the date of the meeting so specified, unless otherwise provided in the proxy.
The burden of proving the validity of any undated proxy at any such meeting of
the shareholders will rest with the person seeking to exercise the same. A
telegram or cablegram appearing to have been transmitted by a shareholder (or by
his duly authorized attorney-in-fact) may be accepted as a sufficiently written
and executed proxy.
2.06 Corporate Shareholders. Any other corporation entitled to vote
shares of the Corporation's stock at any meeting of the Corporation's
shareholders may be represented at the meeting by such persons designated by the
bylaws of such corporation or by resolution of its board of directors, and such
officer or other person so designated may vote such corporation's stock in this
Corporation in person or by proxy appointed by him.
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2.07 Quorum. At any meeting of the shareholders, the presence in person
or by proxy of the holders of a majority of all issued and outstanding shares of
the Corporation which would then be entitled to vote on any single subject
matter which may be brought before the meeting will constitute a quorum of the
shareholders for all purposes, and the affirmative majority of all votes cast
on any item shall constitute the act of the shareholders. In the absence of a
quorum, any meeting may be adjourned from time to time, until a quorum is
present, by the affirmative vote thereof by the holders of a majority of shares
then present, without notice other than by announcement thereat of the time and
place of the adjourned meeting, except as otherwise provided by law. At any such
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at a meeting as originally noticed. The
shareholders present at a duly organized meeting may continue to transact
business until adjournment, and action on any matter is approved if the votes
cast favoring the action exceed the votes cast opposing the action as specified
in A.R.S. ss. 10-725(C), notwithstanding the withdrawal of enough shareholders
to leave less than a quorum.
2.08 Participation in Shareholders' Meeting. The Board of Directors may
permit any or all shareholders to participate in an annual or special
shareholders' meeting by or conduct the meeting through use of any means of
communication by which all shareholders participating may simultaneously hear
each other during the meeting. If the Board of Directors in its sole discretion
elects to permit participation by such means of communication, the notice of the
meeting shall specify how a shareholder may participate in the meeting by such
means of communication. The participation may be limited by the Board of
Directors in its sole discretion to specified locations or means of
communications. A shareholder participating in a meeting by this means is deemed
to be present in person at the meeting.
2.09 Election Inspectors. The Board of Directors, in advance of any
shareholders' meeting, may appoint an election inspector or inspectors to act at
such meeting (and any adjournment thereof). If an election inspector or
inspectors are not so appointed, the chairman of the meeting may, or upon the
request of any person entitled to vote at the meeting will, make such
appointment. If any person appointed as an inspector fails to appear or to act,
a substitute may be appointed by the chairman of the meeting. If appointed, the
election inspector or inspectors (acting through a majority of them if there is
more than one) will determine the number of shares outstanding, the
authenticity, validity and effect of proxies and the number of shares
represented at the meeting in person and by proxy; they will receive and count
votes, ballots and consents and announce the results thereof; they will hear and
determine all challenges and questions pertaining to proxies and voting; and, in
general, they will perform such acts as may be proper to conduct elections and
voting with complete fairness to all shareholders. No such election inspector
need be a shareholder of the Corporation.
2.10 Organization and Conduct of Meetings. Each shareholders' meeting
will be called to order and thereafter chaired by the Chairman or the President,
or if the Chairman or President are unavailable, then by such other officer of
the Corporation or such shareholder as may be appointed by the Board of
Directors. The Corporation's Secretary or Assistant Secretary will act as
secretary of each shareholders' meeting; in his absence, the chairman of the
meeting may
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appoint any person (whether a shareholder or not) to act as secretary thereat.
After calling a meeting to order, the chairman thereof may require the
registration of all shareholders intending to vote in person, and the filing of
all proxies, with the election inspector or inspectors, if one or more have been
appointed (or, if not, with the secretary of the meeting). After the announced
time for such filing of proxies has ended, no further proxies or changes,
substitutions or revocations of proxies will be accepted. If directors are to be
elected, a tabulation of the proxies so filed will, if any person entitled to
vote in such election so requests, be announced at a meeting (or adjournment
thereof) prior to the closing of the election polls. Absent a showing of bad
faith on his part, the chairman of a meeting will, among other things, have
absolute authority to fix the period of time allowed for the registration of
shareholders and the filing of proxies, to determine the order of the business
to be conducted at such meeting and to establish reasonable rules for expediting
the business of the meeting (including any informal, or question and answer
portions thereof).
2.11 Voting. Except for the election of directors (which will be
governed by the cumulative voting laws of Arizona) and except as may otherwise
be required by the Corporation's Articles or by statutes, each issued and
outstanding share of the Corporation's capital stock (specifically excluding
shares held in the treasury of the Corporation) represented at any meeting of
the shareholders in person or by a proxy given as provided in Section 2.05
above, will be entitled to one (1) vote. The voting on any question as to which
a ballot vote is demanded, prior to the time the voting begins, by any person
entitled to vote on such question; otherwise, a voice vote will suffice. No
ballot or change of vote will be accepted after the polls have been declared
closed following the ending of the announced time for voting.
2.12 Shareholder Approval or Ratification. The Board of Directors may
submit any contract or act for approval or ratification at any duly constituted
meeting of the shareholders, the notice of which either includes mention of the
proposed submittal or is waived as provided in Section 2.03 above. If any
contract or act so submitted is approved or ratified by a majority of the votes
cast thereon at such meeting, the same will be valid and as binding upon the
Corporation and all of its shareholders as it would be if approved and ratified
by each and every shareholder of the Corporation, except as specifically
provided to the contrary by statute.
2.13 Action Without a Meeting. Any action required to be taken at a
meeting of the shareholders of the Corporation, or any action that may be taken
at a meeting of the shareholders, may be taken without a meeting and without
notice 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. This consent shall have the same effect as a unanimous vote of
the shareholders. Unless otherwise specified in the consent or consents, the
action is effective on the date that the last consenting shareholder signs,
except where notice to non-voting shareholders requires a different effective
date as specified in A.R.S. 10-704(D) or any amended or successor statute
thereto.
2.14 Informalities and Irregularities. All informalities or
irregularities in any call or notice of a meeting, or in the areas of
credentials, proxies, quorums, voting and similar matters,
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will be deemed waived if no objection is made regarding call, notice, proxy or
quorum, at the beginning of the meeting, and regarding voting for specific
matters, when the matter is presented.
2.15 List of Shareholders. The officer who has charge of the stock
ledger of the Corporation or its equivalent shall prepare and make available, at
least ten (10) days before every meeting of shareholders, a complete list of the
shareholders entitled to vote, arranged in alphabetical order, and showing the
address and number of shares issued in the name of each shareholder. Such list
shall be open to the examination of any shareholder, for any purpose germane to
the meeting at the corporation's principal office, the office of the
corporation's transfer agent if specified in the meeting notice or at another
place identified in the meeting notice in the city where the meeting will be
held. The list shall also be produced and kept at the place of the meeting
during the whole time thereof, and may be inspected by any shareholder present.
2.16 Shareholder Approval of Certain Transactions. Shareholder approval
or ratification shall be required for a plan or arrangement under subparagraph
(A) below or, prior to the issuance of designated securities under subparagraphs
(B), (C) or (D) below:
(A) when a stock option or purchase plan is to be established
or other arrangement made pursuant to which stock may be acquired by
officers or directors, except for warrants or rights issued generally
to security holders of the Corporation or broadly based plans or
arrangements including other employees (e.g. ESOPs). In a case where
the shares are issued to a person not previously employed by the
Corporation, as an inducement essential to the individual's entering
into an employment contract with the Corporation, shareholder approval
will generally not be required. The establishment of a plan or
arrangement under which the amount of securities which may be issued
does not exceed the lesser of 1% of the number of shares of Common
Stock, 1% of the voting power outstanding, or 25,000 shares will not
generally require shareholder approval. Shareholder approval under this
subparagraph may be by ratification at the next annual or special
meeting of the shareholders;
(B) when the issuance will result in a change of control of
the Corporation;
(C) in connection with the acquisition of the stock or assets
of another company if:
(i) any director, officer or substantial shareholder
of the Corporation has a 5% or greater interest (or such
persons collectively have a 10% or greater interest), directly
or indirectly, in the company or assets to be acquired or in
the consideration to be paid in the transaction or series of
related transactions and the present or potential issuance of
Common Stock, or securities convertible into or exercisable
for Common Stock, could result in an increase in outstanding
Common Shares or voting power of 5% or more; or
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(ii) where the present or potential issuance of
Common Stock, or securities convertible into or exercisable
for Common Stock, other than a public offering for cash, if
the Common Stock has or will have upon issuance voting power
equal to or in excess of 20% of the voting power outstanding
before the issuance of stock or securities convertible into or
exercisable for Common Stock, or the number of shares of
Common Stock to be issued is or will be equal to or in excess
of 20% of the number of shares or Common Stock outstanding
before the issuance of the stock or securities; or
(D) in connection with a transaction other than a public
offering involving:
(i) the sale or issuance by the Corporation of Common
Stock (or securities convertible into or exercisable for
Common Stock) at a price less than the greater of book or
market value which together with sales by officers, directors
or substantial shareholders of the Corporation equals 20% or
more of the Common Stock or 20% or more of the voting power
outstanding before the issuance; or
(ii) the sale or issuance by the Corporation of
Common Stock (or securities convertible into or exercisable
for Common Stock) equal to 20% or more of the Common Stock or
20% or more of the voting power outstanding before the
issuance for less than the greater of book or market value of
the stock.
(E) Exceptions may be made upon application to the National
Association of Securities Dealers, Inc. when:
(i) the delay in securing shareholder approval would
seriously jeopardize the financial viability of the
enterprise;
(ii) reliance by the Corporation on this exception is
expressly approved by the Audit Committee of the Board or a
majority of the Independent Directors; and
(iii) the Corporation mails to all shareholders not
later than ten days before issuance of the securities a letter
alerting them of the Corporation's omission to seek
shareholder approval that would otherwise be required and
indicating that the Audit Committee of the Board or a majority
of the Independent Directors has expressly approved the
exception.
(F) Only shares actually issued and outstanding (excluding
treasury shares or shares held by a subsidiary) are to be used in
making any calculation provided for in this Section 2.16; specifically,
unissued shares reserved for issuance upon conversion of securities or
upon exercise of options or warrants will not be regarded as
outstanding.
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(G) Voting power outstanding as used in this Section 2.16
refers to the aggregate number of votes which may be cast by holders of
those securities outstanding which entitle the holders thereof to vote
generally on all matters submitted to the Corporation's security
holders for a vote.
(H) An interest consisting of less than either 5% of the
number of shares of Common Stock or 5% of the voting power outstanding
of the Corporation or other entity shall not be considered a
"substantial interest" or cause the holder of such an interest to be
regarded as a "substantial security holder."
(I) Where shareholder approval is required, the minimum vote
which will constitute shareholder approval shall be a majority of the
total votes cast on the proposal in person or by proxy.
2.17 Voting Rights. The Corporation shall not issue any class of
security, or take other corporate action, with the effect of nullifying,
restricting, or disparately reducing the per share voting rights of holders of
an outstanding class or classes of Common Stock of the Corporation which is
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
(A) For the purposes of this Section 2.17, the following shall
be presumed to have the effect of nullifying, restricting, or
disparately reducing the per share voting rights of an outstanding
class or classes of Common Stock:
(i) corporate action to impose any restriction on the
voting power of shares of Common Stock held by a beneficial or
record holder based on:
(a) the number of shares held by such
beneficial or record holder; or
(b) the length of time such shares have been
held by such beneficial or record holder; or
(ii) any issuance of securities through an exchange
offer by the Corporation for shares of an outstanding class of
Common Stock or any issuance of securities pursuant to a stock
dividend, or any other type of distribution of stock, in which
the securities issued have voting rights greater than or less
than the per share voting rights of any outstanding class of
Common Stock.
(B) For the purposes of this Section 2.17, the following,
standing alone, shall be presumed not to have the effect of nullifying,
restricting, or disparately reducing the per share voting rights of an
outstanding class or classes of Common Stock:
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(i) the issuance of any class of securities, through
a registered public offering, with voting rights not greater
than the per share voting rights of any outstanding class of
the Corporation's Common Stock;
(ii) the issuance of any class of securities to
effect a bona fide merger or acquisition, with voting rights
not greater than the per share voting rights of any
outstanding class of the Corporation's Common Stock; or
(iii) corporate action taken pursuant to Arizona law
requiring the Corporation to condition the voting rights of a
beneficial or record holder of a specified threshold
percentage of the Corporation's voting stock on the approval
of the Corporation's independent shareholders.
(C) The following terms shall have the following meanings for
purposes of this Section 2.17 only:
(i) "Common Stock" shall include any security of the
Corporation designated as Common Stock and any security,
however designated, which by statute or by its terms is a
common stock (e.g., a security which entitles the holders
thereof to vote generally on matters submitted to the
Corporation's security holders for a vote;
(ii) "Security" shall include any security defined as
such pursuant to Section 3(a)(10) of the Securities Exchange
Act of 1934, as amended, but shall exclude any class of
security having a preference or priority over the
Corporation's Common Stock as to dividends, interest payments,
redemption or payments in liquidation, if the voting rights of
such securities only become effective as a result of specified
events, not relating to an acquisition of the Common Stock of
the Corporation, which reasonably can be expected to
jeopardize the Corporation's financial ability to meet its
payment obligations to the holders of that class of
securities.
III. BOARD OF DIRECTORS
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3.01 Number and Qualification. The business and affairs of the
Corporation shall be managed by a Board of Directors comprised of no less than
one, but no more than nine members. The directors need not be shareholders of
the Corporation or residents of the State of Arizona. The Board may appoint from
its members a Chairman of the Board to preside over all meetings of shareholders
and of the Board.
3.02 Election. The members of the initial Board of Directors shall hold
office until the first annual meeting of the shareholders and until their
successors shall have been elected and qualified. At the first annual meeting of
shareholders, and at each annual meeting thereafter or special meeting in lieu
of an annual meeting called for such purpose, the shareholders shall elect
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the directors to hold office until the next succeeding annual meeting. The
directors shall hold office for the term for which they are elected and until
their successors shall be elected and qualified.
3.03 Vacancies. Except as provided in Section 3.04 below, any vacancy
in the Board caused by death, resignation, removal, increase in the number of
directors, or any other cause, may be filled for the unexpired term by a
majority vote of the remaining directors though less than a quorum or by a sole
remaining director, or, in the event that there are no directors then in office,
then by the shareholders at the next annual meeting or at any special meeting
called for that purpose.
3.04 Resignation and Removal of Directors. Any director may resign at
any time by giving written notice of his or resignation to the Corporation. Any
such resignation shall take effect at the time specified therein, or, if no time
is specified, immediately upon receipt by the President or the Secretary, and,
unless specified in the resignation, the acceptance of such resignation shall
not be necessary to make it effective. Unless prohibited or restricted by an
agreement to the contrary, any director may be removed at any time, either with
or without cause, as provided by the Arizona Revised Statutes then in effect, or
by the affirmative vote of the holders of a majority of the stock of the
Corporation issued and outstanding and entitled to vote, given at a special
meeting of such shareholders called for that purpose, provided that if less than
the entire Board is to be removed, one of the directors may not be removed if
the votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of Directors, and the
vacancy in the Board caused by any such removal may be filled by the
shareholders at such meeting.
3.05 Regular Meetings. A regular annual meeting of the directors is to
be held immediately after the adjournment of each annual shareholders' meeting
at the place at which such shareholders' meeting was held for the purpose of
organization, election of officers and consideration of any other business that
may properly come before the meeting. Regular meetings, other than as specified
herein, may be held at regular intervals at such places and at such times as the
Board of Directors may provide.
3.06 Participation in Directors' Meetings. The Board of Directors may
permit any or all directors to participate in a regular or special meeting by or
conduct the meeting through the use of any means of communication by which all
directors participating may simultaneously hear each other during the meeting. A
director participating in a meeting by this means is deemed to be present in
person at the meeting.
3.07 Special Meetings. Special meetings of the Board of Directors may
be held whenever and wherever called for by the President or the number of
directors which would be required to constitute a quorum.
3.08 Notices. No notice need be given of regular annual meetings of the
Board of Directors. Written notice of the day, place and time (but not
necessarily the purpose or all the
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purposes) of any regular meeting, other than annual meetings, or any special
meeting shall be given to each director in person or by mail or telefacsimile
addressed to him at his latest address appearing on the Corporation's records.
Notice to any director of any such special meeting will be deemed given
sufficiently in advance when, if given by mail, the same is deposited in the
United States mail, with postage thereon prepaid, at least two (2) days before
the meeting date. Notice is sufficiently given if delivered personally or by
telefacsimile to the director, or by telephone, not later than the day before
the day on which such meeting is to be held. Any director may expressly waive
call or notice of any meeting (and any adjournment thereof) at any time before,
during or after it is held. Such waiver shall be in writing, signed by the
director entitled to the call or notice and filed with the minutes or corporate
records. Attendance of a director at any meeting shall evidence his waiver
without a writing of call and notice of such meeting (and any adjournment
thereof) unless the director, at the beginning of the meeting or promptly upon
his arrival, objects to holding the meeting or transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting. No call or notice of a meeting of directors will be necessary if each
of them waives the same in writing or by attendance as aforesaid. Any meeting,
once properly called and noticed (or as to which call and notice have been
waived as aforesaid) and at which a quorum is present, may be adjourned to
another time and place by a majority of those in attendance, and notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which such action to adjourn be taken.
3.09 Quorum and Manner of Acting. A quorum for the transaction of
business at any meeting or adjourned meeting of the directors will consist of a
majority of the number of directors in office immediately before the meeting
begins. Any act of a 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 statute, the Articles or these Bylaws. In all
cases of a tie vote, the Chairman shall have a second or deciding vote to break
the tie. If a quorum shall not be present at any meeting of the Board of
Directors, any meeting may be adjourned from time to time until a quorum is
present by the affirmative vote of the directors then present, without notice
other than by announcement thereat of the time and place of the adjourned
meeting at which a quorum is present, any business may be transacted which might
have been transacted at the original meeting which was adjourned.
3.10 Executive Committee. The Board of Directors may, by resolution
adopted by a majority of the whole Board, name two or more of its members as an
Executive Committee. Except as otherwise prohibited by statute, such Executive
Committee will have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation while the Board is not
in session, subject to such limitations as may be included in the Board's
resolution and the prohibited actions in A.R.S. ss.10-825(E) or any amended or
successor statute thereto. A majority of those named to the Executive Committee
will constitute a quorum. In the event that vacancy occurs in the Executive
Committee, the vacancy shall be filled by the Board of Directors.
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3.11 Other Committees. Other standing or temporary committees may from
time to time be appointed from its own membership by the Board of Directors and
be vested with such powers as the Board may lawfully delegate. All committees
are to keep regular minutes of the transactions of their meetings and make such
minutes available to the Board of Directors.
3.12 Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors, or of any committee, at which
action is taken on any corporate matter will be presumed to have assented to the
action taken unless his dissent is entered in the minutes of the meeting or
unless he files his written dissent to such action with the Secretary of the
Corporation by five o'clock in the afternoon (5:00 p.m.) of the next day after
the adjournment of the meeting, holidays and weekends excepted. A right to
dissent will not be available to a director who voted in favor of the action.
3.13 Action Without A Meeting. Any action that may be taken at a
meeting of the Board of Directors may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all the directors
or committee members, whichever is applicable. Such consent shall have the same
effect as a unanimous vote. Unless otherwise specified in the consent or
consents, the action is effective on the date that the last consenting director
signs.
3.14 Compensation. Each director, in consideration of his serving as
such, shall be entitled to receive from the Corporation such amount or other
form of compensation per annum or such fees for attendance at directors'
meetings, or both, as the Board of Directors shall from time to time determine,
together with reimbursement for the reasonable expenses incurred by him in
connection with the performance of his duties. Nothing contained herein shall
preclude the director from serving the Corporation, its affiliates or
subsidiaries in any other capacity and receiving proper compensation therefor.
Members of any committee established may be allowed such similar compensation
and reimbursement as determined by the Board of Directors.
3.15 Independent Director Approval of Certain Transactions.
(A) Definition of Independent Director. An "Independent Director"
is member of the Corporations's Board of Directors who:
(i) is not an officer or employee of the Corporation, its
subsidiaries or their affiliates or associates and
has not been an officer or employee of the
Corporation, its subsidiaries or their affiliates or
associates within the last two years; and
(ii) is not a "Promoter" of the Corporation, which is
defined as:
a. a person who alone, or in conjunction with
one or more other persons, directly or
indirectly took the initiative in founding
or organizing the Corporation or controls
the Corporation;
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b. a person who, directly or indirectly,
receives as consideration for services
and/or property rendered, five percent (5%)
or more of any class of the Corporations
equity securities or five percent (5%) or
more of the proceeds from the sale of any
class of the Corporation's equity
securities;
c. a person who: (i) is an officer or director;
or (ii) anyone who legally or beneficially
owns, directly or indirectly, five percent
(5%) or more of any class of the
Corporation's equity securities;
d. a person who is an affiliate or an associate
of a person specified in subsections a, b,
or c.
e. "Promoter" does not include: (i) a person
who receives securities or proceeds solely
as underwriting compensation if that person
otherwise falls outside of the definition of
a promoter in a, b, or c; (ii) an
unaffiliated institutional investor.
(iii) Does not have a material business or professional
relationship with the Corporation or any of its
affiliates or associates. For purposes of determining
whether or not a business or professional
relationship is material, the gross revenue derived
by the Independent Director from the Corporation, its
affiliates and associates shall be deemed material
per se if it exceeds five percent (5%) of the
Independent Director's: (i) annual gross revenue,
derived from all sources, during either of the last
two years; or (ii) net worth, on a fair market value
basis.
(B) Requirement to Maintain At Least Two Independent Directors.
The Corporation shall, at all times, maintain at least two
Independent Directors on the Board of Directors.
(C) Policy Regarding Resolution of Conflicts of Interest. The
Corporation shall follow the following policy regarding all
related-party transactions and to loans or the forgiveness of
loans, whether or not to a related-party:
(i) the Corporation will not enter any material,
transaction or loan with a related or affiliated
party unless the transaction or loan is on terms that
are no less favorable to the Corporation than the
Corporation could obtain from an unrelated or
unaffiliated third party; and
(ii) a majority of the Independent Directors who have no
interest in the transactions must review and approve
transactions involving related parties or conflicts
of interest after having been given access, at the
Corporation's
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expense, to the Corporation's counsel or to their own
independent legal counsel; and
(iii) when there are only two Independent Directors, both
directors must approve the transaction.
IV. OFFICERS
--------
4.01 Officers. The officers of the Corporation shall consist of a
President, one or more Vice Presidents, a Treasurer, a Secretary and such
additional officers, agents and employees as shall be appointed in accordance
with the provisions of Section 4.02 hereof. Any two (2) or more offices may be
held by the same person. Officers need not be directors of the Corporation. The
Board may require any such officer, agent or employee to give security for the
faithful performance of his duties.
4.02 Additional Officers. The Board may appoint such subordinate
officers, agents or employees as it may deem necessary or advisable, each of
whom shall hold office for such period, have such authority and perform such
duties as are provided in these Bylaws or as the Board may from time to time
determine. The Board may delegate to any executive officer or to any committee
the power to appoint any such additional officers, agents or employees.
4.03 Election; Term of Office. The officers of the Corporation shall be
elected at the annual meeting of the Board of Directors, each of whom shall
serve with such power and duties and for such tenure as provided by these Bylaws
or as the Board may from time to time determine and shall hold office until his
successor has been duly elected and qualified, or until his death, resignation
or removal.
4.04 Removal. Unless prohibited or restricted by an agreement to the
contrary, any officer of the Corporation may be removed, either with or without
cause, at any time, by a majority of the whole Board at a special meeting
thereof called for that purpose, or by any committee or executive officer upon
whom such power of removal may be conferred by the Board.
4.05 Resignations. Any director or officer may resign his office at any
time, by giving written notice of his resignation to the President or Secretary
of the Corporation. Such resignation shall take effect at the time specified
therein, or if no time be specified therein, at the time of the receipt thereof,
and the acceptance thereof shall not be necessary to make it effective.
4.06 Vacancies. A vacancy in any office, because of death, resignation,
removal, or any other cause, shall be filled by the Board of Directors and the
officer so elected shall hold office until his successor is elected and
qualified.
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4.07 Salaries. The salaries of the officers and employees of the
Corporation, if any, shall be fixed from time to time by the Board of Directors,
or (except as to his own) be left to the discretion of the President, and none
of the officers of the Corporation shall be prevented from receiving a salary by
reason of the fact that he is also a member of the Board of Directors.
4.08 The President. The President shall be the chief executive officer
of the Corporation and shall supervise and manage the business and affairs of
the Corporation, subject to the control of the Board of Directors. He shall see
that all orders and resolutions of the Board are carried into effect. He may
sign, with the Secretary or an Assistant Secretary, certificates of stock of the
Corporation; and he may sign, execute and deliver in the name of the Corporation
all instruments of conveyance, evidences of indebtedness, contracts or other
instruments authorized by the Board, except in cases where the signing,
execution or delivery thereof shall be expressly delegated by the Board or by
these Bylaws to some other officer or agent of the Corporation or where any
thereof shall be required by law to be otherwise signed, executed and delivered.
In general he shall perform all duties as may from time to time be assigned to
him by these Bylaws or by the Board of Directors.
4.09 Vice President. Each Vice President shall have such powers and
perform such other duties as the Board of Directors or the President may, from
time to time, prescribe.
4.10 The Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all the funds and securities of the Corporation and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the Corporation in such banks or other depositories as may be designated by
the Board of Directors; he shall disburse the funds of the Corporation under the
direction of the President or the Board of Directors, taking proper vouchers for
such disbursements, and shall render to the President and to the directors at
the regular meetings of the Board or whenever they may require it, a statement
of all his trans actions as Treasurer and a statement of the financial condition
of the Corporation; and, in general, he shall perform all the duties incident to
the office of Treasurer and such other duties as the Board of Directors or the
President may from time to time prescribe.
4.11 The Secretary. The Secretary shall attend all meetings of the
shareholders and of the Board of Directors, and shall keep, or cause to be kept
in a book provided for the purpose, a true and complete record of the
proceedings of these meetings. He shall be custodian of the stock book and also
of other books, records and the seal of the Corporation, if any, and shall affix
the seal of the Corporation to all certificates of stock and all documents, the
execution of which on behalf of the Corporation under its seal is duly
authorized. He may sign, with the President or a Vice President, certificates of
stock of the Corporation. He shall cause to be given all notices of meetings of
the shareholders and directors and shall perform such other duties as the Board
of Directors or the President may from time to time prescribe.
4.12 Acting Secretary for Meetings of the Board of Directors. If the
Secretary of the Corporation is not a member of, or otherwise in attendance at a
meeting of the Board of Directors, any member of the Board who is also an
officer may execute such minutes as Acting
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Secretary, or the Board may designate any other person to act as Secretary and
sign the minutes of such meeting.
V. RECORDS
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5.01 Records to be Kept. The Corporation shall keep as permanent
records, minutes of all meetings of its shareholders and Board of Directors, a
record of all actions taken by the shareholders or Board of Directors without a
meeting and a record of all actions taken by a committee of the Board of
Directors in place of the Board of Directors on behalf of the corporation. The
Corporation shall also keep appropriate accounting records.
5.02 Shareholder List. The Corporation or its agent shall maintain a
record of its shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders and in alphabetical order by class of
shares showing the number and class of shares held by each.
5.03 Form of Records. The Corporation shall maintain its records in
written form or in another form capable of conversion into written form within a
reasonable time.
5.04 Records Available for Inspection. The Corporation shall keep a
copy of all of the following records, at its known place of business or at the
office of its agents, for the purpose of inspection within five days of an
appropriate demand by a qualifying shareholder, according to A.R.S. ss.ss.
10-141 and 10-1602 et. seq.
(A) The articles or restated articles of incorporation and all
amendments to them currently in effect;
(B) The bylaws or restated bylaws and all amendments to them
currently in effect;
(C) Resolutions adopted by the Board of Directors creating one
or more classes or series of shares and fixing their relative rights,
preferences and limitations, if shares issued pursuant to those
resolutions are outstanding;
(D) The minutes of all shareholders' meetings and records of
all action taken by shareholders without a meeting for the past three
years;
(E) All written communications to shareholders generally
within the past three years, including the financial statements
furnished for the past three years;
(F) A list of the names and business addresses of the current
directors and offices;
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(G) The most recent annual report delivered to the Arizona
Corporation Commission; and
(H) Any agreements among shareholders pursuant to A.R.S. ss.
10-732.
VI. INDEMNIFICATION; SHAREHOLDER LIABILITY
--------------------------------------
6.01 Indemnification. The Corporation shall indemnify every director
(including outside directors as defined in A.R.S. ss. 10-850(6) or any amended
or successor statute thereto) and every officer, employee or agent to the full
extent consistent with public policy and to the full extent permitted by and in
fulfillment of the conditions found in A.R.S. ss.ss. 10-850 to 10-858 or the
indemnification provisions of any amended or successor statute thereto. Such
indemnification shall be mandatory and shall extend to both liability and
expenses (including advances for expenses) as those terms are defined in A.R.S.
ss. 10-850(3)-(4) or any amended or successor statute thereto.
6.02 Shareholder Liability. The private property of the shareholders of
the Corporation shall be exempt from liability for corporate debts pursuant to
A.R.S. ss. 10-622 or any amended or successor statute thereto.
VII. STOCK CERTIFICATES
------------------
7.01 Certificates. Certificates of stock shall be in such form as
required by statute and as approved by the Board of Directors and shall be
issued and signed by the President or a Vice President and by the Secretary or
an Assistant Secretary, and impressed with the seal of the Corporation, if any.
The signatures of such officers upon such certificates may be facsimiles if the
certificate is manually signed by a transfer agent or registered by a registrar
other than the Corporation itself or one of its employees. If any officer who
has signed or whose facsimile signature has been placed upon a certificate has
ceased for any reason to be such officer prior to issuance of the certificate,
the certificate may be issued with the same effect as if that person were such
officer at the date of issue.
7.02 Shares Without Certificates. The Board of Directors of the
Corporation may authorize the issuance of some or all of the shares of any or
all of its classes or series without certificates. Notwithstanding such
authorization by the Board of Directors, every holder of uncertified shares is
entitled to receive a certificate that complies with statutory requirements upon
request to the Corporation. The authorization does not affect shares already
represented by certificates until such certificates are surrendered to the
Corporation. Within a reasonable time after the issuance or transfer of shares
without certificates, the Corporation shall send the shareholder a written
statement of the information required on certificates by statute.
7.03 Ownership. The Corporation will be entitled to treat the
registered owner of any share as the absolute owner thereof and, accordingly,
will not be bound to recognize any
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beneficial, equitable or other claim to, or interest in, such share on the part
of any other person, whether or not it has notice thereof, except as may
expressly be provided by statute.
7.04 Transfers. Transfers of stock shall be made only on the books of
the Corporation by the record holder thereof, or by his duly authorized attorney
or legal representative, and upon surrender and cancellation of certificates
properly endorsed, and with such other information, legal notices and/or legal
opinions as the Corporation, its counsel or the its transfer agent may require.
7.05 Lost Certificates. In the event of the loss, theft or destruction
of any certificate of stock of this Corporation or of any predecessor
corporation, the Corporation may issue a certificate in lieu of that alleged to
be lost, stolen or destroyed, and cause the same to be delivered to the owner of
the stock represented thereby, provided that the owner shall have submitted such
evidence showing the circumstances of the alleged loss, theft or destruction,
and his ownership of the certificate, as the Corporation considers satisfactory,
together with any other facts which the Corporation considers pertinent, and, if
required by the Board of Directors, a surety bond in form and amount
satisfactory to the Corporation, unless the stock represented by the certificate
lost, stolen or destroyed has at the time of issuance of the new certificate a
market value of $500 or less (as determined by the Corporation on the basis of
such information as it may select), in which case the requirement of a surety
bond shall be waived.
VIII. DIVIDENDS
---------
8.01 Dividends. Subject to such restrictions or requirements as may be
imposed by law or the Corporation's Articles or as may otherwise be binding upon
the Corporation, the Board of Directors may from time to time declare dividends
on stock of the Corporation outstanding on the dates of record fixed by the
Board, to be paid in cash, in property or in shares of the Corporation's stock
on or as of such payment or distribution dates as the Board may prescribe.
IX. AMENDMENT
---------
9.01 Amendment. These Bylaws may be altered, amended, repealed or
temporarily or permanently suspended, in whole or in part, or new bylaws
adopted, at any duly constituted meeting of the shareholders or the Board of
Directors, the notice of which meeting either includes the proposed action in
respect thereof or is waived as provided above in section 2.03 or 3.08
(whichever is applicable). If, however, any such action arises as a matter of
necessity at any such meeting and is otherwise proper, no notice thereof will be
required. The Board of Directors may exercise all emergency powers permitted
under A.R.S. 10-303. These Bylaws may contain any provisions for the regulation
and management of the affairs of the Corporation not prohibited by law or the
Articles.
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X. GENDER
------
10.01 Gender. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the person or persons may require.
XI. TERMINATION OF CORPORATION
--------------------------
11.02 Termination of Corporation. The Corporation shall cease to exist
only upon the first to happen of the following events: a) the death of the last
surviving shareholder or b) voluntary or involuntary dissolution pursuant to the
laws governing the same for Arizona private corporations organized for profit.
ADOPTED by the Board of Directors of the Corporation at Scottsdale,
Arizona as of this 8th day of May, 1998.