1
Exhibit 4.2
CODE OF REGULATIONS
-------------------
OF
--
AMERICAN FINANCIAL GROUP, INC. (THE "CORPORATION")
--------------------------------------------------
ARTICLE I
---------
SHAREHOLDERS
------------
Section 1. ANNUAL MEETINGS. The Annual Meeting of the Shareholders of this
Corporation, for the election of the Board of Directors and the transaction of
such other business as may properly be brought before such meeting, shall be
held at the time, date and place designated by the Board of Directors or, if it
shall so determine, by the Chairman of the Board or the President. If the Annual
Meeting is not held or if Directors are not elected thereat, a Special Meeting
may be called and held for that purpose.
Section 2. SPECIAL MEETINGS. Special meetings of the Shareholders may be held on
any business day when called by the Chairman of the Board, the President, a
majority of Directors, or persons holding twenty percent of all voting power of
the Corporation and entitled to vote at such meeting.
Section 3. PLACE OF MEETINGS. Any meeting of Shareholders may be held at such
place within or without the State of Ohio as may be designated in the Notice of
said meeting.
Section 4. NOTICE OF MEETING AND WAIVER OF NOTICE
4.1 NOTICE. Written notice of the time, place and purposes of
any meeting of Shareholders shall be given to each Shareholder entitled
thereto not less than seven (7)days nor more than sixty (60) days
before the date fixed for the meeting and as prescribed by law. Such
notice shall be given by personal delivery, mail or facsimile
transmission to the Share holders at their respective addresses as they
appear on the records of the Corporation. Notice shall be deemed to
have been given on the day mailed. If any meeting is adjourned to
another time or place, no notice as to such adjourned meeting need be
given other than by announcement at the meeting at which such an
adjournment is taken. No business shall be transacted at any such
adjourned meeting except as might have been lawfully transacted at the
meeting at which such adjournment was taken.
4.2 NOTICE TO JOINT OWNERS. All notices with respect to any
shares to which persons are entitled by joint or common ownership may
be given to that one of such persons who is named first upon the books
of this Corporation, and notice so given shall be sufficient notice to
all the holders of such shares.
2
-2-
4.3 WAIVER. Notice of any meeting may be waived in writing by
any Shareholder either before or after any meeting, or by attendance at
such meeting without protest to its commencement.
Section 5. SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE. If a record date shall
not be fixed, the record date for the determination of Shareholders entitled to
notice of or to vote at any meeting of Shareholders shall be the close of
business on the twentieth day prior to the date of the meeting and only
Shareholders of record at such record date shall be entitled to notice of and to
vote at such meeting.
Section 6. QUORUM. The holders of shares entitling them to exercise a majority
of the voting power of the Corporation, present in person or by proxy, shall
constitute a quorum for any meeting. The Shareholders present in person or by
proxy, whether or not a quorum be present, may adjourn the meeting from time to
time without notice other than by announcement at the meeting.
Section 7. VOTING. Except as provided by statute or in the Articles of
Incorporation (the "Articles"), every Shareholder entitled to vote shall be
entitled to cast one vote on each proposal submitted to the meeting for each
share held of record on the record date for the determination of the
Shareholders entitled to vote at the meeting. At any meeting at which a quorum
is present, all questions and business which may come before the meeting shall
be determined by a majority of votes cast, except when a greater proportion is
required by law, the Articles or these Regulations; provided, however, that no
action required by law, the Articles, or these Regulations to be authorized or
taken by the holders of a designated proportion of the shares of the Corporation
may be authorized or taken by a lesser proportion.
Section 8. ORGANIZATION OF MEETINGS.
8.1 PRESIDING OFFICER. The Chairman of the Board, or in his
absence, the President, or the person designated by the Board of
Directors, shall call all meetings of the Shareholders to order and
shall act as Chairman thereof; if all are absent, the Shareholders
shall elect a Chairman.
8.2 MINUTES. The Secretary of the Corporation, or in his
absence, an Assistant Secretary, or, in the absence of both, a person
appointed by the Chairman of the meeting, shall act as Secretary of the
meeting and shall keep and make a record of the proceedings thereat.
Section 9. PROXIES. A person who is entitled to attend a Shareholders' meeting,
to vote thereat, or to execute consents, waivers and releases, may be
represented at such meeting or vote thereat, and execute consents, waivers and
releases and exercise any of his rights, by proxy or proxies appointed by a
writing signed by such person, or by his duly authorized attorney which may be
transmitted physically, by facsimile or by other electronic medium.
3
-3-
Section 10. LIST OF SHAREHOLDERS. At any meeting of Shareholders a list of
Shareholders, alphabetically arranged, showing the number and classes of shares
held by each on the record date applicable to such meeting, shall be produced on
the request of any Shareholder.
ARTICLE II
DIRECTORS
---------
Section 1. GENERAL POWERS.
The authority of this Corporation shall be exercised by or under the
direction of the Board of Directors, except where the law, the Articles or these
Regulations require action to be authorized or taken by the Shareholders.
Section 2. ELECTION, NUMBER AND QUALIFICATION OF DIRECTORS.
2.1 ELECTION. The Directors shall be elected at the annual meeting of
the Shareholders, or if not so elected, at a special meeting of Shareholders
called for that purpose. The only candidates who shall be eligible for election
at such meeting shall be those who have been nominated by or at the direction of
the Board of Directors (which nominations shall be either made at such meeting
or disclosed in a proxy statement, or supplement thereto, distributed to
Shareholders for such meeting at the direction of the Board of Directors) and
those who have been nominated at such meeting by a Shareholder who has complied
with the procedures set forth in this Section 2. A Shareholder may make a
nomination for the office of Director only if such Shareholder has first
delivered or sent by certified mail, return receipt requested, to the Secretary
of the Corporation notice in writing at least fifteen and no more than thirty
days prior to such meeting of Shareholders, which notice shall set forth or be
accompanied by (a) the name and residence of such Shareholder; (b) a
representation that such Shareholder is a holder of record of voting stock of
the Corporation and intends to appear in person or by proxy at such meeting to
nominate the person or persons specified in the notice; (c) the name and
residence of each such nominee; and (d) the consent of such nominee to serve as
director if so elected.
2.2 NUMBER. The number of Directors, which shall not be less than the
lesser of three or the number of Shareholders of record, may be fixed or changed
at a meeting of the Shareholders called for the purpose of electing Directors at
which a quorum is present, by a majority of the votes cast at the meeting. In
addition, the number of Directors may be fixed or changed by action of the
Directors at any meeting at which a quorum is present by a majority vote of the
Directors present at the meeting. The Directors then in office may fill any
Director's office that is created by an increase in the number of Directors. The
number of Directors elected shall be deemed to be the number of Directors fixed
unless otherwise fixed by resolution adopted at the meeting at which such
Directors are elected.
4
-4-
2.3 QUALIFICATIONS. Directors need not be Shareholders of the
Corporation.
Section 3. TERM OF OFFICE OF DIRECTORS.
3.1 TERM. Each Director shall hold office until the next annual meeting
of the Shareholders and until his successor has been elected or until his
earlier resignation, removal from office or death. Directors shall be subject to
removal as provided by statute or by other lawful procedures and nothing herein
shall be construed to prevent the removal of any or all Directors in accordance
therewith.
3.2 RESIGNATION. A resignation from the Board of Directors shall be
deemed to take effect immediately upon its being received by any incumbent
corporate officer other than an officer who is also the resigning Director,
unless some other time is specified therein.
3.3 VACANCY. In the event of any vacancy in the Board of Directors for
any reason, the remaining Directors, though less than a majority of the whole
Board, may fill any such vacancy for the unexpired term.
Section 4. MEETINGS OF DIRECTORS.
4.1 REGULAR MEETINGS. Regular meetings of the Board of Directors shall
be held at such times and places as may be fixed by the Directors.
4.2 SPECIAL MEETINGS. Special Meetings of the Board of Directors may be
held at any time upon call of the Chairman of the Board, the President, any Vice
President, or any two Directors.
4.3 PLACE OF MEETING. Any meeting of Directors may be held at such
place within or without the State of Ohio as may be designated in the notice of
said meeting.
4.4 NOTICE OF MEETING AND WAIVER OF NOTICE. Notice of the time and
place of any regular or special meeting of the Board of Directors shall be given
to each Director by personal delivery, telephone, facsimile transmission or mail
at least forty-eight hours before the meeting, which notice need not specify the
purpose of the meeting.
Section 5. QUORUM AND VOTING.
At any meeting of Directors, not less than one-half of the whole
authorized number of Directors is necessary to constitute a quorum for such
meeting, except that a majority of the remaining Directors in office shall
constitute a quorum for filling a vacancy in the Board. At any meeting at which
a quorum is present, all acts, questions, and business which may come before the
meeting shall be determined by a majority of votes cast by the Directors present
at such meeting, unless the vote of a greater number is required by the Articles
or these Regulations.
5
-5-
Section 6. COMMITTEES.
6.1 APPOINTMENT. The Board of Directors may from time to time appoint
certain of its members to act as a committee or committees in the intervals
between meetings of the Board and may delegate to such committee or committees
power to be exercised under the control and direction of the Board. Each
committee shall be composed of at least three directors unless a lesser number
is allowed by law. Each such committee and each member thereof shall serve at
the pleasure of the Board.
6.2 EXECUTIVE COMMITTEE. In particular, the Board of Directors may
create from its membership and define the powers and duties of an Executive
Committee. During the intervals between meetings of the Board of Directors, the
Executive Committee shall possess and may exercise all of the powers of the
Board of Directors in the management and control and the business of the
Corporation to the extent permitted by law.
6.3 COMMITTEE ACTION. Unless otherwise provided by the Board of
Directors, a majority of the members of any committee appointed by the Board of
Directors pursuant to this Section shall constitute a quorum at any meeting
thereof and the act of a majority of the members present at a meeting at which a
quorum is present shall be the act of such committee. Any such committee shall
prescribe its own rules for calling and holding meetings and its method of
procedure, subject to any rules prescribed by the Board of Directors, and shall
keep a written record of all action taken by it.
Section 7. ACTION OF DIRECTORS WITHOUT A MEETING.
Any action which may be taken at a meeting of Directors or any
committee thereof may be taken without a meeting if authorized by a writing or
writings signed by all the Directors or all of the members of the particular
committee, which writing or writings shall be filed or entered upon the records
of the Corporation.
Section 8. COMPENSATION OF DIRECTORS.
The Board of Directors may allow compensation to Directors for
performance of their duties and for attendance at meetings or for any special
services, may allow compensation to members of any committee, and may reimburse
any Director for his expenses in connection with attending any Board or
committee meeting.
Section 9. RELATIONSHIP WITH CORPORATION.
Directors shall not be barred from providing professional or other
services to the Corporation. No contract, action or transaction shall be void or
voidable with respect to the Corporation for the reason that it is between or
affects the Corporation and one or more of its Directors, or between or affects
the Corporation and any other person in which one or more of its Directors are
6
-6-
directors, trustees or officers or have a financial or personal interest, or for
the reason that one or more interested Directors participate in or vote at the
meeting of the Directors or committee thereof that authorizes such contract,
action or transaction, if, in any such case, any of the following apply:
9.1 the material facts as to the Director's relationship or interest
and as to the contract, action or transaction are disclosed or are known to the
Directors or the committee and the Directors or committee, in good faith,
reasonably justified by such facts, authorize the contract, action or
transaction by the affirmative vote of a majority of the disinterested
Directors, even though the disinterested Directors constitute less than a
quorum;
9.2 the material facts as to the Director's relationship or interest
and as to the contract, action or transaction are disclosed or are known to the
shareholders entitled to vote thereon and the contract, action or transaction is
specifically approved at a meeting of the Shareholders held for such purpose by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Corporation held by persons not interested
in the contract, action or transaction; or
9.3 the contract, action or transaction is fair as to the Corporation
as of the time it is authorized or approved by the Directors, a committee
thereof or the Shareholders.
Section 10. ATTENDANCE AT MEETINGS OF PERSONS
WHO ARE NOT DIRECTORS
Unless waived by the Chairman, any Director who desires the presence at
any regular or special meeting of the Board of Directors of a person who is not
a Director, shall so notify all other Directors, not less than 24 hours before
such meeting, request the presence of such person and state the reason in
writing. Such person will not be permitted to attend the Directors' meeting
unless a majority of the Directors in attendance vote to admit such person to
the meeting. Such vote shall constitute the first order of business for any such
meeting of the Board of Directors. Such right to attend, whether granted by
waiver or vote, may be revoked at any time during any such meeting by the vote
of a majority of the Directors in attendance.
ARTICLE III
OFFICERS
--------
Section 1. GENERAL PROVISIONS.
The Board of Directors shall elect a President, a Secretary and a
Treasurer, and may elect a Chairman of the Board, a Chief Executive Officer, one
or more Vice Presidents, and such other officers and assistant officers as the
Board may from time to time deem necessary. The Chairman
7
-7-
of the Board, if any, shall be a Director, but none of the other officers need
be a Director. Any two or more offices may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity if such instrument is required to be executed, acknowledged or verified
by two or more officers.
Section 2. POWERS AND DUTIES.
All officers, as between themselves and the Corporation, shall
respectively have such authority and perform such duties as are customarily
incident to their respective offices, and as may be specified from time to time
by the Board of Directors, regardless of whether such authority and duties are
customarily incident to such office. The Chief Executive Officer shall also
serve either as Chairman of the Board or President and shall have plenary power
over the business and activities of the Corporation and over its officers and
employees, subject, however, to the control of the Board of Directors and any
limitations thereon contained in these Regulations. In the absence of any
officer of the Corporation, or for any other reason the Board of Directors may
deem sufficient, the powers or duties of such officer, or any of them may be
delegated to any other officer or to any Director. The Board of Directors may
from time to time delegate to any officer authority to appoint and remove
subordinate officers and to prescribe their authority and duties.
Section 3. TERM OF OFFICE AND REMOVAL.
3.1 TERM. Each officer of the Corporation shall hold office at the
pleasure of the Board of Directors.
3.2 REMOVAL. The Board of Directors may remove any officer at any time
with or without cause by the affirmative vote of a majority of Directors in
office.
Section 4. COMPENSATION OF OFFICERS.
The Directors shall establish the compensation of officers and
employees or may, to the extent not prohibited by law, delegate such authority
to a committee of Directors, the President or a Chief Executive Officer, as they
determine.
8
-8-
ARTICLE IV
INDEMNIFICATION
---------------
Section 1. RIGHT TO INDEMNIFICATION.
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil, criminal,
administrative, or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a director or officer of the Corporation or that,
being or having been such a director or officer of the Corporation, he or she is
or was serving at the request of an executive officer of the Corporation as a
director, officer, partner, employee or agent of another corporation or of a
partnership, joint venture, trust, limited liability company or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whenever the basis of such proceeding is alleged
action in an official capacity as such a director, officer, partner, employee,
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent permitted by the General Corporation Law of Ohio, 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 permitted prior thereto), or by other applicable law
as then in effect, against all expense, liability and loss (including, without
limitation, attorneys' fees, costs of investigation, judgments, fines, excise
taxes or penalties arising under the Employee Retirement Income Security Act of
1974 ("ERISA") or other federal or state acts) actually incurred or suffered by
such indemnitee in connection therewith and such indemnification shall continue
as to an indemnitee who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors, and
administrators. Except as provided in Section 2 with respect to proceedings
seeking to enforce rights to indemnification, the Corporation shall indemnify
any such indemnitee in connection with a proceeding (or part thereof) initiated
by such indemnitee only if such proceeding (or part thereof) was authorized or
ratified by the Board of Directors of the Corporation.
The right to indemnification conferred in this Section 1 shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"). An advancement of
expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it is
proved by clear and convincing evidence in a court of competent jurisdiction
that his omission or failure to act involved an act or omission undertaken with
deliberate intent to cause injury to the Corporation or undertaken with reckless
disregard for the best interests of the Corporation. An advancement of expenses
shall not be made if the Corporation's Board of Directors makes a good faith
determination that such payment would violate applicable law.
9
-9-
Section 2. RIGHT OF INDEMNITEE TO BRING SUIT.
If a claim under Section 1 is not paid in full by the Corporation
within thirty days after a written claim has been received by the Corporation,
except in the case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty days, the indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall also be entitled to be paid the
expense of prosecuting or defending such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Article IV upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, where the required undertaking has been tendered to the
Corporation), and thereafter the Corporation shall have the burden of proof to
overcome the presumption that the indemnitee is so entitled. Neither the failure
of the Corporation (including its Board of Directors, independent legal counsel
or its Shareholders) to have made a determination prior to the commencement of
such suit that indemnification of the indemnitee is proper in the circumstances,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or its Shareholders) that the indemnitee is
not entitled to indemnification shall be a defense to the suit or create a
presumption that the indemnitee is not so entitled.
Section 3. NONEXCLUSIVITY AND SURVIVAL OF RIGHTS.
The rights to indemnification and to the advancement of expenses
conferred in this Article IV shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provisions of the
Articles of Incorporation, Code of Regulations, agreement, vote of Shareholders
or disinterested Directors, or otherwise.
Notwithstanding any amendment to or repeal of this Article IV, or of
any of the procedures established by the Board of Directors pursuant to Section
6, any indemnitee shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
Without limiting the generality of the foregoing paragraph, the rights
to indemnification and to the advancement of expenses conferred in this Article
IV shall, notwithstanding any amendment to or repeal of this Article IV, inure
to the benefit of any person who otherwise may be entitled to be indemnified
pursuant to this Article IV (or the estate or personal representative of such
person) for a period of six years after the date such person's service to or in
behalf of the Corporation shall have terminated or for such longer period as may
be required in the event of a lengthening in the applicable statute of
limitations.
10
-10-
Section 4. INSURANCE, CONTRACTS, AND FUNDING.
The Corporation may maintain insurance, at its expense, to protect
itself and any Director, officer, employee, or agent of the Corporation or
another corporation, partnership, joint venture, 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 the General Corporation Law of Ohio. The Corporation may enter into
contracts with any indemnitee in furtherance of the provisions of this Article
IV and may create a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to ensure the payment of
such amounts as may be necessary to effect indemnification as provided in this
Article IV.
Section 5. INDEMNIFICATION OF EMPLOYEES AND AGENTS
OF THE CORPORATION.
The Corporation may, by action of its Board of Directors, authorize one
or more executive officers to grant rights to advancement of expenses to
employees or agents of the Corporation on such terms and conditions no less
stringent than provided in Section 1 hereof as such officer or officers deem
appropriate under the circumstances. The Corporation may, by action of its Board
of Directors, grant rights to indemnification and advancement of expenses to
employees or agents or groups of employees or agents of the Corporation with the
same scope and effect as the provisions of this Article IV with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation; provided, however, that an undertaking shall be made by an employee
or agent only if required by the Board of Directors.
Section 6. PROCEDURES FOR THE SUBMISSION OF CLAIMS.
The Board of Directors may establish reasonable procedures for the
submission of claims for indemnification pursuant to this Article IV,
determination of the entitlement of any person thereto, and review of any such
determination. Such procedures shall be set forth in an appendix to these Code
of Regulations and shall be deemed for all purposes to be a part hereof.
ARTICLE V
AMENDMENTS
----------
This Code of Regulations may be amended by the affirmative vote or the
written consent of the Shareholders entitled to exercise a majority of the
voting power on such proposal. If an amendment is adopted by written consent the
Secretary shall mail a copy of such amendment to each Shareholder who would be
entitled to vote thereon and did not participate in the adoption thereof. This
Code of Regulations may also be amended by the affirmative vote of a majority of
the directors to the extent permitted by Ohio law at the time of such amendment.