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Exhibit: 3.2FT
AMENDED AND RESTATED
BYLAWS
OF
FUTECH INTERACTIVE PRODUCTS
ARTICLE I
OFFICES
SECTION 1.1 Principal Office.
The corporation shall maintain a principal office at its known
place of business in Maricopa County, Arizona.
SECTION 1.2 Other Offices.
The Corporation also may have offices at such other places both
within and without the State of Arizona as the Board of Directors may from
time to time determine or the business of the Corporation may require.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 Shareholder Meetings.
(a) Time and Place of Meetings. Meetings of the shareholders shall be
held at such times and places, either within or without the State of
Arizona, as may from time to time be fixed by the Board of Directors and
stated in the notices or waivers of notice of such meetings.
(b) Annual Meeting. The annual meeting of the shareholders shall be
held when designated by the Board of Directors, for the election of
directors and the transaction of such other business properly brought
before such annual meeting of the shareholders and within the powers of the
shareholders.
(c) Special Meetings. Special meetings of the shareholders of the
Corporation for any purpose or purposes may be called at any time only by
the Chairman of the Board, the
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Chief Executive Officer, or the Board of Directors pursuant to a resolution
approved by a majority of the whole Board of Directors, or at the request in
writing of shareholders owning at least 50% of the capital stock issued
and outstanding and entitled to vote. Business transacted at any special
meeting of the shareholders shall be limited to the purposes stated in the
notice of such meeting.
(d) Notice of Meetings. Except as otherwise provided by law, the
Articles of Incorporation or these Bylaws, written notice of each meeting of
the shareholders shall be given not less than ten days nor more than sixty
days before the date of such meeting to each shareholder entitled to vote
thereat, directed to such shareholder's address as it appears upon the books
of the Corporation, such notice to specify the place, date, hour and purpose
or purposes of such meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail, postage prepaid, addressed
to the shareholder at his address as it appears on the stock ledger of the
Corporation. When a meeting of the shareholders is adjourned to another time
and/or place, notice need not be given of such adjourned meeting if the time
and place thereof are announced at the meeting of the shareholders at which
the adjournment is taken, unless the adjournment is for more than thirty
days or unless after the adjournment a new record date is fixed for such
adjourned meeting, in which event a notice of such adjourned meeting shall
be given to each shareholder of record entitled to vote thereat. Notice of
the time, place and purpose of any meeting of the shareholders may be waived
in writing either before or after such meeting and will be waived by any
shareholder by such shareholder's attendance thereat in person or by proxy.
Any shareholder so waiving notice of such a meeting shall be bound by the
proceedings of any such meeting in all respects as if due notice thereof had
been given.
(e) Quorum. Except as otherwise required by law, the Articles of
Incorporation or these Bylaws, the holders of not less than a majority of
the shares entitled to vote at any meeting of the shareholders, present in
person or by proxy, shall constitute a quorum and the affirmative vote of
the majority of such quorum shall be deemed the act of the shareholders. If
a quorum shall fail to attend any meeting of the shareholders, the presiding
officer of such meeting may adjourn such meeting from time to time to
another place, date or time, without notice other than announcement at such
meeting, until a quorum is present or represented. At such adjourned meeting
at which a quorum is present or represented, any business may be transacted
that might have been transacted at the meeting of the shareholders as
originally noticed. The foregoing notwithstanding, if a notice of any
adjourned special meeting of the shareholders is sent to all shareholders
entitled to vote thereat which states that such adjourned special meeting
will be held with those present in person or by proxy constituting a quorum,
then, except as otherwise required by law, those present at such adjourned
special meeting of the shareholders shall constitute a quorum and all
matters shall be determined by a majority of the votes cast at such special
meeting.
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SECTION 2.2 Determination of Shareholders Entitled to Notice and to Vote.
To determine the shareholders entitled to notice of any meeting of
the shareholders or to vote thereat, the Board of Directors may fix in
advance a record date as provided in Article VII, Section 7.1 of these
Bylaws, or if no record date is fixed by the Board of Directors, a record
date shall be determined as of 4:00 p.m. on the day before notice is sent.
SECTION 2.3 Voting.
(a) Except as otherwise required by law, the Articles of
Incorporation or these Bylaws, each shareholder present in person or by
proxy at a meeting of the shareholders shall be entitled to one vote for
each full share of stock registered in the name of such shareholder at the
time fixed by the Board of Directors or by law at the record date of the
determination of shareholders entitled to vote at such meeting.
(b) Every shareholder entitled to vote at a meeting of the
shareholders may do so either (i) in person or (ii) by one or more agents
authorized by a written proxy executed by the person or such shareholder's
duly authorized agent, whether by manual signature, typewriting, telegraphic
transmission or otherwise as permitted by law. No proxy shall be voted on
after three years from its date, unless the proxy provides for a longer
period.
(c) Voting may be by voice or by ballot as the presiding officer of
the meeting of the shareholders shall determine. On a vote by ballot, each
ballot shall be signed by the shareholder voting, or by such shareholder's
proxy, and shall state the number of shares voted.
(d) In advance of or at any meeting of the shareholders, the
Chairman of the Board or President shall appoint one or more persons as
inspectors of election (the "Inspectors") to act at such meeting. Such
Inspectors shall take charge of the ballots at such meeting. After the
balloting, the Inspectors shall count the ballots cast and make a written
report to the secretary of such meeting of the results. Subject to the
direction of the chairman of the meeting, the duties of such Inspectors may
further include without limitation: determining the number of shares
outstanding and the voting power of each; the shares represented at the
meeting; the existence of a quorum; the authenticity, validity, and effect
of proxies; receiving votes, ballots, or consents; hearing and determining
all challenges and questions in any way arising in connection with the right
to vote; counting and tabulating all votes of consents and determining when
the polls shall close; determining the result; and doing such acts as may be
proper to conduct the election or vote with fairness to all shareholders. An
Inspector need not be a shareholder of the Corporation and any officer of
the Corporation may be an Inspector on any question other than a vote for or
against such officer's election to any position with the Corporation or on
any other questions in which such officer may be directly interested. If
there are three or more Inspectors, the
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determination, report or certificate of a majority of such Inspectors shall be
effective as if unanimously made by all Inspectors.
SECTION 2.4 List of Shareholders.
The officer who has charge of the stock ledger of the Corporation
shall prepare and make available, at least 10 days before every meeting of
shareholders, a complete list of the shareholders entitled to vote thereat,
arranged in alphabetical order, showing the address of and the number of
shares registered in the name of each such shareholder. Such list shall be
open to the examination of any shareholder, for any purpose germane to such
meeting, either at a place within the city where such meeting is to be held
and which place shall be specified in the notice of such meeting, or, if not
so specified, at the place where such meeting is to be held. The list also
shall be produced and kept at the time and place of the meeting of the
shareholders during the whole time thereof, and may be inspected by any
shareholder who is present.
SECTION 2.5 Action by Consent of Shareholders.
A resolution in writing signed by the shareholders, representing
all of those shares entitled to vote shall be deemed to be the action of the
shareholders to the effect therein expressed with the same force and effect
as if the same had been duly passed by the same vote at a duly convened
meeting, and it shall be the duty of the Secretary of the Corporation to
record such resolution in the minute book of the Corporation under its
proper date.
SECTION 2.6 Conduct of Meetings.
The chairman of the meeting shall have full and complete authority
to determine the agenda, to set the procedures and order the conduct of
meetings, all as deemed appropriate by such person in his sole discretion
with due regard to the orderly conduct of business.
SECTION 2.7 Notice of Agenda Matters.
If a shareholder wishes to present to the Chairman of the Board or
the President an item for consideration as an agenda item for a meeting of
shareholders, he must give timely notice to the Secretary of the
Corporation and give a description of (i) the business desired to be
brought before the meeting and (ii) all arrangements or understandings
between such shareholder and any other person or persons (including their
names) in connection with the proposal of business by such shareholder and
any material interest of such shareholder and such other person(s) in such
business. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation,
not less than sixty days nor more than ninety days prior to the meeting;
provided, however, that in the event that less than seventy days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received
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not later than the close of business on the fifteenth day following the date
on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever is earlier, and provided further that any
other time period necessary to comply with federal proxy solicitation rules
or other regulations shall be deemed to be timely.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 General Powers.
Unless otherwise restricted by law, the Articles of Incorporation or
these Bylaws as to action which shall be authorized or approved by the
shareholders, and subject to the duties of directors as prescribed by these
Bylaws, all corporate powers shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be controlled by,
the Board of Directors.
SECTION 3.2 Election of Directors.
(a) Number, Qualification and Term of Office. The authorized number of
directors of the Corporation shall be fixed from time to time by a
resolution duly adopted by a majority of the whole Board of Directors, but
shall not be less than one nor more than nine. The exact number of
directors shall be determined from time to time by a resolution duly
adopted by a majority of the Board of Directors. Directors need not be
shareholders and may succeed themselves.
(b) Resignation. Any director may resign from the Board of Directors
at any time by giving written notice to the Secretary of the Corporation.
Any such resignation shall take effect at the time specified therein, or if
the time when such resignation shall become effective shall not be so
specified, then such resignation shall take effect immediately upon its
receipt by the Secretary; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
(c) Nomination of Directors. Candidates for director of the
Corporation shall be nominated only either by:
(i) the Board of Directors or a committee appointed by the Board
of Directors, or
(ii) nomination at any shareholders' meeting by or on behalf of
any shareholder entitled to vote thereat; provided, that written
notice of such shareholder's intent to make such nomination or
nominations shall have been
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given, either by personal delivery or by United States certified mail,
postage prepaid, to the Secretary of the Corporation not later than
(1) with respect to an election to be held at an annual meeting of the
shareholders, not less than sixty days nor more than ninety days prior
to the meeting; provided, however, that in the event that less than
seventy days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to
be timely must be so received not later than the close of business on
the fifteenth day following the date on which such notice of the date
of the meeting was mailed or such public disclosure was made,
whichever is earlier, and (2) with respect to an election to be held
at a special meeting of the shareholders for the election of
directors, the close of business on the fifteenth day following the
date on which notice of such special meeting is first given to the
shareholders entitled to vote thereat or public disclosure of the
meeting date is made, whichever occurs first. Each such notice by a
shareholder shall set forth: (1) the name and address of the (A)
shareholder who intends to make the nomination and (B) person or
persons to be nominated; (2) a representation that the shareholder is
a holder of record of stock of the Corporation entitled to vote at
such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (3)
a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder; (4) such other
information regarding each nominee proposed by such shareholder as
would be required to be included in a proxy or information statement
filed with the Securities and Exchange Commission pursuant to the
proxy rules promulgated under the Securities Exchange Act of 1934, as
amended, or any successor statute thereto, had the nominee been
nominated or intended to be nominated, by the Board of Directors; and
(5) the manually signed consent of each nominee to serve as a director
of the Corporation if so elected. The presiding officer of the meeting
of the shareholders may refuse to acknowledge the nominee of any
person not made in compliance with the foregoing procedure.
(d) Preferred Stock Directors. Notwithstanding the foregoing, whenever
the holders of any one or more classes or series of stock issued by the
Corporation having a preference over the Common Stock as to dividends or upon
liquidation shall have the right, voting separately by class or series, to elect
directors at an annual or special meeting of the shareholders, the election,
term of office, filling of vacancies, nomination, terms of removal and other
features of such directorships shall be governed by the terms of the Article of
the Articles of Incorporation authorizing the preferred stock and the resolution
or resolutions adopted by the Board of Directors establishing such class or
series adopted pursuant thereto,
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and such directors so elected shall not be divided into classes pursuant to the
Articles of Incorporation unless expressly provided by such terms.
(e) Vacancies. Vacancies and new directorships resulting from an
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by the sole
remaining director. Directors so chosen shall hold office until their successors
are duly elected at the annual meeting and qualified. If no directors are in
office, an election may be held as provided by statute.
SECTION 3.3 Meetings of the Board of Directors.
(a) Regular Meetings. Regular meetings of the Board of Directors shall
be held without call at the following times:
(i) at such times as the Board of Directors shall from time to
time by resolution determine; and
(ii) one-half hour prior to any special meeting of the
shareholders and immediately following the adjournment of any annual
or special meeting of the shareholders.
Notice of all such regular meetings hereby is dispensed with.
(b) Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman, the Chief Executive Officer, or the Board of Directors
pursuant to a resolution approved by a majority of the whole Board of Directors.
Notice of the time and place of special meetings of the Board of Directors shall
be given by the Secretary or an Assistant Secretary of the Corporation, or by
any other officer authorized by the Board of Directors. Such notice shall be
given to each director personally or by mail, messenger, telecopy, telephone or
telegraph at such director's business or residence address. Notice by mail shall
be deposited in the United States mail, postage prepaid, not later than the
fifth day prior to the date fixed for such special meeting. Notice by telecopy,
telephone or telegraph shall be sent and notice given personally or by
messenger shall be delivered, at least twenty-four hours prior to the time set
for such special meeting. Notice of a special meeting of the Board of Directors
need not contain a statement of the purpose of such special meeting.
(c) Adjourned Meetings. A majority of directors present at any regular
or special meeting of the Board of Directors or any committee thereof, whether
or not constituting a quorum, may adjourn any meeting from time to time until a
quorum is present or otherwise. Notice of the time and place of holding any
adjourned meeting shall not be required if the time and place are fixed at the
meeting adjourned.
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(d) Place of Meetings. Meetings of the Board of Directors, both
regular and special, may be held within or without the State of Arizona.
(e) Participation by Telephone. Members of the Board of Directors or
any committee may participate in any meeting of the Board of Directors or
committee through the use of conference telephone or similar communications
equipment, so long as all members participating in such meeting can hear
one another, and such participation shall constitute presence in person at
such meeting.
(f) Quorum. At all meetings of the Board of Directors or any committee
thereof, a majority of the total number of directors of the entire then
authorized Board of Directors or such committee shall constitute a quorum
for the transaction of business and the act of a majority of the directors
present at any such meeting at which there is a quorum shall be the act of
the Board of Directors or any committee, except as may be otherwise
specifically provided by law, the Articles of Incorporation or these
Bylaws. A meeting of the Board of Directors or any committee at which a
quorum initially is present may continue to transact business
notwithstanding the withdrawal of directors so long as any action is
approved by at least a majority of the required quorum for such meeting.
(g) Waiver of Notice. The transactions of any meeting of the Board of
Directors or any committee for which notice is required, however called and
noticed or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum be present and if, either
before or after the meeting, each of the directors not present signs a
written waiver of notice, or a consent to hold such meeting, or an approval
of the minutes thereof. All such waivers, consents or approvals shall be
filed with the corporate records or made a part of the minutes of the
meeting.
SECTION 3.4 Action Without Meeting.
Any action required or permitted to be taken by the Board of Directors
at any meeting or at any meeting of a committee may be taken without a
meeting if all members of the Board of Directors or such committee consent
in writing and the writing or writings are filed with the minutes of the
proceedings of the Board of Directors or such committee.
SECTION 3.5 Compensation of Directors.
Unless otherwise restricted by law, the Articles of Incorporation or
these Bylaws, the Board of Directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be
paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director
from serving the Corporation in any other capacity and receiving
compensation therefor. Members of
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committees of the Board of Directors may be allowed like compensation for
attending committee meetings.
SECTION 3.6 Committees of the Board.
(a) Committees. The Board of Directors may, by resolution adopted by a
majority of the Board of Directors, designate one or more committees of the
Board of Directors, each committee to consist of one or more directors.
Each such committee, to the extent permitted by law, the Articles of
Incorporation and these Bylaws, shall have and may exercise such of the
powers of the Board of Directors in the management and affairs of the
Corporation as may be prescribed by the resolutions creating such
committee. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board of
Directors. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he
or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member. The Board of Directors shall have the power, at any
time for any reason, to change the members of any such committee, to fill
vacancies, and to discontinue any such committee.
(b) Minutes of Meetings. Each committee shall keep regular minutes of
its meetings and report the same to the Board of Directors when required.
(c) Executive Committee. There may be an executive committee
consisting of at least three members of the Board of Directors elected by
the whole Board. Members of the executive committee shall serve at the
pleasure of the Board of Directors and each member of the executive
committee may be removed with or without cause at any time by the Board of
Directors. Vacancies shall be filled by the Board of Directors. The
executive committee may exercise the powers of the Board of Directors and
the management of the business and affairs of the corporation, but shall
not possess any authority prohibited to it by law.
SECTION 3.7 Interested Directors.
In addition to the statutory and corporate common law of Arizona, no
contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which one
or more of its directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason or
solely because the director or officer is present at or participates in the
meeting of the Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his or their votes are counted
for such purpose if (i) the material facts as to his or their relationship
or interest and
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as to the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board of Directors or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (ii) the material facts as to his or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the shareholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of
the shareholders; or (iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof or the shareholders. Common or
interested directors may be counted in determining the presence of a quorum
at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
ARTICLE IV
OFFICERS
SECTION 4.1 Officers.
(a) Number. The officers of the Corporation shall be chosen by the
Board of Directors and may include a Chairman of the Board of Directors
(who must be a director as chosen by the Board of Directors) and shall
include a Chief Executive Officer, a President, a Vice President, a
Secretary and a Treasurer. The Board of Directors also may appoint one or
more Assistant Secretaries or Assistant Treasurers and such other officers
and agents with such powers and duties as it shall deem necessary. Any Vice
President may be given such specific designation as may be determined from
time to time by the Board of Directors. Any number of offices may be held
by the same person, unless otherwise required by law, the Articles of
Incorporation or these Bylaws. The Board of Directors may delegate to any
other officer of the Corporation the power to choose such other officers
and to prescribe their respective duties and powers.
(b) Election and Term of Office. The officers shall be elected
annually by the Board of Directors at its annual meeting and each officer
shall hold office until the next annual election of officers and until such
officer's successor is elected and qualified, or until such officer's
death, resignation or removal. Any officer may be removed at any time, with
or without cause, by a vote of the majority of the whole Board of
Directors. Any vacancy occurring in any office may be filled by the Board
of Directors.
(c) Salaries. The salaries of all officers of the Corporation shall be
fixed by the Board of Directors or a committee thereof from time to time.
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SECTION 4.2 Chairman of the Board of Directors.
The Chairman of the Board of Directors, if there be a Chairman,
shall preside at all meetings of the shareholders and the Board of Directors
and shall have such other power and authority as may from time to time be
assigned by the Board of Directors.
SECTION 4.3 Chief Executive Officer.
The Chief Executive Officer shall preside at all meetings of the
shareholders and the Board of Directors (if a Chairman of the Board has not
been elected), and shall see that all orders and resolutions of the Board of
Directors are carried into effect. Subject to the provisions of these Bylaws
and to the direction of the Board of Directors, the Chief Executive Officer
shall have the general and active management of the business of the
Corporation, may execute all contracts and any mortgages, conveyances or
other legal instruments in the name of and on behalf of the Corporation, but
this provision shall not prohibit the delegation of such powers by the Board
of Directors to some other officer, agent or attorney-in-fact of the
Corporation.
SECTION 4.4 President.
If the President and Chief Executive Officer are different
individuals, in the absence or disability of the Chief Executive Officer,
the President shall perform all the duties of the Chief Executive Officer,
and when so acting shall have all the powers of, and be subject to all
the restrictions upon, the Chief Executive Officer. The President shall have
such other powers and perform such other duties as from time to time may be
prescribed by the Board of Directors or these Bylaws.
SECTION 4.5 Vice Presidents.
In the absence or disability of the Chief Executive Officer and the
President, the Vice Presidents in order of their rank as fixed by the Board
of Directors, or if not ranked, the Vice President designated by the Board
of Directors, shall 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 shall have such other powers and
perform such other duties as from time to time may be prescribed for them,
respectively, by the Board of Directors or these Bylaws.
SECTION 4.6 Secretary and Assistant Secretaries.
The Secretary shall record or cause to be recorded, in books
provided for the purpose, minutes of the meetings of the shareholders, the
Board of Directors and all committees of the Board of Directors; see that
all notices are duly given in accordance with the provisions of these Bylaws
as required by law; be custodian of all corporate records (other than
financial)
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and of the seal of the Corporation, and have authority to affix the
seal to all documents requiring it and attest to the same; give, or
cause to be given, notice of all meetings of the shareholders and
special meetings of the Board of Directors; and, in general, shall
perform all duties incident to the office of Secretary and such other
duties as may, from time to time, be assigned to him by the Board of
Directors or by the President. At the request of the Secretary, or in
the Secretary's absence or disability, any Assistant Secretary shall
perform any of 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.
SECTION 4.7 Treasurer and Assistant Treasurers.
The Treasurer shall keep or cause to be kept the books of
account of the Corporation and shall render statements of the financial
affairs of the Corporation in such form and as often as required by the
Board of Directors or the President. The Treasurer, subject to the
order of the Board of Directors, shall have custody of all funds and
securities of the Corporation and shall deposit all moneys and other
valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The
shall disburse the funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements. The
Treasurer shall perform all other duties commonly incident to his
office and shall perform such other duties and have such other powers
as the Board of Directors or the President shall designate from time to
time. At the request of the Treasurer, or in the Treasurer's absence
or disability, any Assistant Treasurer may perform any of 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. Except where by
law the signature of the Treasurer is required, each of the Assistant
Treasurers shall possess the same power as the Treasurer to sign all
certificates, contracts, obligations and other instruments of the
Corporation.
SECTION 4.8 Non-Executive Staff Officers.
In addition to the executive officer positions which are
described in the preceding paragraphs of this Article IV, the
Corporation shall have such non-executive staff officer positions as
may be created by the Board of Directors, from time to time, which may
include, but shall not necessarily be limited to, a Vice-President of
Risk Management and a Vice-President of Human Resources and Benefits.
Non-executive staff officers will be designated as such in the
resolutions of the Board of Directors which create or fill such
positions. Non-executive staff officers will not have the power or
right to sign documents on behalf of the Corporation, to otherwise bind
the corporation as to legal matters, or to otherwise have any of the
powers or rights of an executive officer of the Corporation. It is the
intent of the Corporation that such restrictions be imposed to vest the
day-to-day management of the Corporation solely in the executive
officers and not in the non-executive staff officers and, furthermore,
to not make the non-executive staff officers executive offers for the
purposes
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of reporting to the United States Securities and Exchange Commission under
applicable federal law or the Commission's Rules and Regulations.
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 5.1 Right to Indemnification.
Subject to the terms and conditions of this Article V, each officer
or director of the Corporation who was or is made a party or witness or is
threatened to be made a party or witness to or is otherwise involved in any
threatened, pending or completed action, suit, alternative dispute
resolution, inquiry, hearing, investigation, or proceeding, whether civil,
criminal, administrative or investigative, including any derivative action
(hereinafter a "proceeding"), by reason of the fact that he or she 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 or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action or
inaction in an official capacity while serving as a director, officer,
employee or agent, shall be indemnified and held harmless by the Corporation
to the fullest extent authorized or permitted by the Arizona Business
Corporation Act (the "Act"), as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than such law permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably 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;
provided, however, that, except as provided herein with respect to
proceedings 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 by the Board of Directors of the Corporation.
The right to indemnification conferred in this Section 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"); provided, however, that, if the
Act requires, an advancement of expenses incurred by an indemnitee shall
be made only upon delivery to the Corporation of an undertaking in the form
then required by the Act (if any), by or on behalf of such indemnitee, with
respect to the repayment of amounts so advanced (hereinafter an
"undertaking").
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SECTION 5.2 Advance of Expenses.
(a) If so requested by an indemnitee in writing, the Corporation
shall (subject to the expense advance rules hereinafter described) advance
to an indemnitee (an "expense advance") any and all expenses incurred in
connection with the investigation and preparation of the indemnitee's
participation in any indemnifiable action, whether as a witness or a party,
pursuant to these Bylaws. The Corporation shall comply with the indemnitee's
written request for an expense advance, and, if required by the Act, make
any necessary determination that the facts then known would not preclude
indemnification under the Act, within ten (10) business days of receipt of
such written request, together with the reimbursement commitment referred to
in subparagraph (b) below.
(b) The obligation of the Corporation to make an expense advance
shall be subject to the condition that, if it is ultimately determined (by
final judicial determination from which there is no further right to appeal)
that there are matters to which indemnitee is not entitled to indemnity
under these Bylaws, the Corporation shall be entitled to be reimbursed by
indemnitee for all such amounts. Prior to obtaining the initial expense
advance, indemnitee shall confirm such reimbursement obligation by delivery
to Corporation of a signed undertaking to that effect. Such obligation shall
be unsecured, and accepted without reference to financial ability to make
repayment.
(c) Expenses in all cases must be reasonable and comply with
existing or future billing procedures of the Company so that the Company can
reasonably monitor and audit such expenses. With respect to attorneys'
fees, the Company will give reasonable consideration to requests for
specific counsel and to requests for the grouping of individuals for joint
defense purposes. Any attorney representing more than one individual may be
requested to render separate statements to each individual or otherwise
allocate billings by individual.
(d) Expenses include attorneys' fees, court costs, deposition
costs, court reporter fees, travel and all other costs, expenses and
obligations actually paid to another or incurred in connection with
investigating the facts underlying a proceeding, preparing to defend and
defending a proceeding or preparing for and participating in a proceeding as
a witness, or any of the foregoing expenses incurred on appeal or in an
action or other proceeding to enforce indemnitee's rights hereunder, or any
other reasonable expenses incurred by indemnitee in participating in any
indemnifiable proceeding.
SECTION 5.3 Right of Indemnitee to Bring Suit.
If a claim under Section 5.1 of this Article is not paid in full
by the Corporation within sixty days after a written claim has been
received by the Corporation, or a claim under Section 5.2 of this Article
is not paid in full within twenty days, the indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid amount
of the claim.
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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 be entitled to be paid also the
expenses of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in a
suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) any suit by the Corporation
to recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses upon
a final adjudication that, the indemnitee has not met the applicable
standard of conduct set forth in the Act. 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 because the indemnitee has met the applicable standard of
conduct set forth in the Act, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its
shareholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard or conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit.
SECTION 5.4 Burden of Proof.
In any determination thereunder, suit brought by the indemnitee to
enforce a right hereunder, or by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the burden of proving
that the indemnitee is not entitled to be indemnified or to such advancement
of expenses under this Section or otherwise shall be on the Corporation. For
purposes of these Bylaws, the termination of any proceeding by judgment,
order, settlement (whether with or without court approval) or conviction, or
upon a plea of nolo contendere or its equivalent, shall not create a
presumption that indemnitee did not meet any particular standard of conduct
or have any particular belief or that a court has determined that
indemnification is not payable under these Bylaws or permitted by applicable
law.
SECTION 5.5 Specific Limitations on Indemnification.
Notwithstanding anything in this Article to the contrary, the
Corporation shall not be obligated to make any payment to any indemnitee
with respect to any proceeding (i) to the extent that payment is actually
made to the indemnitee under any insurance policy, or is made to indemnitee
by the Corporation or an affiliate thereof otherwise than pursuant to this
Article, (ii) for any expense, liability or loss in connection with a
proceeding settled without the Corporation's written consent, which
consent, however, shall not be unreasonably withheld, (iii) for an
accounting of profits made from the purchase or sale by the indemnitee of
securities of the Corporation within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or similar provisions of any
state statutory or common law, or (iv) where prohibited by applicable law.
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SECTION 5.6 Contract.
The provisions of this Article shall be deemed to be a contract between
the Corporation and each director and officer who serves in such capacity at any
time while such Section is in effect, and any repeal or modification thereof
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter based in whole or in part upon any such state of
facts. However, nothing contained in these Bylaws is intended to, or shall,
create any right to continued employment by the Corporation.
SECTION 5.7 Partial Indemnity.
If the indemnitee is entitled under any provision of this Article to
indemnification by the Corporation for some or a portion of the expenses,
liabilities or losses incurred in connection with a proceeding but not, however,
for all of the total amount thereof, the Corporation shall nevertheless
indemnify the indemnitee for the portion thereof to which the indemnitee is
entitled. Moreover, notwithstanding any other provision of this Article, to the
extent that the indemnitee has been successful on the merits or otherwise in
defense of any or all claims relating in whole or in part to a proceeding or in
defense of any issue or matter therein, including dismissal without prejudice,
the indemnitee shall be indemnified against all loss, expense and liability
incurred in connection with the portion of the proceeding with respect to which
indemnitee was successful on the merits or otherwise.
SECTION 5.8 Non-Exclusivity of Rights.
The rights to indemnification and to the advancement of expenses
conferred in this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any contract, statute, the Articles
of Incorporation, bylaw, agreement, vote of shareholders or disinterested
directors or otherwise.
SECTION 5.9 Insurance.
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 law.
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SECTION 5.10 Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to the
advancement of expenses, to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation, or to such lesser extent as may be determined by the Board of
Directors.
SECTION 5.11 Notice by Indemnitee and Defense of Claim.
The indemnitee shall promptly notify the Corporation in writing
upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any matter, whether
civil, criminal, administrative or investigative, but the omission so to
notify the Corporation will not relieve it from any liability which it may
have to the indemnitee if such omission does not prejudice the Corporation's
rights. If such omission does prejudice the Corporation's rights, the
Corporation will be relieved from liability only to the extent of such
prejudice; nor will such omission relieve the Corporation from any liability
which is may have to the indemnitee otherwise than under this Article V.
With respect to any proceedings as to which the indemnitee notifies the
Corporation of the commencement thereof:
(a) The Corporation will be entitled to participate therein at its own
expense; and
(b) The Corporation will be entitled to assume the defense thereof,
with counsel reasonably satisfactory to the indemnitee; provided, however,
that the Corporation shall not be entitled to assume the defense of any
proceeding (and this Section 5.11 shall be inapplicable to such proceeding)
if the indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Corporation and the indemnitee with
respect to such proceeding. After notice from the Corporation to the
indemnitee of its election to assume the defense thereof, the Corporation
will not be liable to the indemnitee under this Article V for any expenses
subsequently incurred by the indemnitee in connection with the defense
thereof, other than reasonable costs of investigation or as otherwise
provided below. The indemnitee shall have the right to employ its own
counsel in such proceeding but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense
thereof shall be at the expense of the indemnitee unless:
(i) The employment of counsel by the indemnitee has been
authorized by the Corporation in writing; or
(ii) The Corporation shall not have employed counsel to assume
the defense in such proceeding or shall not have assumed such defense
and be acting in connection therewith with reasonable diligence;
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in each of which cases the fees and expenses of such
counsel shall be at the expense of the Corporation.
(c) The Corporation shall not settle any proceeding in any manner
which would impose any penalty or limitation on the indemnitee without the
indemnitee's written consent; provided, however, that the indemnitee will
not unreasonably withhold his consent to any proposed settlement.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 6.1 Certificates for Shares.
Unless otherwise provided by a resolution of the Board of
Directors, the shares of the Corporation shall be represented by a
certificate. The certificates of stock of the Corporation shall be numbered
and shall be entered in the books of the Corporation as they are issued.
They shall exhibit the holder's name and number of shares and shall be
signed by or in the name of the Corporation by (a) the Chairman of the
Board of Directors, the President or any Vice President and (b) the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary. Any or all of the signatures on a certificate may be facsimile.
In case any officer of the Corporation, transfer agent or registrar who has
signed, or whose facsimile signature has been placed upon such certificate,
shall have ceased to be such officer, transfer agent or registrar before
such certificate is issued, such certificate may nevertheless be issued by
the Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issuance.
SECTION 6.2 Classes of Stock.
(a) If the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers,
designations, preferences and relative participating, optional or other
special rights of each class of stock or series thereof and the
qualification, limitations, or restrictions of such preferences or rights
shall be set forth in full or summarized on the face or back of the
certificate that the Corporation shall issue to represent such class or
series of stock; provided, that in lieu of the foregoing requirements, there
may be set forth on the face or back of the certificate that the Corporation
shall issue to represent such class or series of stock, a statement that the
Corporation will furnish without charge to each shareholder who so requests
the powers, designations, preferences and relative participating, optional
or other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences or rights.
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(b) Within a reasonable time after the issuance or transfer of
uncertificated stock, the Corporation shall send to the registered owner
thereof a written notice containing the information required to be set forth
or stated on certificates pursuant to applicable law or a statement that the
Corporation will furnish without charge to each shareholder who so requests
the powers, designations, preferences and relative participating, optional
or other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences or rights.
SECTION 6.3 Transfer.
Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it
shall be the duty of the Corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the
transaction upon its books. Upon receipt of proper transfer instructions
from the registered owner of uncertificated shares, such uncertificated
shares shall be cancelled, issuance of new equivalent uncertificated shares
or certificated shares shall be made to the person entitled thereto and the
transaction shall be recorded upon the books of the Corporation.
SECTION 6.4 Record Owner.
The Corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof, and,
accordingly shall not be bound to recognize any equitable or other claim
to or interest in such share on the part of any other person, whether or not
it shall have express or other notice thereof, save as expressly provided by
the laws of the State of Arizona.
SECTION 6.5 Lost Certificates.
The Board of Directors may direct a new certificate or certificates
or uncertificated shares to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates
or uncertificated shares, the Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as the Board of
Directors shall require and to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost,
stolen or destroyed.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Record Date.
(a) In order that the Corporation may determine the shareholders
entitled to notice of or to vote at any meeting of the shareholders or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than seventy nor less than ten days prior to the date of
such meeting nor more than seventy days prior to any other action. If not fixed
by the Board of Directors, the record date shall be determined as provided by
law.
(b) A determination of shareholders of record entitled to notice of or
to vote at a meeting of the shareholders shall apply to any adjournments of the
meeting, unless the Board of Directors fixes a new record date for the adjourned
meeting.
(c) Holders of stock on the record date are entitled to notice and to
vote or to receive the dividend, distribution or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of the
shares on the books of the Corporation after the record date, except as
otherwise provided by agreement or by law, the Articles of Incorporation or
these Bylaws.
SECTION 7.2 Execution of Instruments.
The Board of Directors may, in its discretion, determine the method
and designate the signatory officer or officers, or other persons, to execute
any corporate instrument or document or to sign the corporate name without
limitation, except where otherwise provided by law, the Articles of
Incorporation or these Bylaws. Such designation may be general or confined to
specific instances.
SECTION 7.3 Voting of Securities Owned by the Corporation.
All stock and other securities of other corporations held by the
Corporation shall be voted, and all proxies with respect thereto shall be
executed, by the person so authorized by resolution of the Board of Directors,
or, in the absence of such authorization, by the President.
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