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 may be called
at any time by the Chairman of the Board, President, Secretary or Board
of Directors of the corporation, or by any shareholder pursuant to the
written request of the holders of not less than one-tenth (1/10th) of
all shares entitled to vote at the 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.
2
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.
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, represented in person or by proxy, shall be required
for, and shall constitute a quorum at all meetings of shareholders.
Shares entitled to vote as a separate voting group may take action on a
matter only if a quorum of those shares exists; a
3
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.
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
4
the North Carolina Business Corporation Act 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 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.
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
5
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.
(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
6
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.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. 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 one (1) nor more than
five (5) as may be fixed or changed from time to time, within the
minimum and maximum, by the shareholders or by the Board of Directors.
The number of directors is initially set at three (3). Directors need
not be residents of the State of North Carolina or shareholders of the
corporation.
Section 3. Election of Directors. 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
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
7
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, or, if cumulative voting rights have been provided for in the
corporation's Articles of Incorporation, to cumulate his vote by giving
one candidate as many votes as the number of such directors multiplied
by the number of his shares shall equal, or by distributing such votes
on the same principle among any number of such candidates. This right of
cumulative voting, if available to the shareholders, shall not be
exercised unless (a) the meeting notice or proxy statement accompanying
the notice states conspicuously that shareholders are entitled to
cumulate their votes, or (b) a shareholder or proxy holder who has the
right to cumulate his votes announces in open meeting, before the voting
for the directors starts, his intention so to vote cumulatively; and if
such announcement is made, the chair shall declare that all shares
entitled to vote have the right to vote cumulatively and shall announce
the number of shares present in person and by proxy and shall thereupon
grant a recess of not less than one nor more than four hours, as he
shall determine, or of such other period of time as is unanimously then
agreed upon.
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. 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.
However, if cumulative voting is authorized, a director shall not be
removed when the number of
8
shares voting against the proposal for removal would be sufficient to
elect a director if such shares were voted cumulatively at an annual
election. 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. 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.
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
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
9
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. 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. 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
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.
10
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.
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 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.
11
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. 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.
12
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 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
13
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 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
14
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 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,
15
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 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
16
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
17
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 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. Restrictions on Transfer.
(a) If the corporation has elected Subchapter S status under Section
1362 of the Internal Revenue Code of 1986, as amended, no shareholder or
involuntary transferee shall dispose of or transfer any shares of the
corporation that he now owns or may hereafter acquire if such
disposition or transfer would result in the termination of such
Subchapter S status, unless such disposition or transfer is consented to
by all shareholders of
18
the corporation. Any such disposition or transfer that does not comply
with the terms of this section shall be void and have no legal force or
effect and shall not be recognized on the share transfer books of the
corporation as effective.
(b) If the corporation has elected Subchapter S status under Section
1362 of the Code, every certificate representing shares of the
corporation shall bear a legend prominently displayed that notes the
restrictions on transfer contained in these Bylaws.
(c) The restrictions contained in this Section 3 shall automatically
terminate on the effectiveness of the corporation's initial registration
statement for a public offering of its securities.
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.
19
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
20
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, 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. 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
21
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 regular or special meeting of the Board of Directors.
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
22
the corporation or officer of the 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), 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. 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
23
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" 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.
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
24
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.
25
CERTIFICATE OF ADOPTION OF BYLAWS
FOR BTI TELECOM CORP.
The undersigned certifies that the foregoing twenty-six (26) pages were
adopted as the Bylaws of the corporation effective ________________________,
1997 by the Board of Directors of the corporation pursuant to the initial action
of the Board of Directors by unanimous written consent and were recorded in the
minutes thereof.
IN WITNESS WHEREOF, the undersigned certifies that he has hereunto set
his hand and affixed the corporate seal this ______ day of ___________, 1997.