EXHIBIT 3.2
SECOND AMENDED AND RESTATED BYLAWS
OF
BTI TELECOM CORP.
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of the corporation
shall be located at such place as the Board of Directors may
fix from time to time.
Section 2. Registered Office. The registered office of the corporation
required by law to be maintained in the State of North
Carolina may be, but need not be, identical with the
principal office.
Section 3. Other Offices. The corporation may have offices at
such other places, either within or without the State
of North Carolina, as the Board of Directors may
designate or as the affairs of the corporation may
require from time to time.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of shareholders
shall be held at the principal office of the
corporation, or at such other place, whether within
or without the State of North Carolina, as shall be
designated in the notice of the meeting or agreed
upon by the Board of Directors.
Section 2. Annual Meeting. The annual meeting of shareholders
shall be held during the fourth full month following
the end of the corporation's fiscal year at a time
and on any day (except Saturday, Sunday or a legal
holiday) in that month as determined by the Board of
Directors for the purpose of electing directors of
the corporation and for the transaction of such other
business as may be properly brought before the
meeting.
Section 3. Substitute Annual Meetings. If the annual meeting
shall not be held on the day designated by these
Bylaws, a substitute annual meeting may be called in
accordance with the provisions of Section 4 of this
Article II. A
meeting so called shall be designated and treated for all
purposes as the annual meeting.
Section 4. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by
statute, may be called by the President, the Chief Executive
Officer, the Chairman of the Board or a majority of the
members of the Board of Directors then in office and shall
be called by the Secretary at the written request of holders
of a majority of the outstanding shares of Series A
Preferred Stock.
Any person or persons entitled to call a special meeting of
shareholders shall do so by delivering written notice to the
Secretary of the corporation stating that a special meeting
has been called and certifying to facts establishing that
the person or persons delivering the notice are entitled to
call a special meeting.
Section 5. Notice of Meetings. Written or printed notice stating the
time and place of the meeting shall be delivered not less
than ten (10) nor more than sixty (60) days before the date
of any shareholders' meeting, either personally or by
telegraph, teletype or other form of wire or wireless
communication, or by facsimile, by or at the direction of
the Chairman of the Board, the President, the Secretary or
other person calling the meeting, to each shareholder of
record entitled to vote at such meeting; provided that such
notice must be given to all shareholders with respect to any
meeting at which a merger, share exchange, sale of assets
other than in the regular course of business or voluntary
dissolution is to be considered and in such other instances
as required by law. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on
the record of shareholders of the corporation, with postage
thereon prepaid.
In the case of a special meeting, the notice of meeting
shall specifically state the purpose or purposes for which
the meeting is called; but, in the case of an annual or
substitute annual meeting, the notice of meeting need not
specifically state the business to be transacted thereat
unless such a statement is required by the provisions of the
North Carolina Business Corporation Act.
When a meeting is adjourned to a different date, time or
place, notice need not be given of the new date, time or
place if the new date, time or place is announced at the
meeting before adjournment. If, however, a new record date
for the adjourned meeting is fixed, notice of the adjourned
meeting will be given to all persons who are shareholders as
of the new record date in accordance with this Section 5.
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Section 6. Waiver of Notice. Any shareholder may waive notice of any
meeting. The waiver must be in writing, signed by the
shareholder and delivered to the corporation for inclusion
in the minutes or filing with the corporate records. A
shareholder's attendance at a meeting (a) waives objection
to lack of notice or defective notice of the meeting, unless
the shareholder at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting;
and (b) waives objection to consideration of a particular
matter at the meeting that is not within the purpose or
purposes described in the meeting notice, unless the
shareholder objects to considering the matter before it is
voted upon.
Section 7. Shareholder Lists. Before each meeting of shareholders, the
Secretary of the corporation shall prepare an alphabetical
list of the shareholders entitled to notice of such meeting.
The list shall be arranged by voting group (and within each
voting group by class or series of shares) and show the
address and number of shares held by each shareholder. The
list shall be kept on file at the principal office of the
corporation, or at a place identified in the meeting notice
in the city where the meeting will be held, for the period
beginning two business days after notice of the meeting is
given and continuing through the meeting, and shall be
subject to inspection by any shareholder at any time during
regular business hours. This list shall also be produced and
kept open at the time and place of the meeting and shall be
subject to inspection by any shareholder during the meeting
or any adjournment thereof.
Section 8. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, and until the consummation of
the Corporation's initial public offering of capital stock
pursuant to a registration statement under the Securities
Act of 1933, as amended (an "IPO"), the holders of a
majority of the outstanding shares of Series A Stock
represented in person or by proxy, shall be required for,
and shall constitute a quorum at all meetings of
shareholders; provided, that, if the Corporation provides
reasonable notice and makes reasonable accommodations for
the holders of Series A Preferred Stock to attend a meeting
where a majority of holders of Series A Preferred Stock is
required for a quorum, and such holders of majority of
shares of Series A Preferred Stock are not present, the
holders of a majority of the shares of Series A Preferred
Stock shall not be required for quorum. Shares entitled to
vote as a separate voting group may take action on a matter
only if a quorum of those shares exists; a majority of the
votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group. The shareholders
present at a duly organized meeting may continue to do
business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
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In the absence of a quorum at the opening of any meeting of
shareholders, such meeting may be adjourned from time to
time by a vote of a majority of the shares voting on the
motion to adjourn; and at any adjourned meeting at which a
quorum is present, any business may be transacted that might
have been transacted at the original meeting.
Section 9. Organization. Each meeting of shareholders shall be presided
over by the Chairman of the Board, and in his absence or at
his request by the President, and in their absence or at
their request by any person selected to preside by vote of
the holders of a majority of the shares present and entitled
to vote at the meeting. The Secretary, or in his absence or
at his request, any person designated by the person
presiding at the meeting, shall act as secretary of the
meeting.
Section 10. Proxies. Shares may be voted either in person or by one or
more agents authorized by a written proxy executed by the
shareholder or by his duly authorized attorney-in-fact. A
proxy is not valid after the expiration of eleven months
from the date of its execution, unless the person executing
it specifies therein the length of time for which it is to
continue in force, or limits its use to a particular
meeting. Any proxy shall be revocable by the shareholder
unless the written appointment expressly and conspicuously
provides that it is irrevocable and the appointment is
coupled with an interest as required by law.
Section 11. Voting of Shares. Subject to the provisions of Section 4 of
Article III and the corporation's Articles of Incorporation,
each outstanding share entitled to vote shall be entitled to
one vote on each matter submitted to a vote at a meeting of
shareholders. All shares entitled to vote shall be counted
together collectively on a matter as provided by the
Articles of Incorporation or by the North Carolina Business
Corporation Act and shall constitute a single voting group.
Additional required voting groups shall be determined in
accordance with the Articles of Incorporation and these
Bylaws of this corporation and the North Carolina Business
Corporation Act.
Except in the election of directors as governed by the
provisions of Section 3 of Article III, the vote of a
majority of the shares voted on any matter at a meeting of
shareholders at which a quorum is present shall be the act
of the shareholders on that matter, unless the vote of a
greater number is required by law or by the Articles of
Incorporation or Bylaws of this corporation. Further, except
in the election of directors, action on a matter by a voting
group shall be approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the
action, unless the vote by a greater number is required by
law or by the Articles of Incorporation or Bylaws of this
corporation. Corporate action on such
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matters shall be taken only when approved by each and every
voting group entitled to vote as a separate voting group on
such matters as provided by the Articles of Incorporation or
Bylaws of this corporation or by the North Carolina Business
Corporation Act. The foregoing provisions of this Section 11
are subject to the rights of the holders of the Series A
Preferred Stock pursuant to the provisions of the Articles
of Incorporation of the corporation and the Shareholders
Agreement (as amended from time to time, the "Shareholders
Agreement") dated as of _________ ___, 1999 among the
Corporation and certain holders of Common Stock and Series A
Preferred Stock.
Voting on all matters except the election of directors shall
be by voice vote or by a show of hands unless the holders of
one-tenth (1/10th) of the shares represented at the meeting
shall, prior to the voting on any matter, demand a ballot
vote on that particular matter. Abstentions shall not be
treated as negative votes.
Shares of the corporation's stock are not entitled to vote
if they are owned, directly or indirectly, by a second
corporation and the corporation owns, directly or
indirectly, a majority of the shares entitled to vote for
directors of the second corporation, except that shares held
in a fiduciary capacity, including the corporation's own
shares, may be voted.
Section 12. Informal Action by Shareholders. Any action that is
required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting if one or more
written consents, describing the action so taken, shall be
signed by all of the persons who would be entitled to vote
upon such action at a meeting, and delivered to the
corporation for inclusion in the minutes or filing with the
corporate records. Such consent shall have the same force
and effect as a unanimous vote of shareholders. Any
shareholder may retract his consent until the last
shareholder entitled to vote has signed the appropriate
written consent and all consents have been delivered to the
Secretary of the corporation. When notice of a proposed
action is required to be given to nonvoting shareholders as
provided in Section 5 of Article II of these Bylaws, the
corporation shall give the nonvoting shareholders notice at
least ten (10) days before action is taken in lieu of a
meeting by unanimous consent of the voting shareholders.
Such notice to nonvoting shareholders shall contain or be
accompanied by any material that would have been required to
be sent to the nonvoting shareholders in a notice of meeting
at which the proposed action would have been submitted to
the shareholders for action.
Section 13. Inspectors of Election.
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(a) Appointment of Inspectors of Election. In advance of any
meeting of shareholders, the Board of Directors may appoint
any persons, other than nominees for office, as inspectors
of election to act at such meeting or any adjournment
thereof. If inspectors of election are not so appointed, the
chairman of any such meeting may appoint inspectors of
election at the meeting. The number of inspectors shall be
either one or three. In case any person appointed as
inspector fails to appear or fails or refuses to act, the
vacancy may be filled by appointment by the Board of
Directors in advance of the meeting or at the meeting by the
person acting as chairman.
(b) Duties of Inspectors. The inspectors of election shall
determine 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, receive votes, ballots or consents, hear and
determine all challenges and questions in any way arising in
connection with the right to vote, count and tabulate all
votes or consents, determine the result and do such acts as
may be proper to conduct the election or vote with fairness
to all shareholders. The inspectors of election shall
perform their duties impartially, in good faith, to the best
of their ability and as expeditiously as is practical.
(c) Vote of Inspectors. If there are three inspectors of
election, the decision, act or certificate of a majority
shall be effective in all respects as the decision, act or
certificate of all.
(d) Report of Inspectors. On a request of the chairman of
the meeting, the inspectors shall make a report in writing
of any challenge or question or matter determined by them
and shall execute a certificate of any fact found by them.
Any report or certificate made by them shall be a prima
facie evidence of the facts stated therein.
Section 14. Shareholder Proposals. Any shareholder wishing to bring
any other business before a meeting of the shareholders must
provide notice to the corporation not more than ninety (90)
and not less than fifty (50) days before the meeting in
writing by registered mail, return receipt requested, of the
business to be presented by such shareholder at the
shareholders meeting. Any such notice shall set forth the
following as to each matter the shareholder proposes to
bring before the meeting: (A) a brief description of the
business desired to be brought before the meeting and the
reasons for conducting such business at the meeting and, if
such business includes a proposal to amend the Bylaws of the
corporation, the language of the proposed amendment; (B) the
name and address, as they appear on the corporation's books,
of the shareholder proposing such business; (C) the class
and number of shares of the corporation which are
beneficially owned by such shareholder; (D) a representation
that the
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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 propose such
business; and (E) any material interest of the shareholder
in such business. Notwithstanding the foregoing provisions
of this Section, a shareholder shall also comply with all
applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder with respect to the matters set forth in this
Section. In the absence of such notice to the corporation
meeting the above requirements, a shareholder shall not be
entitled to present any business at any meeting of
shareholders, provided, that, until the corporation's IPO,
the Investor (as defined in the Shareholders Agreement)
shall be entitled to present any business at any meeting of
shareholders without complying with the notice requirements
of this Section 14.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. Subject to and in compliance with the
provisions of Section 7 of the Shareholders Agreement and
Section 6 of the corporation's Articles of Incorporation,
all corporate powers shall be exercised by or under the
authority of, and the business and affairs of the
corporation managed under the direction of, its Board of
Directors or by such executive or other committees as the
Board may establish pursuant to these Bylaws.
Section 2. Number and Qualifications. The number of directors
constituting the initial Board of Directors shall be not
less than five (5) nor more than ten (10) as may be fixed or
changed from time to time, within the minimum and maximum,
by the shareholders or by the Board of Directors. Directors
need not be residents of the State of North Carolina or
shareholders of the corporation.
Section 3. Nomination and Election of Directors. The Board of Directors
shall be constituted as set forth in Section 5 of the
Shareholders Agreement. Subject to the provisions of the
Shareholders Agreement, nominations for the election of
directors may only be made by the Board of Directors, by the
Nominating Committee of the Board of Directors (or, if none,
any other committee serving a similar function) or by any
shareholder entitled to vote generally in elections of
directors where the shareholder complies with the
requirements of this Section. Unless otherwise provided in
the Shareholders Agreement, any shareholder of record
entitled to vote generally in elections of directors may
nominate one or more persons for election as directors at a
meeting of shareholders only if written notice of
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such shareholder's intent to make such nomination or
nominations has been given, either by personal delivery or
by United States certified mail, postage prepaid, to the
Secretary of the corporation (i) with respect to an election
to be held at an annual meeting of shareholders, not more
than ninety (90) days nor less than fifty (50) days in
advance of such meeting and (ii) with respect to an election
to be held at a special meeting of shareholders called for
the purpose of the election of directors, not later than the
close of business on the tenth business day following the
date on which notice of such meeting is first given to
shareholders, provided that the foregoing notice provisions
shall not apply to the nomination of any directors
designated pursuant to the terms of the Shareholders
Agreement. Each such notice of a shareholder's intent to
nominate a director or directors at an annual or special
meeting shall set forth the following: (A) the name and
address, as they appear on the corporation's books, of the
shareholder who intends to make the nomination and the name
and residence address of the person or persons to be
nominated; (B) the class and number of shares of the
corporation which are beneficially owned by the shareholder;
(C) 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; (D) 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; (E) such other information
regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for
election of directors, or as would otherwise be required, in
each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended, including any information
that would be required to be included in a proxy statement
filed pursuant to Regulation 14A had the nominee been
nominated by the Board of Directors; and (F) the written
consent of each nominee to be named in a proxy statement and
to serve as director of the corporation if so elected.
Subject to the provisions of the Shareholders Agreement, no
person shall be eligible to serve as a director of the
corporation unless nominated in accordance with the
procedures set forth in this Section. If the chairman of the
shareholders meeting shall determine that a nomination was
not made in accordance with the procedures described by
these bylaws, he shall so declare to the meeting, and the
defective nomination shall be disregarded. Notwithstanding
the foregoing provisions of this Section, a shareholder
shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder with respect to the
matters set forth in this Section.
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Except as provided in Section 6 of this Article III, the
directors shall be elected at the annual meeting of
shareholders; and those persons who receive the highest
number of votes at a meeting at which a quorum is present
shall be deemed to have been elected. Every shareholder
entitled to vote at an election of directors shall have the
right to vote the number of shares standing of record in his
name for as many persons as there are directors to be
elected and for whose election he has a right to vote.
Section 4. Term of Directors. Each initial director shall hold office
until the first shareholders' meeting at which directors are
elected, or until such director's death, resignation or
removal. The terms of every other director shall expire at
the next annual shareholders' meeting following a director's
election or upon such director's death, resignation or
removal. The term of a director elected to fill a vacancy
expires at the next shareholders' meeting at which directors
are elected. Despite the expiration of a director's term,
such director shall continue to serve until a qualified
successor shall be elected. A decrease in the number of
directors does not shorten an incumbent director's term.
Section 5. Removal. Subject to the provisions of the Shareholders
Agreement, any director may be removed at any time with or
without cause by a vote of the shareholders if the number or
votes cast to remove such director exceeds the number of
votes cast not to remove him. If a director is elected by a
voting group of shareholders, only the shareholders of that
voting group may participate in the vote to remove him. If
any directors are so removed, new directors may be elected
at the same meeting. A director may not be removed by the
shareholders at a meeting unless the notice of the meeting
states that the purpose, or one of the purposes, of the
meeting, is removal of the director.
Section 6. Vacancies. Unless otherwise provided in the Shareholders
Agreement, any vacancy occurring in the Board of Directors,
including, without limitation, a vacancy resulting from an
increase in the number of directors or from the failure by
the shareholders to elect the full authorized number of
directors, may be filled by the shareholders or the Board of
Directors, whichever group shall act first. Unless otherwise
provided in the Shareholders Agreement, if the directors
remaining in office do not constitute a quorum of the Board,
the directors may fill the vacancy by the affirmative vote
of a majority of the remaining directors.
Section 7. Chairman of the Board. There may be a Chairman of the Board
of Directors elected by the directors from their number at
any meeting of the Board. The Chairman shall preside at all
meetings of the Board of Directors and perform such other
duties as may be directed by the Board. He shall be an ex
officio member of all committees. He shall make a
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report in writing at the annual meeting of the Board of
Directors stating the condition of the corporation and shall
make such suggestions and recommendations as he shall deem
proper for the best interests of the corporation. He shall
appoint delegates and representatives to the organizations
with which the corporation is affiliated. He shall have the
power to call the regular and any special meetings of the
Board of Directors. Until a Chairman is elected, the
President of the corporation shall preside at the meetings
of the Board of Directors and shareholders.
Section 8. Compensation. The Board of Directors, in its discretion, may
compensate directors for their services as such and may
provide for the payment of all expenses incurred by
directors in attending regular and special meetings of the
Board or of the Executive Committee. Nothing herein
contained, however, shall be construed to preclude any
director from serving the corporation in any other capacity
and receiving compensation therefor.
Section 9. Executive Committees. Subject to and in compliance with
Section 6 of the Shareholders Agreement, the Board of
Directors, by resolution adopted by a majority of the number
of directors in office when the action is taken or, if
greater, the number of directors required to take action
pursuant to Section 6 of Article IV, may designate two or
more directors to constitute an Executive Committee and
other committees, each of which, to the extent authorized by
law and provided in such resolution, shall have and may
exercise all of the authority of the Board of Directors in
the management of the corporation. Unless otherwise provided
in Section 6 of the Shareholders Agreement, each committee
member serves at the pleasure of the Board of Directors. The
provisions in these Bylaws that govern meetings, action
without meetings, notice and waiver of notice, and quorum
and voting requirements of the Board of Directors apply to
committees established by the Board.
ARTICLE IV
MEETINGS OF DIRECTORS
Section 1. Regular Meetings. A regular meeting of the Board of
Directors shall be held immediately after, and at the same
place as, the annual meeting of shareholders. In addition,
the Board of Directors may provide, by resolution, the time
and place, either within or without the State of North
Carolina, for the holding of additional regular meetings.
Section 2. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman
of the Board of Directors, if any, by the President or any
two directors. Such meetings may be held
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either within or without the State of North Carolina, as
fixed by the person or persons calling the meeting.
Section 3. Notice of Meetings. Regular meetings of the Board of
Directors may be held without notice.
The person or persons calling a special meeting of the Board
of Directors shall, at least two days before the meeting,
give notice thereof by any usual means of communication.
Such notice need not specify the purpose for which the
meeting is called.
Section 4. Waiver of Notice. Any director may waive notice of any
meeting. The waiver must be in writing, signed by the
director entitled to the notice and delivered to the
corporation for inclusion in the minutes or filing with the
corporate records. A director's attendance at or
participation in a meeting shall constitute a waiver of
notice of such meeting, unless the director at the beginning
of the meeting (or promptly on 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.
Section 5. Quorum. A majority of the directors fixed by these Bylaws
shall be required for, and shall constitute, a quorum for
the transaction of business at any meeting of the Board of
Directors unless the Articles of Incorporation or these
Bylaws provide otherwise; provided, that, so long as the
Investor (as defined in the Shareholders Agreement) has the
right to designate a director to the Board of Directors
pursuant to the Shareholders Agreement, a quorum must
include at least one director designated by the Investor
unless the Corporation has given reasonable prior notice and
has made reasonable accommodations for such Investor
designee or designees to attend such meeting.
Section 6. Manner of Acting. Except as otherwise provided in the
Articles of Incorporation or these Bylaws, the act of the
majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of
Directors.
Section 7. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors or a
committee of the Board of Directors when corporate action is
taken is deemed to have assented to the action taken unless
(a) he objects at the beginning of the meeting (or promptly
upon his arrival) to holding it or transacting business at
the meeting, or (b) his dissent or abstention from the
action taken is entered in the minutes of the meeting, or
(c) he files written notice of his dissent or abstention
with the presiding officer of the meeting before its
adjournment
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or with the corporation immediately after the adjournment.
Such right to dissent shall not apply to a director who
voted in favor of such action.
Section 8. Action Without Meeting. Action required or permitted to be
taken at a meeting of the Board of Directors may be taken
without a meeting if the action is taken by all members of
the Board. The action must be evidenced by one or more
written consents signed by each director before or after
such action, describing the action taken, and included in
the minutes or filed with the corporate records. Such action
will become effective when the last director signs the
consent, unless the consent specifies a different date.
Section 9. Conference Telephone Meetings. Any one or more directors or
members of a committee may participate in a meeting of the
Board of Directors or committee by means of a conference
telephone or similar communications device that allows all
persons participating in the meeting to hear each other, and
such participation in a meeting shall be deemed presence in
person at such meeting.
ARTICLE V
OFFICERS
Section 1. Officers of the Corporation. The officers of the
corporation shall consist of a Chairman of the Board,
President, a Secretary, a Treasurer and such
Vice-Presidents, Assistant Secretaries, Assistant
Treasurers, and other officers (including Controllers and
Assistant Controllers) as the Board of Directors may from
time to time elect, subject to and in compliance with
Section 7 of the Shareholders Agreement. Any two or more
offices may be held by the same person, but no officer may
act in more than one capacity where action of two or more
officers is required.
Section 2. Appointment and Term. The officers of the corporation shall
be appointed by the Board of Directors and each officer
shall hold office until his death, resignation, retirement,
removal, disqualification, or his successor shall have been
appointed and qualified.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board at any time
with or without cause; but such removal shall be without
prejudice to the contract rights, if any, of the person so
removed.
Section 4. Resignation. An officer may resign at any time by
communicating his resignation to the corporation, orally or
in writing. A resignation is effective when communicated
unless it specifies in writing a later effective
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date. If a resignation is made effective at a later date
that is accepted by the corporation, the Board of Directors
may fill the pending vacancy before the effective date if
the Board provides that the successor does not take office
until the effective date. An officer's resignation does not
affect the corporation's contract rights, if any, with the
officer.
Section 5. Compensation of Officers. The compensation of all officers
of the corporation shall be fixed by the Board of Directors
and no officer shall serve the corporation in any other
capacity and receive compensation therefor unless such
additional compensation be authorized by the Board of
Directors.
Section 6. Chairman of the Board. Unless otherwise specified by
resolution of the Board, the Chairman of the Board shall be
the Chief Executive Officer of the corporation (and may be
identified as such in his title) and, subject to the
direction and control of the Board of Directors, shall
supervise and control the management of the corporation. The
Chairman of the Board shall, when present, preside at all
meetings of the directors and shareholders and, in general,
shall perform all duties incident to the office of Chairman
of the Board and such other duties as may be prescribed from
time to time by the Board of Directors.
Section 7. President. Unless otherwise specified by resolution of the
Board, the President shall be the Chief Operating Officer of
the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the
business and affairs of the corporation. He shall, in the
absence of the Chairman of the Board, preside at all
meetings of the shareholders. He shall sign, with the
Secretary, an Assistant Secretary, or any other proper
officer of the corporation thereunto authorized by the Board
of Directors, certificates for shares of the corporation,
any deeds, mortgages, bonds, contracts, or other instruments
that the Board of Directors has authorized to be executed,
except in cases where the signing and execution thereof
shall be expressly delegated by the Board of Directors or by
these Bylaws to some other officer or agent of the
corporation, or shall be required by law to be, otherwise
signed or executed; and, in general, he shall perform all
duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from
time to time.
Section 8. Vice-Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, the
Vice-Presidents in the order of their length of service as
such, unless otherwise determined by the Board of Directors,
shall perform 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. Any Vice-President may
sign, with the Secretary or an
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Assistant Secretary, certificates of shares of the
corporation; and shall perform such other duties as from
time to time may be assigned to him by the President or
Board of Directors. The Board of Directors may designate one
or more Vice-Presidents to be responsible for certain
functions, including, without limitation, Marketing,
Finance, Manufacturing and Personnel.
Section 9. Secretary. The Secretary shall: (a) keep the minutes of the
meetings of shareholders, of the Board of Directors and of
all Executive Committees in one or more books provided for
that purpose; (b) see that all notices are duly given in
accordance with the provisions of these Bylaws or as
required by law; (c) be custodian of the corporate records
and of the seal of the corporation and see that the seal of
the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly
authorized; (d) keep a register of the post office address
of each shareholder which shall be furnished to the
Secretary by such shareholder; (e) sign with the President,
or a Vice-President, certificates for shares of the
corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f)
maintain and have general charge of the stock transfer books
of the corporation; (g) prepare or cause to be prepared
shareholder lists prior to each meeting of shareholders as
required by law; (h) attest the signature or certify the
incumbency or signature of any officer of the corporation;
and (i) in general perform all duties incident to the office
of Secretary and such other duties as from time to time may
be assigned to him by the President or by the Board of
Directors.
Section 10. Assistant Secretaries. In the absence of the Secretary or in
the event of his death, inability or refusal to act, the
Assistant Secretaries in the order of their lengths of
service as Assistant Secretaries, unless otherwise
determined by the Board of Directors, shall perform 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. They shall perform such other duties as may
be assigned to them by the Secretary, by the President, or
by the Board of Directors. Any Assistant Secretary may sign,
with the President or a Vice-President, certificates for
shares of the corporation.
Section 11. Treasurer. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the
corporation; receive and give receipts for monies due and
payable to the corporation from any source whatsoever, and
deposit all such monies in the name of the corporation in
such depositories as shall be selected in accordance with
the provisions of Section 4 of Article VI of these Bylaws;
(b) maintain appropriate accounting records as required by
law; (c) prepare, or cause to be prepared, annual financial
statements of the corporation that include a
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balance sheet as of the end of the fiscal year and an income
and cash flow statement for that year, which statements, or
a written notice of their availability, shall be mailed to
each shareholder within One Hundred Twenty (120) days after
the end of such fiscal year; and (d) in general perform all
of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by
the President or by the Board of Directors, or by these
Bylaws.
Section 12. Assistant Treasurers. In the absence of the Treasurer or in
the event of his death, inability or refusal to act, the
Assistant Treasurers in the order of their length of service
as such, unless otherwise determined by the Board of
Directors, shall perform 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. They shall
perform such other duties as may be assigned to them by the
Treasurer, by the President, or by the Board of Directors.
Section 13. Controller and Assistant Controllers. The Controller, if
one has been appointed, shall have charge of the accounting
affairs of the corporation and shall have such other powers
and perform such other duties as the Board of Directors
shall designate. Each Assistant Controller shall have such
powers and perform such duties as may be assigned by the
Board of Directors and the Assistant Controller shall
exercise the powers of the Controller during that officer's
absence or inability to act.
Section 14. Delegation of Duties of Officers. In case of the absence of
any officer of the corporation or for any other reason that
the Board may deem sufficient, the Board may delegate the
powers or duties of such officer to any other officer or to
any director for the time being provided a majority of the
entire Board of Directors concurs herein.
Section 15. Bonds. The Board of Directors may by resolution, require any
or all officers, agents or employees of the corporation to
give bond to the corporation, with sufficient sureties,
conditioned on the faithful performance of the duties of
their respective offices or positions, and to comply with
such other conditions as may from time to time be required
by the Board of Directors.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on
behalf of the corporation, and such
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authority may be general or confined to specific instances.
Any resolution of the Board of Directors authorizing the
execution of documents by the proper officers of the
corporation or by the officers generally shall be deemed to
authorize such execution by the Chairman of the Board, the
President, any Vice-President, or the Treasurer, or any
other officer if such execution is generally within the
scope of the duties of his office. The Board of Directors
may by resolution authorize such execution by means of one
or more facsimile signatures.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidence of indebtedness shall be issued
in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to
specific instances.
Section 3. Checks and Drafts. All checks, drafts or other orders for
the payment of money issued in the name of the corporation
shall be signed by such officer or officers, agent or agents
of the corporation and in such manner as shall from time to
time be determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit
of the corporation in such depositories as the Board of
Directors may select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. The Board of Directors may
authorize the issuance of some or all of the shares of the
corporation's classes or series without issuing certificates
to represent such shares. If shares are represented by
certificates, the certificates shall be in such form as
required by law and shall be determined by the Board of
Directors. Certificates shall be signed (either manually or
in facsimile) by the Chairman of the Board, President or a
Vice-President and by the Secretary or Treasurer or an
Assistant Secretary or an Assistant Treasurer. The
signatures of any such officers upon a certificate may be
facsimiles or may be engraved or printed. In case any
officer who has signed or whose facsimile or other signature
has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were
such officer at the date of its issue. All certificates for
shares shall be consecutively numbered or otherwise
identified and entered into the stock transfer books of the
corporation. When shares are represented by certificates,
the corporation shall issue and deliver to each shareholder
to whom such shares have been issued or
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transferred, certificates representing the shares owned by
him. When shares are not represented by certificates, then
within a reasonable time after the issuance or transfer of
such shares, the corporation shall send the shareholder to
whom such shares have been issued or transferred a written
statement of the information required by law to be on
certificates.
Section 2. Stock Transfer Books. The corporation shall keep a book or
set of books, to be known as the stock transfer books of the
corporation, containing the name of each shareholder of
record, together with such shareholder's address and the
number and class or series of shares held by him. Transfer
of shares shall be made only on the stock transfer books of
the corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with
the Secretary, and on surrender for cancellation of the
certificate for such shares (if the shares are represented
by certificates). All certificates surrendered for transfer
(if the shares are represented by certificates) shall be
cancelled before new certificates (or written statements in
lieu thereof) for the transferred shares shall be issued or
delivered to the shareholder.
Section 3. Reserved.
Section 4. Fixing Record Date. The Board of Directors may fix a future
date as the record date for one or more voting groups in
order to determine the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any distribution,
or in order to make a determination of shareholders for any
other proper purpose. Such record date may not be more than
seventy (70) days before the meeting or date on which the
particular action requiring such determination of
shareholders is to be taken. A determination of shareholders
entitled to notice of or to vote at a shareholders' meeting
is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned
meeting, which it must do if the meeting is adjourned to a
date more than One Hundred Twenty (120) days after the date
fixed for the original meeting.
If no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting
of shareholders, or shareholders entitled to receive payment
of a distribution, the close of business on the day before
the first notice of the meeting is delivered to shareholders
or the date on which the resolution of the Board of
Directors declaring such distribution is adopted, as the
case may be, shall be the record date for such determination
of shareholders.
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Section 5. Lost or Destroyed Certificate. The Board of Directors may
direct a new certificate to be issued in place of any
certificate theretofore issued by the corporation claimed to
have been lost, destroyed or wrongfully taken, upon receipt
of an affidavit of such fact from the person claiming the
certificate of stock to have been lost or destroyed. When
authorizing such issue of a new certificate, the Board of
Directors shall require that the owner of such lost or
destroyed certificate, or his legal representative, give the
corporation a bond in such sum as the Board may direct as
indemnity against any claim that may be made against the
corporation with respect to the certificate claimed to have
been lost or destroyed, except where the Board of Directors
by resolution finds that in the judgment of the directors
the circumstances justify omission of a bond.
Section 6. Holder of Record. Except as otherwise required by law, the
corporation may treat as absolute owner of shares the person
in whose name the shares stand of record on its books just
as if that person had full competency, capacity and
authority to exercise all rights of ownership irrespective
of any knowledge or notice to the contrary or any
description indicating a representative, pledge or other
fiduciary relation or any reference to any other instrument
or to the rights of any other person appearing upon its
record or upon the share certificate except that any person
furnishing to the corporation proof of his appointment as a
fiduciary shall be treated as if he were a holder of record
of its shares.
Section 7. Shares Held By Nominees.
(a) The corporation shall recognize the beneficial owner of
shares registered in the name of a nominee as the owner and
shareholder of such shares for certain purposes if the
nominee in whose name such shares are registered files with
the Secretary of the corporation a written certificate in a
form prescribed by the corporation, signed by the nominee
and indicating the following: (1) the name, address and
taxpayer identification number of the nominee; (2) the name,
address and taxpayer identification number of the beneficial
owner; (3) the number and class or series of shares
registered in the name of the nominee as to which the
beneficial owner shall be recognized as the shareholder; and
(4) the purposes for which the beneficial owner shall be
recognized as the shareholder.
(b) The purposes for which the corporation shall recognize a
beneficial owner as the shareholder may include the
following: (1) receiving notice of, voting at and otherwise
participating in shareholders' meetings; (2) executing
consents with respect to the shares; (3) exercising
dissenters' rights under Article 13 of the North Carolina
Business Corporation Act; (4) receiving distributions and
share dividends with respect to the shares; (5) exercising
inspection rights; (6) receiving reports, financial
statements,
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proxy statements and other communications from the
corporation; (7) making any demand upon the corporation
required or permitted by law; and (8) exercising any other
rights or receiving any other benefits of a shareholder with
respect to the shares.
(c) The certificate shall be effective ten (10) business
days after its receipt by the corporation and until it is
changed by the nominee, unless the certificate specifies a
later effective time or an earlier termination date.
(d) If the certificate affects less than all of the shares
registered in the name of the nominee, the corporation may
require the shares affected by the certificate to be
registered separately on the books of the corporation and be
represented by a share certificate that bears a conspicuous
legend stating that there is a nominee certificate in effect
with respect to the shares represented by that share
certificate.
Section 8. Acquisition by Corporation of its Own Shares. Subject to the
provisions of the Articles of Incorporation, the corporation
may acquire its own shares and shares so acquired shall
constitute authorized but unissued shares. Unless otherwise
prohibited by the Articles of Incorporation, the corporation
may reissue such shares. If reissue is prohibited, the
Articles of Incorporation shall be amended to reduce the
number of authorized shares by the number of shares so
acquired. Such required amendment may be adopted by the
Board of Directors without shareholder action.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Distributions. The Board of Directors may from time to time
authorize, and the corporation may make distributions to its
shareholders pursuant to law and subject to the provisions
of its Articles of Incorporation.
Section 2. Seal. The corporate seal of the corporation shall
consist of two concentric circles between which is the name
of the corporation and in the center of which is inscribed
CORPORATE SEAL; and such seal, as impressed on the margin
hereof, is hereby adopted as the corporate seal of the
corporation.
Section 3. Fiscal Year. The fiscal year of the corporation shall be
fixed by the Board of Directors.
Section 4. Amendments. Except as otherwise provided herein and by law,
these Bylaws may be amended or repealed and new bylaws may
be adopted by the affirmative vote of a majority of the
directors then holding office at any
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regular or special meeting of the Board of Directors,
provided that (i) any provision of these bylaws that is
governed by or subject to the provisions of the Shareholders
Agreement or the Articles of Incorporation shall not be
amended except in accordance with the terms thereof and (ii)
Section 2 of Article III shall not be amended without the
prior written consent of the Investor (as defined in the
Shareholders Agreement) for so long as the Investor has the
right to designate a director to the Board of Directors
pursuant to the Shareholders Agreement.
No bylaw adopted or amended or repealed by the shareholders
shall be readopted, amended or repealed by the Board of
Directors, unless the Articles of Incorporation or a bylaw
adopted by the shareholders authorizes the Board of
Directors to adopt, amend or repeal that particular bylaw or
the Bylaws generally.
Section 5. Salary and Other Compensation. Any payments made to an
officer of the corporation such as salary, commission,
bonus, interest, rent or entertainment expense incurred by
him, that shall be disallowed in whole or in part as a
deductible expense by the Internal Revenue Service, shall be
reimbursed by such officer of the corporation to the full
extent of such disallowance.
Section 6. Indemnification. Any person who at any time serves or has
served as a director or officer of the corporation or in
such capacity at the request of this corporation as a
director or officer of another corporation, partnership,
joint venture, trust or other enterprise, shall have a right
to be indemnified by the corporation to the fullest extent
permitted by law against (a) reasonable expenses, including
attorneys' fees, actually and necessarily incurred by him in
connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative
or investigative (and any appeal therein), formal or
informal, and whether or not brought by or on behalf of the
corporation, seeking to hold him liable by reason of the
fact that he is or was acting in such capacity, and (b)
reasonable payments made by him in satisfaction of any
judgment, money decree, fine, penalty or settlement for
which he may have become liable in any such action, suit or
proceeding.
The Board of Directors of the corporation shall take all
such action as may be necessary and appropriate to authorize
the corporation to pay the indemnification required by this
bylaw, including without limitation, to the extent needed,
making a good faith evaluation of the manner in which the
claimant for indemnity acted and of the reasonable amount of
indemnity due him and giving notice to, and obtaining
approval by, the shareholders of the corporation.
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Any person who is entitled to indemnification by the
corporation hereunder shall, subject to applicable law, also
be entitled to reimbursement of reasonable costs, expenses
and attorneys' fees incurred in obtaining such
indemnification.
Expenses incurred by a director in defending an action, suit
or proceeding shall be paid by the corporation in advance of
the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the
director to pay such amount unless it shall ultimately be
determined that he or she is entitled to be indemnified by
the corporation against such expenses.
Any person who at any time after the adoption of this bylaw
serves or has served in any of the aforesaid capacities for
or on behalf of the corporation shall be deemed to be doing
or to have done so in reliance upon, and as consideration
for, the right of indemnification provided herein. Such
right shall inure to the benefit of the legal
representatives of any such person and shall not be
exclusive of any other rights to which such person may be
entitled apart from the provision of this bylaw.
Section 7. Advance Payment of Expenses. The corporation shall (upon
receipt of an undertaking by or on behalf of the director or
officer involved to repay the expenses described herein
unless it shall ultimately be determined that he is entitled
to be indemnified by the corporation against such expenses)
pay expenses (including attorneys' fees) incurred by such
director, officer, employee or agent in defending any
threatened, pending or completed action, suit or proceeding
and any appeal therein whether civil, criminal,
administrative, investigative or arbitrative and whether
formal or informal or appearing as a witness at a time when
he has not been named as a defendant or a respondent with
respect thereto in advance of the final disposition of such
proceeding.
Section 8. Directors and Officers Liability Insurance. The Board of
Directors may cause the corporation to purchase and maintain
"Directors and Officers Liability Insurance" in amounts as
are reasonable and customary for companies conducting
business similar to that of the corporation for the benefit
of any person who is or was serving as a director, officer,
employee or agent of this corporation or for the benefit of
any person who is or was serving at the request of this
corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or
other enterprise. This insurance may cover any liability
incurred by such person in any capacity arising out of this
status as such even if the corporation would not otherwise
have the power to indemnify him against that liability.
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Section 9. Effective Date of Notice. Except as provided in Section 5 of
Article II, written notice shall be effective at the
earliest of the following: (1) when received; (2) five days
after its deposit in the United States mail, as evidenced by
the postmark, if mailed with postage thereon prepaid and
correctly addressed; or (3) on the date shown on the return
receipt, if sent by registered or certified mail, return
receipt requested and the receipt is signed by or on behalf
of the addressee.
Section 10. Corporate Records. Any records maintained by the corporation
in the regular course of its business, including its stock
ledger, books of account and minute books, may be kept on or
be in the form of punch cards, magnetic tape, photographs,
microphotographs or any other information storage device;
provided that the records so kept can be converted into
clearly legible form within a reasonable time. The
corporation shall so convert any records so kept upon the
request of any person entitled to inspect the same. The
corporation shall maintain at its principal office the
following records: (1) Articles of Incorporation or Restated
Articles of Incorporation and all amendments thereto; (2)
Bylaws or restated Bylaws and all amendments thereto; (3)
resolutions by the Board of Directors creating classes or
series of shares and affixing rights, preferences or
limitations to shares; (4) minutes of all shareholder
meetings or action taken without a meeting for the past
three years; (5) all written communications to shareholders
for the past three years, including financial statements;
and (6) the corporation's most recent annual report filed
with the North Carolina Secretary of State.
Section 11. Amendments to Articles of Incorporation. To the extent
permitted by law, the Board of Directors may amend the
Articles of Incorporation without shareholder approval to
(1) delete the initial directors' names and addresses; (2)
change the initial registered agent or office in any state
in which it is qualified to do business, provided such
change is on file with the applicable Secretary of State;
(3) change each issued and unissued share of an outstanding
class into a greater number of whole shares, provided that
class is the corporation's only outstanding share class; (4)
change the corporate name by substituting "corporation,"
"incorporated," "company," "limited" or the abbreviations
therefor for a similar word or abbreviation or by adding,
deleting or changing a geographic designation in the name;
(5) make any other change expressly permitted by the North
Carolina Business Corporation Act to be made without
shareholder action. All other amendments to the Articles of
Incorporation must be approved by the appropriate voting
group or groups as required by law.
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Section 12 The provisions of these Bylaws are subject in all respects to
the provisions of the Shareholders Agreement and the
Articles of Incorporation. In the event of any conflict
between any provision of these Bylaws and any provision of
the Shareholders Agreement or the Articles of Incorporation,
the applicable provisions of the Shareholders Agreement and
the Articles of Incorporation shall control.
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